10-Q – 2025-10-22 – isrg-20250930.htm

Three Months Ended September 30, Nine Months Ended September 30,
  2025 2024 2025 2024
Revenue
Instruments and accessories $ 1,518.8  $ 1,264.2  $ 4,360.6  $ 3,667.5 
Systems 590.4  445.0  1,687.8  1,311.4 
Total product revenue 2,109.2  1,709.2  6,048.4  4,978.9 
Service
395.9  328.9  1,150.1  959.7 
Total revenue $ 2,505.1  $ 2,038.1  $ 7,198.5  $ 5,938.6 

U.S. $ 1,717.6  $ 1,379.4  $ 4,885.2  $ 3,937.1 
OUS 787.5  658.7  2,313.3  2,001.5 
Total revenue $ 2,505.1  $ 2,038.1  $ 7,198.5  $ 5,938.6 
% of Revenue – U.S. 69% 68% 68% 66%
% of Revenue – OUS 31% 32% 32% 34%

Instruments and accessories $ 1,518.8  $ 1,264.2  $ 4,360.6  $ 3,667.5 
Service
395.9  328.9  1,150.1  959.7 
Operating lease revenue 223.0  167.8  632.0  472.7 
Total recurring revenue $ 2,137.7  $ 1,760.9  $ 6,142.7  $ 5,099.9 
% of Total revenue 85% 86% 85% 86%

Da Vinci Surgical System Placements by Region

U.S. unit placements 263  219  683  516 
OUS unit placements 164  160  506  517 
Total unit placements* 427  379  1,189  1,033 
*Systems placed under fixed-payment operating lease arrangements (included in total unit placements) 116  79  276  227 
*Systems placed under usage-based operating lease arrangements (included in total unit placements) 115  141  346  327 

Da Vinci Surgical System Placements involving Trade-ins or Lease Upgrades

Unit placements involving trade-ins or lease upgrades
141  38  291  88 
Unit placements not involving trade-ins or lease upgrades
286  341  898  945 

Ion System Placements** 50  58  153  202 
**Systems placed under fixed-payment operating lease arrangements (included in total unit placements) 11  19  38  61 
**Systems placed under usage-based operating lease arrangements (included in total unit placements) 6  17  42  54 

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Product Revenue

Three Months Ended September 30, 2025

Product revenue increased by 23% to $2.11 billion for the three months ended September 30, 2025, compared to $1.71 billion for the three months ended September 30, 2024.
Instruments and accessories revenue increased by 20% to $1.52 billion for the three months ended September 30, 2025, compared to $1.26 billion for the three months ended September 30, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 19% higher da Vinci procedure volume and approximately 52% higher Ion procedure volume. The third quarter 2025 U.S. da Vinci procedure growth was approximately 16%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and appendectomy procedures, as well as growth in gynecological procedures. The number of U.S. da Vinci bariatric procedures performed declined in the high-single digits in the third quarter of 2025 compared to the third quarter of 2024. The third quarter 2025 OUS da Vinci procedure growth was approximately 24%, driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures, most notably hysterectomy procedures. Geographically, the third quarter 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in India, South Korea, and Brazil .
Systems revenue increased by 33% to $590 million for the three months ended September 30, 2025, compared to $445 million for the three months ended September 30, 2024. The higher third quarter 2025 system revenue was primarily driven by an increase in da Vinci system placements, including a decrease in the proportion of da Vinci system placements under operating leases, higher operating lease revenue, and higher ASPs in the third quarter of 2025, driven by an increase in da Vinci 5 system placements.
During the third quarter of 2025 , 427 da Vinci surgical systems were placed compared to 379 systems during the third quarter of 2024. By geography, 263 systems were placed in the U.S., 63 in Europe, 60 in Asia, and 41 in other markets during the third quarter of 2025, compared to 219 systems placed in the U.S., 65 in Europe, 74 in Asia, and 21 in other markets during the third quarter of 2024. The increase in system placements was primarily driven by continued demand for additional capacity by our customers as a result of procedure growth as well as increased demand for our next-generation da Vinci 5 system, including the impact from customers beginning to trade in fourth-generation da Vinci systems. As of September 30, 2025, we had a da Vinci surgical system installed base of approximately 10,763 systems, compared to an installed base of approximately 9,539 systems as of September 30, 2024. The incremental system installed base reflects continued procedure growth and further customer validation that robotic-assisted surgery addresses their Quintuple Aim objectives.
The following table summarizes our da Vinci system placements and systems installed at customers under leasing arrangements:

Three Months Ended September 30,
2025 2024
Da Vinci System Placements under Leasing Arrangements

Fixed-payment operating lease arrangements 116  79 
Usage-based operating lease arrangements 115  141 
Total da Vinci system placements under operating lease arrangements 231  220 
% of Total da Vinci system placements 54% 58%
Sales-type lease arrangements 12  13 
Total da Vinci system placements under leasing arrangements 243  233 

Da Vinci System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements 1,379  1,289 
Usage-based operating lease arrangements 1,736  1,352 
Total da Vinci system installed base under operating leasing arrangements 3,115  2,641 

Operating lease revenue, including the contribution from Ion systems, was $223 million for the three months ended September 30, 2025, of which $138 million was variable lease revenue related to usage-based arrangements, compared to $168 million for the three months ended September 30, 2024, of which $87 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $22 million for the three months ended September 30, 2025, compared to $24 million for the three months ended September 30, 2024. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
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The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.60 million for the three months ended September 30, 2025, compared to approximately $1.51 million for the three months ended September 30, 2024. The higher third quarter 2025 ASP was largely driven by favorable product mix, including from da Vinci 5 system placements, partially offset by higher pricing discounts and more trade-ins. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the third quarter of 2025, 50 Ion systems were placed compared to 58 systems during the third quarter of 2024. By geography, 41 systems were placed in the U.S., 5 in Europe, and 4 in Asia during third quarter of 2025, compared to 53 systems placed in the U.S. and 3 in Europe during the third quarter of 2024. In the U.S., where we estimate that penetration of lung biopsy is approaching the halfway point, our customers’ focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of September 30, 2025, we had an Ion system installed base of approximately 954 systems, compared to an installed base of approximately 736 systems as of September 30, 2024.
The following table summarizes our Ion system placements and systems installed at customers under leasing arrangements:

Three Months Ended September 30,
2025 2024
Ion System Placements under Leasing Arrangements

Fixed-payment operating lease arrangements 11  19 
Usage-based operating lease arrangements 6  17 
Total Ion system placements under operating lease arrangements 17  36 
% of Total Ion system placements 34% 62%
Sales-type lease arrangements
5  2 
Total Ion system placements under leasing arrangements 22  38 

Ion System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements 123  117 
Usage-based operating lease arrangements 239  179 
Total Ion system installed base under operating leasing arrangements 362  296 

Nine Months Ended September 30, 2025
Product revenue increased by 21% to $6.05 billion for the nine months ended September 30, 2025, compared to $4.98 billion for the nine months ended September 30, 2024.
Instruments and accessories revenue increased by 19% to $4.36 billion for the nine months ended September 30, 2025, compared to $3.67 billion for the nine months ended September 30, 2024. The increase in instruments and accessories revenue was primarily driven by approximately 18% higher da Vinci procedure volume and approximately 54% higher Ion procedure volume. The year-to-date 2025 U.S. da Vinci procedure growth was approximately 14%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and appendectomy procedures, as well as growth in gynecological procedures. The number of U.S. da Vinci bariatric procedures continued to decline in the high-single digits in the first nine months of 2025 compared with the first nine months of 2024. The year-to-date 2025 OUS da Vinci procedure growth was approximately 24%, driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures, most notably hysterectomy procedures. Geographically, the year-to-date 2025 OUS da Vinci procedure growth was driven by several markets with particular strength in India and South Korea.
Systems revenue increased by 29% to $1.69 billion for the nine months ended September 30, 2025, compared to $1.31 billion for the nine months ended September 30, 2024. The higher year-to-date 2025 system revenue was primarily driven by an increase in da Vinci system placements, including a decrease in the proportion of da Vinci system placements under operating leases, higher operating lease revenue, and higher year-to-date 2025 ASPs, driven by an increase in da Vinci 5 system placements.
During the nine months ended September 30, 2025, a total of 1,189 da Vinci surgical systems were placed compared to 1,033 systems during the nine months ended September 30, 2024. By geography, 683 systems were placed in the U.S., 224 in Europe, 181 in Asia, and 101 in other OUS markets during the nine months ended September 30, 2025, compared to 516 systems placed in the U.S., 220 in Europe, 225 in Asia, and 72 in other OUS markets during the nine months ended September 30, 2024. The increase in system placements was primarily driven by continued demand for additional capacity by
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our customers as a result of procedure growth as well as increased demand for our next-generation da Vinci 5 system, including the impact from customers beginning to trade in fourth-generation da Vinci systems.
The following table summarizes our da Vinci system placements and systems installed at customers under leasing arrangements:

Nine Months Ended September 30,
2025 2024
Da Vinci System Placements under Leasing Arrangements

Fixed-payment operating lease arrangements 276  227 
Usage-based operating lease arrangements 346  327 
Total da Vinci system placements under operating lease arrangements 622  554 
% of Total da Vinci system placements 52% 54%
Sales-type lease arrangements 28  45 
Total da Vinci system placements under leasing arrangements 650  599 

Da Vinci System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements 1,379  1,289 
Usage-based operating lease arrangements 1,736  1,352 
Total da Vinci system installed base under operating leasing arrangements 3,115  2,641 

Operating lease revenue, including the contribution from Ion systems, was $632 million for the nine months ended September 30, 2025, of which $380 million was variable lease revenue related to usage-based arrangements, compared to $473 million for the nine months ended September 30, 2024, of which $237 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $91 million for the nine months ended September 30, 2025, compared to $81 million for the nine months ended September 30, 2024. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.57 million for the nine months ended September 30, 2025, compared to approximately $1.44 million for the nine months ended September 30, 2024. The higher year-to-date 2025 ASP was largely driven by favorable product mix, including from da Vinci 5 system placements, partially offset by more trade-ins. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the nine months ended September 30, 2025, 153 Ion systems were placed compared to 202 systems during the nine months ended September 30, 2024. By geography, 133 systems were placed in the U.S., 11 in Europe, 6 in Asia, and 3 in other markets during nine months ended September 30, 2025, compared to 191 systems placed in the U.S. and 9 in Europe during the nine months ended September 30, 2024. In the U.S., where we estimate that penetration of lung biopsy is approaching the halfway point, our customers’ focus has begun to shift from increasing capacity to increasing utilization of their existing systems. As of September 30, 2025, we had an Ion system installed base of approximately 954 systems, compared to an installed base of approximately 736 systems as of September 30, 2024.
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The following table summarizes our Ion system placements and systems installed at customers under leasing arrangements:

Nine Months Ended September 30,
2025 2024
Ion System Placements under Leasing Arrangements

Fixed-payment operating lease arrangements 38  61 
Usage-based operating lease arrangements 42  54 
Total Ion system placements under operating lease arrangements 80  115 
% of Total Ion system placements 52% 57%
Sales-type lease arrangements 10  2 
Total Ion system placements under leasing arrangements 90  117 

Ion System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements 123  117 
Usage-based operating lease arrangements 239  179 
Total Ion system installed base under operating leasing arrangements 362  296 

Service Revenue

Service revenue increased by 20% to $396 million for the three months ended September 30, 2025, compared to $329 million for the three months ended September 30, 2024. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue and favorable product mix, including from da Vinci 5 system placements.

Service revenue increased by 20% to $1.15 billion for the nine months ended September 30, 2025, compared to $0.96 billion for the nine months ended September 30, 2024. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue and favorable product mix, including from da Vinci 5 system placements.

Gross Profit

Product
Product gross profit for the three months ended September 30, 2025, increased by 22% to $1.41 billion, representing 66.8% of product revenue, compared to $1.15 billion, representing 67.5% of product revenue, for the three months ended September 30, 2024. The lower product gross profit margin for the three months ended September 30, 2025, was primarily driven by the impact of tariffs.

