01—Abstract
Summary
Summary of the 10-Q filed October 21, 2026. Cited figures are marked; the original filing is the authoritative source.
Intuitive Surgical Inc. reported strong revenue growth for the third quarter and first nine months of fiscal year 2026, driven by increased da Vinci procedure volumes and system placements.
Total revenue rose 22% year-over-year for the quarter and 21% for the nine-month period, reflecting robust demand for both instruments/accessories and systems. The company continues to expand its installed base for both da Vinci and Ion systems, indicating sustained market adoption. However, operating income saw a significant decrease in the quarter, largely due to a $450 milliona settlement charge for antitrust class action litigation.
Despite this, the company maintained healthy gross profit margins and saw positive trends in recurring revenue streams. Shareholder returns were supported by substantial share repurchases, although the company's cash and investment balances decreased due to these repurchases and a business acquisition.
02—Key points
Key Highlights
- Total revenue grew by 22% to $3.05 billion for Q3 2026, driven by a 14% increase in da Vinci procedures and a 31% increase in Ion procedures.
- System placements for da Vinci surgical systems increased by 28% year-over-year in Q3 2026, reaching 546 units.
- Instruments and accessories revenue increased by 18% to $1.80 billion in Q3 2026, reflecting higher procedure volumes and a favorable product mix.
- A $450 million charge was recorded in Q3 2026 for the settlement of antitrust class action litigation, significantly impacting operating income.
- Gross profit margin improved to 68.9% for product revenue in Q3 2026, up from 66.8% in Q3 2025, partly due to tariff refunds.
- Share repurchases totaled $2.94 billion in Q3 2026, reflecting continued capital return to shareholders.
- The company's cash, cash equivalents, and investments decreased by $2.23 billion to $6.80 billion as of September 30, 2026, primarily due to stock repurchases and a business acquisition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Intuitive Surgical kept $0.17.
- Revenue$3.05B100.0%
- Cost of revenue−$964.4M31.6%
- Gross profit$2.08B68.4%
- Operating costs−$1.49B48.9%
- Operating income$592.6M19.4%
- Interest, other & tax−$69.8M2.3%
- Net income$522.8M17.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 21, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $3.05B$2.51B | +21.7% |
| Cost of Revenue | $964.40M$842.70M | +14.4% |
| Gross Profit | $2.08B$1.66B | +25.4% |
| R&D Expenses | $408.30M$329.40M | +24.0% |
| SG&A Expenses | $633.40M$573.30M | +10.5% |
| Operating Expenses | $1.49B$902.70M | +65.2% |
| Operating Income | $592.60M$759.70M | −22.0% |
| Net Income | $522.80M$704.40M | −25.8% |
| EPS (Basic) | $1.50$1.98 | −24.2% |
| EPS (Diluted) | $1.49$1.95 | −23.6% |
| Shares Outstanding (Basic) | 349.00M356.60M | −2.1% |
| Shares Outstanding (Diluted) | 351.60M361.80M | −2.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of the significant decrease in operating income in Q3 2026?
The significant decrease in operating income for the three months ended September 30, 2026, was primarily driven by a $450 million charge recorded in connection with the settlement of an antitrust class action litigation. This charge was not present in the prior year period.
How did the company's revenue performance compare to the prior year?
Intuitive Surgical demonstrated strong revenue growth. Total revenue increased by 22% to $3.05 billion for the three months ended September 30, 2026, compared to $2.51 billion for the same period in 2025. For the nine months ended September 30, 2026, total revenue grew by 21% to $8.71 billion compared to $7.20 billion in the prior year.
What is the company's outlook regarding tariffs and trade measures?
The company continues to monitor tariffs and trade measures, noting changes in U.S. import surcharge and duties. While they received significant IEEPA tariff refunds in 2026 which positively impacted gross profit, future changes in tariffs and trade barriers could materially affect operations and results. They specifically mentioned anticipating price reductions on instruments sold in China due to a new national pricing framework.
What is the company doing with its cash reserves?
The company's cash, cash equivalents, and investments decreased significantly, primarily due to substantial share repurchases ($4.42 billion in the nine months ended September 30, 2026) and a business acquisition ($518.6 million in the nine months ended September 30, 2026). Despite this decrease, the company expects current cash levels and operational cash flow to be sufficient for future growth.
06—Continue