Intuitive Surgical, Inc.

Q1 2026 Earnings Call — April 21, 2026

Analyst Travis Steed (Bank of America): Hey, congrats on a good quarter. Maybe to start with, I kind of want to talk a little bit about some of the future. You talked a lot about data and digital infrastructure, augmented dexterity. Just kind of curious, how do you see the digital and data roadmap for Intuitive? And there's also some hints on biopsy and the Rose acquisition. So I'd love to kind of hear your big picture view of how that kind of plays out and anything you can say on timing.

Executive Name (Title): Happy to do it, Travis. Thank you for the question. So I'll start with AI. And I'm really, and you asked the question, but I'm going to speak specifically about AI as it shows up in our products and with our customers, and not so much AI on the corporate side. When we look at AI, it's like any other product, and it's really through the lens of the quintuple aim. Will it advance outcomes and reduce variation, improve care team patient experiences, lower total cost, advance access for patients around the globe? And we believe, yes, that AI will be a contributor to moving the quintuple aim forward.

Our approach here is what we've described in the past, and it's really to build kind of this layered capabilities. And it starts with high-quality data, and that data will exist in video data from surgeries. It'll exist in robotic data streams like kinematic data and force data. It will exist in connected electronic medical records where we're working with customers to do so. And once we have that high-quality data set, then the job of AI and our data scientists is to turn that into meaningful insights.

And once we have those, I think the critical part here is how do we deliver those to the customers? And it has to be in a consumable fashion. It has to be at the right time in the moment that matters to the customer. And so there are, I think, ways in which this will show up to the customer. Some will be as operational guidance and assistance as they look at their hospital robotic program and want to increase efficiencies or understand costs. Some of it may show up in the learning of a surgeon and or a care team. But a lot of it will show up in the operating room, and I think show up in the surgery itself.

An example of this kind of first phase might be AI-enabled anatomy identification, where you can see AI showing critical structures in the surgical field, showing tissue planes to help assist the surgeon. Then, over time, what we expect is that many of those same foundations that are being established and built in kind of that first phase, if you will, will support more advanced assistance around augmented dexterity, and it will likely include aspects of automation. There, an example might be helping to control the camera as the surgeon is focused on the procedure.

And so throughout this, every step, it's about clinical value, of course, and it's about safety and reliability, and not just doing this in a one-off, but doing this in a scaled fashion. And so if I look at that as the layer that we're progressing through, and I look to see where, how do we sit? How do we exist within the AI ecosystem? And how are we differentiated? And part of that differentiation is around the installed base of systems that we have out there, including about the 1500 DaVinci Five systems, the 3 million and more procedures that are being done on an annual basis.

I believe that gives us the foundation to strengthen the differentiation over the next, you know, three to five years. If you look at the industry and you say, what is broadly available, broadly available to everyone, it's things like edge and cloud compute, you know, the math that underscores much of this, some of the training algorithms, our advantage, we believe lies in the unique data sets that are available to us today through something like force feedback and will be increasingly available to us as we add capability to DaVinci 5.

And so all of that together creates this flywheel. It's a flywheel that starts with data, insights, actions, advancing the quintuple aim. The flywheel spins and becomes that virtuous cycle. And we have the team's focused on it, and we are investing to advance this in the future and look forward to updating you along the journey.

That's exciting. Can't wait. Maybe my follow-up question, Jamie, on margins. You highlighted some macro stuff, but still raised gross margins 50 basis points, and tariffs only came down 20 basis points. So I guess the contribution margin to DV5, comparable like size, a nice positive for margins. But kind of curious, kind of what you saw in the macro and what you kind of baked in on that front and any color on kind of what percent of COGS you'd call chips and exposure to oil and resin.

Executive Name (Title): I'd just say for oil prices and the derivative impact that has on input prices and logistics costs and memory, based on what we know today, in the gross margin guidance, it has an impact, but it's relatively small. I think what you see in Q1 in particular is relatively significant leverage from the 23% revenue growth and a really nice contribution from the product cost reductions that we've described.

So the macro is having an impact and obviously we're watching it carefully. You also have to watch the potential supply constraints. But the macro is baked in and relatively small just given the components of our product costs.

Great. Thanks a lot. So, Travis, real quick, you had asked about ROSE and EBUS and just some color there. So, both are known technologies, and the timelines are more short-term, but they won't be this year. We do believe that they are bringing, you know, truly significant differentiated value to the lung cancer diagnosis, detection diagnosis journey. We expect to share that value with customers. As that gets closer, we'll let you know more about it.

Thank you, and one moment for our next question.

