filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
INTUITIVE SURGICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| in millions (except par values) | June 30, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 3,403.1 | $ | 2,027.4 | |||||||
| Short-term investments | 1,923.4 | 1,985.9 | |||||||||
| Accounts receivable, net | 1,269.2 | 1,225.4 | |||||||||
| Inventory | 1,667.0 | 1,487.2 | |||||||||
| Prepaids and other current assets | 483.2 | 385.1 | |||||||||
| Total current assets | 8,745.9 | 7,111.0 | |||||||||
| Property, plant, and equipment, net | 4,985.3 | 4,646.6 | |||||||||
| Long-term investments | 4,206.0 | 4,819.1 | |||||||||
| Deferred tax assets | 1,070.3 | 1,045.1 | |||||||||
| Intangible and other assets, net | 807.0 | 773.9 | |||||||||
| Goodwill | 348.7 | 347.5 | |||||||||
| Total assets | $ | 20,163.2 | $ | 18,743.2 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 266.8 | $ | 193.4 | |||||||
| Accrued compensation and employee benefits | 420.8 | 535.6 | |||||||||
| Deferred revenue | 499.9 | 468.8 | |||||||||
| Other accrued liabilities | 505.1 | 547.5 | |||||||||
| Total current liabilities | 1,692.6 | 1,745.3 | |||||||||
| Other long-term liabilities | 517.5 | 468.3 | |||||||||
| Total liabilities | 2,210.1 | 2,213.6 | |||||||||
| Contingencies (Note 8) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, 2.5 shares authorized, $0.001 par value, issuable in series; zero shares issued and outstanding as of June 30, 2025, and December 31, 2024 | — | — | |||||||||
| Common stock, 600.0 shares authorized, $0.001 par value, 358.4 shares and 356.6 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively | 0.4 | 0.4 | |||||||||
| Additional paid-in capital | 10,236.8 | 9,681.3 | |||||||||
| Retained earnings | 7,605.5 | 6,803.3 | |||||||||
| Accumulated other comprehensive income (loss) | 3.0 | (51.3) | |||||||||
| Total Intuitive Surgical, Inc. stockholders’ equity | 17,845.7 | 16,433.7 | |||||||||
| Noncontrolling interest in joint venture | 107.4 | 95.9 | |||||||||
| Total stockholders’ equity | 17,953.1 | 16,529.6 | |||||||||
| Total liabilities and stockholders’ equity | $ | 20,163.2 | $ | 18,743.2 | |||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).
INTUITIVE SURGICAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| in millions (except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Product | $ | 2,048.8 | $ | 1,692.6 | $ | 3,939.2 | $ | 3,269.7 | |||||||||||||||
| Service | 391.2 | 317.3 | 754.2 | 630.8 | |||||||||||||||||||
| Total revenue | 2,440.0 | 2,009.9 | 4,693.4 | 3,900.5 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Product | 686.2 | 539.4 | 1,356.9 | 1,093.8 | |||||||||||||||||||
| Service | 135.9 | 97.8 | 260.9 | 188.6 | |||||||||||||||||||
| Total cost of revenue | 822.1 | 637.2 | 1,617.8 | 1,282.4 | |||||||||||||||||||
| Gross profit | 1,617.9 | 1,372.7 | 3,075.6 | 2,618.1 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general, and administrative | 561.2 | 525.3 | 1,124.6 | 1,016.8 | |||||||||||||||||||
| Research and development | 313.3 | 280.1 | 629.5 | 564.6 | |||||||||||||||||||
| Total operating expenses | 874.5 | 805.4 | 1,754.1 | 1,581.4 | |||||||||||||||||||
| Income from operations | 743.4 | 567.3 | 1,321.5 | 1,036.7 | |||||||||||||||||||
| Interest and other income, net | 88.7 | 87.2 | 179.1 | 156.3 | |||||||||||||||||||
| Income before taxes | 832.1 | 654.5 | 1,500.6 | 1,193.0 | |||||||||||||||||||
| Income tax expense | 167.9 | 123.0 | 132.7 | 114.1 | |||||||||||||||||||
| Net income | 664.2 | 531.5 | 1,367.9 | 1,078.9 | |||||||||||||||||||
| Less: net income attributable to noncontrolling interest in joint venture | 5.8 | 4.6 | 11.1 | 7.1 | |||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | $ | 658.4 | $ | 526.9 | $ | 1,356.8 | $ | 1,071.8 | |||||||||||||||
| Net income per share attributable to Intuitive Surgical, Inc.: | |||||||||||||||||||||||
| Basic | $ | 1.84 | $ | 1.48 | $ | 3.79 | $ | 3.03 | |||||||||||||||
| Diluted | $ | 1.81 | $ | 1.46 | $ | 3.72 | $ | 2.97 | |||||||||||||||
| Shares used in computing net income per share attributable to Intuitive Surgical, Inc.: | |||||||||||||||||||||||
| Basic | 358.5 | 355.0 | 358.0 | 354.2 | |||||||||||||||||||
| Diluted | 364.1 | 361.0 | 364.4 | 360.8 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Unrealized gains (losses) on hedge instruments | $ | (15.3) | $ | 4.8 | $ | (25.7) | $ | 10.4 | |||||||||||||||
| Unrealized gains on available-for-sale securities | 7.4 | 5.5 | 36.5 | 1.3 | |||||||||||||||||||
| Foreign currency translation gains (losses) | 38.1 | (25.3) | 43.6 | (23.5) | |||||||||||||||||||
| Employee benefit plan adjustments | 0.2 | — | 0.3 | (0.1) | |||||||||||||||||||
| Other comprehensive income (loss) | 30.4 | (15.0) | 54.7 | (11.9) | |||||||||||||||||||
| Total comprehensive income | 694.6 | 516.5 | 1,422.6 | 1,067.0 | |||||||||||||||||||
| Less: comprehensive income attributable to noncontrolling interest | 6.1 | 4.4 | 11.5 | 6.5 | |||||||||||||||||||
| Total comprehensive income attributable to Intuitive Surgical, Inc. | $ | 688.5 | $ | 512.1 | $ | 1,411.1 | $ | 1,060.5 | |||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).
INTUITIVE SURGICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, | |||||||||||
| in millions | 2025 | 2024 | |||||||||
| Operating activities: | |||||||||||
| Net income | $ | 1,367.9 | $ | 1,078.9 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and loss on disposal of property, plant, and equipment | 289.6 | 211.0 | |||||||||
| Amortization of intangible assets | 6.6 | 10.1 | |||||||||
| Gain on investments, accretion of discounts, and amortization of premiums on investments, net | (27.4) | (25.9) | |||||||||
| Deferred income taxes | (29.4) | (39.8) | |||||||||
| Share-based compensation expense | 381.4 | 326.9 | |||||||||
| Amortization of contract acquisition assets | 17.8 | 17.6 | |||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
| Accounts receivable | (44.1) | 21.0 | |||||||||
| Inventory | (494.2) | (389.4) | |||||||||
| Prepaids and other assets | (141.8) | (111.7) | |||||||||
| Accounts payable | 72.4 | (1.6) | |||||||||
| Accrued compensation and employee benefits | (114.9) | (115.1) | |||||||||
| Deferred revenue | 48.8 | (14.3) | |||||||||
| Other liabilities | (35.7) | (81.8) | |||||||||
| Net cash provided by operating activities | 1,297.0 | 885.9 | |||||||||
| Investing activities: | |||||||||||
| Purchase of investments | (691.8) | (1,789.4) | |||||||||
| Proceeds from sales of investments | 249.1 | 100.2 | |||||||||
| Proceeds from maturities of investments | 1,190.0 | 1,644.9 | |||||||||
| Purchase of property, plant, and equipment | (271.9) | (551.3) | |||||||||
| Acquisition of businesses, net of cash, and intellectual property and other investing activities | (1.2) | — | |||||||||
| Net cash provided by (used in) investing activities | 474.2 | (595.6) | |||||||||
| Financing activities: | |||||||||||
| Proceeds from issuance of common stock relating to employee stock plans | 183.7 | 251.9 | |||||||||
| Taxes paid related to net share settlement of equity awards | (386.3) | (240.1) | |||||||||
| Repurchase of common stock | (181.0) | — | |||||||||
| Cash dividends paid by joint venture to noncontrolling interest | — | (8.0) | |||||||||
| Payment of deferred purchase consideration | — | (0.5) | |||||||||
| Net cash provided by (used in) financing activities | (383.6) | 3.3 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (3.5) | 3.1 | |||||||||
| Net increase in cash, cash equivalents, and restricted cash | 1,384.1 | 296.7 | |||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 2,062.4 | 2,770.1 | |||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 3,446.5 | $ | 3,066.8 | |||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements (Unaudited).
