Intuitive Surgical Q4 Beats as da Vinci Demand Stays Strong
Robotic surgery leader posts 21% revenue growth, places 532 systems in quarter. Analysts raise targets on continued hospital adoption.
Intuitive Surgical keeps proving the skeptics wrong.
The robotic surgery pioneer posted fourth-quarter results Thursday that beat estimates across the board, sending shares up 1.3% in after-hours trading. Adjusted earnings of $2.53 per share topped the $2.26 consensus by 12%, while revenue of $2.87 billion exceeded the $2.75 billion forecast.
The numbers extend a streak that's made ISRG one of the best-performing healthcare stocks of the past decade.
The Procedure Math
Intuitive's business model is simple: place robotic surgery systems in hospitals, then profit from procedures and instrument sales for years after.
Da Vinci procedures grew 17% in Q4 versus the prior year. Ion procedures—the company's newer lung biopsy system—jumped 44%. Both metrics exceeded analyst estimates.
The system placement number matters most. Intuitive installed 532 da Vinci systems during the quarter, up from 493 a year ago. That includes 303 placements of the da Vinci 5, the company's newest surgical platform.
"The placement of 303 da Vinci 5 systems this quarter demonstrates strong customer reception to our newest surgical system," CEO Gary Guthart said.
Each installed system generates roughly $2 million annually in recurring revenue from instruments, accessories, and service contracts. At 532 placements quarterly, Intuitive is adding over $1 billion in future annual revenue every quarter.
The 2026 Outlook
Management guided for 13-15% worldwide da Vinci procedure growth in 2026, down from 18% in 2025. The deceleration reflects market maturation in developed markets rather than competitive pressure.
Gross margins are expected at 67-68% of revenue, which includes an estimated 1.2% drag from tariffs. Intuitive manufactures some components overseas and will absorb the cost impact rather than pass it to hospital customers.
The company ended Q4 with $9.03 billion in cash and investments—up $600 million during the quarter. That balance sheet provides firepower for R&D, acquisitions, or buybacks.
Analyst Upgrades
Wall Street responded with target increases.
Goldman Sachs raised its price target to $714 from $621, maintaining a Buy rating. Bernstein increased to $740 from $700 with an Outperform rating. Both firms cited durable procedure growth and the da Vinci 5 adoption curve.
The bull case rests on international expansion. Da Vinci penetration in US hospitals exceeds 70% for certain procedures, but international markets remain significantly underpenetrated. Europe and Asia represent long runways for system placements.
Competition Watch
Intuitive faces growing competition from Johnson & Johnson's Ottava system and Medtronic's Hugo platform. Neither has achieved meaningful market share, but the duopoly risk has pressured ISRG's multiple at times.
The da Vinci 5's early adoption suggests hospitals aren't waiting for alternatives. The 303 Q4 placements came against expectations for a slower launch ramp as hospitals evaluated the new platform.
When customers upgrade to the latest model instead of switching vendors, the competitive moat looks intact.
For Traders
ISRG trades at roughly 55x forward earnings—a premium that assumes continued procedure growth and margin stability. The Q4 beat supports that valuation, but the multiple leaves little room for disappointment.
The stock has more than doubled since 2022. At current levels, the market is pricing in years of 15%+ revenue growth with stable profitability.
If tariff costs prove higher than the 1.2% estimate, or if procedure growth decelerates faster than guided, the premium could compress. But for now, Intuitive remains the dominant player in a market that keeps expanding.
Hospital CFOs buy da Vinci systems because surgeons demand them. That dynamic hasn't changed.