Analyst Larry Bejelsen (Wells Fargo): All right. Thanks for taking the question. Congrats on a good start to the year here. I had one on procedures, and then I had one follow-up for Shami. I'd love to hear you talk about the appendectomy opportunity. It looks like about $300,000 per year. It's one of the first times I've heard you call that out on an earnings call, $300,000 per year in the U.S., and if you could size the incremental Japan opportunity from those new procedures, that would be great, and add one follow-up.

Executive Name (Title): We haven't sized appendectomy yet. I think there's a question of what makes sense in terms of the robotic portion of that overall TAM. Because we're so early in appendectomy, we're still kind of working through internally on what we think is the right opportunity. We called out the kind of emerging evidence on clinical outcomes just because over the quarter, actually, we've had a couple of engagements with surgeons that have kind of done work in their own institutions and we saw several of those come together.

Across the set of functional outcomes in the work that they did, da Vinci was better on all comparison points, which we thought was encouraging. We'd like to see that show up in clinical studies that have larger data sets in terms of number of patients. But we think that's super interesting for what is typically a relatively quick procedure with relatively low reimbursements.

Larry, on Japan, I think we noted MHLW added reimbursement coverage for seven procedures across a couple different categories. The largest of those is bilateral inguinal hernia repair. Reimbursement there is roughly $1,500 per procedure. I think in aggregate, it's too early for us to size the incremental procedure opportunity in Japan, but the impact is relatively modest, and like in prior periods where we've had incremental reimbursement, it'll take time to develop.

Thanks for that, Dan. Jamie, I'd love to hear you flesh out more what you meant by innovation-led revenue growth. That's the first time I've heard you talk about that. Is there any way to frame how much faster revenues will grow versus procedures? In Q1, it was obviously 23% versus 17%. Do you expect that delta to increase going forward? Maybe just talk about the implications of this innovation-led revenue growth. Thank you.

Executive Name (Title): Yeah, I really felt like it was worth describing because if we look back at last year, even revenue growth was 21%, and obviously procedure growth was also lower than that last year, and then you see the numbers in Q1. The business framing we have is kind of what I describe as a push and pull. We're very conscious about deploying our R&D to places where we can be differentiated and make a difference on the quintuple aim. That's integrated in how we make R&D deployment decisions.

And so where you can be differentiated and make a meaningful difference for customers and create value for them, then you get to share in that value in the form of, on the intuitive side, accretive pricing or incremental pricing. And we see that in DaVinci 5. You see that actually in SP I&A. And there are other areas where we have that opportunity.

On the other side of it, if you look at the totality of our business, there of course are procedures and geographies that are more cost sensitive. And so we also then look for, as we work on bringing our costs down, particularly our manufacturing and product costs, we also look for opportunities to then share that cost savings with our customers because they have the economical cost sensitivity.

And we do that particularly in mind with what can be the elasticity response when it's cost sensitive. And so we work on both of those, and therefore that creates a mixed dynamic between the two. In terms of like how long does it sustain, I don't think I want to get into that just because we don't guide revenue. Our attempt to just describe what's happened in recent periods with respect to the difference between revenue growth and procedure growth. And I think we're just reemphasizing the fact that innovation is critical to our success.

Thank you.

Thank you, and one moment for our next question.

Analyst Robbie Marcus (JP Morgan): Oh, great. Thanks for taking the questions, and I'll add my congratulations on a really nice quarter as well. Two for me. First, the utilization continues to just be really impressive, especially with the after-hours metrics and the utilization improvement on DaVinci 5, which is now becoming a pretty substantial part of the installed base. I was hoping you could just add a little more color there in terms of know how much more is there to go because I think everyone knows that utilization and procedure volume growth ultimately is what drives placement so how much more is there to go and how do you think about that translating into unit growth down the road how much and when if you're willing to quantify thanks.

Executive Name (Title): That's that in some regards that's the impossible question to answer in the following sense, Robbie. It really, you have to be aware of the averages and you have to look at it by market in terms of where is the distribution of utilization within any given market? What's the mix of systems they have in any given market? From a macro perspective, we are strategically aligned with customers that we want to increase robotic throughput because we think that serves them well economically and is good for intuitive long-term.

So it's a difficult question to answer. There are markets where there's obviously room to improve utilization, such as Japan and some of the European markets. In the U.S., I think utilization growth will mostly be driven by the rate by which the entire installed base in the U.S. switches over to DaVinci five, which we think structurally has the ability given its feature set to run higher levels of utilization.

The next side, um, for us, we'd like to keep utilization growth going. Cause we think it's super critical and differentiators, I think from competitive competitors is also, um, but like, I don't think we have the ability to call how long it goes and what the derivative impact is.

