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Intuitive Surgical (ISRG) delivered a solid performance in 2Q25, surpassing EPS and revenue expectations, propelled by a healthy 17% yr/yr growth in worldwide da Vinci procedures, reflecting sustained demand for its robotic-assisted surgical systems, and an improvement in non-GAAP gross margin to 67.9% from 66.4% in the prior-year period, driven by operational efficiencies and favorable product mix.

The company also provided an optimistic update to its FY25 guidance, nudging the lower end of its worldwide da Vinci procedure growth forecast higher to 15.5-17.0% from the prior 15-17%, signaling confidence in sustained demand despite macroeconomic headwinds. Additionally, ISRG raised its FY25 non-GAAP gross margin guidance to 66-67% from 65.0-66.5%, reflecting a smaller-than-expected impact from tariffs, which are now estimated to reduce margins by approximately 1% rather than the previously feared 1.7%. This adjustment highlights management’s proactive cost management and supply chain optimizations.

• Worldwide da Vinci procedure growth, a critical metric for ISRG as it drives recurring revenue from single-use instruments and accessories, remains a cornerstone of the company’s financial health. The 17% growth in Q2, consistent with 2024’s full-year growth, was fueled by strong performance in U.S. general surgery (19% growth) and robust international expansion, particularly in non-urology procedures (23% growth outside the U.S.).
• While FY25 guidance of 15.5-17.0% indicates a slight moderation from 2024’s 17%, it still reflects resilient demand, supported by the global installed base expansion to 10,189 systems (up 15% yr/yr) and increasing surgeon adoption of the da Vinci platform for its precision and minimally invasive benefits. However, a modest decline in U.S. bariatric procedures, influenced by the rise of GLP-1 medications, slightly tempered overall growth, underscoring the need for diversification across procedure types.
• System placements, another key growth driver, saw significant momentum with 395 da Vinci systems installed in Q2, up 15.8% from 341 in 2Q24, including 180 next-generation da Vinci 5 systems compared to 70 in the prior-year period. This uptick reflects strong hospital demand for advanced surgical technology, particularly the da Vinci 5, which offers enhanced visualization and dexterity, driving upgrades and new installations. The increasing adoption of da Vinci 5 highlights its competitive edge and supports ISRG’s long-term strategy to expand its installed base.
• Non-GAAP gross margin expanded to 67.9% in Q2 from 66.4% in 2Q24, driven by a favorable product mix with higher da Vinci 5 system sales, improved manufacturing efficiencies, and reduced supply chain costs. Management noted that the margin improvement also benefited from lower-than-anticipated tariff impacts, as strategic sourcing adjustments mitigated cost pressures. Looking ahead, the raised FY25 gross margin guidance reflects confidence in sustaining these gains, though challenges such as increased depreciation from da Vinci 5 production and foreign exchange headwinds could temper further expansion.

ISRG’s Q2 results affirm strong demand for its da Vinci surgical systems, driven by robust procedure growth and accelerating da Vinci 5 placements. The company’s ability to raise guidance while mitigating tariff impacts highlights its operational resilience and positions it well for sustained growth, easing investor concerns about margin pressures and reinforcing its leadership in robotic-assisted surgery.