Product gross profit for the nine months ended September 30, 2025, increased by 20% to $3.99 billion, representing 66.0% of product revenue, compared to $3.33 billion, representing 66.9% of product revenue, for the nine months ended September 30, 2024. The lower product gross profit margin for the nine months ended September 30, 2025, was primarily driven by the impact of tariffs, higher costs associated with the phased launch of our da Vinci 5 surgical system, and incremental fixed overhead costs, including depreciation expense, associated with expanded manufacturing capacity in the U.S., partially offset by lower excess and obsolete inventory charges.

Product gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $31.5 million and $92.0 million, respectively, compared with $24.9 million and $71.2 million for the three and nine months ended September 30, 2024, respectively. Product gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $2.2 million and $6.7 million, respectively, compared with $2.2 million and $9.3 million for the three and nine months ended September 30, 2024, respectively.
Compared to historical levels, our capital expenditures increased in 2024 and 2025 as a result of the investments made to build the infrastructure needed to scale our business. Therefore, in 2025, depreciation expense has increased and is expected to continue to increase as additional projects are placed in service, which may impact our future gross profit margin.

Service
Service gross profit for the three months ended September 30, 2025, increased by 15% to $253 million, representing 63.8% of service revenue, compared to $220 million, representing 66.9% of service revenue, for the three months ended September 30, 2024. The higher service gross profit for the three months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, partially offset by a lower service gross profit margin. The lower service gross profit margin for the three months ended September 30, 2025, was primarily driven by higher costs associated with the phased launch of our da Vinci 5 surgical system, an unfavorable repair mix, incremental fixed costs,
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including depreciation expense, and the impact of tariffs, partially offset by lower excess and obsolete inventory charges and lower logistics costs.

Service gross profit for the nine months ended September 30, 2025, increased by 13% to $746 million, representing 64.9% of service revenue, compared to $662 million, representing 69.0% of service revenue, for the nine months ended September 30, 2024. The higher service gross profit for the nine months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, and a lower service gross profit margin. The lower service gross profit margin for the nine months ended September 30, 2025, was primarily driven by higher costs associated with the phased launch of our da Vinci 5 surgical system, an unfavorable repair mix, incremental fixed costs, including depreciation expense, and the impact of tariffs, partially offset by lower logistics costs and lower excess and obsolete inventory charges.

Service gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $8.8 million and $25.6 million, respectively, compared with $7.9 million and $22.5 million for the three and nine months ended September 30, 2024, respectively. Service gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $0.2 million and $0.6 million, respectively, compared with $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses include costs for sales, marketing, and administrative personnel, sales and marketing activities, trade show expenses, legal expenses, regulatory fees, and general corporate expenses.

Selling, general, and administrative expenses for the three months ended September 30, 2025, increased by 12% to $573 million, compared to $511 million for the three months ended September 30, 2024. The increase in selling, general, and administrative expenses for the three months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including variable compensation and share-based compensation expense, and higher litigation charges, partially offset by lower legal expenses.
Selling, general, and administrative expenses for the nine months ended September 30, 2025, increased by 11% to $1.70 billion, compared to $1.53 billion for the nine months ended September 30, 2024. The increase in selling, general, and administrative expenses for the nine months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense and variable compensation, and increased infrastructure costs to support our growth.

Selling, general, and administrative expenses for the three and nine months ended September 30, 2025, included share-based compensation expense of $88.1 million and $256.7 million, respectively, compared with $77.6 million and $225.4 million for the three and nine months ended September 30, 2024, respectively. Selling, general, and administrative expenses for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $0.1 million and $0.7 million, respectively, compared with $0.6 million and $2.2 million for the three and nine months ended September 30, 2024, respectively.

Research and Development Expenses

Research and development costs are expensed as incurred and primarily include costs associated with research and the design, development, testing, and significant enhancement of our products. Our main product development initiatives include multi-port, Ion, and SP platform investments as well as digital products and services and various research projects.