INTUITIVE SURGICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In this report, “Intuitive,” the “Company,” “we,” “us,” and “our” refer to Intuitive Surgical, Inc. and its wholly and majority-owned subsidiaries.
NOTE 1. DESCRIPTION OF THE BUSINESS
Intuitive develops, manufactures, and markets da Vinci® surgical systems and the Ion® endoluminal system. The Company’s products and related services enable physicians and healthcare providers to improve the quality of and access to minimally invasive care. The da Vinci surgical system is designed to enable surgeons to perform a wide range of surgical procedures within our targeted general surgery, urologic, gynecologic, cardiothoracic, and head and neck specialties and consists of a surgeon console or consoles, a patient-side cart, and a high-performance vision system. The Ion endoluminal system is a flexible, robotic-assisted, catheter-based platform for which the first cleared indication is minimally invasive biopsies in the lung and consists of a system cart, a controller, a catheter, and a vision probe. Both systems use software, instruments, and accessories.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited Condensed Consolidated Financial Statements (“Financial Statements”) and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management, the accompanying Financial Statements of Intuitive Surgical, Inc. and its wholly and majority-owned subsidiaries have been prepared on a consistent basis with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2024, and include all adjustments, consisting of only normal, recurring adjustments, necessary to fairly state the information set forth herein.
Certain information and footnote disclosures typically included in the annual consolidated financial statements have been condensed or omitted. Accordingly, these Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on January 31, 2025. The results of operations for the first six months of 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any future periods.
The Financial Statements include the results and balances of the Company’s majority-owned joint ventures, Intuitive Surgical-Fosun Medical Technology (Shanghai) Co., Ltd. and Intuitive Surgical-Fosun (HongKong) Co., Ltd. (collectively, the “Joint Venture”), with Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”). The Company holds a controlling financial interest in the Joint Venture, and the noncontrolling interest is reflected as a separate component of the consolidated stockholders’ equity. The noncontrolling interest’s share of the earnings in the Joint Venture is presented separately in the Condensed Consolidated Statements of Comprehensive Income.
Risks and Uncertainties
The Company’s future results of operations and liquidity could be materially adversely affected by uncertainties surrounding macroeconomic and geopolitical factors in both the U.S. and globally. These uncertainties include any introduction or modification of tariffs or trade barriers, supply chain challenges, inflationary pressures, elevated interest rates, and disruptions in commodity markets stemming from conflicts, such as those between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran.
Recent tariff changes imposed by the U.S. and other countries have created increased risks and uncertainties surrounding the Company’s future results of operations. The U.S. import tariffs, along with any reciprocal measures by other countries, are expected to increase the Company’s cost of raw materials and finished goods imported from outside of the U.S. Additionally, the Company anticipates that some of its suppliers will incur incremental tariff-related costs, which may be passed on to the Company. The ultimate impact of changes to tariffs or trade barriers will depend on various factors, including the timing, amount, scope, and nature of any tariffs or trade barriers that are implemented.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense
or benefit, and income tax expense or benefit from continuing operations. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company plans to adopt ASU 2023-09 during the fourth quarter of 2025 for its annual report using a prospective transition method and does not expect this standard to have a material impact on its Financial Statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.
The Company continues to monitor new accounting pronouncements issued by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the Company’s Financial Statements.
Significant Accounting Policies
There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, that are of significance, or potential significance, to the Company.
NOTE 3. FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, and Investments
The following tables summarize the Company’s cash and available-for-sale debt securities’ amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit loss, and fair value by significant investment category reported as cash and cash equivalents, short-term investments, or long-term investments (in millions):
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reported as: | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Loss | Fair Value | Cash and Cash Equivalents | Short- term Investments | Long- term Investments | ||||||||||||||||||||||||||||||||||||||||
| Cash | $ | 528.0 | $ | — | $ | — | $ | — | $ | 528.0 | $ | 528.0 | $ | — | $ | — | |||||||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | 2,590.8 | — | — | — | 2,590.8 | 2,590.8 | — | — | |||||||||||||||||||||||||||||||||||||||
| U.S. treasuries | 5,776.4 | 34.9 | (6.3) | — | 5,805.0 | 284.3 | 1,736.7 | 3,784.0 | |||||||||||||||||||||||||||||||||||||||
| Subtotal | 8,367.2 | 34.9 | (6.3) | — | 8,395.8 | 2,875.1 | 1,736.7 | 3,784.0 | |||||||||||||||||||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 124.8 | — | (1.9) | (0.1) | 122.8 | — | 97.5 | 25.3 | |||||||||||||||||||||||||||||||||||||||
| U.S. government agencies | 482.8 | 2.2 | (0.5) | — | 484.5 | — | 87.8 | 396.7 | |||||||||||||||||||||||||||||||||||||||
| Municipal securities | 1.4 | — | — | — | 1.4 | — | 1.4 | — | |||||||||||||||||||||||||||||||||||||||
| Subtotal | 609.0 | 2.2 | (2.4) | (0.1) | 608.7 | — | 186.7 | 422.0 | |||||||||||||||||||||||||||||||||||||||
| Total assets measured at fair value | $ | 9,504.2 | $ | 37.1 | $ | (8.7) | $ | (0.1) | $ | 9,532.5 | $ | 3,403.1 | $ | 1,923.4 | $ | 4,206.0 |
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Reported as: | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Loss | Fair Value | Cash and Cash Equivalents | Short- term Investments | Long- term Investments | ||||||||||||||||||||||||||||||||||||||||
| Cash | $ | 479.4 | $ | — | $ | — | $ | — | $ | 479.4 | $ | 479.4 | $ | — | $ | — | |||||||||||||||||||||||||||||||
| Level 1: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | 1,516.1 | — | — | — | 1,516.1 | 1,516.1 | — | — | |||||||||||||||||||||||||||||||||||||||
| U.S. treasuries | 6,011.5 | 13.2 | (27.5) | — | 5,997.2 | 31.9 | 1,637.4 | 4,327.9 | |||||||||||||||||||||||||||||||||||||||
| Subtotal | 7,527.6 | 13.2 | (27.5) | — | 7,513.3 | 1,548.0 | 1,637.4 | 4,327.9 | |||||||||||||||||||||||||||||||||||||||
| Level 2: | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 287.5 | 0.1 | (3.7) | (0.1) | 283.8 | — | 189.7 | 94.1 | |||||||||||||||||||||||||||||||||||||||
| U.S. government agencies | 552.2 | 1.5 | (2.4) | — | 551.3 | — | 154.2 | 397.1 | |||||||||||||||||||||||||||||||||||||||
| Municipal securities | 4.7 | — | (0.1) | — | 4.6 | — | 4.6 | — | |||||||||||||||||||||||||||||||||||||||
| Subtotal | 844.4 | 1.6 | (6.2) | (0.1) | 839.7 | — | 348.5 | 491.2 | |||||||||||||||||||||||||||||||||||||||
| Total assets measured at fair value | $ | 8,851.4 | $ | 14.8 | $ | (33.7) | $ | (0.1) | $ | 8,832.4 | $ | 2,027.4 | $ | 1,985.9 | $ | 4,819.1 |
The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale debt securities, excluding money market funds (in millions):
| As of June 30, 2025 | |||||||||||
| Amortized Cost | Fair Value | ||||||||||
| Mature in less than one year | $ | 2,207.5 | $ | 2,207.7 | |||||||
| Mature in one to five years | 4,177.9 | 4,206.0 | |||||||||
| Total | $ | 6,385.4 | $ | 6,413.7 |
Actual maturities may differ from contractual maturities, because certain borrowers have the right to call or prepay certain obligations. Gross realized gains and losses recognized on the sale of investments were immaterial for the periods presented.