I know it's a hard question. That's why I'm asking you. I'm hoping you could do my job for me a little bit. Um, maybe just a follow-up. We have more and more, um, competitors trying to enter the market here. Some in the U.S. from big surgical competitors, some in China, others in Europe, you know, have the opportunity to offer a tiered pricing strategy with refurbished excise. Um, be great just to get a refresh on how you're thinking about global competition at different price points in different markets and how you're feeling about your positioning there. Thanks a lot.

Executive Name (Title): Yeah, Robby. So I think competition is about, I think, meeting the needs of the customer at the right price point. And so it's really about the value that they're going to obtain from getting a robotic program established and treating patients and getting to great outcomes. And so what we know is that the basis of competition, we are wanting to make sure that people look at it not as the kind of the price you pay for the robot and the fact that now you have it in one of your ORs, but it's really the value of your program.

How are patients being treated? Are you seeing the outcome improvements? Are you seeing a shift in the mix of open surgery to minimally invasive robotic procedures that you expected in any of the other strategic initiatives that a given customer might have? And so that's where and how we want to ensure that we are entering the conversations with customers and helping educate them around the globe about the questions they should be asking, what kind of data should they be looking for as they engage one or more robotic competitors from around the globe.

And when it comes to those conversations and the data that are shared, you know, I expect with our portfolio and now with XIR added, that will be a strong choice to lead in those value because of the demonstrated clinical output, you know, the reliability of our systems, our ecosystem of services and training that can support them on their journey. And so that is, I think, the high-level picture of how we compete globally.

Jamie, anything else you may want to add to that?

Executive Name (Title): I would just say we're still selling X, and actually we sold 41 X systems in the quarter, 34 refurbished XIs. And then, of course, we have DB5. I think the segmentation there is really appealing and, in some senses, a competitive advantage for us to be at a tier feature the capability and economics for various segments of our customers.

The refurbished XI, Dave said it, but I'll just say it again, that is a very capable product. It has the full, complete suite in the ecosystem, and the economics for customers are really attractive. And so I think that's been a great kind of addition to the system portfolio.

Thanks a lot. Appreciate it.

Thank you, and one moment for our next question.

Analyst Rick Wise (Stifel): Good afternoon, everybody. Sorry for my scratchy voice here. One specific question for Jamie and then a bigger picture question for you, Dave. Jamie, just help us if you could better understand what dynamics internationally drove INA at double the rate of procedure growth. I mean, obviously, it's a big delta, 40% OUS INA versus 19% OUS procedure growth. Was there anything one time there or country-specific? And is this dynamic? Should we imagine this dynamic continues? Thank you.

Executive Name (Title): I have not looked at that deeply for OUS specifically, Rick. I do think the customer ordering patterns is likely a good chunk of that because all of our distributors obviously are international and they can be pretty lumpy in terms of their kind of ordering patterns. They can place orders in a quarter for several quarters. So I'd imagine that the greatest impact is that.

And I think given the strong capital placements, we probably had a bunch of stocking orders that also benefited Q1. And finally, there is a benefit from FX.

Got you. All right, Jamie. Dave, for you, just as we get ready for some upcoming robotic meetings and I reflect on some of the topics that are going to be discussed and presented, I was hoping you maybe would sort of step back and, looking longer term, talk about, you know, a couple of initiatives that others are focused on and to what degree is this important to Intuitive Surgical, like telesurgery robotics. We saw the first remote procedure done recently. The value of robotics to stroke or minimally invasive cardiovascular disease. Just, again, at the highest level, your interest or passion or focus on areas like that that might be future drivers of growth for Intuitive. Thank you both.

Executive Name (Title): I really appreciate the question, Rick. You know, if I stand back and I think about adding incremental capabilities to our ecosystem, it is about where, one, number one, we can drive the quintuple aim. Number two, you know, whatever it is we think will be better in our hands. And so, for example, some of the things that you called out on telesurgery, I actually, I really believe deeply in the collaboration capabilities of these telestration, telecollaboration tools.

And we are seeing some pretty rapid utilization of our current platform with My Intuitive Plus. And we're seeing thousands of use cases a month. And so that is, I think, demonstrating stickiness and value with our customers. As we expand those capabilities, and we'll include telesurgery in the future, that is on our roadmap, we expect that to be a subset of those use cases.

And just yesterday, I was with a customer here, and we were speaking to their expectation of how telesurgery will be deployed within their IDN within their small set of hospitals. And I think there's real value there, though we do believe that a majority of the use cases, when telecollaboration is warranted, will likely be served by existing tools with telestration and audio-video interactions.

And it will, if you will, kind of escalate to telesurgery in certain use cases. So I do think that's an important part of our future and what customers will find value in. You know, recently, semi-recently, we've announced kind of our investment into cardiac and cardiac surgery. And there, again, I believe that there's going to be a set of patients who can benefit from minimally invasive cardiac surgery and a set of patients who will benefit from percutaneous transcatheter approaches.

