Intuitive Surgical (NASDAQ:ISRG) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
Intuitive Surgical reported a 23% increase in Q1 2026 revenue to $2.77 billion with a significant rise in procedure volume, driven by 17% total procedure growth.
The company saw strong adoption of Da Vinci 5, SP, and Ion platforms, with notable growth in Da Vinci procedures in the U.S. and Europe, despite challenges in Asia.
The company updated its 2026 full-year guidance, expecting Da Vinci procedure growth of 13.5% to 15.5%, and improved non-GAAP gross profit margin guidance to 67.5% to 68.5%.
Intuitive Surgical highlighted strategic investments in digital infrastructure and AI capabilities to enhance surgical outcomes and operational efficiency.
Management emphasized continued international expansion, including acquisitions of distributors in Europe, and addressed competitive pressures and regulatory challenges in different regions.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the intuitive first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Conley, Vice President, Investor Relations. Sir, please go ahead.
Dan Conley (Vice President, Investor Relations)
Good afternoon and welcome to Intuitive’s first Quarter Earnings Conference Call. Joining me today are Dave Rosa, our CEO, and Jamie Samath, our CFO. Before we begin, I would like to remind you that comments made on today’s call may contain forward looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in our Securities and Exchange Commission filings, including our most recent Form 10K filed on February 3, 2026. Our SEC filings can be found through our website intuitive.com or at the SEC’s website. Investors are cautioned not to place undue reliance on such forward looking statements. Please note that this conference call will be available for audio replay on our website in the Events section under our Investor Relations page. We are experiencing technical difficulties with distribution of today’s press release. You can find today’s 8K, including our press release on our website or at the SEC’s website. The Q1 2026 financial data tables have been posted to our website as well. Our format for this afternoon’s earnings conference call is as follows. Dave will review business and operational highlights. Jamie will provide a review of our financial results and procedure highlights. I will review clinical highlights and discuss our updated financial outlook for 2026. And finally, we will host a question and answer session. With that I will turn it over to Dave.
Dave Rosa (Chief Executive Officer)
Good afternoon and thank you for joining us. Q1 was a solid start to the year for intuitive, driven by 17% total procedure growth and broad based adoption across DaXiinci and Ion platforms as customers continue to advance minimally invasive care. In Q1, Da Xiinci procedures grew 16% to 847,000 and ion procedures increased 39% to 43,000. Performance was strong in the US and Europe with mixed results in Asia. In the United States, Da Xiinci procedures grew 14% year over year, led by strength. In general surgery growth was supported by a 31% increase in after hours procedures and higher overall utilization. DaXiinci Xi utilization continues to exceed that of Da Xiinci Xi, driving U.S. utilization growth to 4%. Outside the U.S. Da Xiinci procedures grew 19%, led by continued strength in general surgery and gynecology as adoption expands beyond urology. The lower growth rate relative to prior quarters reflects ongoing challenges in China and Japan. In China, the environment remains largely consistent with recent quarters, reflecting relatively low tender activity across the category, domestic competition and policy driven pricing pressure. Given our belief in the long term opportunity, we continue to make investments to improve procedure growth, establish favorable patient charge codes and support other market access activities. In Japan, procedure growth improved sequentially but remained below historical levels following fewer system placements in 2025. We are encouraged by recent policy developments including incremental financial support for higher volume robotic programs and new reimbursement for seven additional procedures, both policies to be effective starting in June 2026. Jamie will describe these changes in more detail shortly. I have confidence in our ability to execute our international strategy. Investments in our organizational capabilities, clinical trials and research and market access efforts are yielding supportive robotic surgery policies and reimbursements in many of the countries we serve. The arc of progress is evident with with OUS procedures now representing 38% of total Da Xiinci volume, up from 25% a decade ago, we are well positioned to expand access and drive deeper adoption in these countries with the addition of Xi to our system portfolio and our overall ecosystem of technologies, training and services. Turning to Capital, we placed 431 DaXiinci Systems in Q1, including 232 DaXiinci 5 Systems, 34 Single Port (SP) Systems and 34 Xi Systems. We also placed 52 Ion Systems in the quarter. As DaXiinci Xi moves into broader