Intuitive Surgical (ISRG) 10-K risk factor changes: FY2022 vs FY2021

You should consider each of the following risk factors, which could materially affect our business, financial [removed: position,] [added: condition,] or future results of operations.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial [removed: position,] [added: condition,] or future results of operations.

In addition, the global economic [removed: climate] [added: environment] and additional or unforeseen effects from the COVID-19 pandemic amplify many of these risks.

PUBLIC HEALTH CRISES OR EPIDEMIC DISEASES, OR THE PERCEPTION OF THEIR EFFECTS, [removed: HAVE AND] COULD [removed: CONTINUE TO] MATERIALLY ADVERSELY AFFECT OUR [removed: BUSINESS AND] [added: BUSINESS, FINANCIAL CONDITION, OR] RESULTS OF OPERATIONS.

To date, COVID-19 has had, and may continue to have, an adverse impact on our operations, our supply chains and distribution systems, and our expenses, including as a result of preventive and precautionary measures that we, other businesses, and governments [removed: are taking.][added: have taken and may continue to take.]

In addition, hospitals are [removed: also] experiencing staffing shortages and supply chain issues that could impact their ability to provide patient care.

[removed: In addition,] [added: Also,] our customers have delayed, cancelled, or redirected and, in the future, may delay, cancel, or [removed: redirect] [added: redirect,] planned capital expenditures in order to focus resources on COVID-19 or in response to economic disruption related to COVID-19.

In addition, U.S. and global public health bodies have, at times, recommended delaying elective surgeries during the COVID-19 pandemic, [removed: and surgeons and medical societies are evaluating the risks of minimally invasive surgeries in the presence of infectious diseases,] which [removed: we expect will] [added: may] continue to negatively impact the usage of our products and the number of da Vinci procedures performed.

Also, as we are conducting IDE studies to support 510(k) submission for da Vinci platforms and for seeking new indications, we may experience delays in obtaining new product approvals, [removed: certifications,] or clearances from the FDA or foreign approvals or certifications from foreign authorities or notified bodies or delays in recruiting patients in our ongoing and planned clinical studies.

As a result of the COVID-19 outbreak, we [removed: have] experienced significant business disruptions, including restrictions on our ability to travel as well as distribute and service our products, temporary closures of our facilities and the facilities of our suppliers and their contract manufacturers, and a reduction in access to our customers due to diverted resources and priorities and the business hours of hospitals, as governments institute prolonged shelter-in-place and/or self-quarantine mandates.

[removed: These unprecedented measures to slow the spread of the virus taken by local governments and healthcare] authorities globally, including the deferral of elective medical procedures and social distancing measures, [removed: have] had, and [removed: we expect will] [added: may] continue to have, a negative impact on our operations and financial results.

Furthermore, our future ways of working changes, including [added: working from home,] fully [removed: remote and] [added: on-site, or in a] hybrid [removed: work environments,] [added: fashion,] may present additional risks, uncertainties, and costs that could affect our performance, including increased operational risk, uncertainty regarding office space needs, heightened vulnerability to [removed: cyber attacks] [added: cyberattacks] due to remote work, potential reduced productivity, changes to our company culture, and increased costs to ensure our offices are safe and functional as hybrid offices that enable effective collaboration of both remote and in-person colleagues.

In addition, the COVID-19 pandemic [removed: has] adversely [removed: affected,] [added: affected] and may continue to adversely [removed: affect,] [added: affect] the economies and financial markets of many countries, which may result in a period of regional, national, and global economic slowdown or regional, national, or global recessions that could curtail or delay spending by hospitals and affect demand for our products as well as increased risk of customer defaults or delays in payments.

COVID-19 and the current financial, economic, and capital markets environment, and future developments in these and other areas present material uncertainty and risk with respect to our performance, financial condition, volume of business, [added: or] results of [removed: operations, and cash flows.][added: operations.]

[removed: [Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)][added: [Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)]

[added: Any of these] outbreaks could negatively impact the number of procedures performed and have a material adverse effect on our business, financial condition, [added: or] results of [removed: operations, or cash flows.][added: operations.]

OUR RELIANCE ON SOLE AND SINGLE SOURCE SUPPLIERS AND [removed: OUR] ABILITY TO PURCHASE AT ACCEPTABLE PRICES A SUFFICIENT SUPPLY OF MATERIALS, PARTS, AND COMPONENTS COULD HARM OUR ABILITY TO MEET [added: PRODUCT] DEMAND [removed: FOR OUR PRODUCTS] IN A TIMELY MANNER OR WITHIN BUDGET.

The time and processes associated with the verification of a new manufacturer could delay our ability to manufacture our products on schedule or within budget, which may have a material adverse impact on our business, financial condition, [added: or] results of [removed: operations, or cash flows.][added: operations.]

An information technology systems interruption, including [removed: cybersecurity attacks,] [added: cyberattacks,] could adversely affect the ordering, distribution, and manufacturing processes of our suppliers.

Difficulties [added: remain] in obtaining a sufficient supply of semiconductor and other component [removed: materials continue to increase,] [added: materials,] and we expect such difficulties to persist in the foreseeable future.

If shortages and price increases in important supply-chain materials in the semiconductor or other markets continue, we could also fail to meet product demand, which would adversely impact our business, financial condition, [added: or] results of [removed: operations, or cash flows.][added: operations.]

BECAUSE OUR MARKETS ARE HIGHLY COMPETITIVE, CUSTOMERS MAY CHOOSE TO PURCHASE OUR COMPETITORS’ PRODUCTS OR SERVICES OR MAY NOT ACCEPT [removed: DA VINCI] ROBOTIC-ASSISTED [removed: SURGERY,] [added: MEDICAL PROCEDURES,] WHICH [removed: WOULD] [added: COULD] RESULT IN REDUCED REVENUE AND LOSS OF MARKET SHARE.

Robotic-assisted surgery with a da Vinci Surgical System [removed: is a technology] [added: or robotic-assisted bronchoscopy using an Ion endoluminal system are technologies] that [removed: competes] [added: compete] with established and emerging treatment options in [removed: both disease management and] reconstructive medical [removed: procedures.][added: procedures or]

These competitive treatment options include [removed: conventional MIS,] open surgery, [removed: interventional approaches,] [added: conventional MIS, drug therapies, radiation treatment,] and [removed: pharmacological regimens.][added: other emerging diagnostic and interventional surgical approaches.]

Studies could be published that show that other treatment options are more beneficial and/or cost-effective than robotic-assisted [removed: surgery.][added: medical procedures.]

Additionally, we face or expect to face competition from companies that develop or have developed wristed, robotic-assisted, or computer-assisted [removed: surgical] [added: medical] systems and products.

Companies have introduced products in the field of robotic [removed: surgery] [added: medical procedures] or have made explicit statements about their efforts to enter the field including, but not limited to, the following companies: Asensus Surgical, Inc.; avateramedical GmbH; CMR Surgical Ltd.; Johnson & Johnson; [removed: Medicaroid, Inc.;] [added: Medicaroid Corporation;] Medrobotics Corporation; Medtronic plc; meerecompany Inc.; [removed: MicroPort Scientific Corporation;] Olympus Corporation; Samsung [removed: Group;] [added: Electronics Co., Ltd;] Shandong Weigao Group Medical Polymer Company Ltd.; [added: Shanghai Microport Medbot (Group) Co., Ltd.;] and Titan Medical Inc. Other companies with substantial experience in industrial robotics could potentially expand into the field of [removed: surgical] [added: medical] robotics and become competitors.

If we are unable to compete successfully, our revenues will suffer, which could have a material adverse effect on our business, financial condition, [added: or] result of [removed: operations, or cash flows.][added: operations.]

In addition, third-party service providers that provide services to da Vinci Surgical System [added: and Ion endoluminal system] operators may emerge and compete with us on price or offerings.

To date, substantially all of our customers have sourced services on their [removed: da Vinci Surgical Systems] [added: systems] from us through service contract commitments or time and materials contracts.

Furthermore, there are third-party service providers offering consulting services targeted at analyzing the cost-effectiveness of hospitals’ robotic-assisted [removed: surgery] [added: medical] programs, including procedures performed, placement of systems, and consumption of instruments and accessories.

[removed: THE INFLATIONARY ENVIRONMENT COULD MATERIALLY ADVERSELY IMPACT OUR BUSINESS AND RESULTS OF OPERATIONS.][added: If a recession occurs, economies weaken, or inflationary trends continue, our business and operating results could be materially adversely affected.]

In [removed: an] [added: a higher] inflationary environment, we may be unable to raise the prices of our products [added: and services] sufficiently to keep up with the rate of inflation.

Impacts from inflationary pressures could be more pronounced and materially adversely impact aspects of our business [removed: with] [added: where] revenue streams and cost commitments [added: are] linked to contractual agreements that extend further into the future, as we may not be able to quickly or easily adjust pricing, reduce costs, or implement [removed: counter measures.][added: countermeasures.]

IF [removed: INSTITUTIONS OR SURGEONS] [added: HOSPITALS] ARE UNABLE TO OBTAIN COVERAGE AND REIMBURSEMENT [removed: FROM THIRD-PARTY PAYORS] FOR PROCEDURES USING OUR PRODUCTS, [removed: OR] IF REIMBURSEMENT IS INSUFFICIENT TO COVER THE COSTS OF PURCHASING OUR PRODUCTS, [added: OR IF LIMITATIONS ARE IMPOSED BY GOVERNMENTS ON THE AMOUNT HOSPITALS CAN CHARGE FOR CERTAIN PROCEDURES,] WE MAY BE UNABLE TO GENERATE SUFFICIENT SALES TO SUPPORT OUR BUSINESS.

In addition, to the extent that there is a shift from an inpatient setting to outpatient settings, we may [removed: experience pricing pressure and a reduction in the number of procedures performed.]

Our success in OUS markets also depends [removed: upon] [added: on] the eligibility of our products for coverage and reimbursement through government-sponsored healthcare payment systems and third-party payors.

Market acceptance of our products may depend on the availability and level of coverage and reimbursement in [removed: any] [added: a] country within a particular time.

[removed: Please see] [added: Refer to] our risk factor [removed: below] titled “Changes in Healthcare Legislation and Policy May Have a Material Adverse Effect on Our [added: Business,] Financial [removed: Condition and] [added: Condition, or] Results of Operations” for additional risks related to the ability of [removed: institutions or surgeons] [added: hospitals] to obtain reimbursements.

IF OUR PRODUCTS CONTAIN DEFECTS OR ENCOUNTER PERFORMANCE PROBLEMS, WE MAY HAVE TO RECALL OUR [removed: PRODUCTS,] [added: PRODUCTS AND, AS A RESULT,] INCUR ADDITIONAL UNFORESEEN COSTS, AND OUR REPUTATION MAY SUFFER.

MACROECONOMIC CONDITIONS COULD HAVE A MATERIALLY ADVERSE IMPACT ON OUR BUSINESS, FINANCIAL CONDITION, OR RESULTS OF OPERATIONS.

Recent macroeconomic conditions have been adversely impacted by political instability and military hostilities in multiple geographies (including the conflict between Ukraine and Russia), monetary and financial uncertainties, and the ongoing COVID-19 pandemic.

The results of these macroeconomic conditions, and the actions taken by governments, central banks, companies, and consumers in response, have and may continue to result in higher inflation in the U.S. and globally, which is likely, in turn, to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.

Other adverse impacts of recent macroeconomic conditions have been and may continue to be supply chain constraints, logistics challenges, and fluctuations in labor availability.

A higher inflationary environment can also negatively impact raw material, component, and logistics costs that, in turn, may increase the costs of producing and distributing our products.

Recently, the costs of raw materials, transportation, construction, services, and energy necessary for the production and distribution of our products have increased significantly.

Hospitals, in particular, are experiencing and may continue to experience financial and operational pressures as a result of staffing shortages, the supply chain environment, and increased inflation, which could impact their ability to access capital markets and other funding sources, increase the cost of funding, or impede their ability to comply with debt covenants, all of which could impede their ability to provide patient care, defer elective surgeries, and impact their profitability.

To the extent that hospitals face financial pressures, reductions in government spending, or higher interest rates, hospitals’ ability or willingness to spend on capital equipment may be adversely impacted, all of which could have a material adverse effect on our business, financial condition, or results of operations.

We are unable to predict the impact of efforts by central banks and federal, state, and local governments to combat elevated levels of inflation.

If their efforts to create downward pressure on inflation are too aggressive, they may lead to a recession.