And, you know, the evidence shows that in some cases, surgery is better. In some cases, an interventional approach is better, and when surgery is warranted, then I think the investments we're making, capabilities of DaVinci 5, and investments in training in particular, will pay dividends and have an opportunity for surgeons to treat patients with a very minimally invasive cardiac approach to their disease.

And there are others. You mentioned stroke. That is an interesting area, but there are plenty of areas that I think about in terms of adding capability and procedures and value to Intuitive and to the patients that our customers serve. One of the trends over the year that I've been just kind of fascinated by is how surgeons take the core capabilities of a platform like DaVinci and apply them into areas that we didn't envision, that it wasn't an area that we investigated.

And that's been repeated over and over. And I believe with DaVinci 5 capabilities that exist today, and as we add more in the future, we're going to see that cycle continue. We're going to see surgeons, and we're seeing it already, say, hey, we think there is value in these areas that aren't currently served. And so I'm excited by some of those opportunities. We'll do the work to see if indeed there's true value there, and it can be scaled and repeatable and teachable. But it's an area that I look forward to updating you along the way.

Great. Thank you, Dave.

Thank you, and one moment for our next question.

Analyst David Roman (Goldman Sachs): Thank you. I appreciate your taking the question here. Maybe you could start on SP. And it looks like a lot of pieces are coming together here to support further adoption of that technology, whether that's additional clearances from a procedure standpoint or additional instrumentation. Maybe just give us a sense of where we are in bringing SP to a point where that adoption curve can accelerate, whereby that becomes a more just meaningful percentage of places.

And I guess if you could also contextualize that, is that additive to the overall addressable procedure market, or does it become a choice of a typical DV5 procedure or SP?

Executive Name (Title): I guess I would say if you look at the kind of procedure growth over the last year or so, it's been strong, 68% this last quarter. And that strength has been in part driven by additional geographical clearances and additional procedure clearances, particularly in the US. And so I think that that then continues over some period. It's not that it suddenly inflects and accelerates from where it is. I think we continue that kind of progression on some reasonable pace.

If you look at the question of long-term, what are the incremental opportunities that are different from multiple, that multiple is not going to serve and therefore an effect of TAM expanding, I think those opportunities exist. Nipple sparing mastectomy is a good example of that, and obviously that's in an early stage. You have some work being done to see if SP is better than alternatives, including multiport.

And, of course, that's then largely an exchange between one stream or one set of procedures that we have to another. There's work in our labs that's super interesting for additional disease states that aren't served today, the TAM expanding. It's too early for us to discuss because our current focus is on the opportunity we have. We have still a long way to go in each of the markets where we're cleared and for the new indications that we've added.

And so the next year or two, that's where our focus is. But I think the long-term opportunity for SP is perhaps a little underestimated.

That's helpful. And I appreciate it's hard to get into all the details on a call like this regarding just your OUS strategy, given the number of different geographies and moving pieces. But maybe just at a high level, you could help us think about the number of actions you've taken here. You acquired distributors in Europe. You have the XIR opportunity. You have a joint venture in China to go after that market.

But how are you prioritizing markets outside the U.S.? What is, broadly speaking, the strategy here just to ensure competitiveness as new lower cost entrants approach the market, but also contrasted with things like favorable reimbursement clearances in the UK, which occurred last year? Maybe just help think about how OUS evolves here a little bit over the course of 26 and how that contributes to your forward outlook here.

Executive Name (Title): You know, David, for me, you sort of answered your own question. I think it is all of the above, right? Our investments start with the people we have in the region and to ensure that they understand deeply are well trained of course the investments we have in our products including an expanding system portfolio ensuring that the procedures that are being served in that geography have the right rest of the ecosystem cleared in that geography.

That's another piece of the puzzle as we continue to innovate and bring new products to the market. We want to ensure those are available as well, so there are regulatory pathways. And so we have the portfolio of products that are required in a given geography. Then what we want to do is ensure, to the very best of our ability, that they are priced appropriately for the value they bring.

And so we have broad economic programs in pricing that we're able to tailor to the market. But what we want to do, and I mentioned this briefly before, is we want to ensure that the value that's being realized is able to be articulated and substantiated in a given geography, that it's not just all about price.

And so that's a piece of the market access effort that goes into ensuring our customers themselves understand the value, but also that the reimbursement and government agencies that drive the overall economics of a given country also understand the value. And that's a multi-year journey. So you get it from both sides, you know, kind of the products and pricing, but also the value being realized by both customers and the government in that.

It is a geography by geography amount of work that's years in the making around the globe. Maybe I just add, in each of the markets, we take a localized approach to how we engage, what our strategy is there, and each of those markets has a strategic plan, and that results in us investing differentially in each of those markets.