The following tables present the breakdown of the available-for-sale debt securities with unrealized losses (in millions):
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Unrealized losses less than 12 months | Unrealized losses 12 months or greater | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
| U.S. treasuries | $ | 1,779.3 | $ | (4.3) | $ | 101.9 | $ | (2.0) | $ | 1,881.2 | $ | (6.3) | |||||||||||||||||||||||
| Corporate debt securities | 7.0 | — | 82.4 | (1.9) | 89.4 | (1.9) | |||||||||||||||||||||||||||||
| U.S. government agencies | 37.2 | (0.1) | 15.4 | (0.4) | 52.6 | (0.5) | |||||||||||||||||||||||||||||
| Municipal securities | — | — | 1.4 | — | 1.4 | — | |||||||||||||||||||||||||||||
| Total | $ | 1,823.5 | $ | (4.4) | $ | 201.1 | $ | (4.3) | $ | 2,024.6 | $ | (8.7) |
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized losses less than 12 months | Unrealized losses 12 months or greater | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||
| U.S. treasuries | $ | 2,744.4 | $ | (23.3) | $ | 190.1 | $ | (4.2) | $ | 2,934.5 | $ | (27.5) | |||||||||||||||||||||||||||||||||||
| Corporate debt securities | — | — | 218.7 | (3.7) | 218.7 | (3.7) | |||||||||||||||||||||||||||||||||||||||||
| U.S. government agencies | 178.1 | (1.2) | 106.7 | (1.2) | 284.8 | (2.4) | |||||||||||||||||||||||||||||||||||||||||
| Municipal securities | — | — | 4.6 | (0.1) | 4.6 | (0.1) | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | 2,922.5 | $ | (24.5) | $ | 520.1 | $ | (9.2) | $ | 3,442.6 | $ | (33.7) |
The Company’s investments may, at any time, consist of money market funds, U.S. treasury and U.S. government agency securities, high-quality corporate notes and bonds, commercial paper, non-U.S. government agency securities, and taxable and tax-exempt municipal notes. The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, and the expected cash flows from the security. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero-loss expectation for U.S. treasury and U.S. government agency securities. The basis for this assumption is that these securities have consistently high credit ratings by rating agencies, have a long history with no credit losses, are explicitly guaranteed by a sovereign entity, which can print its own currency, and are denominated in a currency that is routinely held by central banks, used in international commerce, and commonly viewed as a reserve currency. Additionally, all of the Company’s investments in corporate debt securities and municipal securities are in securities with high-quality credit ratings, which have historically experienced low rates of default.
The current unrealized losses on the Company’s available-for-sale debt securities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. As of June 30, 2025, the Company does not intend to sell the investments in unrealized loss positions, and it is not more-likely-than-not that the Company will be required to sell any of the investments before recovery of their amortized cost basis, which may be at maturity. Therefore, the Company does not expect to realize any losses on these available-for-sale debt securities. Additional factors considered in determining the treatment of unrealized losses include the financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, and the expected cash flows from the security.
For the three and six months ended June 30, 2025, and 2024, credit losses related to available-for-sales debt securities were not material.
Equity Investments
The Company’s equity investments may, at any time, consist of equity investments with and without readily determinable fair values. The Company generally recognizes equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The following table is a summary of the activity related to equity investments (in millions):
| Reported as: | |||||||||||||||||||||||||||||||||||
| December 31, 2024 Carrying Value | Changes in Fair Value | Purchases / Sales / Other (1) | June 30, 2025 Carrying Value | Prepaids and other current assets | Intangible and other assets, net | ||||||||||||||||||||||||||||||
| Equity investments without readily determinable fair value (Level 2) | $ | 84.6 | $ | (5.0) | $ | 6.4 | $ | 86.0 | $ | — | $ | 86.0 | |||||||||||||||||||||||
| (1) Other includes foreign currency translation gains/(losses). | |||||||||||||||||||||||||||||||||||
For the six months ended June 30, 2025, the Company did not hold any equity investments with readily determinable fair values (Level 1).
For the six months ended June 30, 2025, the Company recognized a net decrease in fair value of $5.0 million, primarily due to impairments and net decreases in observable price changes for certain equity investments, in interest and other income, net.
Foreign Currency Derivatives
The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on net cash flow from foreign currency-denominated sales, expenses, intercompany balances, and other monetary assets or liabilities denominated in currencies other than the U.S. dollar (“USD”). The terms of the Company’s derivative contracts are generally thirteen months or shorter. The derivative assets and liabilities are measured using Level 2 fair value inputs.
Cash Flow Hedges
The Company enters into currency forward contracts as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the USD, primarily the Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), the Korean Won (“KRW”), the New Taiwan Dollar (“TWD”), and the Indian Rupee (“INR”). The Company also enters into currency forward contracts as cash flow hedges to hedge certain forecasted expense transactions denominated in EUR and the Swiss Franc (“CHF”).
For these derivatives, the Company reports the unrealized after-tax gain or loss from the hedge as a component of accumulated other comprehensive income (loss) in stockholders’ equity and reclassifies the amount into earnings in the same period in which the hedged transaction affects earnings. The amounts reclassified to revenue and expenses related to the hedged transactions and the ineffective portions of cash flow hedges were not material for the three and six months ended June 30, 2025, and 2024.
Other Derivatives Not Designated as Hedging Instruments
Other derivatives not designated as hedging instruments consist primarily of forward contracts that the Company uses to hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the USD, primarily the EUR, GBP, JPY, KRW, CHF, TWD, INR, the Mexican Peso (“MXN”), and the Chinese Yuan (“CNY”).
