Intuitive Surgical, Inc. (NASDAQ: ISRG)

Intuitive Surgical delivered impressive financial results in the first quarter of 2025, with revenue growing 19% year-over-year to $2.25 billion. This strong performance was driven by 17% growth in da Vinci procedure volume, higher system placements, and an expanding installed base. The company's GAAP net income attributable to Intuitive Surgical increased 28.1% to $698 million ($1.92 per diluted share), compared with $545 million ($1.51 per diluted share) in Q1 2024. Non-GAAP net income rose to $662 million ($1.81 per diluted share), up 22.4% from $541 million ($1.50 per diluted share) in the prior year. The company ended the quarter with a solid cash position of $9.10 billion in cash, cash equivalents, and investments, an increase of $269 million during the quarter, primarily driven by cash generated from operations.

Intuitive Surgical's revenue growth was strong across all categories in Q1 2025. Instruments and accessories revenue, which represents the largest component at 60.7% of total revenue, increased by 18.0% to $1.37 billion, primarily driven by approximately 17% growth in da Vinci procedure volume and approximately 58% growth in Ion procedure volume. Systems revenue grew 25.0% to $522.7 million, reflecting the higher number of da Vinci system placements (367 vs. 313 in Q1 2024) and the increased mix of the premium-priced da Vinci 5 systems (147 vs. 8 in Q1 2024). Services revenue increased 15.8% to $363.0 million, reflecting the continued growth in the installed base of systems, which expanded by 15% year-over-year to 10,189 systems. The balanced growth across all revenue streams demonstrates Intuitive's successful business model of generating recurring revenue from its expanding installed base.

Intuitive Surgical saw robust operational performance in Q1 2025, with worldwide da Vinci procedures growing approximately 17% compared to the first quarter of 2024. This strong procedure growth continues to be a key driver of the company's revenue expansion, particularly for instruments and accessories. System placements increased significantly, with 367 da Vinci surgical systems placed in Q1 2025, compared with 313 in Q1 2024. Most notably, the adoption of the newer da Vinci 5 system accelerated dramatically, with 147 systems placed in Q1 2025 compared to just 8 in Q1 2024, reflecting strong customer reception to this latest platform. Operating lease arrangements continued to be an important part of the company's commercial strategy, with 198 systems placed under operating lease arrangements, including 107 under usage-based models. The company's installed base grew to 10,189 systems as of March 31, 2025, an increase of 15% compared to 8,887 systems a year ago, providing a solid foundation for future recurring revenue growth.

Intuitive Surgical maintained a strong balance sheet in Q1 2025, ending the quarter with $9.10 billion in cash, cash equivalents, and investments, an increase of $269 million during the quarter. This improvement was primarily driven by cash generated from operations, partially offset by taxes paid related to net share settlement of equity awards and capital expenditures. Total assets increased to $19.22 billion, up $477 million from year-end 2024, while total liabilities decreased by $201 million to $2.01 billion. Stockholders' equity grew by $678 million to $17.21 billion. The company continues to operate with virtually no debt, providing significant financial flexibility for future investments in innovation, manufacturing capacity, and potential strategic acquisitions. This strong financial position enables Intuitive to navigate potential headwinds, such as the tariff impacts mentioned in the outlook, while continuing to invest in long-term growth opportunities.

For the full year 2025, Intuitive Surgical expects worldwide da Vinci procedure growth of approximately 15% to 17%, compared to 17% growth achieved in 2024. This outlook reflects continued strong adoption of robotic-assisted surgery across global markets, balanced with the higher comparative base as the business scales. The company projects non-GAAP gross profit margin to be within a range of 65% and 66.5% of revenue in 2025, compared to 69.1% in 2024, including an estimated impact from tariffs of 1.7% of revenue (±30 basis points). Non-GAAP operating expense growth is expected to be 10% to 14% in 2025, compared to 10% in 2024, as the company continues to invest in innovation, commercial expansion, and infrastructure to support future growth. Management emphasized that the ultimate impact from any tariffs will depend on various factors, including the volume of system sales in China, manufacturing strategies, and the amount and timing of tariffs. These guidance metrics reflect Intuitive's balanced approach to driving growth while managing profitability in an environment with some cost pressures from tariffs.