Research and development expenses for the three months ended September 30, 2025, increased by 15% to $329 million, compared to $286 million for the three months ended September 30, 2024. Research and development expenses for the nine months ended September 30, 2025, increased by 13% to $959 million, compared to $851 million for the nine months ended September 30, 2024. The increase in research and development expenses for the three and nine months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense, and other project costs incurred to support a broad set of product development initiatives.

Research and development expenses for the three and nine months ended September 30, 2025, included share-based compensation expense of $77.6 million and $221.3 million, respectively, compared with $65.4 million and $188.7 million for the three and nine months ended September 30, 2024, respectively. Research and development expenses for the three and nine months ended September 30, 2025, included intangible asset-related charges of $1.4 million and $9.2 million, respectively, compared with $0.5 million and $1.7 million for the three and nine months ended September 30, 2024, respectively.

Research and development expenses fluctuate with project timing. Based upon our broader set of product development initiatives and the stage of the underlying projects, we expect to continue to make substantial investments in research and development and anticipate that research and development expenses will continue to increase in the future.
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Interest and Other Income, Net

Interest and other income, net, for the three months ended September 30, 2025, increased by 2% to $95.5 million, compared to $93.7 million for the three months ended September 30, 2024. The increase in interest and other income, net, for the three months ended September 30, 2025, was primarily driven by unrealized gains on strategic investments (compared to unrealized losses during the three months ended September 30, 2024) and higher interest income earned due to higher average cash and investment balances, partially offset by foreign exchange losses, net of the impacts of derivatives and hedging (compared to foreign exchange gains during the three months ended September 30, 2024).

Interest and other income, net, for the nine months ended September 30, 2025, increased by 10% to $275 million, compared to $250 million for nine months ended September 30, 2024. The increase in interest and other income, net, for the nine months ended September 30, 2025, was primarily driven by higher interest income earned due to higher average cash and investment balances and an increase in average interest rates, partially offset by foreign exchange losses, net of the impacts of derivatives and hedging (compared to foreign exchange gains during the nine months ended September 30, 2024), and unrealized losses on strategic investments (compared to unrealized gains during the nine months ended September 30, 2024).

Income Tax Expense

Income tax expense for the three months ended September 30, 2025, was $146.0 million, or 17.1% of income before taxes, compared to $100.4 million, or 15.0% of income before taxes, for the three months ended September 30, 2024. Income tax expense for the nine months ended September 30, 2025, was $278.7 million, or 11.8% of income before taxes, compared to $214.5 million, or 11.5% of income before taxes, for the nine months ended September 30, 2024.

Our higher effective tax rate for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, was primarily due to a lower tax rate benefit from excess tax benefits, as discussed below, and lower federal research and development credit benefits, partially offset by lower U.S. taxes on foreign earnings.

Our provision for income taxes for the three months ended September 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $24.2 million and $42.2 million, respectively, which reduced our effective tax rate by 2.8 and 6.3 percentage points, respectively. Our provision for income taxes for the nine months ended September 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $202.5 million and $189.0 million, respectively, which reduced our effective tax rate by 8.6 and 10.1 percentage points, respectively. The amount of excess tax benefits or deficiencies will fluctuate from period to period based on the price of our stock, the volume of share-based awards settled or vested, and the value assigned to employee equity awards under GAAP, which results in increased income tax expense volatility.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The changes introduced by the OBBB Act are not expected to have a material impact on our annual effective tax rate for 2025.
In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate (“Pillar Two”). The OECD issued Pillar Two model rules and continues to release guidance on these rules. In January 2025, the OECD released additional guidance, which includes a limitation on certain deferred tax assets recognized after November 2021. Various countries, including Switzerland and EU member states, have enacted or have announced plans to enact new tax laws to implement the global minimum tax. We considered the applicable tax law changes and additional guidance on Pillar Two implementation in the relevant countries, and there is no material impact to our tax provision for the three and nine months ended September 30, 2025. We will continue to evaluate the impact of any additional guidance and tax law changes on future reporting periods.