Alternatively, if they are insufficient or are not sustained long enough to bring inflation to lower, more acceptable levels, hospitals’ ability or willingness to spend on capital equipment may be impacted for a prolonged period of time.

In addition, in early 2023, the U.S. Government reached its existing statutory limit on the amount of permissible federal debt, and this limit must be raised in order for the U.S. Government to continue to pay its obligations on a timely basis.

If the debt ceiling is not raised, it is unclear how the U.S. Government would prioritize its payments towards its various programs, which could have a significant impact on the overall economy as well as on medical procedures performed.

Also, we have and may continue to experience supply chain constraints due to the current supply chain environment and logistic challenges, including difficulties obtaining a sufficient supply of component materials used in our products.

If interest rates continue to rise, access to credit may become more difficult, which may result in the insolvency of key suppliers, including single-source suppliers, which would exacerbate supply chain challenges.

Such supply chain constraints could cause us to fail to meet product demand, which could result in deferred or canceled procedures.

These unprecedented measures to slow the spread of the virus taken by local governments and healthcare

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

Also, antitrust claims have been brought against us by third parties looking to compete in the instruments or servicing space and by certain customers.

We could also be subject to governmental investigations in connection with many of these claims.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

disease management.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

experience pricing pressure and a reduction in the number of procedures performed.

In China, the Hunan Provincial Healthcare Security Administration implemented significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery and orthopedics.

This rule has had and may continue to have a material negative impact on our procedures performed in the Hunan province.

In addition to the Hunan province, the Hainan province (an island province of China) recently announced a policy to implement almost identical limits on what hospitals can charge patients for surgeries using robotic surgical technology.

We cannot assure you that other provincial healthcare administrations will not impose similar limits.

WE COULD BE SUBJECT TO SIGNIFICANT, UNINSURED LOSSES, WHICH MAY HAVE A MATERIAL ADVERSE IMPACT ON OUR BUSINESS, FINANCIAL CONDITION, OR RESULTS OF OPERATIONS.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

Additionally, as a result of recent declines in our stock price, certain long-term incentive benefits, such as recently issued stock options, may be viewed as having less value and, accordingly, could lead to higher attrition.

Fluctuations in labor availability globally, including labor shortages and staff burnout and attrition, may also impact our ability to hire and retain personnel critical to our manufacturing, logistics, and commercial operations.

Moreover, if we fail to attract, motivate, or retain personnel, or relax our standards in order to meet the demands of our growth, our corporate culture, our ability to achieve our strategic objectives, and our compliance with obligations under our internal controls and other requirements may be harmed.

We believe that a critical contributor to our success has been our corporate culture, which we believe fosters innovation, teamwork, and a focus on execution, as well as facilitates critical knowledge transfer and knowledge sharing.

Many of our employees have worked remotely during the COVID-19 pandemic, which makes it challenging to maintain or enhance our culture.

While we are exploring ways to improve the employee experience, regardless of whether an employee is working from home, fully on-site, or in a hybrid fashion, the impact this will have on our corporate culture, innovation, collaboration, and ability to attract and retain talent is uncertain.

Historically, we have experienced lower procedure volume in

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On June 26, 2022, the MHRA published its response to a 10-week consultation on the future regulation of medical devices in the UK.

Any of these

However, notwithstanding these activities, the global semiconductor and materials supply shortage is likely to remain a challenge for the foreseeable future.

Changes in economic conditions and supply chain constraints and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, could lead to higher inflation than previously experienced or expected, which could, in turn, lead to an increase in costs.

WE ARE SUBJECT TO SIGNIFICANT, UNINSURED LIABILITIES.

The timing of procedures

CE markings will continue to be recognized in the UK, and certificates issued by EU-recognized notified bodies will be valid in the UK until June 30, 2023.

For medical devices placed on the market in Great Britain after this period, the UK Conformity Assessed (“UKCA”) marking will be mandatory.

competitive and reduce consumer demand.

DISRUPTION OF CRITICAL INFORMATION SYSTEMS OR MATERIAL BREACHES IN THE SECURITY OF OUR SYSTEMS COULD HARM OUR BUSINESS, CUSTOMER RELATIONS, AND FINANCIAL CONDITION.

We may experience attacks on or a breach of our systems and may be unable to protect personal information, confidential data, or sensitive data.

It is possible for such vulnerabilities to remain undetected for an extended period, including several years or longer.

vulnerabilities could be significant.

The European Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU member states to the UK without additional safeguards.

However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/extends that decision and remains under review by the Commission during this period.

The CJEU went on to state that, if the competent supervisory authority believes that the standard contractual clauses cannot be complied with in the recipient country and the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer unless the data exporter has already done so itself.

The European Commission has published revised standard contractual clauses for data transfers from the EEA.

The revised clauses must be used for relevant new data transfers from September 27, 2021.

Existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.

We will be required to implement the revised standard contractual clauses in relation to relevant existing contracts and certain additional contracts and vendor arrangements within the relevant time frames.

There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR.

customers in their country be maintained solely in their country.

collaboration.

Third parties have attempted to and may discover ways to manufacture and sell counterfeit reprocessed instruments and/or alter instruments that are compatible and function with the da Vinci Surgical System, and such activities may reduce our market share.

While our sales arrangements with customers generally prohibit the use of unauthorized, unapproved, or uncertified instruments and accessories with da Vinci Surgical Systems, warranties will be void if such instruments and accessories are used, and a programmed memory chip inside each instrument is designed to prevent the instrument from being used for more than the prescribed number of procedures to help ensure that its performance meets specifications during each procedure, these measures may not prevent the use of unauthorized, unapproved, or uncertified instruments and accessories by our customers.

WE OFFER ALTERNATIVE CAPITAL ACQUISITION APPROACHES.

or cash flows.

Subsequently, on July 10, 2020, the FDA resumed certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system.

The FDA utilized this risk-based assessment system to assist in determining when and where it was safest to conduct prioritized domestic inspections.

In May 2021, the FDA outlined a detailed plan to move toward a more consistent state of inspectional operations and, in July 2021, the FDA resumed standard inspectional operations of domestic facilities and was continuing to maintain this level of operation as of September 2021.

Subsequently, in November 2021, the FDA announced its intention to resume certain prioritized inspections of foreign manufacturing facilities, including surveillance and application-related inspections, starting in February 2022.

ECONOMIC CONDITIONS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR COMPANY.

There could be additional effects from adverse conditions in the credit

markets on our business, including the insolvency of key suppliers or their inability to obtain credit to finance the development and/or manufacturing of our products resulting in product delays.

In addition, our business is closely tied to the overall U.S. healthcare system, relating to which there are concerns and uncertainties as a result of efforts made by the U.S. federal government to modify, repeal, or otherwise invalidate all, or certain provisions of, the ACA.

In addition, the U.S. federal government has called for, or enacted, substantial changes to trade, fiscal, and tax policies, which may include changes to existing trade agreements including, but not limited to, the replacement of NAFTA by the USMCA (effective July 1, 2020), that may have a significant impact on our operations.

We cannot predict the impact, if any, that these changes could have on our business.

If economic conditions worsen or new legislation is passed related to the healthcare system or trade, fiscal, or tax policies, customer demand may not materialize to the levels we require to achieve our anticipated financial results, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.

Our corporate headquarters and many of our operations, including certain of our manufacturing facilities, are located in California, which has experienced both severe earthquakes and other natural disasters in the past and is vulnerable to climate change effects.

In addition, global climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our future operations resulting in the aforementioned natural disasters as well as other extreme weather conditions, including, but not limited to, hurricanes, tornadoes, earthquakes, wildfires or flooding.

Such extreme weather conditions could pose physical risks to our facilities and disrupt operations of our supply chain and may impact operational costs.

However, the large incisions required for open surgery create trauma to patients, typically resulting in longer hospitalization and recovery times, increased hospitalization costs, and additional pain and suffering relative to minimally invasive [removed: surgery (“MIS”),] [added: surgery,] where MIS is available.

Digitally-enabled for [removed: more than two] [added: nearly three] decades, these three [removed: categories] [added: offerings] aim to decrease variability by [removed: offering] [added: providing] dependable, consistent functionality and an integrated user experience.

We [removed: have] extended our [removed: fourth generation] [added: fourth-generation] platform by adding the da Vinci X Surgical System, commercialized in 2017, and the da Vinci SP Surgical System, commercialized in 2018.

The da Vinci SP Surgical System accesses the body through a single [removed: incision] [added: incision,] while the other da Vinci Surgical Systems access the body through multiple incisions.

We are [removed: still] in [removed: a measured launch] [added: the early stages] of [added: launching] our da Vinci SP Surgical System, and we have an installed base of [removed: 99] [added: 121] da Vinci SP Surgical Systems as of December 31, [removed: 2021.][added: 2022.]

We [added: have] received FDA [removed: clearances] [added: clearance] for the da Vinci SP Surgical System for [removed: urological] [added: urologic] and certain transoral [added: procedures, and we have received regulatory clearance in South Korea, where the da Vinci SP Surgical System may be used for a broad set of] procedures.

We also received [added: regulatory] clearance in South Korea [removed: where the] [added: for our] da Vinci SP Surgical System [removed: may be used for a broad set of procedures.][added: in May 2018.]

We offer advanced instrumentation for the da Vinci [removed: Xi] [added: X] and da Vinci [removed: X] [added: Xi] platforms, including da Vinci Energy and da Vinci Stapler products, to provide surgeons with sophisticated, computer-aided tools to precisely and efficiently interact with tissue.

Da Vinci X and da Vinci Xi Surgical Systems share the same [removed: instruments] [added: instruments,] whereas the da Vinci Si Surgical System uses instruments that are not compatible with da Vinci X or da Vinci Xi systems.

Training technologies include our Intuitive Simulation products, our [removed: Iris augmented reality imaging product, our] Intuitive Telepresence remote case observation and telementoring tools, and our dual console for use in surgeon proctoring and collaborative surgery.

[removed: During the first quarter of] [added: In] 2019, the FDA cleared our Ion endoluminal system to enable minimally invasive biopsies in the lung.

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[removed: Our rollout of the Ion] system is progressing well, and we are continuing to gather additional clinical evidence.

We plan to seek additional clearances for [added: the] Ion [added: system] in OUS markets over time.

In the [removed: second quarter of 2020,] [added: U.S.,] procedures [removed: per week in the U.S.] [added: initially] continued to [removed: decline in April, reaching approximately 30% of pre-COVID-19 levels followed by steady] [added: decline, before starting a] recovery [removed: in May and June,] as COVID-19 cases dropped and elective procedures were permitted.

In the U.S., [added: the impact of] high COVID-related hospitalization rates [removed: have been][added: on procedure volumes was exacerbated by staffing shortages.]

[removed: Despite the fact that] [added: Although] hospitals were better equipped to handle COVID patients [removed: in the fourth quarter of 2021] [added: as] compared to the outset of the pandemic, COVID-19 resurgences [removed: like those being experienced in the U.S. and parts of Europe have] challenged hospital resources and [removed: have] negatively impacted da Vinci procedure volumes.

In addition, delays in diagnosis and treatment of underlying conditions [removed: have, and will continue to, negatively] [added: had a negative] impact [added: on] da Vinci procedure volumes.

Based on our experience during [removed: 2020 and 2021,] [added: the last three years,] we do not expect all markets, regions, and procedure types to recover at the same time or at the same pace.

[removed: However,] [added: On the other hand,] throughout 2021, we experienced strong system demand, as utilization levels recovered.

[removed: However, hospitals] [added: Hospitals] are [removed: currently] experiencing staffing shortages and supply chain issues that could [removed: impact] [added: affect] their ability to provide patient [removed: care, defer elective surgeries, and impact their profitability, all of which could impact hospitals’ spend on capital equipment.][added: care.]

The program [removed: was comprised] [added: consisted] of three main elements.

The first element provided credits against service fees otherwise due in the six-month period from April 1 through September 30, 2020, [removed: that] [added: which] generally reflected the underutilization of the system during that period.

While the short-term payment relief offered did not have a material impact [removed: to] [added: on] the results of operations, we deferred $15 million of lease billings and extended payment terms associated with $181 million of trade receivables during the program, of which $19 million remained outstanding as of December 31, 2020.

All of the trade receivables with extended payment terms [removed: have been] [added: were] collected as of December 31, 2021.

There was no similar customer relief program offered in [removed: 2021.][added: 2021 or 2022.]