These derivative instruments are used to hedge against balance sheet foreign currency exposures. The related gains and losses were as follows (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Recognized gains (losses) in interest and other income, net | $ | (24.8) | $ | 11.8 | $ | (35.3) | $ | 30.1 | |||||||||||||||
| Foreign exchange gains (losses) related to balance sheet re-measurement | $ | 18.8 | $ | (13.2) | $ | 26.5 | $ | (32.6) | |||||||||||||||
The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for outstanding derivatives and the aggregate gross fair value at the end of each period were as follows (in millions):
| Derivatives Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | June 30, 2025 | December 31, 2024 | ||||||||||||||||||||
| Notional amounts: | |||||||||||||||||||||||
| Forward contracts | $ | 454.0 | $ | 382.2 | $ | 760.0 | $ | 693.5 | |||||||||||||||
| Gross fair value recorded in: | |||||||||||||||||||||||
| Prepaids and other current assets | $ | 3.1 | $ | 14.9 | $ | 3.6 | $ | 13.0 | |||||||||||||||
| Other accrued liabilities | $ | 20.3 | $ | 2.1 | $ | 13.3 | $ | 2.4 |
NOTE 4. BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION
Balance Sheet Details
The following tables provide details of selected Condensed Consolidated Balance Sheet line items (in millions):
| As of | |||||||||||
| Accounts receivable, net | June 30, 2025 | December 31, 2024 | |||||||||
| Trade accounts receivable, net | $ | 1,132.0 | $ | 1,117.2 | |||||||
| Unbilled accounts receivable and other | 160.1 | 138.7 | |||||||||
| Sales returns and allowances | (22.9) | (30.5) | |||||||||
| Total accounts receivable, net | $ | 1,269.2 | $ | 1,225.4 |
| As of | |||||||||||
| Inventory | June 30, 2025 | December 31, 2024 | |||||||||
| Raw materials | $ | 525.4 | $ | 563.9 | |||||||
| Work-in-process | 230.8 | 205.7 | |||||||||
| Finished goods | 910.8 | 717.6 | |||||||||
| Total inventory | $ | 1,667.0 | $ | 1,487.2 |
| As of | |||||||||||
| Prepaids and other current assets | June 30, 2025 | December 31, 2024 | |||||||||
| Net investment in sales-type leases – short-term | $ | 125.0 | $ | 131.4 | |||||||
| Other prepaids and other current assets | 358.2 | 253.7 | |||||||||
| Total prepaids and other current assets | $ | 483.2 | $ | 385.1 |
| As of | |||||||||||
| Other accrued liabilities – short-term | June 30, 2025 | December 31, 2024 | |||||||||
| Income and other taxes payable | $ | 93.7 | $ | 154.4 | |||||||
| Accrued construction-related capital expenditures | 55.7 | 57.2 | |||||||||
| Other accrued liabilities | 355.7 | 335.9 | |||||||||
| Total other accrued liabilities – short-term | $ | 505.1 | $ | 547.5 |
| As of | |||||||||||
| Other long-term liabilities | June 30, 2025 | December 31, 2024 | |||||||||
| Income taxes – long-term | $ | 249.9 | $ | 239.0 | |||||||
| Deferred revenue – long-term | 71.8 | 54.1 | |||||||||
| Other long-term liabilities | 195.8 | 175.2 | |||||||||
| Total other long-term liabilities | $ | 517.5 | $ | 468.3 |
Supplemental Cash Flow Information
The following table provides supplemental non-cash investing and financing activities (in millions):
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Equipment transfers, including operating lease assets, from inventory to property, plant, and equipment | $ | 357.2 | $ | 246.8 | |||||||
| Acquisition of property, plant, and equipment in accounts payable and accrued liabilities | $ | 74.8 | $ | 184.2 | |||||||
Restricted Cash
Amounts included in restricted cash primarily relate to the Company’s insurance programs and certain employee-related benefits. The following table provides details of total cash, cash equivalents, and restricted cash as of the periods presented (in millions):
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| Cash and cash equivalents | $ | 3,403.1 | $ | 2,027.4 | |||||||
| Restricted cash within other current assets | 28.4 | 20.0 | |||||||||
| Restricted cash within other assets | 15.0 | 15.0 | |||||||||
| Total cash, cash equivalents, and restricted cash | $ | 3,446.5 | $ | 2,062.4 | |||||||
NOTE 5. REVENUE
Revenue from external customers is attributed to individual countries based on customer location. The following table presents revenue disaggregated by geography and type (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| U.S. | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Instruments and accessories | $ | 1,017.3 | $ | 891.4 | $ | 1,981.1 | $ | 1,713.8 | |||||||||||||||
| Systems | 354.0 | 224.3 | 689.9 | 436.8 | |||||||||||||||||||
| Service | 258.1 | 203.5 | 496.6 | 407.1 | |||||||||||||||||||
| Total U.S. revenue | $ | 1,629.4 | $ | 1,319.2 | $ | 3,167.6 | $ | 2,557.7 | |||||||||||||||
| Outside of the U.S. (“OUS”) | |||||||||||||||||||||||
| Instruments and accessories | $ | 456.8 | $ | 353.0 | $ | 860.7 | $ | 689.5 | |||||||||||||||
| Systems | 220.7 | 223.9 | 407.5 | 429.6 | |||||||||||||||||||
| Service | 133.1 | 113.8 | 257.6 | 223.7 | |||||||||||||||||||
| Total OUS revenue | $ | 810.6 | $ | 690.7 | $ | 1,525.8 | $ | 1,342.8 | |||||||||||||||
| Total | |||||||||||||||||||||||
| Instruments and accessories | $ | 1,474.1 | $ | 1,244.4 | $ | 2,841.8 | $ | 2,403.3 | |||||||||||||||
| Systems | 574.7 | 448.2 | 1,097.4 | 866.4 | |||||||||||||||||||
| Service | 391.2 | 317.3 | 754.2 | 630.8 | |||||||||||||||||||
| Total revenue | $ | 2,440.0 | $ | 2,009.9 | $ | 4,693.4 | $ | 3,900.5 |
Remaining Performance Obligations
The transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which revenue has not yet been recognized. A significant portion of these performance obligations relate to service obligations in the Company’s system sale and lease arrangements that will be satisfied and recognized as revenue in future periods. The transaction price allocated to the remaining performance obligations was $2.81 billion as of June 30, 2025. The remaining performance obligations are expected to be satisfied over the term of the system sale, lease, and service arrangements. Approximately 43% of the remaining performance obligations are expected to be recognized in the next 12 months with the remainder recognized thereafter over the term of the system sale, lease, and service arrangements, which are generally up to 5 years.
Contract Assets and Liabilities
The following information summarizes the Company’s contract assets and liabilities (in millions):
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| Contract assets | $ | 20.9 | $ | 13.9 | |||||||
| Deferred revenue | $ | 571.7 | $ | 522.9 |
Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied and the contractual billing terms in the arrangements. The Company did not have any significant impairment losses on its contract assets for the periods presented.
The Company invoices its customers based on the billing schedules in its sales arrangements. Payments are generally due 30 to 60 days from the date of invoice.
Deferred revenue for the periods presented primarily relates to service contracts where the service fees are billed up-front, generally quarterly or annually, prior to those services having been performed. The associated deferred revenue is generally recognized over the term of the service period.
During the three and six months ended June 30, 2025, the Company recognized $126 million and $324 million of revenue, respectively, that was included in the deferred revenue balance as of December 31, 2024. During the three and six months
ended June 30, 2024, the Company recognized $118 million and $307 million of revenue, respectively, that was included in the deferred revenue balance as of December 31, 2023.
Intuitive System Leasing
The following table presents product revenue from Intuitive System Leasing arrangements (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Sales-type lease revenue | $ | 15.1 | $ | 45.1 | $ | 41.6 | $ | 58.4 | |||||||||||||||
| Operating lease revenue* | $ | 213.8 | $ | 156.9 | $ | 409.0 | $ | 304.9 | |||||||||||||||
| *Variable lease revenue related to usage-based arrangements included within operating lease revenue | $ | 130.0 | $ | 80.1 | $ | 241.7 | $ | 150.1 |
Trade Accounts Receivable
The allowance for doubtful accounts is based on the Company’s assessment of the collectibility of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. For the three and six months ended June 30, 2025, and 2024, bad debt expense was not material.
The Company’s exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, procedure coverage and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors. Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of lease and trade receivables as hospital cash flows are impacted by macroeconomic factors, including inflation, tariffs, high interest rates, and staffing shortages.
NOTE 6. LEASES
Lessor Information related to Intuitive System Leasing
Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions):
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| Gross lease receivables | $ | 351.8 | $ | 393.4 | |||||||
| Unearned income | (13.7) | (13.9) | |||||||||
| Subtotal | 338.1 | 379.5 | |||||||||
| Allowance for credit loss | (2.6) | (2.6) | |||||||||
| Net investment in sales-type leases | $ | 335.5 | $ | 376.9 | |||||||
| Reported as: | |||||||||||
| Prepaids and other current assets | $ | 125.0 | $ | 131.4 | |||||||
| Intangible and other assets, net | 210.5 | 245.5 | |||||||||
| Net investment in sales-type leases | $ | 335.5 | $ | 376.9 |
Contractual maturities of gross lease receivables as of June 30, 2025, are as follows (in millions):
| Fiscal Year | Amount | ||||
| Remainder of 2025 | $ | 60.5 | |||
| 2026 | 120.2 | ||||
| 2027 | 82.2 | ||||
| 2028 | 50.1 | ||||
| 2029 | 31.6 | ||||
| 2030 and thereafter | 7.2 | ||||
| Total | $ | 351.8 |
The Company enters into sales-type leases with certain qualified customers to purchase its systems. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. The allowance for loan loss is based on the Company’s assessment of the current expected lifetime loss on lease receivables. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the lease receivable balances, and current economic conditions that may affect a customer’s ability to pay. Lease receivables are considered past due 90 days after invoice.