clinical use globally, customer adoption and feedback remain very encouraging. Customers are building experience with the DaXiinci Xi ecosystem, resulting in increased clinical throughput and expanded access to DaXiinci surgery. At the recent annual SAGES conference, several clinical abstracts demonstrated objectively lower tissue forces using Da Xiinci Force Feedback instrumentation across multiple procedure types. We continue to believe that objective knowledge of applied forces in surgery will lead to improved surgical outcomes and are investing to demonstrate this at scale. In March, we received FDA 510(k) clearance for additional uses of our force feedback instruments. Five of six instruments are now cleared for 15 uses, while our Mega SutureCut Needle driver is cleared for 10 uses. Combined with multi year investments in supply chain and manufacturing, this clearance supports broader availability in Q2 that will increase over the rest of the year. We expect adoption of force feedback instrumentation to progress steadily through 2026 and beyond. Turning to our digital ecosystem, we continue to invest in the data and digital infrastructure that underpins our longer term innovation. Roadmap. DaXiinci5 captures real world surgical data at greater scale and fidelity, enabling deeper insight into how procedures are performed in practice. That insight, paired with clinical context from connected electronic medical records, provides better understanding of variation, workflow and outcomes and informs current and planned digital and AI enabled capabilities. My Intuitive plus continues to play an expanding role in training and program support with growing adoption of intuitive telepresence capabilities that enable proctoring, mentoring and collaboration across surgeons and sites. Collectively, these efforts are foundational to to our long term digital and AI roadmap where we expect to add telesurgery, deeper decision support and augmented dexterity, including aspects of future automation, all in pursuit of Advancing the quintuple aim I’m excited by the progress our development teams are making turning to our single port platform. Single Port (SP) momentum continued in the quarter with procedures growing 68% year over year. Growth was driven by expansion in Korea and the US and ongoing early adoption across select international markets. Recently, US surgeons performed the first non ide nipple sparing mastectomy cases as we advance our measured rollout focused on training and support of our customers. We also moved our single port stapler into broad launch which will support deeper penetration in thoracic and colorectal procedures as customers expand their programs. Our teams are focused on new product and procedure launches, expanding our customer base and securing new geographic clearances over the midterm. Single Port (SP) will incorporate much of the DaXiinci 5 ecosystem, including current and future digital and AI capabilities. We’re excited about the potential of Single Port (SP) to drive meaningful improvement in the quintuple aim. Moving to Ion we’re pleased with the results and progress this quarter. Ion’s North Star is to help physicians improve lung cancer patient survival. Clinical publications continue to reinforce progress here, including a recent Mayo Clinic publication of approximately 2000 patients which demonstrated that use of ION supports earlier identification of malignancy with the potential to improve patient survival. Dan will walk through the study in more detail later in the call. Our teams are making progress on our rapid on site tissue evaluation technology or Rapid On-Site Evaluation (ROSE) and endobronchial ultrasound integration as we look to further streamline the time from detection to diagnosis. Looking ahead, our company priorities for 2026 are unchanged. First, the global expansion of our platforms, digital feature releases and ecosystem enhancements. Second, increased adoption for focused procedures by country through training, commercial activities and market access efforts. Third, building industrial scale, enhancing product quality and achieving manufacturing optimization and finally advancing innovation to reach more patients in current and new disease states. Before I turn the call over to Jamie, I want to recognize an important leadership transition at Intuitive. Dr. Miriam Curette is retiring this quarter after more than 20 years as Intuitive’s Chief Medical Officer. I’d like to thank Miriam for all her efforts in advancing our mission as a physician, a patient advocate and a business leader. I’m also pleased to announce Dr. Jamie Wong’s promotion to Chief Medical Officer and member of our executive leadership team. Jamie provides combines a deep clinical background as a practicing Da Xiinci urologist with his experience of more than a decade at Intuitive leading a variety of functions. As cmo, he will lead our global medical office overseeing customer training, clinical evidence generation and research and reimbursement and market access efforts. And with that, I’ll turn the time over to Jamie to take you through our finances in greater detail.