[removed: In particular, we] [added: We] have experienced increased difficulties in obtaining a sufficient supply of [added: a number of] component materials used in our products, [removed: including those in the] [added: such as] semiconductor [removed: market,] [added: components] as [added: well as a range of other materials, including, but not limited to, metals and polymers, as] global supply has become significantly constrained due to increased demand [removed: in semiconductors and other] [added: for certain] materials.

Such global shortages in important components [removed: and] [added: as well as certain] logistics challenges have resulted in, and will continue to cause, inflationary cost pressure in our supply chain.

To date, these [added: supply chain] challenges have not materially impacted our [added: results of operations or] ability to deliver [added: products and services to our customers.]

However, if shortages in important supply chain materials in the semiconductor or other markets [added: or logistics challenges] continue, we could fail to meet product demand, which [removed: would adversely impact our business, financial condition, results of operations,] [added: could result in deferred] or [removed: cash flows.][added: canceled procedures.]

[removed: Increased] [added: Fluctuations in] labor [removed: shortages] [added: availability] globally, including [added: labor shortages and] staff burnout and attrition, could also impact our ability to hire and retain personnel critical to our manufacturing, logistics, and commercial operations.

Any [added: or all] of these [removed: events] [added: factors] could negatively impact the number of [added: da Vinci] procedures performed or the number of system placements and have a material adverse effect on our business, financial condition, [added: or] results of [removed: operations, or cash flows.][added: operations resulting in failure to achieve our anticipated financial results.]

First, we are focused on the health and safety of all those we [removed: serve – patients,] [added: serve—patients,] customers, our communities, and our [removed: employees – implementing] [added: employees—implementing] continuous updates to our health and safety policies and processes.

Second, we are supporting our customers according to their [removed: priorities – clinical,] [added: priorities—clinical,] operational, and [removed: economic – and] [added: economic—and] ensuring continuity of supply by working with our suppliers and our distributors.

As COVID-19 vaccination rates increase and [added: the severity of] cases [removed: decline,] [added: declines,] we [removed: have enhanced our focus on evaluating and] [added: are] implementing our return-to-office strategy.

We generate revenue from the [removed: placements] [added: placement] of da Vinci Surgical Systems, in sales or sales-type lease arrangements where revenue is recognized up-front [removed: at a point in time] or in operating lease [removed: transactions] and usage-based [removed: models] [added: arrangements] where revenue is recognized over time.

[removed: During the fourth quarter of] [added: In late] 2020, we launched our Extended Use Program (refer to further discussion [removed: immediately] [added: in the section] below) [added: in the U.S. and Europe,] with the intention to reduce the cost for customers to treat patients, which in turn will reduce our overall instruments and accessories revenue per procedure.

We typically enter into service contracts at the time systems are sold or leased at an annual fee between $80,000 and $190,000, depending upon the configuration of the underlying system and [added: the] composition of the services offered under the contract.

We generate revenue from the placement of Ion systems, in sales or sales-type lease arrangements where revenue is recognized up-front [removed: at a point in time] or in operating lease [removed: transactions] and usage-based [removed: models] [added: arrangements] where revenue is recognized over time.

We earn recurring revenue from the sales of [removed: instruments and accessories used in biopsies] [added: instruments, accessories,] and [removed: ongoing system service,] [added: services,] as well as [added: the] revenue from operating leases.

In September 2022, we also received regulatory clearance for the da Vinci SP Surgical System in Japan for the same set of procedures as can be performed on the da Vinci Xi Surgical System in Japan.

Our rollout of the Ion

Macroeconomic Environment

Uncertainty surrounding macroeconomic factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, rising interest rates, labor shortages, and significant disruption in the commodities’ markets as a result of the Russia and Ukraine conflict may result in a recession, which could have a material adverse effect on our long-term business.

With rising interest rates, access to credit may become more difficult, and any insolvency of key suppliers, including sole-source and single-source suppliers, may exacerbate current supply chain challenges.

We are engaged in activities to seek to mitigate supply disruptions, but the global supply chain shortages will remain a challenge for the foreseeable future.

If inflationary pressures in logistics or component costs persist, we may not be able to adjust pricing, reduce costs, or implement countermeasures.

Additionally, there is uncertainty surrounding the impact of any monetary policy changes taken by the U.S. Federal Reserve and other central banks to address the structural risks associated with inflation.

The current macroeconomic environment is impacting our customers financially and operationally as well.

Additionally, hospitals are facing significant financial pressure as supply chain constraints and inflation drive up operating costs, rising interest rates make access to credit more expensive, unrealized losses decrease available cash reserves, and fiscal stimulus programs enacted during the COVID-19 pandemic wind down.

As a consequence of the financial pressures and decreased profitability, some hospitals have indicated that they are lowering their capital investment plans and tightening their operational budgets.

We believe that these factors have contributed to a softening in our U.S. capital pipeline, and we expect that demand for capital, particularly in the U.S., will continue to be impacted while macroeconomic conditions remain challenging.

In addition, as competition progresses in various markets, we will likely experience longer selling cycles and pricing pressures.

In 2020, as a result of the outbreak of a novel strain of coronavirus (COVID-19), we saw a substantial reduction in da Vinci procedures.

The initial decline in procedures in the first quarter of 2020 was significant, most notably in China and then later in Western Europe and the U.S. as the pandemic spread.

The second quarter of 2020 saw a further significant decline in procedures, followed by a period of recovery and new resurgences.

In China, procedure volumes recovered strongly, while the impact on procedure volumes of other countries varied.

The third and fourth quarters of 2020 were characterized by the continued recovery of procedure volumes in the U.S. and China, while the procedure volumes of other countries, such as Japan, continued to vary depending on the spread and/or resurgence of COVID-19.

In 2021, COVID-19 resurgences affected da Vinci procedure volumes at various times throughout the year in most of the markets that we operate in.

After each resurgence, as COVID-19 cases and hospitalizations subsided, we saw procedure

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volumes recover.

Volumes associated with benign procedures were generally impacted to a higher degree when COVID-19 cases and hospitalizations increased, reflecting the deferability of certain elective surgeries.

In early 2022, a resurgence of COVID-19 resulted in a significant increase in infections and hospitalization rates in the U.S. and certain countries in Europe, which, in turn, negatively impacted procedure volumes in January and February.

As infections and hospitalizations started to decrease in February in the U.S. and Europe, we saw a recovery of procedure volumes.

In March and during the second quarter of 2022, we also saw a resurgence in COVID-19 cases and increased hospitalizations and government interventions impacting parts of Asia, particularly China, which negatively impacted procedure volumes.

During the third quarter of 2022, we did not experience significant disruptions from COVID-19.

In the fourth quarter of 2022, we saw a resurgence in COVID-19 cases in China, which had a significant negative impact on our procedure volumes in the region.

This system demand continued during 2022; however, in 2022, our system demand was also impacted by macroeconomic challenges impacting our customers, primarily in the U.S. Refer to the factors outlined in the *Macroeconomic Environment* section above.

In addition, COVID-19 has contributed to the staffing shortages experienced by hospitals, which impacts hospitals’ ability to provide patient care and, in some cases, results in the deferral of elective surgeries.

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We collected internal and external insights to inform decision-making on work models that would align with how employees will work in the current environment, which has evolved as a result of the COVID-19 pandemic.

These efforts will allow for an improved employee experience, regardless of whether an employee is working from home, fully on-site, or in a hybrid fashion.

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Service revenue was $1.02 billion in 2022, compared to $0.92 billion in 2021 and $0.72 billion in 2020.

In the years ended December 31, 2022, 2021, and 2020, we placed 112, 57, and 9 Ion systems, respectively, under lease and usage-based arrangements, of which 101, 50, and 9 systems, respectively, were operating lease and usage-based arrangements.

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and 2020, respectively, of which $133 million, $78 million, and $28 million, respectively, was variable lease revenue.

A total of 132, 61, and 11 Ion systems were installed at customers under operating lease or usage-based arrangements as of December 31, 2022, 2021, and 2020, respectively.

As a result of these macroeconomic factors impacting our customers, we may be exposed to defaults under our lease financing arrangements.

Our plans for the rollout of the da Vinci SP Surgical System include putting systems in the hands of experienced da Vinci users first while we optimize training pathways and our supply chain.

We have placed 129 Ion systems as of December 31, 2021.

Ion systems are not included in our da Vinci Surgical System installed base.

Beginning in January 2020, as a result of the spread of COVID-19, we saw a substantial reduction in da Vinci procedures in China and, by early February 2020, procedures per week in China had declined by approximately 90% compared to the weekly procedure rates experienced in early January 2020.

As the COVID-19 pandemic subsided in China in March 2020, da Vinci procedure volume began to recover and, by the end of the first quarter of 2020, China procedures per week were approximately 70% of the early January 2020 weekly procedure rate.

As the COVID-19 pandemic spread to Western Europe and the U.S., we experienced a significant decline in da Vinci procedures in the last half of March 2020 to approximately 65% of the weekly procedure rate experienced earlier in the first quarter of 2020.

However, with the resurgence of COVID-19 cases in the last two weeks of June, we experienced a corresponding decline in da Vinci procedures.

The impact of COVID-19 in Europe during the second quarter of 2020 varied by country.

In China, procedures per week continued to increase to a level consistent with the early January 2020 weekly procedure rate.

We experienced little impact on the procedure volume in Korea and Japan in the second quarter of 2020.

In the third quarter of 2020, in the U.S., procedures recovered slowly, leveling off to near pre-COVID-19 levels towards the end of the quarter.

Outside of the U.S., da Vinci procedures varied depending on the spread and/or resurgence of COVID-19.

Procedures in China grew significantly year over year, while COVID-19 outbreaks resulted in year-over-year procedure growth rates in Japan slowing somewhat relative to the second quarter.

The COVID-19 pandemic also affected the volumes of certain procedure types differently.

In the fourth quarter of 2020, procedure volumes continued to be significantly impacted by the COVID-19 pandemic as healthcare systems around the world diverted resources to respond to the pandemic.

The impact continued to differ significantly by geography and region, depending on the spread and resurgence of COVID-19.

In the U.S., while procedures continued to recover in the early part of the quarter, the resurgence of COVID-19 infections experienced by some states had an increasingly adverse impact on our procedure volumes as the quarter progressed, a trend that continued into January.

Outside of the U.S., similar to the trends noted in the third quarter of 2020, procedures also continued to vary significantly by geography and region.

In the first quarter of 2021, in the U.S., the COVID-19 resurgence that affected procedures later in the fourth quarter of 2020 continued well into January 2021.

Then, as COVID-19 cases subsided, procedures experienced a steady improvement throughout February and March.

In Europe, the spread of COVID-19 varied regionally, and procedure growth rates were mixed.

While there were COVID-19 hot spots within some of our Asia Pacific markets, they tended to be isolated and, in general, procedures performed well.

In the second quarter of 2021, as the U.S. continued its broad rollout of vaccinations, COVID-19 cases and hospitalizations decreased, and procedure volumes recovered, partially attributed to the performance of a number of procedures that were deferred during the pandemic.

In Europe, the rollout of vaccinations and spread of COVID-19 varied regionally, and procedure growth rates were mixed.

We continued to see the impacts of regional resurgences of COVID-19 cases within the Asia Pacific markets.

China growth continued to be strong year over year, primarily reflecting the growth in the system installed base.

In the third quarter of 2021, COVID-19 infections resurged as the quarter progressed, and we saw a corresponding impact to our procedures.

In the U.S., we saw decreasing procedure volumes in August and September compared to June as COVID-19 cases and hospitalizations increased.

Late in the quarter, as COVID-19 cases began to slow, procedures began to recover.

Outside of the U.S., in Europe, the impact of COVID-19 in the third quarter of 2021 varied regionally.

China growth in the third quarter continued to be stronger than other Asia Pacific markets.

In the fourth quarter of 2021, procedure volumes continued to recover in October and November from the COVID-19 resurgence related to the Delta variant in the third quarter.

However, in December, procedure volumes were adversely impacted by the increase in hospitalizations in the U.S. and parts of Europe (most notably France and Italy) as the Omicron variant began to spread rapidly.

This trend has continued into January 2022.

exacerbated by staffing shortages.

Benign procedures experienced a more significant impact in December, reflecting the deferability of certain elective surgeries.

Our Asia Pacific markets were not significantly impacted by the resurgence in COVID-19 and saw strong procedure growth across multiple specialties in China, South Korea, and Japan.

More specifically, during 2021, system demand reflected procedure growth, hospitals purchasing systems in preparation for a post-COVID-19 pandemic environment, and hospitals upgrading their system portfolio to access and/or standardize on fourth generation capabilities.