The Company manages the credit risk of the net investment in sales-type leases using a number of factors relating to its customers, including, but not limited to, the following: size of operations; profitability, liquidity, and debt ratios; payment history; and past due amounts. The Company also uses credit scores obtained from external providers as a key indicator for the purposes of determining credit quality. The following table summarizes the amortized cost basis by year of origination and by credit quality for the net investment in sales-type leases as of June 30, 2025 (in millions):
| 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Net Investment | |||||||||||||||||||||||||||||||||||
| Credit Rating: | |||||||||||||||||||||||||||||||||||||||||
| High | $ | 21.2 | $ | 61.0 | $ | 27.7 | $ | 37.1 | $ | 23.4 | $ | 3.4 | $ | 173.8 | |||||||||||||||||||||||||||
| Moderate | 18.8 | 66.9 | 15.3 | 28.5 | 18.4 | 6.5 | 154.4 | ||||||||||||||||||||||||||||||||||
| Low | — | 6.1 | 0.7 | 1.9 | 1.0 | 0.2 | 9.9 | ||||||||||||||||||||||||||||||||||
| Total | $ | 40.0 | $ | 134.0 | $ | 43.7 | $ | 67.5 | $ | 42.8 | $ | 10.1 | $ | 338.1 | |||||||||||||||||||||||||||
For the three and six months ended June 30, 2025, and 2024, credit losses related to the net investment in sales-type leases were not material.
NOTE 7. GOODWILL AND INTANGIBLE ASSETS
Acquisitions
There were no material acquisitions in the six months ended June 30, 2025, and 2024.
Pending Acquisitions
On January 21, 2025, Intuitive announced that it has entered into a definitive agreement with the current Intuitive technology distributors ab medica, Abex, Excelencia Robotica, and their affiliates to acquire the da Vinci and Ion distribution businesses in Italy, Spain, Portugal, Malta, and San Marino, and associated territories. The transaction consists of an upfront cash payment of approximately EUR 290 million and up to an additional EUR 31 million in commercial milestone cash payments, subject to certain closing adjustments. The Company expects to complete the transaction in the first half of 2026, subject to applicable regulatory approvals and customary closing conditions.
Goodwill
The following table summarizes the changes in the carrying amount of goodwill (in millions):
| Amount | |||||
| Balance as of December 31, 2024 | $ | 347.5 | |||
| Acquisition activity | — | ||||
| Translation and other | 1.2 | ||||
| Balance as of June 30, 2025 | $ | 348.7 |
Intangible Assets
The following table summarizes the components of gross intangible assets, accumulated amortization, and net intangible assets balances (in millions):
| As of June 30, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||
| Patents and developed technology | $ | 204.5 | $ | (189.8) | $ | 14.7 | $ | 203.3 | $ | (185.4) | $ | 17.9 | ||||||||||||||||||||||||||
| Customer relationships | 29.2 | (26.0) | 3.2 | 27.3 | (22.3) | 5.0 | ||||||||||||||||||||||||||||||||
| Distribution rights and others | — | — | — | 1.2 | (1.1) | 0.1 | ||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 233.7 | $ | (215.8) | $ | 17.9 | $ | 231.8 | $ | (208.8) | $ | 23.0 |
Amortization expense related to intangible assets was $3.2 million and $5.0 million for the three months ended June 30, 2025, and 2024, respectively. Amortization expense related to intangible assets was $6.6 million and $10.1 million for the six months ended June 30, 2025, and 2024, respectively.
The estimated future amortization expense related to intangible assets as of June 30, 2025, is as follows (in millions):
| Fiscal Year | Amount | ||||
| Remainder of 2025 | $ | 6.6 | |||
| 2026 | 5.9 | ||||
| 2027 | 3.0 | ||||
| 2028 | 1.4 | ||||
| 2029 | 0.6 | ||||
| 2030 and thereafter | 0.4 | ||||
| Total | $ | 17.9 |
The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, measurement-period adjustments to intangible assets, changes in foreign currency exchange rates, impairments of intangible assets, accelerated amortization of intangible assets, and other events.
NOTE 8. CONTINGENCIES
From time to time, the Company is involved in a variety of claims, lawsuits, investigations, and proceedings relating to securities laws, product liability, intellectual property, commercial, insurance, contract disputes, employment, and other matters. Certain of these lawsuits and claims are described in further detail below. It is not possible to predict what the outcome of these matters will be, and the Company cannot guarantee that any resolution will be reached on commercially reasonable terms, if at all.
A liability and related charge to earnings are recorded in the Financial Statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to each case. Nevertheless, it is possible that additional future legal costs (including settlements, judgments, legal fees, and other related defense costs) could have a material adverse effect on the Company’s business, financial condition, or future results of operations.
Product Liability Litigation
The Company is currently named as a defendant in a number of individual product liability lawsuits filed in various state and federal courts. The plaintiffs generally allege that they or a family member underwent surgical procedures that utilized the da Vinci surgical system and sustained a variety of personal injuries and, in some cases, death as a result of such surgery. Several of the filed cases have trial dates in the next 12 months.
The cases raise a variety of allegations including, to varying degrees, that plaintiffs’ injuries resulted from purported defects in the da Vinci surgical system and/or failure on the Company’s part to provide adequate training resources to the healthcare professionals who performed plaintiffs’ surgeries. The cases further allege that the Company failed to adequately disclose and/or misrepresented the potential risks and/or benefits of the da Vinci surgical system. Plaintiffs also assert a variety of causes of action, including, for example, strict liability based on purported design defects, negligence, fraud, breach of
express and implied warranties, unjust enrichment, and loss of consortium. Plaintiffs seek recovery for alleged personal injuries and, in many cases, punitive damages. The Company disputes these allegations and is defending against these claims.
The Company’s estimate of the anticipated cost of resolving the pending cases is based on negotiations with attorneys for the claimants. The final outcome of the pending lawsuits and claims, and others that might arise, is dependent on many variables that are difficult to predict, and the ultimate cost associated with these product liability lawsuits and claims may be materially different than the amount of the current estimate and accruals and could have a material adverse effect on the Company’s business, financial condition, or future results of operations. Although there is a reasonable possibility that a loss in excess of the amount recognized exists, the Company is unable to estimate the possible loss or range of loss in excess of the amount recognized at this time.
Patent Litigation
On October 19, 2022, a jury rendered a verdict against the Company awarding $10 million in damages to Rex Medical, L.P. in a patent infringement lawsuit. On September 20, 2023, the court granted the Company’s post-trial motion and reduced the damages to Rex Medical L.P. to nominal damages of $1. On October 18, 2023, Rex Medical filed a notice of appeal to the United States Court of Appeals for the Federal Circuit and, on October 31, 2023, Intuitive filed its notice of cross appeal. The parties have completed briefing before the Court of Appeals for the Federal Circuit. Based on currently available information, the Company does not believe that any losses arising from this matter would be material.
Commercial Litigation
On May 10, 2021, Surgical Instrument Service Company, Inc. (“SIS”) filed a complaint in the Northern District of California Court alleging antitrust claims against the Company relating to EndoWrist service, maintenance, and repair processes. The Court granted in part and denied in part the Company’s Motion to Dismiss, and discovery has commenced. The Company filed an answer denying the antitrust allegations and filed counterclaims against SIS. The counterclaims allege that SIS violated the Federal Lanham Act, California’s Unfair Competition Law, and California’s False Advertising Law and that SIS is also liable to the Company for Unfair Competition and Tortious Interference with Contract. The parties filed summary judgment motions, and the Court held a hearing on these motions on September 7, 2023.