For OUS, as you've seen, we'll go direct in markets that are already where we think the opportunity makes sense for us. And there may be instances where we start to look at, in large markets, some localized manufacturing, which is becoming increasingly important for some of those markets. I think the final thing I'd say is we have ambitions internationally, just given we're earlier in penetration. And over time, there may be additional markets that we franchise with distributors that we don't do business in today.

Okay. That was our last question. Thank you for all the questions.

In closing, we continue to believe there's a substantial and durable opportunity to fundamentally improve surgery and acute interventions. Our teams continue to work closely with hospitals, physicians, and care teams in pursuit of what our customers have termed the quintuple aim.

Better and more predictable patient outcomes, better experiences for patients, better experiences for their care teams, lower total cost of care, and finally increased access to care. We believe value creation in surgery and acute care is foundationally human. It flows from respect for and understanding of patients and care teams and their needs and their environment.

At Intuitive, we envision a future of care that is less invasive and profoundly better, where diseases are identified earlier and treated quickly, so patients can get back to what matters most. Thank you for your support on this extraordinary journey. We look forward to talking with you again in three months.

This concludes today's conference call. Thank you for participating and you may now disconnect. Everyone have a great day.

Q4 2025 Earnings Call — January 22, 2026

Analyst Travis Steed (Bank of America): Hey, thanks for taking the question. First, I wanted to ask about the FDA approval for the cardiac non-force feedback instruments. Just trying to get a little more color on what that is and what it opens up. When I was looking at your 2026 priorities that you mentioned, you added new disease states. So if you could elaborate on that, if that's cardiac or there's more there.

Executive Name (Title): Sure. Travis, thank you for the question. I'll start maybe with some framing around cardiac and the work we're doing, and then Jamie can follow up with it. And so you know, we've been supporting cardiac surgery for decades and have a good understanding of what cardiac programs need to do to be successful and have great patient outcomes. And so there are some foundational aspects that we're working on today. Those include clearances on the platform on DV5 in certain geographies. We just received the U.S. clearance. We're working through approval in Europe and several other countries. Part of those indications as well will include force feedback instruments. Cardiac surgery is a wide variety of procedures with a wide variety of tasks. And we do think that force feedback can have some benefit in certain parts of certain procedures. And so the initial clearance here I think incorporates our entire portfolio of non-force feedback instruments and has value today for cardiac procedures. And again, we'll work to add force feedback in time through the regulatory pathway. We are also developing training pathways to support.

It's a unique pathway through to learn the cardiac robotic surgery business, if you will, for minimally invasive approaches with da Vinci. And so we're investing there. We are developing cardiac-specific instrumentation, including force feedback, some accessories, and tuning some of the digital tools we have. Those will be multi-year efforts to bring all of those to the market. And then finally worked with surgical societies. It's an important aspect of, I think, doing this well for training and other parts that they are helping to develop. And so that lays this kind of foundation, if you will, for the beginning, for this cardiac journey that we're on, particularly with DB5. And so maybe Jamie.

Executive Name (Title): Yeah, Travis, I just give some numbers maybe for grounding. So in 25 globally, there were about 17,000 cardiac procedures performed. That's on SI and XI. That business has been growing for multiples of years, but obviously from a small base. The growth in recent years, including 25, was accretive to the corporate average. While obviously the cardiac TAM is really quite large, when we do our clinical analysis, when we look at where cardiac is cleared for DaVinci 5, which currently is now the U.S. and Korea, we think the opportunity from a DaVinci 5 perspective or a robotic perspective is about 160,000 procedures per year. And obviously that has the opportunity to expand if and as we add additional geographies.

Analyst Travis Steed (Bank of America): Great. Thanks. That's really helpful. And you've talked a lot on advanced imaging. Just curious how you think about incorporating these additional advanced imaging features into the robotic ecosystem. Did you leverage the existing hardware? Is there new hardware? How do you think about recognizing the value that you're providing to customers? Is it just deeper penetration or is there potential for new revenue streams? Just want to try to understand how some of this imaging stuff could come into the business in a more detailed way.

Executive Name (Title): Yeah, Travis, you know, some of the advanced imaging capabilities that we've talked about are additional molecules that we're working on, and those are long timelines that will add to the fluorescence imaging capability of the system. Those molecules will have revenue streams attached to them. We recently have talked about kind of a form of hyperspectral imaging that shows tissue oxygenation. That is going to be a capability of the system that requires some new software and some tuning of some of our hardware. All of those are pointed at trying to give more information to the surgeon and to the system where we're able to add perhaps some AI layers to it, but really with the intent of improving, ultimately improving outcomes, be it in prostate cancer or ureter injuries, or perhaps in areas of surgery where perfusion, which is where the tissue oxygenation is pointed, can make a difference in outcomes.