Worldwide economies have been significantly impacted by the COVID-19 pandemic, and it is possible that factors related to the COVID-19 pandemic could cause a prolonged recession in local and/or global economies.

Such an economic recession could have a material adverse effect on our long-term business as hospitals curtail and reduce capital and overall spending.

The primary objective of our investment activities is to preserve principal while supporting [removed: the Company’s] [added: our] liquidity requirements.

To achieve this objective, we maintain a diversified portfolio of cash equivalents and short- and long-term investments in a variety of [removed: high quality] [added: high-quality] securities, including [added: money market funds,] U.S. treasury and U.S. government agency securities, [removed: municipal notes,] corporate notes and bonds, commercial paper, non-U.S. government agency securities, [removed: cash deposits,] and [removed: money market funds.][added: municipal notes.]

The weighted average duration of our portfolio as of December 31, [removed: 2021,] [added: 2022,] was approximately [removed: 1.2] [added: 0.8] years.

A hypothetical increase or decrease in interest [removed: rate] [added: rates] by 25 basis points would have resulted in a decrease or increase in the fair value of our net investment position of approximately [removed: $23] [added: $12] million, respectively, as of December 31, [removed: 2021.][added: 2022.]

As a result, because a portion of our operations [removed: consist] [added: consists] of sales activities outside of the U.S., we have foreign exchange exposures to non-U.S. dollar revenues, operating expenses, accounts receivable, accounts payable, and foreign currency bank balances.

For the year ended December 31, [removed: 2021,] [added: 2022,] sales denominated in foreign currencies were approximately [removed: 23%] [added: 24%] of total revenue.

The objective of our hedging program is to mitigate the impact of changes in currency exchange rates on our net cash flow from foreign [removed: currency denominated] [added: currency-denominated] sales and expenses.

For the year ended December 31, [removed: 2021,] [added: 2022,] our revenue would have decreased by approximately [removed: $25.1] [added: $100] million if the U.S. dollar exchange rate strengthened by 10%.

A 10% strengthening of the U.S. dollar exchange rate against all currencies to which we have exposure, after considering foreign currency hedges and offsetting positions as of December 31, [removed: 2021,] [added: 2022,] would have resulted in an approximately [removed: $7.6] [added: $2.7] million increase in the carrying amounts of those net assets.

Although we sell to distributors outside of the U.S. in U.S. dollars, strengthening of the dollar can impact our distributors’ margins and could impact the end customers’ ability to purchase our [removed: product] [added: products] if our distributors seek to recover the impact of the change in the dollar by increasing product and service prices.

Less than 10% of our revenue is conducted through distributors outside [added: of] the U.S. Strengthening of the dollar relative to non-U.S. currencies could have an adverse impact on our business.

Our operations outside of the U.S. are subject to risks typical of operations outside of the U.S. including, but not limited to, differing economic conditions, changes in [added: the] political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility.

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Intuitive®, Intuitive Surgical*®*, da Vinci®, da Vinci S®, da Vinci [removed: S HD Surgical System®, da Vinci] Si®, da Vinci X®, da Vinci Xi®, da Vinci SP®, EndoWrist®, Firefly®, [removed: InSite®, SureForm®,] Ion®, Iris®, [added: OnSite®, SimNow®, SureForm®,] and SynchroSeal® are trademarks or registered trademarks of the Company.

At the same time, governments strain to cover the healthcare needs of their populations and demand lower total [removed: cost] [added: costs] per patient to treat disease.

We address our [removed: customer] [added: customers’] needs by sharing their goals reflected in the quadruple aim.

Advanced robotic systems provide precise, powerful systems with high-performance [removed: vision] [added: vision,] extending [added: the] care team’s capabilities to enhance minimally invasive care.

By striving to find less invasive ways to enter the body, provide clearer views of anatomy and more precise tissue interactions, and [removed: helping] [added: help] hone surgical skills, Intuitive launched its first da Vinci Surgical System in 1999.

In 2000, the [removed: U.S. Food and Drug Administration (“FDA”)] [added: FDA] cleared da Vinci for general laparoscopic surgery.

Da Vinci systems offer surgeons [removed: three dimensional,] [added: three-dimensional,] high definition (“3DHD”) vision, a magnified view, and robotic and computer assistance.

They use specialized instrumentation, including a miniaturized surgical camera (endoscope) and wristed instruments (e.g., scissors, scalpels, [removed: forceps, etc.)] [added: and forceps)] that are designed to help with precise dissection and reconstruction deep inside the body.

[removed: The surgeon’s fingers grasp instrument controls below the display] with the surgeon’s hands naturally positioned relative to his or her eyes.

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[added: Using electronic hardware, software, algorithms,] and mechanics, our technology translates the surgeon’s hand movements into precise and corresponding real-time micro movements of the da Vinci instruments positioned inside the patient.

On most of our current systems (da Vinci X*,* da Vinci [removed: Xi*,*] [added: Xi, da Vinci SP,] and da Vinci Si), a second surgeon’s console may be used in two ways: to provide assistance to the primary surgeon during surgery or to act as an active aid during surgeon-proctor training sessions.

With the da Vinci X*,* da Vinci [removed: Xi*,*] [added: Xi, da Vinci SP,] and da Vinci Si, a surgeon sitting at a second console can view the same surgery as the primary surgeon and can be passed control of some or all of the da Vinci instruments during the surgery.

Our da Vinci SP Surgical System includes a single arm with [removed: three,] [added: three] multi-jointed, wristed instruments and the first da Vinci fully wristed, 3DHD camera.

Firefly is a standard feature of the da Vinci [removed: X] [added: X, da Vinci Xi,] and da Vinci [removed: Xi] [added: SP] Surgical Systems and is available as an upgrade on our da Vinci Si Surgical System.

[removed: Firefly is typically used in the procedure] [added: The most common procedural] categories [added: for the use] of [added: Firefly are] urology, gynecology, and general surgery.

This gives OR teams the capability to [removed: optimally position] [added: improve] the [added: positioning of the] operating table during da Vinci Surgical System procedures.

[removed: Integrated Table Motion] [added: It] enables surgeons to [removed: maximize] [added: extend] reach, facilitate access, and choose the angle of approach to target anatomy, as well as reposition the table during the procedure to enhance anesthesiologists’ management of the patient.

In 2019, the FDA cleared our Ion endoluminal system, which [removed: enables] [added: is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories for which the first cleared indication is] minimally invasive biopsies in the lung.

The system features an ultra-thin, ultra-maneuverable catheter that can articulate 180 degrees in all directions and allows navigation far into the peripheral lung and provides the stability necessary for precision in [added: a] biopsy.

[removed: We manufacture a variety of instruments, most] [added: Most] of [removed: which] [added: the various instruments that we manufacture] incorporate EndoWrist technology with wristed joints for natural dexterity and tips customized for various surgical procedures.

[added: Da Vinci instruments are offered] in a variety of diameters, of which 8mm and 12mm diameter sizes are the most commonly sold.

Various da Vinci instrument tips include forceps, scissors, electrocautery tools, scalpels, and other surgical tools that are familiar to the surgeon from open surgery and conventional [removed: MIS.][added: minimally invasive surgery (“MIS”).]

In addition, the chip [removed: will] generally [added: will] not allow the instrument to be used for more than the prescribed number of procedures to help ensure that its performance meets specifications during each procedure.

In 2020, we announced our “Extended Use Program,” which consists of select da Vinci Xi and da Vinci X instruments possessing 12 to 18 uses (“Extended Use [removed: Instruments”),] [added: Instruments”)] compared to [added: the] previously 10 uses.

The EndoWrist [removed: Stapler is a] [added: and SureForm Staplers are] wristed, stapling [removed: instrument] [added: instruments] intended for resection, transection, [removed: and/or] [added: and] creation of anastomoses.

[removed: This instrument enables] [added: These instruments enable] operators to precisely position and fire the stapler.

We [removed: market] [added: have various clearances for] five staplers [removed: available] [added: that can be used] with the da Vinci X and da Vinci Xi Surgical Systems: the EndoWrist Stapler 30 and 45 and the SureForm Stapler 30, 45, and 60, where the numeric designation indicates the length of the staple line.

The SureForm Staplers 30, 45, and 60 are [added: single-use, fully wristed, stapling instruments] intended to be used in general surgery, thoracic, gynecologic, urologic, and pediatric surgery procedures.

The SureForm Stapler 30 [removed: received U.S. FDA 510(k) clearance in December 2021 and] may deliver particular utility in thoracic procedures.

The SureForm Stapler 60 is [removed: a single-use, fully wristed, stapling instrument] intended to deliver particular utility in bariatric procedures.

We [removed: market] [added: also have various clearances for] five stapler reloads: gray (2.0 mm), white (2.5 mm), blue (3.5 mm), green (4.3 mm), and black (4.6 mm).

The da Vinci Vessel Sealer Extend is a single-use, fully wristed bipolar electrosurgical instrument compatible with our [removed: fourth generation] [added: fourth-generation] multiport systems.

The E-100 generator is Intuitive’s first generator and is offered as an upgrade to power [removed: the] [added: our] da Vinci Vessel Sealer Extend and [removed: our] SynchroSeal [removed: instrument, which was cleared by the FDA in November 2019.][added: instruments.]

We have a network of field service [added: and technical support] engineers across the U.S., Europe, and Asia and maintain relationships with various distributors around the globe.

This infrastructure of service and support specialists offers a full complement of services for our customers, including [removed: 24/7 support,] installation, repair, [added: maintenance, 24/7 technical support,] and [removed: maintenance.][added: proactive system health monitoring.]

Our comprehensive support and program assistance helps [removed: to] ensure customers and care teams maximize program performance and protect their investment.

Services include readiness support, maintenance support, [removed: OR] [added: perioperative] consulting, [removed: Customer] [added: Custom] Hospital Analytics, and market consulting optimization.

*Readiness and Maintenance Support.* Readiness support is operational support to [removed: assure] [added: ensure] smooth onboarding and adoption of new systems and technology.

It includes services care plans, support teams, [removed: onsite] [added: OnSite] monitoring, software upgrades and [removed: updates] [added: updates,] as well as a [removed: maintenance] customer portal.

This connected ecosystem includes systems, instruments and accessories, learning, and services connected by a digital portfolio that enables actionable digital insights across the care continuum and provides enhanced capabilities, intraoperative guidance, decision support, and a personalized learning journey, all with the goal to help improve outcomes and efficiency.

The surgeon’s fingers grasp instrument controls below the display

Integrated Table Motion enables the patient to be dynamically positioned during the procedure.

Our Ion system extends our commercial offering beyond surgery into diagnostic, endoluminal procedures.

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We believe that, as of the end of 2021, in the U.S. and Europe, full cutover to Extended Use Instruments had occurred, as customers had substantially utilized all of their remaining 10 use instruments.

They are structured and measured training pathways for surgeons, physicians, and care teams.

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The customer portal is an online tool that enables customers to access system utilization and program analytics, view orders and maintenance history, and initiate product returns and exchanges to help achieve the operational and financial goals of a robotics program.

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We have completed several pilot studies with Iris to obtain customer feedback, which is currently being incorporated to support a future product launch.

For the care team, Intuitive Hub acts as a point-of-care device that automates tasks, such as video recording and bookmarking, and can be used to facilitate peer-to-peer collaboration utilizing our Telepresence offering.

For physicians, Intuitive Hub connects video and other data that can be accessed after a medical procedure to help facilitate personalized learning and increased efficiency.

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We provide products and services in China through our majority-owned joint venture (“Joint Venture”) with Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”) and its affiliates.

This infrastructure of service and support specialists, along with advanced service tools and solutions, offers a full complement of services for our customers, including installation, repair, maintenance, 24/7 technical support, and proactive system health monitoring.

Through ingenuity and intelligent technology, we

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As of December 31, 2022, we owned more than 4,300 patents granted and still in force and more than 2,100 patents pending worldwide.

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The clinical investigators in the clinical study are also subject to the FDA’s regulations and must obtain patient informed

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Data Privacy and Security Laws

Numerous state, federal, and foreign laws, regulations, and standards govern the collection, use, access to, confidentiality, and security of health-related and other personal information and could apply now or in the future to our operations or the operations of our partners.

In the U.S., numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information.

In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

We collect, process, share, disclose, transfer, and otherwise use data, some of which contains personal information about identifiable individuals including, but not limited to, our employees, clinical trial participants, partners, and vendors.