On March 31, 2024, the Court granted-in-part and denied-in-part both Intuitive’s and plaintiff’s motions for summary judgment. Trial in this matter commenced on January 6, 2025. On January 28, 2025, after the close of both plaintiff’s and Intuitive’s cases in chief, the Court found in Intuitive’s favor on all of SIS’s antitrust claims and stayed Intuitive’s counterclaims. On February 27, 2025, SIS filed a Notice of Appeal to the Ninth Circuit Court of Appeals. SIS’s brief is due July 23, 2025. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
Three class action complaints were filed against the Company in the Northern District of California Court alleging antitrust allegations relating to the service and repair of certain instruments manufactured by the Company. A complaint by Larkin Community Hospital was filed on May 20, 2021, a complaint by Franciscan Alliance, Inc. and King County Public Hospital District No. 1 was filed on July 6, 2021, and a complaint by Kaleida Health was filed on July 8, 2021. The Court has consolidated the Franciscan Alliance, Inc. and King County Public Hospital District No. 1 and Kaleida Health cases with the Larkin Community Hospital case, which is now captioned on the Larkin docket as “In Re: da Vinci Surgical Robot Antitrust Litigation.” A Consolidated Amended Class Action Complaint has been filed on behalf of each plaintiff named in the earlier-filed cases. On January 14, 2022, Kaleida Health voluntarily dismissed itself as a party to this case. On January 18, 2022, the Company filed an answer against the plaintiffs in this matter, and discovery has commenced.
With regard to this class action case, on September 7, 2023, the Court heard argument on the parties’ respective motions for summary judgment and motions related to expert testimony. On March 31, 2024, the Court granted-in-part and denied-in-part plaintiffs’ motion for summary judgment on certain market definition issues and denied Intuitive’s motion on the antitrust claims. In denying Intuitive’s motion, the Court declined to decide whether third-party companies were required to obtain 510(k) clearance for their services with respect to EndoWrist instruments, and in the absence of a formal ruling from the FDA on that question denied Intuitive’s motion for summary judgment challenging plaintiffs’ standing on that ground. There were additional rulings on the expert witness issues as well. In the summary judgment order, the Court ruled with plaintiffs that the da Vinci robot and EndoWrist instruments occupy separate product markets for antitrust purposes. The Court also ruled that there is an antitrust aftermarket for the repair and replacement of EndoWrist instruments, and that Intuitive holds monopoly power in that aftermarket. The Court denied summary judgment for plaintiffs on the issue of whether soft-tissue surgical robots constitute a relevant antitrust market or are part of a larger market that includes laparoscopic and open surgery for antitrust purposes. On July 30, 2024, the Court granted Intuitive’s motion for reconsideration, vacating those portions of the Court’s March 31, 2024 Order granting summary judgment as to the definition of a U.S. market for EndoWrist instrument repair and replacement and Intuitive’s market power in such a market. On March 31, 2025, the Court granted plaintiff’s motion for class certification. No trial date has been scheduled for this matter. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
On September 18, 2024, Restore Robotics Repairs (“Restore”) filed a complaint in the United States District Court for the Northern District of Florida alleging antitrust claims against the Company relating to the service and replacement of X/Xi EndoWrist instruments for use with the da Vinci X and Xi surgical systems. On December 9, 2024, Intuitive filed a motion to dismiss to which plaintiff responded by amending its complaint. Intuitive filed a motion to dismiss the first amended complaint on January 31, 2025. Plaintiff filed an opposition to Intuitive’s motion to dismiss on February 14, 2025, and Intuitive filed a reply on March 26, 2025. The Court has not yet ruled on that motion. On April 7, 2025, Plaintiff filed a motion for leave to file a second amended complaint. On April 21, 2025, Intuitive filed an opposition to Plaintiff’s motion for leave to file a second amended complaint. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
NOTE 9. STOCKHOLDERS’ EQUITY
Stockholders’ Equity
The following tables present the changes in stockholders’ equity (in millions):
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Intuitive Surgical, Inc. Stockholders’ Equity | Noncontrolling Interest in Joint Venture | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | 358.4 | $ | 0.4 | $ | 9,993.7 | $ | 7,139.4 | $ | (27.1) | $ | 17,106.4 | $ | 101.3 | $ | 17,207.7 | ||||||||||||||||||||||||||||||||
| Issuance of common stock through employee stock plans | 0.4 | — | 49.4 | — | — | 49.4 | — | 49.4 | |||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (0.1) | — | (0.4) | (15.8) | — | (16.2) | — | (16.2) | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense related to employee stock plans | — | — | 198.6 | — | — | 198.6 | — | 198.6 | |||||||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common stock | (0.3) | — | (4.5) | (176.5) | — | (181.0) | — | (181.0) | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | — | — | — | 658.4 | — | 658.4 | — | 658.4 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 30.1 | 30.1 | 0.3 | 30.4 | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in joint venture | — | — | — | — | — | — | 5.8 | 5.8 | |||||||||||||||||||||||||||||||||||||||
| Ending balance | 358.4 | $ | 0.4 | $ | 10,236.8 | $ | 7,605.5 | $ | 3.0 | $ | 17,845.7 | $ | 107.4 | $ | 17,953.1 | ||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Intuitive Surgical, Inc. Stockholders’ Equity | Noncontrolling Interest in Joint Venture | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | 354.7 | $ | 0.4 | $ | 8,903.0 | $ | 5,067.9 | $ | (8.7) | $ | 13,962.6 | $ | 83.8 | $ | 14,046.4 | ||||||||||||||||||||||||||||||||
| Issuance of common stock through employee stock plans | 0.6 | — | 71.5 | — | — | 71.5 | — | 71.5 | |||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | — | — | (0.4) | (13.1) | — | (13.5) | — | (13.5) | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense related to employee stock plans | — | — | 175.6 | — | — | 175.6 | — | 175.6 | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | — | — | — | 526.9 | — | 526.9 | — | 526.9 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | (14.8) | (14.8) | (0.2) | (15.0) | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in joint venture | — | — | — | — | — | — | 4.6 | 4.6 | |||||||||||||||||||||||||||||||||||||||
| Ending balance | 355.3 | $ | 0.4 | $ | 9,149.7 | $ | 5,581.7 | $ | (23.5) | $ | 14,708.3 | $ | 88.2 | $ | 14,796.5 | ||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Intuitive Surgical, Inc. Stockholders’ Equity | Noncontrolling Interest in Joint Venture | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | 356.6 | $ | 0.4 | $ | 9,681.3 | $ | 6,803.3 | $ | (51.3) | $ | 16,433.7 | $ | 95.9 | $ | 16,529.6 | ||||||||||||||||||||||||||||||||
| Issuance of common stock through employee stock plans | 2.8 | — | 183.7 | — | — | 183.7 | — | 183.7 | |||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (0.7) | — | (8.2) | (378.1) | — | (386.3) | — | (386.3) | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense related to employee stock plans | — | — | 384.5 | — | — | 384.5 | — | 384.5 | |||||||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common stock | (0.3) | — | (4.5) | (176.5) | — | (181.0) | — | (181.0) | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | — | — | — | 1,356.8 | — | 1,356.8 | — | 1,356.8 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 54.3 | 54.3 | 0.4 | 54.7 | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in joint venture | — | — | — | — | — | — | 11.1 | 11.1 | |||||||||||||||||||||||||||||||||||||||
| Ending balance | 358.4 | $ | 0.4 | $ | 10,236.8 | $ | 7,605.5 | $ | 3.0 | $ | 17,845.7 | $ | 107.4 | $ | 17,953.1 | ||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Intuitive Surgical, Inc. Stockholders’ Equity | Noncontrolling Interest in Joint Venture | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | 352.3 | $ | 0.4 | $ | 8,576.4 | $ | 4,743.0 | $ | (12.2) | $ | 13,307.6 | $ | 89.7 | $ | 13,397.3 | ||||||||||||||||||||||||||||||||
| Issuance of common stock through employee stock plans | 3.6 | — | 251.9 | — | — | 251.9 | — | 251.9 | |||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (0.6) | — | (7.0) | (233.1) | — | (240.1) | — | (240.1) | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense related to employee stock plans | — | — | 328.4 | — | — | 328.4 | — | 328.4 | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | — | — | — | 1,071.8 | — | 1,071.8 | — | 1,071.8 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | (11.3) | (11.3) | (0.6) | (11.9) | |||||||||||||||||||||||||||||||||||||||
| Cash dividends declared and paid by joint venture | — | — | — | — | — | — | (8.0) | (8.0) | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest in joint venture | — | — | — | — | — | — | 7.1 | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Ending balance | 355.3 | $ | 0.4 | $ | 9,149.7 | $ | 5,581.7 | $ | (23.5) | $ | 14,708.3 | $ | 88.2 | $ | 14,796.5 | ||||||||||||||||||||||||||||||||
Stock Repurchase Program
The Company’s Board of Directors (the “Board”) has authorized an aggregate of $13.0 billion of funding for the Company’s common stock repurchase program (the “Repurchase Program”) since its establishment in March 2009. The most recent authorization occurred in May 2025, when the Board increased the authorized amount available under the Repurchase Program to $4.0 billion, including amounts remaining under previous authorization. As of June 30, 2025, the remaining amount of share repurchases authorized by the Board under the Repurchase Program was approximately $3.8 billion.
