Intuitive Surgical, Inc. ISRG reported second-quarter 2026 adjusted earnings per share (EPS) of $2.80, which beat the Zacks Consensus Estimate of $2.48 by 12.9%. The bottom line increased 27.9% from $2.19 in the year-ago quarter.
GAAP EPS was $2.28 versus $1.92 a year ago.
Revenue Details
Revenues rose 18.5% year over year to $2.89 billion and surpassed the consensus estimate of $2.81 billion by 3.1%. Growth reflected higher procedure volumes, system leasing revenues and expansion of the installed base. Worldwide da Vinci and Ion procedures increased about 16%.
Recurring revenues reached $2.47 billion and represented about 85% of total quarterly revenues, highlighting the importance of procedure-driven instruments, accessories, leasing and service sales.
Despite this robust quarterly performance, the stock was down 10.8% during after-hours trading on July 16, likely due to weaker sequential procedure growth.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Intuitive Surgical, Inc. price-consensus-eps-surprise-chart | Intuitive Surgical, Inc. Quote
Segment Details
ISRG’s Instruments Revenues Rise 18%
Instruments and accessories revenues increased 17.7% year over year to $1.73 billion. Growth was driven by higher da Vinci and Ion procedure volumes, along with a favorable mix of da Vinci 5 and single-port procedures.
Worldwide da Vinci procedure volume increased roughly 15% year over year, while Ion procedures climbed approximately 36%. U.S. da Vinci procedures rose 12%, led by general surgery, while procedures outside the United States advanced 20%.
Management noted some moderation in deferrable U.S. procedures, partly reflecting patient coverage and premium dynamics. Bariatric procedures also declined in the high-single digits amid increased use of GLP-1 obesity drugs. International growth remained strong, particularly in India, Italy, Taiwan and the United Kingdom.
Da Vinci instruments and accessories revenue per procedure was approximately $1,830, up from $1,800 a year earlier. Higher adoption of Force Feedback instruments and newer platforms supported the metric, while customer ordering patterns, increased cholecystectomy procedures and lower bariatric volumes limited growth.
ISRG System Placements Gain on da Vinci 5
Systems revenues totaled $685 million, up 19.2% from the prior-year quarter’s level. Intuitive Surgical placed 468 da Vinci systems, an 18.5% increase from 395 systems a year ago. The total included 246 da Vinci 5 systems compared with 180 in the second quarter of 2025.
The company also placed 55 Ion systems compared with 54 a year earlier. Da Vinci placements included 254 systems under operating lease arrangements, of which 131 were usage-based leases. Leasing represented 54% of total da Vinci placements and continued to offer customers greater capital flexibility.
The global da Vinci installed base increased 11.7% year over year to 11,710 systems. The Ion installed base grew 21.1% to 1,096 systems.
Services
Service revenues improved 20.8% to $472.4 million, supported by the larger installed base and higher service revenue per da Vinci system.
ISRG Margins Benefit From Tariff Refunds
Adjusted gross profit rose to $2.02 billion from $1.66 billion a year earlier. The adjusted gross margin expanded to 70% from 67.9%. Excluding a $36 million pretax benefit related to refunds of previously paid tariffs, the margin would have been 68.7%.
Adjusted operating income increased 28.7% to $1.22 billion. The adjusted operating margin was approximately 42.1% compared with 38.8% in the prior-year quarter. Adjusted operating expenses rose 13%, reflecting higher headcount, variable compensation and facility costs as Intuitive Surgical continued investing in research and development.
ISRG Strengthens Cash Through Operations
Intuitive Surgical ended the quarter with $8.63 billion in cash, cash equivalents and investments, up $650 million sequentially. Cash generation from operations more than offset common-stock repurchases during the period.
Total assets increased to $20.88 billion from $20.11 billion in the first quarter of 2026.
The company repurchased 0.9 million shares for $379 million at an average price of $439 per share. Capital expenditures totaled $112 million, while free cash flow for the first six months of 2026 increased 71% year over year to $1.8 billion.
ISRG Maintains Procedure Growth Outlook
Intuitive Surgical maintained its 2026 worldwide da Vinci procedure growth forecast of 13.5% to 15.5% and expects results to be closer to the midpoint. The outlook incorporates uncertainty surrounding U.S. patient behavior, China tender activity, competition and capital constraints in parts of Europe.
The company raised its adjusted gross margin outlook to 68-69% from 67.5-68.5%. The range includes an estimated tariff impact equal to 1% of revenues. Adjusted operating expense growth is now projected to be 11-13% compared with the earlier expectation of 11-14%.
Our Take
ISRG ended the second quarter on a strong note, with earnings and revenues beating the Zacks Consensus Estimate.
Shares of Intuitive Surgical have lost 29% so far this year compared with the industry’s 14.2% decline. The S&P 500 Index has increased 10.9% during the same time frame.
Intuitive Surgical's shares fell sharply after earnings release as investors likely focused on signs of moderating procedure growth rather than the headline beat. U.S. da Vinci procedure growth slowed to 12% in the second quarter from 14% in the first quarter, with management acknowledging that growth in elective procedures weakened amid uncertainty surrounding changes to Affordable Care Act (ACA) premium subsidies.
The company also highlighted that bariatric procedures continued to decline at a high-single-digit rate due to increasing adoption of GLP-1 weight-loss drugs. While management maintained its full-year procedure growth outlook, it refrained from raising guidance despite a strong first half and cautioned about tougher comparisons in the second half. Investors were also unsettled by the planned 2027 extension of instrument life, which could pressure recurring Instruments & Accessories revenues, even though management believes it will support broader adoption over time.
Nevertheless, Intuitive Surgical's long-term outlook remains compelling. Strong adoption of da Vinci 5, accelerating SP and Ion procedure growth, expanding ambulatory surgery center penetration through XiR, and continued software, AI and product innovations position the company for sustained growth. International opportunities, particularly in Japan and India, together with new clinical applications in cardiac, lung and gastrointestinal procedures, provide additional avenues for expansion beyond 2026.
Zacks Rank & Key Picks
Intuitive Surgical currently carries a Zacks Rank #2 (Buy).
Some better-ranked stocks from the broader medical space are Alcon ALC, West Pharmaceutical Services WST and Cardinal Health CAH, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alcon reported first-quarter 2026 earnings per share of 85 cents, which beat the Zacks Consensus Estimate by 6.3%. Revenues of $2.69 billion surpassed the Zacks Consensus Estimate by 0.3%.
Alcon has an estimated long-term earnings growth rate of 11.5%. ALC’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 3.66%.
West Pharma reported first-quarter 2026 adjusted EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $845 million surpassed the Zacks Consensus Estimate by 8.6%.
West Pharma has an estimated long-term earnings growth rate of 14.4%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.
Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.
Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%.
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