Analyst Larry Bigelson (Wells Fargo): Good afternoon. Thanks for taking the question. I wanted to start with the ASC commentary, Dave. I'd love to hear you expand on your comment about expanding your footprint in ASCs. How large is the ASC opportunity for your focus procedures today? You know, what are those key procedures moving to the ASC, and what do you need to do to unlock the opportunity? And I did have one follow-up.

Executive Name (Title): Yeah, maybe, Larry, I'll start just kind of always try to start with the problem we're solving or what the customer needs are, and I'm going to start there and then Jamie can jump in on some of the numbers here. When I meet with ASC leaders and when they're wanting to say, I want to establish a soft tissue program within one or more of our ASCs, really what they're looking for are repeatable high quality clinical outcomes, technology systems that work every day, and operating infrastructure, training, supply chain, reprocessing, those sorts of things that is routine and easily accessible. And all of that has to fit into an economic structure that works for the reimbursement levels of that particular ASC. And so when I look at what we have in our current portfolio of systems, including now XIR, the broader ecosystem of all the other products and training and services, that is well positioned to serve the needs that we're hearing from our customers, the procedures that are generally within that environment are the ones that you know, cholecystectomy, hernia repairs, benign GYN.

It oftentimes is the lower acuity procedures where the volume and the repeatability can be managed in the ASC environment. I just say, Larry, in terms of numbers today, it's a relatively small proportion of U.S. procedures done, but we do see it growing at an accretive rate. I think those trends have been talked about just broadly. Most of our commentary today reflects what we've heard from customers. I think that in part reflects desire of payers to take advantage of the lower reimbursement in the ASC setting. And for us now, with the launch of DaVinci 5, the trading cycle has commenced and we get the XIs back and we can refurbish them. We think the XIR in combination with our instrument portfolio is well positioned for that setting as procedures grow in ASCs.

Analyst Larry Bigelson (Wells Fargo): That's super helpful. Jamie, how should we think about utilization in 2026 and system ASPs? in 2026 after we saw strong growth in 2025. Did the refurbished XIs put some downward pressure on the ASBs and the move into the ASCs maybe put some downward pressure on utilization? Thank you.

Executive Name (Title): Yeah, I'd just say if you look at the last couple of quarters in each case, we saw overall DaVinci utilization grow 4%. We think that's a healthy level, but we're not ready to predict what that will be in 2026. For the presence that we already have in ASCs because we've been focused primarily with our existing IDN customers and we've looked for programs that have strong soft tissue surgery volumes that can support a robotics program, the existing utilization that we have in ASCs is actually pretty good. And I think economically then obviously that works for them. System ASPs, I'm not going to predict what the overall 26 direction will be. Obviously, we don't guide capital. I just say you should expect a higher DaVinci 5 mix in 26 versus 25. That reflects, of course, the fact that we have, in part, new geographies cleared with DaVinci 5. You should also expect a higher mix of XAR. That's going to be ASPs that are quite a bit below where XI is today, but we haven't said yet what the XIR price range is likely to be. And I would expect higher trade-ins. And so there's a set of offsetting mixed dynamics there that, frankly, we'll let you model. I'd just also say in terms of system ASPs, of course, that is only on systems purchased, which roughly is about half of the system placements today.

Analyst Robbie Marcus (JP Morgan): Hi. Thanks for taking the questions and congratulations again on a great quarter. Jamie, you touched on this a little bit, but I was hoping you could give a little more color into the gross margin and OPEX assumptions, there's obviously a lot of moving pieces under the hood. Wondering if you could tease out some of them, you know, as we think about how XIR ramps and impacts or positively or negatively margins and trade-ins, and then what's assumed at the high and the low end of the OPEX expense. And I have a follow-up.

Executive Name (Title): Yeah, with respect to gross margin, there's actually a number of dynamics. You have the higher trade-ins that we just described. You have a higher mix of DaVinci 5 that's not yet at target product costs. The procedure guidance is reflected in that gross margin range. We also have had, for a couple of years now, kind of post-COVID recovery, number of product cost reduction efforts that have had a growing impact within what you see in gross margin in 25 you saw the impact of all the new facilities with incremental depreciation of facility costs and that starts to start to get leveraged in in 26 and so there's a set of offsetting dynamics there in gross margin the kind of net to the guidance that we provided which effectively is flattish. I would highlight again We have 120 basis points of tariffs reflected in the 26 guidance. That was about 65 basis points in 25, so an incremental 50-ish basis points from tariffs. With respect to XIR, like I said, we expect the pricing to be lower than currently what you pay for a new XI, but the margins are relatively healthy on XIR.