We file federal, state, and foreign income tax returns in many jurisdictions in the U.S. and OUS. Years before 2020 are considered closed for significant jurisdictions. Certain of our unrecognized tax benefits could change due to activities of various tax authorities, including evolving interpretations of existing tax laws in the jurisdictions in which we operate, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect our effective tax rate in the period in which they change.
We are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. Management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. If any issues addressed in our tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.
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Liquidity and Capital Resources

Sources and Uses of Cash and Cash Equivalents
Our principal source of liquidity is cash provided by our operations. Cash and cash equivalents plus short- and long-term investments decreased by $0.40 billion to $8.43 billion as of September 30, 2025, from $8.83 billion as of December 31, 2024, primarily as a result of cash used for repurchases of common stock, capital expenditures, and taxes paid related to net share settlements of equity awards, partially offset by cash provided by operating activities and proceeds from stock option exercises and employee stock purchases.
Our cash requirements depend on numerous factors, including market acceptance of our products, the resources we devote to developing and supporting our products, and other factors. We expect to continue to devote substantial resources to expand procedure adoption and acceptance of our products. We have made substantial investments in our commercial operations, product development activities, facilities, and intellectual property. Based on our business model, we anticipate that we will continue to be able to fund future growth through cash provided by our operations. We believe that our current cash, cash equivalents, and investment balances, together with income to be derived from our business, will be sufficient to meet our liquidity requirements for the foreseeable future. However, we may experience reduced cash flow from operations as a result of macroeconomic and geopolitical headwinds.
See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K for the fiscal year ended December 31, 2024, for discussion on the impact of interest rate risk and market risk on our investment portfolio.

Condensed Consolidated Cash Flow Data
The following table summarizes our cash flows (in millions):

Nine Months Ended September 30,
2025
2024

Net cash provided by (used in):
Operating activities $ 2,138.0  $ 1,592.4 
Investing activities 875.2  (2,008.6)
Financing activities (2,226.6) 101.5 
Effect of exchange rates on cash, cash equivalents, and restricted cash 0.5  (9.1)
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 787.1  $ (323.8)

Operating Activities
For the nine months ended September 30, 2025, net cash provided by operating activities of $2.14 billion exceeded our net income of $2.08 billion, primarily due to the following factors:
1. Our net income included non-cash charges of $1.08 billion, consisting primarily of share-based compensation of $585 million and depreciation expense and losses on the disposal of property, plant, and equipment of $446 million.
2. Changes in operating assets and liabilities resulted in $1.02 billion of cash used in operating activities during the nine months ended September 30, 2025. Inventory, including the transfer of equipment from inventory to property, plant, and equipment, increased by $810 million, primarily to address the growth in our business, including the expansion of our leasing business, and to mitigate risks of disruption that could arise from global supply chain shortages. Refer to Note 4 to the Financial Statements for further details in the supplemental cash flow information. Prepaids and other assets increased by $249 million, primarily driven by tax payments, an increase in lease incentive assets associated with operating leases, and new and extended facilities leases. Accrued compensation and employee benefits decreased by $80 million, primarily due to payments for 2024 incentive compensation and stock purchases related to our ESPP. The unfavorable impact of these items on cash provided by operating activities was partially offset by an increase in accounts payable of $97 million, primarily due to more inventory purchases, and an increase in deferred revenue of $48 million, primarily due to an increased volume of sales contracts.

Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2025, consisted primarily of proceeds from maturities and sales of investments, net of purchases of investments of $1.25 billion, partially offset by $377 million paid for the acquisition of property, plant, and equipment. We invest predominantly in high quality, fixed income securities. Our investment portfolio may, at any time, contain investments in money market funds, U.S. treasury and U.S. government agency
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securities, high-quality corporate notes and bonds, commercial paper, non-U.S. government agency securities, and taxable and tax-exempt municipal notes.

Financing Activities
Net cash used in financing activities for the nine months ended September 30, 2025, consisted primarily of cash used in the repurchase of 4.4 million shares of our common stock for $2.09 billion and cash used for taxes paid on behalf of employees related to net share settlements of vested employee equity awards of $406 million, partially offset by cash proceeds from stock option exercises and employee stock purchases of $274 million.