The following table summarizes stock repurchase activities (in millions, except per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Shares repurchased | 0.3 | — | 0.3 | — | |||||||||||||||||||
| Average price per share | $ | 517.7 | $ | — | $ | 517.7 | $ | — | |||||||||||||||
| Value of shares repurchased | $ | 181.0 | $ | — | $ | 181.0 | $ | — |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Attributable to Intuitive Surgical, Inc.
The components of accumulated other comprehensive income (loss), net of tax, attributable to Intuitive Surgical, Inc. are as follows (in millions):
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Gains (Losses) on Hedge Instruments | Unrealized Gains on Available-for-Sale Securities | Foreign Currency Translation Gains (Losses) | Employee Benefit Plans | Total | |||||||||||||||||||||||||
| Beginning balance | $ | 0.6 | $ | 14.5 | $ | (27.7) | $ | (14.5) | $ | (27.1) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (11.8) | 7.1 | 37.8 | — | 33.1 | ||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (3.5) | 0.3 | — | 0.2 | (3.0) | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | (15.3) | 7.4 | 37.8 | 0.2 | 30.1 | ||||||||||||||||||||||||
| Ending balance | $ | (14.7) | $ | 21.9 | $ | 10.1 | $ | (14.3) | $ | 3.0 | |||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| Gains on Hedge Instruments | Unrealized Losses on Available-for-Sale Securities | Foreign Currency Translation Gains (Losses) | Employee Benefit Plans | Total | |||||||||||||||||||||||||
| Beginning balance | $ | 3.1 | $ | (33.9) | $ | 21.6 | $ | 0.5 | $ | (8.7) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 1.1 | 5.4 | (25.1) | — | (18.6) | ||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | 3.7 | 0.1 | — | — | 3.8 | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | 4.8 | 5.5 | (25.1) | — | (14.8) | ||||||||||||||||||||||||
| Ending balance | $ | 7.9 | $ | (28.4) | $ | (3.5) | $ | 0.5 | $ | (23.5) | |||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Gains (Losses) on Hedge Instruments | Unrealized Gains (Losses) on Available-for-Sale Securities | Foreign Currency Translation Gains (Losses) | Employee Benefit Plans | Total | |||||||||||||||||||||||||
| Beginning balance | $ | 11.0 | $ | (14.6) | $ | (33.1) | $ | (14.6) | $ | (51.3) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (27.8) | 36.2 | 43.2 | — | 51.6 | ||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | 2.1 | 0.3 | — | 0.3 | 2.7 | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | (25.7) | 36.5 | 43.2 | 0.3 | 54.3 | ||||||||||||||||||||||||
| Ending balance | $ | (14.7) | $ | 21.9 | $ | 10.1 | $ | (14.3) | $ | 3.0 | |||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
| Gains (Losses) on Hedge Instruments | Unrealized Losses on Available-for-Sale Securities | Foreign Currency Translation Gains (Losses) | Employee Benefit Plans | Total | |||||||||||||||||||||||||
| Beginning balance | $ | (2.5) | $ | (29.7) | $ | 19.4 | $ | 0.6 | $ | (12.2) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 5.2 | 1.1 | (22.9) | — | (16.6) | ||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | 5.2 | 0.2 | — | (0.1) | 5.3 | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | 10.4 | 1.3 | (22.9) | (0.1) | (11.3) | ||||||||||||||||||||||||
| Ending balance | $ | 7.9 | $ | (28.4) | $ | (3.5) | $ | 0.5 | $ | (23.5) | |||||||||||||||||||
The tax impacts for amounts recognized in other comprehensive income (loss) before reclassifications and reclassified from accumulated other comprehensive income (loss) relating to hedge instruments, available-for-sale securities, foreign currency translation gains (losses), and employee benefit plans for the three and six months ended June 30, 2025, and 2024, were not material to the Company’s Financial Statements.
NOTE 10. SHARE-BASED COMPENSATION
In May 2025, the Company’s shareholders approved an amended and restated 2010 Incentive Award Plan to provide for an increase in the number of shares of common stock reserved for issuance thereunder from 115,350,000 to 120,350,000. As of June 30, 2025, approximately 22.1 million shares were reserved for future issuance under the Company’s stock plans, and a maximum of approximately 9.6 million of these shares can be awarded as restricted stock units (“RSUs”).
Restricted Stock Units
RSU activity under all stock plans for the six months ended June 30, 2025, was as follows (in millions, except per share amounts):
| Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
| Unvested balance as of December 31, 2024 | 5.2 | $ | 314.39 | ||||||||
| RSUs granted | 1.6 | $ | 577.16 | ||||||||
| RSUs vested | (1.7) | $ | 295.39 | ||||||||
| RSUs forfeited | (0.2) | $ | 354.07 | ||||||||
| Unvested balance as of June 30, 2025 | 4.9 | $ | 405.57 |
Stock Options
Stock option activity under all stock plans for the six months ended June 30, 2025, was as follows (in millions, except per share amounts):
| Stock Options Outstanding | ||||||||||||||
| Number Outstanding | Weighted-Average Exercise Price Per Share | |||||||||||||
| Balance as of December 31, 2024 | 7.1 | $ | 192.90 | |||||||||||
| Options granted | — | $ | — | |||||||||||
| Options exercised | (0.9) | $ | 135.30 | |||||||||||
| Options forfeited or expired | — | $ | 241.29 | |||||||||||
| Balance as of June 30, 2025 | 6.2 | $ | 200.19 |
As of June 30, 2025, options to purchase an aggregate of 5.5 million shares of common stock were exercisable at a weighted-average price of $192.54 per share.
Performance Stock Units
In 2022, the Company began granting performance stock units (“PSUs”) to officers and other key employees subject to three-year cliff vesting and pre-established, quantitative goals. Whether any PSUs vest, and the amount that do vest, is tied to
completion of service over three years and the achievement of three equally-weighted, quantitative goals that directly align with or help drive the Company’s strategy and long-term total shareholder return.
For the six months ended June 30, 2025, the Company had four types of PSU awards: the 2022 PSU awards, the 2023 PSU awards, the 2024 PSU awards, and the 2025 PSU awards. The 2022 PSU grant metrics were focused on relative total shareholder return (“TSR”), year-over-year da Vinci procedure growth for 2023, and two-year compound annual da Vinci procedure growth for 2024. The 2022 PSU awards vested in the first quarter of 2025. The 2023 PSU grant metrics are focused on relative TSR, da Vinci and Ion procedure growth in 2024 compared to 2022, and da Vinci and Ion procedure growth in 2025 compared to 2022. The 2024 PSU grant metrics are focused on relative TSR, da Vinci and Ion procedure growth in 2025 compared to 2023, and da Vinci and Ion procedure growth in 2026 compared to 2023. The 2025 PSU grant metrics are focused on relative adjusted operating margin as compared to selected peers, da Vinci and Ion procedure growth in 2026 compared to 2024, and da Vinci and Ion procedure growth in 2027 compared to 2024.