Analyst Robbie Marcus (JP Morgan): Great. Appreciate that. And a quick follow up. You mentioned increased price and competition in China. I saw there were, you know, a new reimbursement program put out. Some helps favor local competition. I was wondering if you could just comment on how you think about your position in China and your ability to continue to win there. And also, if you have any update on the latest tender.

Executive Name (Title): Yeah, I might start. So just to answer that question specifically, around the local robotic competitors that are in China, many, as you know, many of the architectures are very similar to XI. And over time, there are instances where they may be favored by home provinces. And certainly, over the past several quarters, the number of robotic companies in China have been increasing and as a result what you see is that pricing has become even more intense as tenders are published and competed for. So given that sort of environment, you look at how are we competing and that's with an XI system, we're manufacturing it locally, we have a very strong team in China and so feel very good about how we're positioned with our system, our team, our broader ecosystem to compete in China with those local robotic companies that are increasingly coming to market. And we believe we can do so at a price point that is healthy for them and healthy for us and can effectively compete on price where we want to and where it matters. Robbie, I'd just add there's about 273 systems left in the current quota.

And I would just say, as we said in the prepared remarks, the tender win ratio was lower in Q4. If you look at 2025 as a whole, it was slightly higher than the prior year. And obviously, Dave described our ability to compete. I think I missed, Robbie, your question on OPEX, so I would just say in that 11 to 15% range, it does reflect the impact of going direct in Italy, Spain, and Portugal, but the range mostly is in relation to the procedure range.

Analyst Rick Weiss (Stifel): Good afternoon. Hi, Dave. Hi, Jamie. Dave, I was reflecting on your comment, your words. If I'm quoting you accurately, you said you still see intuitive as being in the early stages of your journey. I mean, that's similar language I've heard from intuitive for years. And I was reflecting on it in the context of a slide you posted during the JP Morgan conference a couple of weeks ago, about 9 million procedures in direct line of sight. I went back and looked at 24, and you all said 7 million at the time. That's nearly a 30% increase in procedures in direct line of sight. And I just wondered, I'm guessing maybe the cardiac opportunity, is that part of it? Is it the ambulatory surgery opportunity? Is it, you know, something instrument specific? Just I was hoping you would you'd just reflect on that with me and us and maybe unpack that a little bit.

Executive Name (Title): I thank you for the question and maybe I'll comment on the early part of the journey at least as I meant it with my words and Dan and Jamie can jump in. You know, when I think about the journey with the ultimate destination really improving outcomes substantially, eliminating complications to the extent that we possibly can. And you choose a procedure today and there's still variability, there are still poor outcomes for a given set of patients, even in the very best of hands with the very best of technology. And so that's when I think about the journey, it's the journey of impacting patients, meaningfully and more than we even have today. With respect to the line of sight procedures and the growth and how that has increased over the years, maybe I'll look to Dan.

Executive Name (Title): Yeah, Rick, 2024, 7 million, 25, 8 million, 26, 9 million. I'd say primarily strengthening clinical validation and supportive economics and benign procedures, kind of the largest impact. Also saw modest impact from additional procedure clearances like nipple sparing mastectomy, SP in the US. And then lastly, contributing as well kind of demographic impact from an aging population. So generally consistent with prior increases and the factors underneath that generally consistent as well.

Analyst Rick Weiss (Stifel): Okay. And just a quick follow up. Dave, you also highlighted digital subscription and I'm just not sure if I've personally, maybe I've missed it, heard that language. It sounds like a positive economic factor and something potentially incremental. Again, could you just expand on your comments and what it might mean to the growth outlook or adoption of DaVinci Five, et cetera? Thank you, both.

Executive Name (Title): Yeah, I'll take that, Rick. Dave was referring to MIA+, which comes with DaVinci 5. It incorporates telepresence, integrated skill simulation, and case insights. When we launched DaVinci 5, that package came with one-year free use for customers. We actually did a significant software update in Q2 of last year, and so we extended that free period for customers. Technically what happened when we did that was a portion of the system purchase price got carved out of systems revenue and deferred and put into service revenue over time. Just the way the accounting rules work. Come Q two issue of 26 then customers now have the opportunity to renew for that subscription package where they'll now have to pay. And in the end then, the value that surgeons and customers are experiencing with that package would determine both what is the renewal rate and what is the ASP that we realize with respect to the case insights portion of that package we've got good early customer feedback. I think we have some work to do to continue to refine and enhance the capability there and I think we see long-term value in what that could ultimately do.

It also has quite a bit of synergy with force feedback, which has not been in full supply. And so as we get that into full supply later this year, you then get to kind of see the impact of force more clearly in the case insights reporting that gets done. And so there is then some invoicing that we'll do for customers that renew and that starts to get reflected in revenue.