Therefore, we are subject to U.S. (federal, state, local) and international laws and regulations, including those in the European Economic Area (“EEA”) and the UK regarding data privacy and security and our use of such data.

We are subject to the European Union General Data Protection Regulation 2016/679 and applicable national supplementing laws (collectively, the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the “GDPR”).

The GDPR imposes comprehensive data privacy compliance obligations in relation to our collection, processing, sharing, disclosure, transfer, and other use of data relating to an identifiable living individual or “personal data,” including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training, and audit.

The EU GDPR and UK GDPR also regulate cross-border transfers of personal data out of the EEA and the UK.

Recent legal developments in Europe have created complexity and uncertainty regarding such transfers, in particular in relation to transfers to the United States.

Cybersecurity

In the normal course of business, we may collect and store personal information and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, patient information, sensitive third-party information, and employee information.

To protect this information, our existing cybersecurity policies require continuous monitoring and detection programs, network security precautions, encryption of critical data, and in-depth security assessments of vendors.

We maintain various protections designed to safeguard against cyberattacks, including firewalls and virus detection software.

This ecosystem includes systems, instruments and accessories, learning, and services connected by a digital portfolio that enables precision and control, seamless interactions and experiences, and meaningful insights to drive better care.

Using electronic hardware, software, algorithms,

Our Ion system is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories, which extends our commercial offering beyond surgery into diagnostic, endoluminal procedures with this first application.

Da Vinci instruments are offered

They will continue to be introduced at various times throughout 2022 in other geographies, depending on regulatory processes.

The maintenance customer portal is an online tool that delivers on-demand data to set, monitor, and help the operational goals of a robotics program.

The service is currently being used in pilot studies.

We launched our first pilot site in 2019, continued in 2020 with select sites, and have six pilot sites as of December 31, 2021.

The most recent update connects the da Vinci system to the media management application, automating video bookmarking and editing for physicians aimed at improving workflow efficiencies outside the OR.

In January 2019, our Intuitive-Fosun joint venture (referred to herein as the “Joint Venture”) with Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”) acquired certain assets related to the distribution business of Chindex Medical Limited and its affiliates (“Chindex”), a subsidiary of Fosun Pharma, which has been our distribution partner for da Vinci Surgical Systems in China since 2011, and began direct operations for da Vinci products and services in China.

As of December 31, 2021, and 2020, 84% and 83% of all long-lived assets were in the U.S., respectively.

As of December 31, 2021, we held ownership or exclusive field-of-use licenses for more than 4,200 U.S. and foreign patents and have filed more than 2,100 U.S. and foreign patent applications.

them.

For example, in November 2018, FDA officials announced forthcoming steps that the FDA intended to take to modernize the premarket notification pathway under Section 510(k) of the FFDCA.

Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates.

These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old.

These proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation.

If the FDA determines that a manufacturer has failed

Compliance with the essential requirements is a prerequisite for European Conformity Marking (“CE mark”) without which medical devices cannot be marketed or sold in the EU.

To demonstrate compliance with the essential requirements, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification.

Notified bodies are

A notified body would typically audit and examine a product’s technical dossiers and the manufacturers’ quality system.

By July 1, 2023, in Great Britain, all medical devices will require a UKCA (“UK Conformity Assessed”) mark, but CE marks issued by EU notified bodies will remain valid until this time.

Further, prior to the U.S. Supreme Court ruling, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021, through August 15, 2021, for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

disabilities, sexual orientations, body sizes, military backgrounds, socioeconomic backgrounds, religions, and family structures.

Additionally, we provide programs that help employees have peace of mind concerning events that may require time away from work or that may impact their family, mental health, or financial well-being.

This includes having employees continue to work from home, where possible, while providing support for strategic, on-site, in-person activities and gatherings with meeting and event protocols in place to help minimize the exposure to COVID-19 and other risks.

In 2021, investments in building upgrades and facility safety improvements included improved-efficiency HVAC filters and restrooms equipped with touchless faucets, toilets, towel dispensers, and door kickplates, where possible.

We increased cleaning frequency in common areas, while implementing additional safety measures for employees continuing critical on-site work.

Employees critical to maintaining our essential engineering, manufacturing, repair, and logistics functions have continued to work from Intuitive locations globally.

To protect and support our essential team members, health and safety measures that included maximizing personal workspaces, changing shift schedules, providing personal protective equipment (PPE), and screening and testing resources continue to be provided.

Our future ways of working team helped us explore changes that could strengthen our culture and could appeal to a diverse group of new employees.

These included redefining job classifications to include fully remote and hybrid work arrangements, setting new expectations around how we work.

An employee survey to inform new ways of working resulted in more outdoor working spaces, self-service information technology equipment procurement, on-demand mental health care and resilience resources, ergonomics review and new furniture choices for those working from home, new scheduling systems for reserving on-site workspaces, and more thoughtful approaches to building cleaning and access to common areas.

Keeping in mind employee health and safety, Intuitive has prepared for a post-pandemic future where employees can return to an Intuitive workspace with peace of mind.

We conduct pay equity reviews annually to help us understand whether our compensation structure is appropriate and to identify what improvements can be made.

In addition, we utilize a robust inspection process with an independent consulting firm for gender and ethnicity hiring, promotion, and wage equity to determine whether any statistically significant pay differences exist between women and men and between minorities and non-minorities.

If pay disparities are identified, we conduct further evaluation to determine whether remedial adjustments are

appropriate.

The information included in [Note 8 to the Consolidated Financial [removed: Statements](#i30d98ad3bee64d018232130137db9899_268)] [added: Statements](#i025de1eec32044f5a30c5872569f0e8d_250)] included in Part II, Item 8 of this report is incorporated herein by reference.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates on June 30, [removed: 2021,] [added: 2022,] based upon the closing price of Common Stock on such date as reported on The Nasdaq Global Select Market, was approximately [removed: $108.7] [added: $71.4] billion.

The number of outstanding shares of the registrant’s common stock as of [removed: January 26, 2022,] [added: February 7, 2023,] was [removed: 357,744,031.][added: 350,389,679.]

Part III incorporates information by reference to the definitive proxy statement for the Company’s Annual Meeting of Stockholders to be held on or about April [removed: 28, 2022,] [added: 27, 2023,] to be filed within 120 days of the registrant’s fiscal year ended December 31, [removed: 2021.][added: 2022.]

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[removed: [Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)][added: [Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)]

[removed: Words] [added: Statements using words] such as “estimates,” “projects,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “may,” “will,” “could,” “should,” “would,” “targeted,” and similar words and expressions are intended to identify forward-looking statements.

These forward-looking statements include, but are not limited to, statements related to the expected impacts of the COVID-19 pandemic on our business, financial condition, and results of operations, [removed: the potential impact on our procedure volume, our acquisitions, our expected business, our expected new product introductions, the impacts of Extended Use Instruments, procedures and procedure adoption,] future results of operations, future financial [removed: position, our ability to increase our revenues, the anticipated mix of our revenues between product and service revenues,] [added: condition,] our financing plans and future capital requirements, [removed: anticipated costs of revenue, anticipated expenses,] our potential tax assets or liabilities, [removed: the effect of recent accounting pronouncements, our investments, anticipated cash flows, our ability to finance operations from cash flows] and [removed: similar matters, and] statements based on current expectations, estimates, forecasts, and projections about the economies and markets in which we operate and our beliefs and assumptions regarding these economies and markets.

These forward-looking statements should be considered in light of various important factors, including, but not limited to, the following: the [added: overall macroeconomic environment, which impacts customer spending and our costs, including increased inflation and interest rates; the conflict in Ukraine; disruption to our supply chain, including increased difficulties in obtaining a sufficient supply of materials in the semiconductor and other markets; the] risk that the COVID-19 pandemic could lead to [removed: further] material delays and cancellations of, or reduced demand for, procedures; curtailed or delayed capital spending by hospitals; [removed: disruption to our supply chain, including increased difficulties in obtaining a sufficient supply of materials in the semiconductor and other markets;] closures of our facilities; delays in surgeon training; delays in gathering clinical evidence; delays in obtaining new product approvals, clearances, or certifications from the U.S. Food and Drug Administration [removed: (“FDA”) due to the effects of the COVID-19 pandemic; the evaluation of the risks of robotic-assisted surgery in the presence of infectious diseases;] [added: (“FDA”), comparable regulatory authorities, or notified bodies;] diversion of [removed: management and other] resources to respond to COVID-19 outbreaks; the impact of global and regional economic and credit market conditions on healthcare spending; the risk [removed: that the COVID-19 virus disrupts local economies and causes economies in our key markets to enter prolonged recessions; the risk] of our inability to comply with complex FDA and other regulations, which may result in significant enforcement actions; [added: regulatory approvals, clearances, certifications, and restrictions or any dispute that may occur with any regulatory body; guidelines and recommendations in the] healthcare [added: and patient communities; healthcare] reform legislation in the U.S. and its impact on hospital spending, reimbursement, and fees levied on certain medical device revenues; changes in hospital admissions and actions by payers to limit or manage surgical procedures; the timing and success of product development and market acceptance of developed products; the results of any collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships, including the joint venture with Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; our completion of and ability to successfully integrate acquisitions, including Orpheus Medical; procedure counts; [removed: regulatory approvals, clearances, certifications, and restrictions or any dispute that may occur with any regulatory body; guidelines and recommendations in the healthcare and patient communities;] intellectual property positions and litigation; competition in the medical device industry and in the specific markets of surgery in which we operate; risks associated with our operations [added: and any expansion] outside of the United States; unanticipated manufacturing disruptions or the inability to meet demand for products; our reliance on sole and single source suppliers; the results of legal proceedings to which we are or may become a [removed: party;] [added: party, including, but not limited to,] product liability [removed: and other litigation] claims; adverse publicity regarding us and the safety of our products and adequacy of training; [removed: our ability to expand into foreign markets;] the impact of changes to tax legislation, guidance, and interpretations; changes in tariffs, trade barriers, and regulatory requirements; and other [removed: risk factors.][added: risks and uncertainties, including those listed under the caption “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report and which are based on current expectations and are subject to risks, uncertainties, and assumptions that are difficult to predict.]

[removed: Risks] [added: Additional risks] are described throughout this [removed: filing,] [added: report,] particularly in Part I, “Item 1A.

- Public health crises or epidemic diseases, or the perception of their effects, [removed: have and] could [removed: continue to] materially adversely affect our [removed: business and] [added: business, financial condition, or] results of operations.

- Our reliance on sole and single source suppliers and [removed: our] ability to purchase at acceptable prices a sufficient supply of materials, parts, and components could harm our ability to meet [added: product] demand [removed: for our products] in a timely manner or within budget.

- Because our markets are highly competitive, customers may choose to purchase our competitors’ products or services or may not accept [removed: da Vinci] robotic-assisted [removed: surgery,] [added: medical procedures,] which [removed: would] [added: could] result in reduced revenue and loss of market share.

- If [removed: institutions or surgeons] [added: hospitals] are unable to obtain coverage and reimbursement [removed: from third-party payors] for procedures using our products, [removed: or] if reimbursement is insufficient to cover the costs of purchasing our products, [added: or if limitations are imposed by governments on the amount hospitals can charge for certain procedures,] we may be unable to generate sufficient sales to support our business.

- If our products contain defects or encounter performance problems, we may have to recall our [removed: products,] [added: products and, as a result,] incur additional unforeseen costs, and our reputation may suffer.

- We are subject to [removed: product liability] [added: litigation, investigations,] and [removed: negligence claims] [added: other legal proceedings] relating to [removed: the use of] our [removed: products] [added: products, our customers, our competitors,] and [removed: other legal proceedings] [added: government regulators] that could materially adversely affect our financial condition, divert management’s attention, and harm our business.

- Negative publicity, whether accurate or inaccurate, concerning our products or our company could reduce market acceptance of our products and could result in decreased product demand and [removed: a decline in] [added: reduced] revenues.

- If we lose key personnel or are unable to attract and retain [removed: additional] [added: other] personnel, our ability to compete will be [removed: harmed] [added: harmed,] and increases in labor costs could materially adversely impact our [removed: business and] [added: business, financial condition, or] results of operations.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [PART I](#i025de1eec32044f5a30c5872569f0e8d_16) | | | | | | | | |

| [PART II](#i025de1eec32044f5a30c5872569f0e8d_88) | | | | | | | | |

| [PART III](#i025de1eec32044f5a30c5872569f0e8d_292) | | | | | | | | |

| [PART IV](#i025de1eec32044f5a30c5872569f0e8d_310) | | | | | | | | |

| [SIGNATURES](#i025de1eec32044f5a30c5872569f0e8d_322) | | | | | | [127](#i025de1eec32044f5a30c5872569f0e8d_322) | | |

These forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

- Macroeconomic conditions could have a materially adverse impact on our business, financial condition, or results of operations.

