Intuitive Surgical (ISRG, Financial) reported impressive results for the second quarter of 2025, surpassing EPS and revenue forecasts. The company experienced a 17% year-over-year increase in worldwide da Vinci procedures, demonstrating ongoing demand for its robotic-assisted surgical systems. Additionally, ISRG improved its non-GAAP gross margin to 67.9%, up from 66.4% in the previous year, thanks to operational efficiencies and a favorable product mix.
The company updated its FY25 guidance, raising the lower end of its worldwide da Vinci procedure growth forecast to 15.5-17.0%, up from the previous 15-17%. This adjustment indicates confidence in sustained demand despite macroeconomic challenges. Furthermore, ISRG increased its FY25 non-GAAP gross margin guidance to 66-67%, reflecting a smaller-than-expected tariff impact, now estimated to reduce margins by about 1% instead of the previously anticipated 1.7%.
- Worldwide da Vinci procedure growth is crucial for ISRG, driving recurring revenue from single-use instruments and accessories. The 17% growth in Q2 mirrored 2024’s full-year growth, driven by a 19% increase in U.S. general surgery and 23% growth in non-urology procedures internationally.
- FY25 guidance of 15.5-17.0% suggests slight moderation from 2024’s 17% but still indicates strong demand. This is supported by a 15% year-over-year increase in the global installed base to 10,189 systems and growing surgeon adoption of the da Vinci platform. However, a decline in U.S. bariatric procedures, influenced by GLP-1 medications, slightly affected overall growth.
- System placements surged with 395 da Vinci systems installed in Q2, a 15.8% increase from 341 in 2Q24. This includes 180 next-generation da Vinci 5 systems, up from 70 in the prior year, reflecting strong hospital demand for advanced surgical technology. The da Vinci 5's enhanced features are driving upgrades and new installations.
- Non-GAAP gross margin rose to 67.9% in Q2 from 66.4% in 2Q24, aided by a favorable product mix, improved manufacturing efficiencies, and reduced supply chain costs. The margin improvement also benefited from lower-than-expected tariff impacts due to strategic sourcing adjustments. Looking forward, the raised FY25 gross margin guidance reflects confidence in sustaining these gains, though challenges such as increased depreciation and foreign exchange headwinds may limit further expansion.
ISRG’s Q2 results confirm strong demand for its da Vinci surgical systems, driven by robust procedure growth and increased da Vinci 5 placements. The company's ability to raise guidance while mitigating tariff impacts underscores its operational resilience, positioning it well for sustained growth and reinforcing its leadership in robotic-assisted surgery.