The TSR metric used in the 2022, 2023, and 2024 PSU awards is considered a market condition, and the expense is determined at the grant date. The procedure growth and relative adjusted operating margin metrics are considered performance conditions, and the expense is recorded based on the forecasted performance, which is reassessed each reporting period based on the probability of achieving the performance conditions. The number of shares earned at the end of the three-year period will vary, based on actual performance, from 0% to 125% of the target number of PSUs granted. PSUs are subject to forfeiture if employment terminates prior to the vesting date. PSUs are not considered issued or outstanding shares of the Company.
The Company calculates the fair value for each component of the PSUs individually. The fair value for the component with the TSR metric was determined using Monte Carlo simulation. The fair value per share for the components with the procedure growth metrics is equal to the closing stock price on the grant date.
PSU activity for the six months ended June 30, 2025, was as follows (in millions, except per share amounts):
| Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||||||||
| Unvested balance as of December 31, 2024 | 0.3 | $ | 306.94 | |||||||||||
| Granted | 0.1 | $ | 580.93 | |||||||||||
| Vested | (0.1) | $ | 299.32 | |||||||||||
| Performance change | — | $ | 267.23 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Unvested balance as of June 30, 2025 | 0.3 | $ | 367.92 |
Employee Stock Purchase Plan
Under the Employee Stock Purchase Plan (“ESPP”), employees purchased approximately 0.2 million shares for $75.5 million and approximately 0.3 million shares for $68.4 million during the six months ended June 30, 2025, and 2024, respectively.
Share-Based Compensation Expense
The following table summarizes share-based compensation expense (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenue – product (before capitalization) | $ | 33.1 | $ | 25.4 | $ | 64.0 | $ | 48.2 | |||||||||||||||
| Amounts capitalized into inventory | (31.3) | (23.7) | (59.8) | (45.1) | |||||||||||||||||||
| Amounts recognized in income for amounts previously capitalized in inventory | 28.5 | 21.9 | 56.3 | 43.2 | |||||||||||||||||||
| Cost of revenue – product | $ | 30.3 | $ | 23.6 | $ | 60.5 | $ | 46.3 | |||||||||||||||
| Cost of revenue – service | 8.6 | 7.6 | 16.8 | 14.6 | |||||||||||||||||||
| Total cost of revenue | 38.9 | 31.2 | 77.3 | 60.9 | |||||||||||||||||||
| Selling, general, and administrative | 86.3 | 79.6 | 168.6 | 147.8 | |||||||||||||||||||
| Research and development | 74.7 | 65.6 | 143.7 | 123.3 | |||||||||||||||||||
| Share-based compensation expense before income taxes | 199.9 | 176.4 | 389.6 | 332.0 | |||||||||||||||||||
| Income tax benefit | 39.3 | 36.1 | 76.3 | 68.5 | |||||||||||||||||||
| Share-based compensation expense after income taxes | $ | 160.6 | $ | 140.3 | $ | 313.3 | $ | 263.5 | |||||||||||||||
The fair value of each right to acquire stock granted under the ESPP was estimated using the Black-Scholes-Merton option-pricing model with the following weighted-average assumptions:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| ESPP | |||||||||||||||||||||||
| Risk-free interest rate | —% | —% | 4.2% | 4.6% | |||||||||||||||||||
| Expected term (in years) | 0.0 | 0.0 | 1.2 | 1.2 | |||||||||||||||||||
| Expected volatility | —% | —% | 30% | 32% | |||||||||||||||||||
| Fair value at grant date | $— | $— | $170.50 | $115.48 | |||||||||||||||||||
NOTE 11. INCOME TAXES
Income tax expense for the three months ended June 30, 2025, was $167.9 million, or 20.2% of income before taxes, compared to $123.0 million, or 18.8% of income before taxes, for the three months ended June 30, 2024. Income tax expense for the six months ended June 30, 2025, was $132.7 million, or 8.8% of income before taxes, compared to $114.1 million, or 9.6% of income before taxes, for the six months ended June 30, 2024.
The effective tax rates for the three and six months ended June 30, 2025, and 2024, differed from the U.S. federal statutory rate of 21% primarily due to the excess tax benefits associated with employee equity plans, the federal research and development credit benefit, and the effect of income earned by certain overseas entities being taxed at rates lower than the federal statutory rate, partially offset by state income taxes (net of the federal benefit) and U.S. tax on foreign earnings.
The Company’s provision for income taxes for the three months ended June 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $32.9 million and $35.7 million, respectively, which reduced the Company’s effective tax rate by 4.0 and 5.5 percentage points, respectively. The provision for income taxes for the six months ended June 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $178.3 million and $146.8 million, respectively, which reduced the Company’s effective tax rate by 11.9 and 12.3 percentage points, respectively.
The Company files federal, state, and foreign income tax returns in many jurisdictions in the U.S. and OUS. Years before 2017 are considered closed for significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including evolving interpretations of existing tax laws in the jurisdictions in which the Company operates, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. It is reasonably possible that the Company’s existing unrecognized tax benefits may decrease by up to $49 million as a result of expirations of the statute of limitations and audit conclusions in various jurisdictions within the next 12 months.
The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.
NOTE 12. NET INCOME PER SHARE
The following table presents the computation of basic and diluted net income per share attributable to Intuitive Surgical, Inc. (in millions, except per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to Intuitive Surgical, Inc. | $ | 658.4 | $ | 526.9 | $ | 1,356.8 | $ | 1,071.8 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares outstanding used in basic calculation | 358.5 | 355.0 | 358.0 | 354.2 | |||||||||||||||||||
| Add: dilutive effect of potential common shares | 5.6 | 6.0 | 6.4 | 6.6 | |||||||||||||||||||
| Weighted-average shares outstanding used in diluted calculation | 364.1 | 361.0 | 364.4 | 360.8 | |||||||||||||||||||
| Net income per share attributable to Intuitive Surgical, Inc.: | |||||||||||||||||||||||
| Basic | $ | 1.84 | $ | 1.48 | $ | 3.79 | $ | 3.03 | |||||||||||||||
| Diluted | $ | 1.81 | $ | 1.46 | $ | 3.72 | $ | 2.97 |
Share-based compensation awards of approximately 1.5 million and 0.0 million shares for the three months ended June 30, 2025, and 2024, respectively, and approximately 1.1 million and 0.4 million shares for the six months ended June 30, 2025, and 2024, respectively, were outstanding but were not included in the computation of diluted net income per share attributable to Intuitive Surgical, Inc. common stockholders, because the effect of including such shares would have been anti-dilutive in the periods presented.
NOTE 13. SEGMENT INFORMATION
Intuitive is committed to advancing minimally invasive care through a comprehensive ecosystem of products and services. 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. The systems, as well as the instruments and accessories, are primarily developed and manufactured by Intuitive. For the three months ended June 30, 2025, and 2024, domestic revenue accounted for 67% and 66%, respectively, of total revenue, while revenue from the Company’s OUS markets accounted for 33% and 34%, respectively, of total revenue. The Company manages the business activities on a consolidated basis and operates in one reportable segment.
Intuitive’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM utilizes the Company’s long-range plan, which includes product development roadmaps and long-range financial models, as a key input to resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using income from operations. Net income is also a measure that is considered in monitoring budget versus actual results.
Significant expenses within income from operations, as well as within net income, include cost of revenue, research and development, and selling, general, and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Income. Other segment items within net income include interest and other income, net, and income tax expense.
The Company’s long-lived assets consist primarily of property, plant, and equipment, net. As of June 30, 2025, and December 31, 2024, 81% and 83%, respectively, of long-lived assets were in the U.S. As of June 30, 2025, and December 31, 2024, no individual country other than the U.S. accounted for 10% or more of these assets.
NOTE 14. SUBSEQUENT EVENT
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The Company is currently assessing the implications of these tax law changes and does not expect that they will have a material impact on its Financial Statements in the current year. Since the OBBB Act was enacted subsequent to the Company’s balance sheet date, the Company’s tax provision for the three and six months ended June 30, 2025, does not incorporate the effects of these tax law changes.
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