- We could be subject to significant, uninsured losses, which may have a material adverse impact on our business, financial condition, or results of operations.

- Information technology system failures, cyberattacks, or deficiencies in our cybersecurity could harm our business, customer relations, financial condition, or results of operations.

- The ongoing armed conflict between Russia and Ukraine could adversely affect our business, financial condition, or results of operations.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

| [PART I](#i30d98ad3bee64d018232130137db9899_13) | | | | | | | | |

| [PART II](#i30d98ad3bee64d018232130137db9899_88) | | | | | | | | |

| [PART III](#i30d98ad3bee64d018232130137db9899_307) | | | | | | | | |

| [PART IV](#i30d98ad3bee64d018232130137db9899_325) | | | | | | | | |

| [SIGNATURES](#i30d98ad3bee64d018232130137db9899_337) | | | | | | [124](#i30d98ad3bee64d018232130137db9899_337) | | |

Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on current expectations and are subject to risks, uncertainties, and assumptions that are difficult to predict.

- The inflationary environment could materially adversely impact our business and results of operations.

- We are subject to significant, uninsured liabilities.

- Disruption of critical information systems or material breaches in the security of our systems could harm our business, customer relations, and financial condition.

- We offer alternative capital acquisition approaches.

- Economic conditions could have a material adverse effect on our company.

[Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)

As of December 31, [removed: 2021,] [added: 2022,] we own approximately [removed: 1.8] [added: 2.0] million square feet of space on [removed: 111] [added: 112] acres of land in Sunnyvale, California, where we house our principal headquarters, research and development, service, and support functions, [removed: and] [added: as well as] certain of our manufacturing operations.

We also lease approximately [removed: 660,000] [added: 750,000] square feet of space for certain engineering, warehousing, and support functions at various locations in the U.S. Outside of the U.S., we own properties in Mexicali, Mexico, primarily for manufacturing operations, and Aubonne, Switzerland, primarily for our international headquarters.

[Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)

[removed: [Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)][added: [Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)]

As of [removed: January 26, 2022,] [added: February 7, 2023,] there were [removed: 136] [added: 130] stockholders of record of our common stock, although [removed: we believe that] there are a significantly larger number of beneficial owners of our common stock.

We [added: currently] intend to retain earnings for use in the operation and expansion of our business.

[removed: [Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)][added: [Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)]

The table below summarizes our stock repurchase activity for the quarter ended December 31, [removed: 2021.][added: 2022.]

| November 1 to November 30, [removed: 2021] [added: 2022] | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 1.6 | billion |

| Total during quarter ended December 31, [removed: 2021] [added: 2022] | | | [removed: —] [added: 3,933,491] | | | | | | $ | [removed: —] [added: 254.46] | | | | | [removed: —] [added: 3,933,491] | | | | | | | | |

(1) Since March 2009, we have had an active stock repurchase [removed: program.][added: program (the “Repurchase Program”).]

As of December 31, [removed: 2021,] [added: 2022,] our Board of Directors (our “Board”) had authorized an aggregate amount of up to [removed: $7.5] [added: $10.0] billion for stock repurchases, of which the most recent authorization occurred in [removed: January 2019,] [added: July 2022,] when our Board increased the authorized amount available under our [removed: share repurchase program] [added: Repurchase Program] to [removed: $2.0] [added: $3.5] billion.

The remaining [removed: $1.6 billion represents the] amount available to repurchase shares under the authorized [removed: repurchase program] [added: Repurchase Program] as of December 31, [removed: 2021.][added: 2022, is $1.5 billion.]

The authorized [removed: stock repurchase program] [added: Repurchase Program] does not have an expiration date.

The graph set forth below compares the cumulative total stockholder return on our common stock between December 31, [removed: 2016,] [added: 2017,] and December 31, [removed: 2021,] [added: 2022,] with the cumulative total return of (i) the Nasdaq Composite Index, (ii) the S&P 500 Healthcare Index, and (iii) the S&P 500 Index over the same period.

This graph assumes an investment of $100.00 on December 31, [removed: 2016] [added: 2017,] in our common stock, the Nasdaq Composite Index, the S&P Healthcare Index, and the S&P 500 Index and assumes the re-investment of dividends, if any.

The comparisons shown in the graph below are based [removed: upon] [added: on] historical data.

[removed: ][added: ]

| | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

In addition, we may use a portion of our retained earnings to repurchase shares of our common stock, if appropriate.

Please see Item 12.

"Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" under Part III of this Annual Report on Form 10-K for information on where to find information required by Item 201(d) of Regulation S-K.

| October 1 to October 31, 2022 | | | 3,635,474 | | | | | | $ | 254.46 | | | | | 3,635,474 | | | | | | $ | 1.6 | billion |

| December 1 to December 31, 2022 | | | 298,017 | | | | | | $ | 254.48 | | | | | 298,017 | | | | | | $ | 1.5 | billion |

| Intuitive Surgical, Inc. | | | $ | 100.00 | | | | | $ | 131.23 | | | | | $ | 163.08 | | | | | $ | 224.17 | | | | | $ | 295.36 | | | | | $ | 218.13 | |

| Nasdaq Composite | | | $ | 100.00 | | | | | $ | 97.16 | | | | | $ | 132.81 | | | | | $ | 192.47 | | | | | $ | 235.15 | | | | | $ | 158.65 | |

| S&P 500 Healthcare Index | | | $ | 100.00 | | | | | $ | 104.69 | | | | | $ | 124.25 | | | | | $ | 138.45 | | | | | $ | 171.90 | | | | | $ | 165.80 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 95.62 | | | | | $ | 125.72 | | | | | $ | 148.85 | | | | | $ | 191.58 | | | | | $ | 156.88 | |

The following table contains information as of December 31, 2021, for two categories of equity compensation plans.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) (2) | | | | | | Weighted-average exercise price of outstanding options (3) | | | | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (4) | | |

| Equity compensation plans approved by security holders | | | 15,620,115 | | | | | | $ | 129.64 | | | | | 28,243,671 | | |

| Equity compensation plans not approved by security holders (1) | | | 821,483 | | | | | | $ | 64.68 | | | | | — | | |

| Total | | | 16,441,598 | | | | | | $ | 125.07 | | | | | 28,243,671 | | |

(1)Represents options under the Amended and Restated 2009 Employment Commencement Incentive Plan, adopted by the Board in October 2009 and first used in 2010.

Options are granted at an exercise price not less than the fair market value of the stock on the date of grant and have a term not to exceed ten years.

This plan expired in October 2019 and, therefore, there are no shares reserved for future grant.

However, awards granted prior to the plan’s expiration continue to remain outstanding until their original expiration date.

(2)Number of securities includes options to purchase 11,684,236 shares of common stock and 4,757,362 shares of common stock subject to vesting under RSUs.

(3)The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs, which have no exercise price.

(4)Number of securities includes 2,775,339 shares remaining available for future issuance under the 2000 Employee Stock Purchase Plan.

*Material Features of the Amended and Restated 2009 Employment Commencement Incentive Plan*

In October 2009, the Board adopted our Amended and Restated 2009 Employment Commencement Incentive Plan (the “2009 Plan”), pursuant to Rule 5653(c)(4) of the Nasdaq Global Market, which was subsequently amended by the Board in February 2011, July 2011, February 2012, July 2012, January 2013, May 2013, December 2013, and April 2015.

Awards granted under the 2009 Plan were intended to constitute “employment inducement awards” under Nasdaq Listing Rule 5635(c)(4) and, therefore, the 2009 Plan was intended to be exempt from the Nasdaq Listing Rules regarding stockholder approval of stock option and stock purchase plans.

A total of 13,095,000 shares of our common stock were reserved for issuance under the 2009 Plan.

The 2009 Plan provided for the grant of non-qualified stock options, restricted stock units, restricted stock awards, dividend equivalents, or stock appreciation rights.

These awards may have been granted to individuals who were then new employees, or were commencing employment with us or one of our subsidiaries following a bona fide period of non-employment with us, and for whom such awards were granted as a material inducement to commencing employment with us or one of our subsidiaries.

The 2009 Plan is administered by the Compensation Committee or another committee of the Board.

The plan administrator has broad discretion to take action under the 2009 Plan, as well as make adjustments to the terms and conditions of existing awards, in the event of certain transactions and events affecting our common stock, including a change in control, stock

dividends, stock splits, mergers, acquisitions, consolidations, and other corporate transactions.

In addition, in the event of certain non-reciprocal transactions with our stockholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the 2009 Plan and outstanding awards.

The Board may amend, suspend, or terminate the 2009 Plan at any time, provided that no such action may impair any rights under any outstanding awards without the consent of the participant.

| October 1 to October 31, 2021 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 1.6 | billion |

| December 1 to December 31, 2021 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 1.6 | billion |

| Intuitive Surgical, Inc. | | | $ | 100.00 | | | | | $ | 172.64 | | | | | $ | 226.56 | | | | | $ | 281.54 | | | | | $ | 387.01 | | | | | $ | 509.91 | |

| Nasdaq Composite | | | $ | 100.00 | | | | | $ | 129.64 | | | | | $ | 125.96 | | | | | $ | 172.18 | | | | | $ | 249.51 | | | | | $ | 304.85 | |

| S&P 500 Healthcare Index | | | $ | 100.00 | | | | | $ | 120.00 | | | | | $ | 125.63 | | | | | $ | 149.10 | | | | | $ | 166.14 | | | | | $ | 206.29 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 121.83 | | | | | $ | 116.49 | | | | | $ | 153.17 | | | | | $ | 181.35 | | | | | $ | 233.41 | |

[removed: [Table](#i30d98ad3bee64d018232130137db9899_7) [of](#i30d98ad3bee64d018232130137db9899_7) [Contents](#i30d98ad3bee64d018232130137db9899_7)][added: [Table](#i025de1eec32044f5a30c5872569f0e8d_7) [of Contents](#i025de1eec32044f5a30c5872569f0e8d_7)]

| [Report of Independent Registered Public Accounting [removed: Firm](#i30d98ad3bee64d018232130137db9899_205)] [added: Firm](#i025de1eec32044f5a30c5872569f0e8d_205)] – | | | PCAOB ID: | | | 238 | | | [removed: [82](#i30d98ad3bee64d018232130137db9899_205)] [added: [84](#i025de1eec32044f5a30c5872569f0e8d_205)] | | |

| [Consolidated Balance Sheets [removed: a](#i30d98ad3bee64d018232130137db9899_208)[s of](#i30d98ad3bee64d018232130137db9899_208) [December 31, 202](#i30d98ad3bee64d018232130137db9899_208)[1](#i30d98ad3bee64d018232130137db9899_208)[, and 20](#i30d98ad3bee64d018232130137db9899_208)[2](#i30d98ad3bee64d018232130137db9899_208)0] [added: as of December 31,](#i025de1eec32044f5a30c5872569f0e8d_208) 2022[, and](#i025de1eec32044f5a30c5872569f0e8d_208) 2021] | | | | | | | | | [removed: [83](#i30d98ad3bee64d018232130137db9899_208)] [added: [85](#i025de1eec32044f5a30c5872569f0e8d_208)] | | |

| [Consolidated Statements of [added: Comprehensive] Income for the years ended December [removed: 31, 202](#i30d98ad3bee64d018232130137db9899_214)[1](#i30d98ad3bee64d018232130137db9899_214)[, 20](#i30d98ad3bee64d018232130137db9899_214)[20](#i30d98ad3bee64d018232130137db9899_214)[, and 201](#i30d98ad3bee64d018232130137db9899_214)9] [added: 31,](#i025de1eec32044f5a30c5872569f0e8d_214) 2022[,](#i025de1eec32044f5a30c5872569f0e8d_214) 2021[, and](#i025de1eec32044f5a30c5872569f0e8d_214) 2020] | | | | | | | | | [removed: [84](#i30d98ad3bee64d018232130137db9899_214)] [added: [87](#i025de1eec32044f5a30c5872569f0e8d_214)] | | |