Jamie Samath (Chief Financial Officer)
Good afternoon. I’ll describe our performance on a non-GAAP basis and I will summarize our GAAP results later in my remarks. A reconciliatIon between our non-GAAP and GAAP results is available on our website. All references to Total procedures and their related growth rates include both Da Vinci and Ion procedures. Before detailing our quarterly results, I would like to briefly address the cyber incident that occurred during the first quarter which resulted in unauthorized access to some customer business and contact informatIon as well as certain Intuitive employee and corporate data contained in certain of our it business applicatIons. The incident did not disrupt our business or manufacturing operatIons and did not affect our products. it also did not have a significant impact on our first quarter financial results. We have contained the incident, notified customers, and informed appropriate data privacy regulators. We are also taking additIonal steps to further strengthen our CyberSecurity protocols. In Q1, total procedures grew 17%, reflecting 16% growth in Da Vinci procedures and 39% growth in Ion procedures. Quarter one revenue increased 23% to $2.77 billIon, with recurring revenue also higher by 23% to $2.4 billIon, accounting for 86% of total revenue on a constant currency basis, revenue growth was 22%. Non GAAP operating margin was strong at 39%, primarily reflecting leverage of fixed costs. The strength of our financial results reflected continuing global expansIon and procedure adoptIon of our Da Vinci XiiON and Single Port platforms. Turning to the clinical side of our business in the US, total procedures increased 15%, reflecting 14% growth in Da Vinci procedures and 37% growth in Ion procedures. For our Da Vinci platforms, we continue to see strong growth in cholecystectomy and appendectomy procedures which combined grew by 31%, driven in part by by continued expansIon of use of Da Vinci during after hours and on weekends. We are starting to see emerging evidence that a broad set of clinical outcomes for appendectomy are improved with Da Vinci surgery as compared to laparoscopy. Over the last year in the US We’ve invested in incremental clinical support for surgeons performing benign gynecology procedures given the opportunity to improve patient outcomes. While total US gynecology procedures grew 10% in Q1, investments in this area drove a 19% increase in non hysterectomy benign procedures including sacrocopopexy endometriosis, oophorectomy and myomectomy during the quarter. Da Vinci bariatrics procedures in the US Continue to be impacted by the growth in use of GLP1s declined approximately 10%. Da Vinci utilizatIon in the US increased 4% in Q1 higher than recent quarters, driven by a growing in store base of Da Vinci 5 systems where utilizatIon is approximately 11% higher than Xi with respect to the expiratIon of subsidies for enhanced premiums under aca. While we did not see any significant impact on procedure volumes in Q1 at this time, we remain cautious as to what the potential impact, if any, might be outside the US total procedures grew 20% with Da Vinci procedure growth of 19%, reflecting strong results in India, Canada, the UK, Korea and Taiwan and solid growth in distributor markets Italy and Germany. The market in China continues to be challenging. In Q1, procedure growth was below the corporate average, reflecting lower tenders and competitive and pricing pressures. There are ongoing discussIons with provinces regarding potential new charge code and reimbursement policies in China for robotic procedures. We are actively engaged with policymakers but do not expect clarity on the outcome of these matters until 2027. Procedure Growth in Japan was also below the corporate average, reflecting lower capital placements over the last several quarters in Q1. The Japanese Ministry of Health, labor and Welfare or MHLW recently introduced incremental reimbursement for hospitals that exceed robotic procedure volumes of 200 qualifying cases per year. In additIon, seven new procedures have been granted robotic reimbursement starting in June of 2026. Furthermore, rectal resectIon has been granted premium reimbursement when performed robotically. While we are encouraged by these steps, we remain cautious in our outlook for the Japanese market in the short term, given the financial positIon of public hospitals in recent periods. Globally, we continue to see healthy procedure growth for our Single Port platform at 68% for Q1 with strength in Korea and continuing robust early stage growth in Europe, Japan and Taiwan. In the US Single Port average system utilizatIon continued to accelerate following recent additIonal clearances, growing 22% as compared to quarter one of last year. During the quarter we moved our new Single Port Stapler into broad launch in the US where it was used in almost 40% of cases where we would expect a stapler to be used. We are planning to move the Single Port Stapler into measured launch in Korea and Europe in Q2 as we expand manufacturing capacity as a result of our clinical performance. Total INA revenue in quarter one grew 23% to $1.7 billIon. Da Vinci INA revenue per procedure was approximately $1,880 compared to $1,780 last year, driven by customer ordering patterns, a higher mix of Single Port and Da Vinci 5 procedures and FX, partially offset by lower bariatric and hilarcholecystectomy procedures. Turning to capital performance and starting with our Da Vinci business, we placed 431 Da Vinci Systems in quarter one, a 17% increase from the 367 systems placed in the same quarter last year. 232 of the 431 placements were Da Vinci 5, including 40 in OUS markets. The install base of Da Vinci 5 is now almost 1500 systems used by almost 13,000 surgeons since launch. Customers acquired 34 refurbished Xi systems in Q1 compared to 2 in the year ago period. 26 of the 34 placements were in OUS markets in segments where we see greater cost sensitivity. There were 119 trading transactIons in quarter one, up from 67 a year ago, primarily driven by US customers upgrading to Da Vinci 5. In the US we placed 226 systems, up from 204 last year to driven by adoptIon of Da Vinci 5. Outside the US we placed 205 systems, an increase of 26% compared to the 100 and 63 systems placed last year. OUS placements included 117 systems in Europe, 62 in Asia and 26 in the rest of the world compared to 88, 52 and 23 respectively last year. Relative strength in Europe was driven primarily by the UK where we placed 34 systems. As the NHS closed out its budgetary year, we placed 13 systems in Japan and …
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