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Intuitive Surgical (ISRG) posted strong Q3 results and raised FY25 guidance, driven by accelerating procedure growth and broader platform adoption. EPS rose 30% y/y, easily beating expectations, as worldwide procedures grew by 20% y/y (up from 17% in Q2). Management lifted FY25 da Vinci procedure growth to 17-17.5% (from 15.5-17%) and gross margin guidance to 67-67.5% (from 66-67%).

• Worldwide procedures grew 20% yr/yr with da Vinci procedures up 20% and ION procedures soaring 52%. The ION platform is ISRG’s robotic bronchoscopy system for minimally invasive lung biopsies.
• Procedure growth was fueled by rapid adoption of the da Vinci 5, which offers enhanced automation, ergonomics, and efficiency for surgeons and hospitals.
• General surgery, gynecology, colorectal, and thoracic procedures all posted strong yr/yr gains, both in the U.S. and internationally.
• System utilization increased by 4%, and international markets such as India, Korea, and Europe continued to drive higher procedural volumes.
• Instrument and accessories revenue rose 20% to $1.52 bln, reflecting strong utilization and growth in recurring revenue.
• ISRG placed 427 da Vinci systems in Q3, up from 379 a year earlier, including 240 da Vinci 5 systems compared to 110 last year.
• Increased leasing activity, representing 54% of placements, is helping hospitals manage capital budgets while expanding ISRG’s footprint.
• Tariff costs reduced gross margin by roughly 90 basis points in Q3, but the full-year outlook for tariffs was lowered to about 70 bps.
• Although the rise of GLP-1 medications has modestly reduced bariatric procedure volumes, ISRG offset that softness through strong growth in other surgical categories.

Briefing.com Analyst Insight:

ISRG delivered broad-based strength across its platforms, with da Vinci 5 and ION adoption driving the upside. The company’s raised guidance underscores expanding scale efficiencies, cost discipline, and easing tariff pressure. Recurring revenue now accounts for about 85% of total sales, adding visibility and stability to results. While the GLP-1 trend presents a modest risk to bariatric growth, ISRG’s diversification across other surgical areas and its rapid platform expansion more than compensate. The company’s performance reinforces confidence in sustainable high-teens growth, though quarterly margins may fluctuate as new systems and service ramps continue.