| [Consolidated Statements of [removed: Comprehensive] Income for the years ended December [removed: 31, 202](#i30d98ad3bee64d018232130137db9899_223)[1](#i30d98ad3bee64d018232130137db9899_223)[, 20](#i30d98ad3bee64d018232130137db9899_223)[20](#i30d98ad3bee64d018232130137db9899_223)[, and 201](#i30d98ad3bee64d018232130137db9899_223)9] [added: 31,](#i025de1eec32044f5a30c5872569f0e8d_211) 2022[,](#i025de1eec32044f5a30c5872569f0e8d_211) 2021[, and](#i025de1eec32044f5a30c5872569f0e8d_211) 2020] | | | | | | | | | [removed: [85](#i30d98ad3bee64d018232130137db9899_223)] [added: [86](#i025de1eec32044f5a30c5872569f0e8d_211)] | | |

| [Consolidated Statements of Stockholders’ Equity for the years ended December [removed: 31, 202](#i30d98ad3bee64d018232130137db9899_229)[1](#i30d98ad3bee64d018232130137db9899_229)[, 20](#i30d98ad3bee64d018232130137db9899_229)[20](#i30d98ad3bee64d018232130137db9899_229)[, and 201](#i30d98ad3bee64d018232130137db9899_229)9] [added: 31,](#i025de1eec32044f5a30c5872569f0e8d_217) 2022[,](#i025de1eec32044f5a30c5872569f0e8d_217) 2021[, and](#i025de1eec32044f5a30c5872569f0e8d_217) 2020] | | | | | | | | | [removed: [86](#i30d98ad3bee64d018232130137db9899_229)] [added: [88](#i025de1eec32044f5a30c5872569f0e8d_217)] | | |

| [Consolidated Statements of Cash Flows for the years ended December [removed: 31, 202](#i30d98ad3bee64d018232130137db9899_235)[1](#i30d98ad3bee64d018232130137db9899_235)[, 20](#i30d98ad3bee64d018232130137db9899_235)[20](#i30d98ad3bee64d018232130137db9899_235)[, and 201](#i30d98ad3bee64d018232130137db9899_235)9] [added: 31,](#i025de1eec32044f5a30c5872569f0e8d_220) 2022[,](#i025de1eec32044f5a30c5872569f0e8d_220) 2021[, and](#i025de1eec32044f5a30c5872569f0e8d_220) 2020] | | | | | | | | | [removed: [87](#i30d98ad3bee64d018232130137db9899_235)] [added: [89](#i025de1eec32044f5a30c5872569f0e8d_220)] | | |

| [Notes to the Consolidated Financial [removed: Statements](#i30d98ad3bee64d018232130137db9899_238)] [added: Statements](#i025de1eec32044f5a30c5872569f0e8d_223)] | | | | | | | | | [removed: [88](#i30d98ad3bee64d018232130137db9899_238)] [added: [90](#i025de1eec32044f5a30c5872569f0e8d_223)] | | |

| [Schedule II—Valuation and Qualifying [removed: Accounts](#i30d98ad3bee64d018232130137db9899_295)] [added: Accounts](#i025de1eec32044f5a30c5872569f0e8d_277)] | | | | | | | | | [removed: [118](#i30d98ad3bee64d018232130137db9899_295)] [added: [121](#i025de1eec32044f5a30c5872569f0e8d_277)] | | |

We have audited the accompanying consolidated balance sheets of Intuitive Surgical, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

As described in Notes 2 and 5 to the consolidated financial statements, the Company recognized [removed: $1,693.4] [added: $1,680.1] million of systems revenue, during the year ended December 31, [removed: 2021.][added: 2022.]

Standalone selling prices are based on observable prices at which the Company separately sells the products or [removed: services.]

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 1,290.9] [added: 1,581.2] | | | | | $ | [removed: 1,622.6] [added: 1,290.9] | |

| Short-term investments | | | [removed: 2,913.1] [added: 2,536.7] | | | | | | [removed: 3,488.8] [added: 2,913.1] | | |

| Accounts receivable, net of allowances of [removed: $20.2] [added: $22.4] and [removed: $17.7] [added: $20.2] as of December 31, [removed: 2021,] [added: 2022,] and [removed: 2020,] [added: 2021,] respectively | | | [removed: 782.7] [added: 942.1] | | | | | | [removed: 645.5] [added: 782.7] | | |

| Inventory | | | [removed: 587.1] [added: 893.2] | | | | | | [removed: 601.5] [added: 587.1] | | |

| Prepaids and other current assets | | | [removed: 271.1] [added: 299.8] | | | | | | [removed: 267.5] [added: 271.1] | | |

| Total current assets | | | [removed: 5,844.9] [added: 6,253.0] | | | | | | [removed: 6,625.9] [added: 5,844.9] | | |

| Property, plant, and equipment, net | | | [removed: 1,876.4] [added: 2,374.2] | | | | | | [removed: 1,577.3] [added: 1,876.4] | | |

| Long-term investments | | | [removed: 4,415.5] [added: 2,623.6] | | | | | | [removed: 1,757.7] [added: 4,415.5] | | |

| Deferred tax assets | | | [removed: 441.4] [added: 664.6] | | | | | | [removed: 367.7] [added: 441.4] | | |

| Intangible and other assets, net | | | [removed: 633.2] [added: 710.1] | | | | | | [removed: 503.6] [added: 633.2] | | |

| Goodwill | | | [removed: 343.6] [added: 348.5] | | | | | | [removed: 336.7] [added: 343.6] | | |

| Total assets | | | $ | [removed: 13,555.0] [added: 12,974.0] | | | | | $ | [removed: 11,168.9] [added: 13,555.0] | |

| Accounts payable | | | $ | [removed: 121.2] [added: 147.0] | | | | | $ | [removed: 81.6] [added: 121.2] | |

| Accrued compensation and employee benefits | | | [removed: 350.1] [added: 401.6] | | | | | | [removed: 235.0] [added: 350.1] | | |

| Deferred revenue | | | [removed: 377.2] [added: 397.3] | | | | | | [removed: 350.3] [added: 377.2] | | |

| Other accrued liabilities | | | [removed: 301.3] [added: 476.2] | | | | | | [removed: 298.3] [added: 301.3] | | |

| Total current liabilities | | | [removed: 1,149.8] [added: 1,422.1] | | | | | | [removed: 965.2] [added: 1,149.8] | | |

| Other long-term liabilities | | | [removed: 453.7] [added: 439.3] | | | | | | [removed: 444.6] [added: 453.7] | | |

| Total liabilities | | | [removed: 1,603.5] [added: 1,861.4] | | | | | | [removed: 1,409.8] [added: 1,603.5] | | |

| Preferred stock, 2.5 shares authorized, $0.001 par value, issuable in series; no shares issued and outstanding as of December 31, [removed: 2021,] [added: 2022,] and [removed: 2020] [added: 2021] | | | — | | | | | | — | | |

| Common stock, 600.0 shares authorized, $0.001 par value, [removed: 357.7] [added: 350.0] shares and [removed: 353.1] [added: 357.7] shares issued and outstanding as of December 31, [removed: 2021,] [added: 2022,] and [removed: 2020,] [added: 2021,] respectively | | | 0.4 | | | | | | 0.4 | | |

| Additional paid-in capital | | | [removed: 7,164.0] [added: 7,703.9] | | | | | | [removed: 6,444.9] [added: 7,164.0] | | |

| Retained earnings | | | [removed: 4,760.9] [added: 3,500.1] | | | | | | [removed: 3,261.3] [added: 4,760.9] | | |

| Accumulated other comprehensive [removed: income (loss)] [added: loss] | | | [removed: (24.2)] [added: (162.5)] | | | | | | [removed: 24.9] [added: (24.2)] | | |

| Total Intuitive Surgical, Inc. stockholders’ equity | | | [removed: 11,901.1] [added: 11,041.9] | | | | | | [removed: 9,731.5] [added: 11,901.1] | | |

February 10, 2023

| | | | 2022 | | | | | | 2021 | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Other comprehensive income (loss), net of tax | | | (140.1) | | | | | | (49.8) | | | | | | 13.0 | | |

| Total comprehensive income | | | $ | 1,204.3 | | | | | $ | 1,678.3 | | | | | $ | 1,079.8 | |

| Less: comprehensive income attributable to noncontrolling interest | | | $ | 20.3 | | | | | $ | 22.8 | | | | | $ | 6.7 | |

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| Repurchase and retirement of common stock | | | (11.2) | | | | | | — | | | | | | (211.1) | | | | | | (2,396.3) | | | | | | — | | | | | | (2,607.4) | | | | | | — | | | | | | (2,607.4) | | |

| Net income attributable to Intuitive Surgical, Inc. | | | — | | | | | | — | | | | | | — | | | | | | 1,322.3 | | | | | | — | | | | | | 1,322.3 | | | | | | — | | | | | | 1,322.3 | | |

| Balances as of December 31, 2022 | | | 350.0 | | | | | | $ | 0.4 | | | | | $ | 7,703.9 | | | | | $ | 3,500.1 | | | | | $ | (162.5) | | | | | $ | 11,041.9 | | | | | $ | 70.7 | | | | | $ | 11,112.6 | |

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| Net income | | | $ | 1,344.4 | | | | | $ | 1,728.1 | | | | | $ | 1,066.8 | |

| Gain on sale of business | | | (3.8) | | | | | | — | | | | | | — | | |

| Acquisition of businesses, net of cash, and intellectual property and other investing activities | | | (12.8) | | | | | | (22.7) | | | | | | (37.7) | | |

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With rising interest rates, access to credit may become more difficult, and any insolvency of the Company’s key suppliers, including sole-source and single-source suppliers, may exacerbate current supply chain challenges.

Additionally, if inflationary pressures in logistics or component costs persist, the Company may not be able to quickly or easily adjust pricing, reduce costs, or implement countermeasures.

Additionally, there is uncertainty surrounding the impact of any monetary policy changes taken by the U.S. Federal Reserve and other central banks to address the structural risks associated with inflation.

Additionally, hospitals are facing significant financial pressure as supply chain constraints and inflation drive up operating costs, rising interest rates make access to credit more expensive, unrealized losses decrease available cash reserves, and fiscal stimulus programs enacted during the COVID-19 pandemic wind down.

To the extent macroeconomic conditions remain challenging, it is likely that hospitals’ spend on capital equipment will be adversely impacted.

In addition, as competition progresses in various markets, longer selling cycles and pricing pressures are likely to result.

February 3, 2022

(IN MILIONS)

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| Balances as of December 31, 2018 | | | 343.4 | | | | | | $ | 0.3 | | | | | $ | 5,170.1 | | | | | $ | 1,521.7 | | | | | $ | (13.3) | | | | | $ | 6,678.8 | | | | | $ | 8.7 | | | | | $ | 6,687.5 | |

| Repurchase and retirement of common stock | | | (1.7) | | | | | | | | | | | | (14.5) | | | | | | (255.0) | | | | | | | | | | | | (269.5) | | | | | | | | | | | | (269.5) | | |

| Capital contribution from noncontrolling interest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | 10.0 | | | | | | 10.0 | | |

| Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | 12.5 | | | | | | 12.5 | | | | | | 0.5 | | | | | | 13.0 | | |

| Acquisition of businesses, net of cash | | | (8.7) | | | | | | (37.7) | | | | | | (59.7) | | |

| Capital contribution from noncontrolling interest | | | — | | | | | | — | | | | | | 10.0 | | |

Furthermore, economies worldwide have been negatively impacted by the COVID-19 pandemic, and it is possible that the impact could cause an extended local and/or global economic recession.

Such economic disruption could have a material adverse effect on the Company’s business as

hospitals curtail and reduce capital and overall spending.

Policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and their economies.

However, the magnitude and overall effectiveness of these actions remains uncertain.

The Company has also experienced challenges in logistics, as certain shipping routes have been impacted by port closures.

Attracting and retaining qualified personnel is critical to its success, and competition for them has become more intense.

with $181 million of billings during the program, of which $19 million remained outstanding as of December 31, 2020.

As of December 31, 2020, the Company had $18.0 million of restricted cash associated with its insurance programs.