Analyst David Roman (Goldman Sachs): Thank you. Good afternoon, everybody. I wanted to maybe come back to SP. And it seems like the second half of 2025 represented, at least in the U.S., the potential of putting in place the dynamics you need to really see an inflection in growth in both SP placements as well as associated procedures. As you kind of look at the portfolio and indications you have entering the year, is there anything less, either from a technology standpoint, maybe a vessel sealer that you think would be necessary to really unlock the opportunity and how you're thinking about the SP strategy now that you have a more full portfolio of instruments as well as indications? And I had one follow-up.

Executive Name (Title): Thanks, David. It's Dan. I think broadly very encouraged by the response to the technology and the procedure growth rates that we've seen here recently. Looking to continue to build the platform internationally. We're still relatively early. Europe, Japan, and Taiwan. And then in the U.S. with recent clearances, colorectal, thoracic, and NSM indications as well. You mentioned on instrumentation, we do need to continue development of the vessel sealer device, add that clearance, and then add stapler clearances globally. I think we're encouraged by the early feedback from initial launch on SP stapler and thoracic and colorectal and excited to bring that forward more fully. And I'd say over time, we've also got the opportunity to take SP to additional geographies as well.

Analyst David Roman (Goldman Sachs): Okay. And then maybe on the guidance, I think you talked about reflecting some of the risks around macro pressures, whether those are hospital purchasing on Medicaid cuts or potential changes in utilization associated with exchange subsidies expiring. Can you just help us understand how you saw these dynamics play out through the back half of 2025? I know in Q3, you talked about the potential of some pull forward of procedure volumes, what you saw kind of exiting the year and how you're kind of observing trend here early in January.

Executive Name (Title): Yeah, no specific comment on kind of early trend in January, but I'd say over Q4, do not have any evidence either way from an impact, but we haven't heard that from customers at all. I know we spoke about that potentially in Q3 related to some intra-quarter dynamics there, but have not heard that from customers more broadly recently.

Analyst Patrick Wood (Morgan Stanley): Beautiful. Thank you so much for the question. I guess, conceptually, thinking, you know, medium term into the future, how do you guys think about, you know, new form factors and cost competition? You know, we've talked about lower acuity cases and going down. Is the solution here in your mind like a lower-end form factor, or do we stick with, you know, refurbished systems, or is it the case that you think you can get to the point where you know, speed and innovation is getting us faster than lap with a lower cost curve than lap. And that's the solution to the lower acuity. So is it a lower form factor or is it getting the tech to the point where automation and speed is just better than lap anyway? Thanks.

Executive Name (Title): Yeah, it's an interesting question and I will turn it back around to the problem to be solved, you know, and I think it varies depending on where you look. And so if you're in a complex cancer procedure where you're trying to move the needle on, let's say, cancer margins, it's going to require a different solution set than if you're looking for routine use in an ambulatory setting that is working on a very different set of procedures. And so I think we don't have enough time to look through each one of those areas where customers are trying to work in particular. If we focus on, let's say, the ASC setting, I'd go back to what we described before and say what is required there is great clinical outcomes, routine use, repeatable use, reliability. Those parts of the needs there that exist I think are really well served by the existing ecosystem that we have today. You know, can it be optimized through new platform development or some other tweaks within the ecosystem? Maybe. You know, we'd have to go see and see what that looks like. But today, I think what we have can serve the complex portion of the procedures customers are trying to do as well as these lower acuity, higher volume ones.

Executive Name (Title): Patrick, I just add that I think segmentation can be important depending on the IDN. And you can segment by using DV5 across a broad set of procedures that can do cancer and whatever other procedures are done in the hospital. But you can also segment by a HOPD or by an ASC. And where we are today, we have the portfolio to do that. I think we have confidence in that. Of course, things change over time. And I think that's part of our strat planning. And we wouldn't comment on how we might further develop that just yet.

Executive Name (Title): Okay, that was our last question. Thank you for the questions. In closing, we continue to believe there's a substantial and durable opportunity to fundamentally improve surgery and acute interventions. Our teams continue to work closely with hospitals, physicians, and care teams in pursuit of what our customers have termed the quintuple aim, better and more predictable patient outcomes, better experiences for patients, better experiences for their care teams, lower total cost of care, and finally, increased access to care. We believe value creation in surgery and acute care is foundationally human. It flows from respect for and understanding of patients and care teams and their needs and their environment. At Intuitive, we envision a future of care that is less invasive and profoundly better, where diseases are identified earlier and treated quickly so patients can get back to what matters most. Thank you for your support on this extraordinary journey. We look forward to talking with you again in three months. And this concludes today's conference. Thank you all for participating, and you may now disconnect.