Intuitive Surgical’s fourth-quarter revenue grew by 19% to $2.4bn, reflecting strong growth in both deliveries of surgical systems, and sales of accessories and instruments. When preliminary figures were announced earlier this month, all revenue lines were ahead of market expectations.
Underlying operating profit was up 15% to $1.1bn, with growth held back by lower gross margins that were impacted by tariffs and a change in the revenue mix.
Underlying earnings per share of $2.53 grew at a similar speed and came in 12% ahead of market forecasts.
Recently issued 2026 guidance for growth in surgical procedures for the flagship da Vinci platform was unchanged at 13-15%. Underlying gross margins are anticipated to be between 67-68% (2025: 67.6%), with underlying operating expenses expected to rise 11-15%.
The shares rose 2.3% in after-hours trading.
Our view
Intuitive Surgical’s final quarter rounded off another year of double-digit revenue and profit growth. Better-than-expected earnings raised investor spirits on the day. Guidance for growth in surgical procedures looks a little light, but management has consistently under-promised and over-delivered.
The company’s the market leader in the complex field of robotic surgery. At around $2mn a piece, its flagship da Vinci systems aren’t cheap. But they offer compelling benefits to both healthcare providers and patients, including reduced complication rates and shorter hospital stays.
That’s helped drive rapid adoption, with some 3.2 million operations carried out with assistance from the company’s platforms in 2025. With the latest generation of da Vinci still in the early stages of its rollout, there’s plenty of scope to add new hospitals and upgrade existing sites.
Once in place, the installed base of systems generates high levels of recurring income from instruments and accessories, which need replenishing after each operation. Alongside regular machine servicing, this provides excellent revenue visibility.
Yet there are some risks to be aware of. China is one market where Intuitive’s seeing intense competition. Meanwhile, tariffs have dented margins, and the boom in anti-obesity medicines is dampening demand for some surgeries.
However, we still see plenty of space for market penetration with potential to treble annual procedures based solely on established use cases of the technology. The total addressable market looks significantly higher and Intuitive is making good progress for approvals for use in new clinical areas. Regulatory clearance for several cardiac procedures in early 2026 opens the door to 160,000 minimally invasive heart procedures in the US and Korea alone.
Intuitive continues to innovate, spending $1.3bn on research and development in 2025. Its more recently launched Ion platform for lung biopsies has very strong momentum with procedures up 51% last year. The company was also an early adopter of artificial intelligence (AI) and here we also see further scope for monetisation.
Intuitive’s high levels of innovation are supported by a robust net cash balance of around $9bn and strong cash flows. While the company doesn’t pay a dividend, the healthy financials allowed share buybacks to the tune of $2.3bn last year. There are however no guarantees of a repeat in 2026.
We think Intuitive is well placed to keep its place at the forefront of surgical innovation. Consensus forecasts don’t look too demanding and even without upgrades there’s potential for upside. However the company’s quality is reflected in a valuation at the top of the peer group, leaving the shares vulnerable to disappointments.
Environmental, social and governance (ESG) risk
The healthcare industry is medium/high risk in terms of ESG, depending on subindustry. Across the board, product governance is the most acute risk, with business ethics, labour relations and data privacy also contributing. Providing reasonable access to healthcare as a basic service is also a growing issue, with greater concerns surrounding the social implications of for-profit healthcare companies.
According to Sustainalytics, Intuitive Surgical’s management of ESG risks is strong and often ahead of the industry. Its surgical systems are subject to the relevant safety certifications, complemented by a robust internal product and safety programme. The advanced nature of Intuitive’s technology also requires specialist knowledge. That’s supported by initiatives for talent development and recruitment, reflected in a staff turnover rate below 10%.
While it manages most material risks better than peers, it falls behind on its approach to eco-friendly product design, and end of life product stewardship, although these issues are mentioned in its reporting.
Access to care for patients is another key ESG risk for the sector, and while Intuitive recognises this, its approach could be improved by setting targets and reporting on the progress of its initiatives.
Intuitive Surgical key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.