The Company has designated all investments as available-for-sale and, therefore, such investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss).

and services, geographies, and type of customer.

liabilities for the Company’s automobile leases.

| High | | | $ | 101.7 | | | | | $ | 51.0 | | | | | $ | 18.8 | | | | | $ | 7.0 | | | | | $ | 1.7 | | | | | | | | $ | — | | | | | $ | 180.2 | |

| Moderate | | | 109.3 | | | | | | 62.6 | | | | | | 18.8 | | | | | | 7.0 | | | | | | 2.8 | | | | | | | | | 0.6 | | | | | | 201.1 | | |

| Low | | | 8.1 | | | | | | 1.6 | | | | | | 1.3 | | | | | | 0.1 | | | | | | — | | | | | | | | | 0.2 | | | | | | 11.3 | | |

| Total | | | $ | 219.1 | | | | | $ | 115.2 | | | | | $ | 38.9 | | | | | $ | 14.1 | | | | | $ | 4.5 | | | | | | | | $ | 0.8 | | | | | $ | 392.6 | |

*Available-for-sale debt securities.* The Company’s investment portfolio at any point in time contains investments in U.S. treasury and U.S. government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S. government agency securities, cash deposits, and money market funds.

current earnings.

Revenue is attributed to a geographic region based on the location of the end customer.

*Certain Leases with Variable Lease Payments*

In July 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-05, *Lessors — Certain Leases with Variable Lease Payments*, which amends the lessor lease classification guidance in ASC 842 for leases that include any amount of variable lease payments that are not based on an index or rate.

The standard had no impact on the Company's consolidated financial statements and related disclosures.

contract assets and contract liabilities from contracts with customers acquired in a business combination.

The impact of the adoption of ASU 2021-08 cannot currently be determined, as it is dependent on future business combinations that the Company may enter into.

| Cash | | | $ | 644.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 644.3 | | | | | $ | 644.3 | | | | | $ | — | | | | | $ | — | |

| U.S. treasuries | | | 2,626.8 | | | | | | 23.0 | | | | | | — | | | | | | — | | | | | | 2,649.8 | | | | | | 212.5 | | | | | | 1,567.9 | | | | | | 869.4 | | |

| Subtotal | | | 3,252.6 | | | | | | 23.0 | | | | | | — | | | | | | — | | | | | | 3,275.6 | | | | | | 838.3 | | | | | | 1,567.9 | | | | | | 869.4 | | |

| Commercial paper | | | 671.3 | | | | | | — | | | | | | — | | | | | | — | | | | | | 671.3 | | | | | | 64.1 | | | | | | 607.2 | | | | | | — | | |

| Corporate securities | | | 1,425.4 | | | | | | 11.9 | | | | | | (0.2) | | | | | | — | | | | | | 1,437.1 | | | | | | 3.4 | | | | | | 1,036.5 | | | | | | 397.2 | | |

| U.S. government agencies | | | 716.5 | | | | | | 2.5 | | | | | | — | | | | | | — | | | | | | 719.0 | | | | | | 72.5 | | | | | | 233.6 | | | | | | 412.9 | | |

| Municipal securities | | | 119.8 | | | | | | 2.0 | | | | | | — | | | | | | — | | | | | | 121.8 | | | | | | — | | | | | | 43.6 | | | | | | 78.2 | | |

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of [removed: financial statements] [added: the Consolidated Financial Statements] for external purposes in accordance with [removed: U.S.] GAAP.

(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of [removed: financial statements] [added: the Consolidated Financial Statements] in accordance with [removed: U.S.] GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the [removed: financial statements.][added: Consolidated Financial Statements.]

Based on the results of our assessment under the framework in the Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included under “Item 8.

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2021,] [added: 2022,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Certain information required by Part III is omitted from this report on Form 10-K and is incorporated herein by reference to our definitive Proxy Statement for our next Annual Meeting of Stockholders (the “Proxy Statement”), which we intend to file pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, within 120 days after December 31, [removed: 2021.][added: 2022.]

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in our Proxy [removed: Statement.][added: Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2022.]

2)The following financial statement schedule of Intuitive Surgical, Inc. for [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] is filed as part of this report and should be read in conjunction with the [removed: financial statements] [added: Consolidated Financial Statements] of Intuitive Surgical, Inc.:

| [Schedule II - Valuation and Qualifying [removed: Accounts](#i30d98ad3bee64d018232130137db9899_295)] [added: Accounts](#i025de1eec32044f5a30c5872569f0e8d_277)] | | | [removed: [118](#i30d98ad3bee64d018232130137db9899_295)] [added: [121](#i025de1eec32044f5a30c5872569f0e8d_277)] | | |

| 3.1(1) | | | | | | [Amended and Restated Certificate of Incorporation of the Company, [removed: as](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000166/ex-31xamendedandrestat.htm) [A](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000166/ex-31xamendedandrestat.htm)[mended.](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000166/ex-31xamendedandrestat.htm)] [added: as Amended.](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000166/ex-31xamendedandrestat.htm)] | | |

| [removed: 4.2] [added: 4.2(5)] | | | | | | [Description of the [removed: Registrant's] [added: Registrant](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex42q42021xf.htm)’[s] Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex42q42021xf.htm) | | |

| [removed: 10.1(5)] [added: 10.1(6)] | | | | | | [2000 Non-Employee Directors’ Stock Option Plan.](http://www.sec.gov/Archives/edgar/data/1035267/000089161800001640/0000891618-00-001640.txt) * | | |

| [removed: 10.2(6)] [added: 10.2(7)] | | | | | | [Form of Indemnity Agreement.](http://www.sec.gov/Archives/edgar/data/1035267/000103526715000087/ex101intuitivesurgicalincf.htm) * | | |

| [removed: 10.3(7)] [added: 10.3(8)] | | | | | | [2009 Employment Commencement Incentive Plan, as amended and restated.](http://www.sec.gov/Archives/edgar/data/1035267/000103526715000051/ex422009employmentcommence.htm) * | | |

| [removed: 10.4(8)] [added: 10.4(9)] | | | | | | [2000 Employee Stock Purchase Plan, as amended and restated.](http://www.sec.gov/Archives/edgar/data/1035267/000103526717000079/ex1012000employeestockpurc.htm) * | | |

| [removed: 10.5(9)] [added: 10.5(10)] | | | | | | [2010 Incentive Award Plan, as amended and [removed: restated.](https://www.sec.gov/Archives/edgar/data/1035267/000103526721000094/ex-101xamendedandrestated2.htm)] [added: restated.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000115/ex-101xamendedandrestated2.htm)] * | | |

| [removed: 10.6(10)] [added: 10.6(11)] | | | | | | [Severance Plan.](http://www.sec.gov/Archives/edgar/data/1035267/000119312508246630/dex101.htm) * | | |

| [removed: 10.7(11)] [added: 10.7(12)] | | | | | | [Form of Amended and Restated Intuitive Surgical, Inc. 2009 Employment Commencement Incentive Plan Stock Option Grant Notice.](http://www.sec.gov/Archives/edgar/data/1035267/000103526716000130/isrg-20151231xex109.htm) * | | |

| [removed: 10.8(12)] [added: 10.8(13)] | | | | | | [Form of Amended and Restated Intuitive Surgical, Inc. 2009 Employment Commencement Incentive Plan Restricted Stock Unit Grant Notice.](http://www.sec.gov/Archives/edgar/data/1035267/000103526716000130/isrg-20151231xex1010.htm) * | | |

| [removed: 10.9(13)] [added: 10.9] | | | | | | [Form of Amended and Restated Intuitive Surgical, Inc. 2010 Incentive Award Plan Global Stock Option Grant [removed: Notice.](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000122/ex-102x2010planoptionn.htm)] [added: Notice.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-109xfy23optionagree.htm)] * | | |

| [removed: 10.10(14)] [added: 10.10] | | | | | | [Form of Amended and Restated Intuitive Surgical, Inc. 2010 Incentive Award Plan Global Restricted Stock Unit Grant [removed: Notice.](https://www.sec.gov/Archives/edgar/data/1035267/000103526720000122/ex-103x2010planrsunoti.htm)] [added: Notice.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-1010xfy23rsuagreeme.htm)] * | | |

| 10.11 | | | | | | [Form of Amended and Restated Intuitive Surgical, Inc. 2010 Incentive Award Plan [removed: Global](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex1011q42021.htm) [Performance](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex1011q42021.htm) [Stock] [added: Global Performance Stock] Unit Grant [removed: Notice](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex1011q42021.htm).] [added: Notice](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-1011xfy23psuagreeme.htm).] * | | |

| 21.1 | | | | | | [Intuitive Surgical, Inc. [removed: Subsidiaries.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex211q42021x.htm)] [added: Subsidiaries.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-211xsubsidiariesq4o.htm)] | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex231q42021x.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-231xauditorconsentq.htm)] | | |

| 31.1 | | | | | | [Certification of Principal Executive [removed: Officer.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex311q42021x.htm)] [added: Officer.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-311xceocertofsoxsec.htm)] | | |

| 31.2 | | | | | | [Certification of Principal Financial [removed: Officer.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex312q42021x.htm)] [added: Officer.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-312xcfocertofsoxsec.htm)] | | |

| 32.1 | | | | | | [Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1035267/000103526722000014/isrg-20211231xex321q42021x.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1035267/000103526723000019/q422ex-3212xceoandcfocerto.htm)] | | |

| 101 | | | | | | The following materials from Intuitive Surgical, Inc.’s Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged at Level I through IV. | | |

| 104 | | | | | | The cover page from Intuitive Surgical, Inc.’s Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] formatted in Inline XBRL and contained in Exhibit 101. | | |

[removed: (1)Incorporated] [added: 1.Incorporated] by reference to Exhibit 3.1 filed with the Company’s Quarterly Report on Form 10-Q filed on July 23, 2020 (File No. 000-30713).

[removed: (2)Incorporated] [added: 2.Incorporated] by reference to Exhibit 3.1 filed with the Company’s Quarterly Report on Form 10-Q filed on October 20, 2021 (File No. 000-30713).

[removed: (3)Incorporated] [added: 3.Incorporated] by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K filed on February 1, 2021 (File No. 000-30713).

[removed: (4)Incorporated] [added: 4.Incorporated] by reference to Exhibit 4.2 filed with the Company’s Registration Statement Amendment on Form S-1/A filed on May 2, 2000 (File No. 333-33016).

[removed: (5)Incorporated] [added: 6.Incorporated] by reference to exhibits filed with the Company’s Registration Statement on Form S-1 filed on March 22, 2000 (File No. 333-33016).

[removed: (6)Incorporated] [added: 7.Incorporated] by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on August 3, 2015 (File No. 000-30713).

[removed: (7)Incorporated] [added: 8.Incorporated] by reference to Exhibit 4.2 filed with the Company’s Registration Statement on Form S-8 filed on May 1, 2015 (File No. 333-203793).

[removed: (8)Incorporated] [added: 9.Incorporated] by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on April 26, 2017 (File No. 000-30713).

[removed: (9)Incorporated] [added: 10.Incorporated] by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on [removed: April 26, 2021] [added: May 3, 2022] (File No. 000-30713).

[removed: (10)Incorporated] [added: 11.Incorporated] by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on December 2, 2008 (File No. 000-30713).

[removed: (11)Incorporated] [added: 12.Incorporated] by reference to Exhibit 10.9 filed with the Company’s 2015 Annual Report on Form 10-K filed on February 2, 2016 (File No. 000-30713).

[removed: (12)Incorporated] [added: 13.Incorporated] by reference to Exhibit 10.10 filed with the Company’s 2015 Annual Report on Form 10-K filed on February 2, 2016 (File No. 000-30713).

[removed: (13)Incorporated] [added: 5.Incorporated] by reference to Exhibit [removed: 10.2] [added: 4.2] filed with the Company’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] filed on [removed: July 23, 2020] [added: February 3, 2022] (File No. [removed: 000-30713).][added: 333-33016).]

(14)Incorporated by reference to Exhibit 10.3 filed with the Company’s Quarterly Report on Form 10-Q filed on July 23, 2020 (File No. 000-30713).

Date: February [removed: 3, 2022][added: 10, 2023]

| /S/ GARY S. GUTHART | | | | | | President, Chief Executive Officer, and Director (Principal Executive Officer) | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ JAMIE E. SAMATH | | | | | | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ FREDRIK C. WIDMAN | | | | | | Vice President, Corporate Controller (Principal Accounting Officer) | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ CRAIG H. BARRATT | | | | | | Chairman of the Board of Directors | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ JOSEPH C. BEERY | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ AMAL M. JOHNSON | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ DON R. KANIA | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ AMY L. LADD | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ KEITH R. LEONARD JR. | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ ALAN J. LEVY | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ JAMI DOVER NACHTSHEIM | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ MONICA P. REED | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |

| /S/ MARK J. RUBASH | | | | | | Director | | | | | | February [removed: 3, 2022] [added: 10, 2023] | | |