Capital Expenditures
We expect to continue to invest in infrastructure needed to scale and supply our customers with highly differentiated products manufactured in highly automated factories to facilitate outstanding performance in product quality, availability, and cost. A significant portion of this investment involves the construction of facilities to expand our manufacturing and commercial capabilities. We have also been vertically integrating key technologies to develop a more robust supply chain, enabling us to bring important products to market at attractive price points. These integration efforts include increased ownership of our imaging pipelines and investments in strategic instruments and accessories technologies that allow us to serve our customers better. We expect these capital investments to range between $625 million and $675 million in 2025, the majority of which will be facilities-related investments. We intend to fund these capital investments with cash generated from operations.

Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate our critical accounting estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no new or material changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, that are of significance, or potential significance, to the Company.
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the nine months ended September 30, 2025, compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 4.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
The information included in Note 8 to the Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Quarterly Report is incorporated herein by reference.

ITEM 1A.    RISK FACTORS
You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could materially affect our business, financial position, or future results of operations. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the period covered by this report.
(c) Issuer Purchases of Equity Securities
The table below summarizes our stock repurchase activity for the quarter ended September 30, 2025:

Fiscal Period Total Number
of Shares
Repurchased
Average Price Paid
Per Share
Total Number of Shares Purchased As
Part of a Publicly Announced Program
Approximate Dollar Amount of Shares That May Yet be Purchased Under the Program (1)

July 1 to July 31, 2025
985,341  $ 499.13  985,341  $ 3.3   billion
August 1 to August 31, 2025
2,019,119  $ 478.18  2,019,119  $ 2.4   billion
September 1 to September 30, 2025
998,096  $ 463.21  998,096  $ 1.9   billion
Total during quarter ended September 30, 2025
4,002,556  $ 479.60  4,002,556 

(1) Represents the cumulative amount remaining for stock repurchases under the Board-authorized Repurchase Program established in March 2009 (the “ Repurchase Program ” ). In May 2025, the Board increased the aggregate amount authorized under the Repurchase Program to $4.0 billion. Authorizations under the Repurchase Program do not expire.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.    OTHER INFORMATION

Rule 10b5-1 Plans
On July 29, 2025 , Myriam J. Curet, M.D., F.A.C.S. , the Company’s Chief Medical Officer, adopted a Rule 10b5-1 trading plan. Dr. Curet’s trading plan provides for the potential sale of up to 24,003 shares of the Company’s common stock, including the potential exercise and sale of up to 9,131 shares of the Company’s common stock subject to stock options, until July 29, 2026 . This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s policies regarding transactions in the Company’s securities .
On September 12, 2025 , Mark P. Brosius , the Company’s Chief Manufacturing and Supply Chain Officer , adopted a Rule 10b5-1 trading plan. Mr. Brosius’s trading plan provides for the potential sale of up to 19,730 shares of the Company’s common stock, including the potential exercise and sale of up to 9,000 shares of the Company’s common stock subject to stock options, until February 14, 2027 . This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s policies regarding transactions in the Company’s securities.
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ITEM 6.    EXHIBITS

Incorporated by Reference

Exhibit
Number Exhibit Description
Form
File No. Exhibit Filing Date
3.1 Amended and Restated Certificate of Incorporation of the Company, as Amended .
10-Q
000-30713
3.1
7/23/2020
3.2 Amendment to Amended and Restated Certificate of Incorporation of the Company.
10-Q
000-30713
3.1
10/20/2021

3.3 Amended and Restated Bylaws of the Company.
8-K
000-30713
3.1
2/1/2021

31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File, because its XBRL tags are embedded within the Inline XBRL document.

101.SCH *
Inline XBRL Taxonomy Extension Schema.

101.CAL *
Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF *
Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB *
Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE *
Inline XBRL Taxonomy Extension Presentation Linkbase.

104*
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101).

* Filed herewith.
** Furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INTUITIVE SURGICAL, INC.

By:   /s/ J AMIE E. S AMATH

Jamie E. Samath
Executive Vice President and Chief Financial Officer

(Principal Financial Officer and duly authorized signatory)

Date: October 22, 2025
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