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Key Points
- Intuitive Surgical’s Q4 2025 results beat on both revenue and EPS, reinforcing confidence in its robotics‑assisted surgery leadership despite a deceleration in procedure growth.
- Guidance for 2026 shows steady procedural demand and gross margins, with investment in R&D and new platforms (Ion, da Vinci SP) supporting long‑term growth prospects.
- Tariff headwinds and a high valuation present near‑term risks, but investor resilience and market trust underpin sustained growth expectations.
Robotic-assisted surgery stalwart Intuitive Surgical (NASDAQ: ISRG) blew investors away with its Q3 2025 earnings report back in October 2025. Shares closed up nearly 14% in reaction to the results, marking the healthcare stock’s largest single-day post-earnings gain in recent memory.
On Jan. 22, the company reported its Q4 2025 results. Although they did not elicit nearly as much fanfare as the company’s past report, markets received the release positively. The stock was up by approximately 1.4% in after-hours trading. Despite its lofty valuation, Intuitive maintains a constructive long-term outlook, with the ability to keep its growth engine chugging.
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Intuitive Beats on Revenue and EPS By a Solid Margin
In Q4, Intuitive posted revenue of $2.87 billion, an increase of 19%. This significantly surpassed estimates of $2.72 billion, or 13% growth. The company’s adjusted earnings per share (EPS) beat was arguably even more impressive. The figure came in at $2.53, an increase of just over 14%. Analysts anticipated adjusted EPS of just $2.25, or less than 2% growth.
Da Vinci procedure growth is a key performance indicator for the company. Doctors performing more procedures leads to healthcare providers purchasing more of the company’s disposable instruments. These are an important source of recurring revenue and typically account for the majority of the company’s total sales.
The figure came in at a solid 17%, right in line with the company’s historical range over the past two years. However, this was a deceleration compared to the 19% growth last quarter, a standout figure that the firm had not exceeded since 2023. For the full year, da Vinci procedures increased by 18%.
Intuitive Provides Solid Guidance, But Growth May Decelerate
Looking into 2026, the company expects da Vinci procedure growth of 14% at the midpoint. Note that da Vinci does not provide explicit revenue growth forecasts. However, revenue growth often trends in the same direction as da Vinci procedure growth. The company sees its gross margin coming in at between 67% and 68% in 2026. This is essentially in line with the company’s 2025 gross margin of 67.7%.
Intuitive also expects its operating expenses to increase at a slightly faster rate in 2026 than in 2025. This signals that the company’s operating margin could contract, given that revenue growth could decelerate along with da Vinci procedure growth. However, Intuitive attributes a possible acceleration in expense growth to early-stage research and development efforts.
While potentially dilutive near term, this move supports the stock’s long-term outlook. Intuitive is growing steadily, but maintaining this growth hinges significantly on the company developing new devices and platforms, and getting its current offerings approved for more treatments. The company’s Ion and da Vinci SP platforms demonstrate Intuitive’s ability to find new growth drivers. Procedures for these devices increased by 78% and 51%, respectively, during the quarter.
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Markets Look Past Intuitive’s Tariff Guidance, Mitigating a Key Headwind
Importantly, it seems that investors were not shaken by Intuitive’s tariff-related guidance. In 2026, the firm expects tariffs to negatively impact gross margins by 1.2%. This is significantly higher than their approximately 65-basis-point impact in 2025. Seeing shares hold up well despite this is a good sign, considering that tariff fears weighed on the stock during much of 2025. Investors now have a much better handle on Intuitive’s tariff exposure, leading to reduced uncertainty around the stock. This helps give investors more confidence in the company’s path forward.
Intuitive Surgical is not a cheap stock, trading at a forward price-to-earnings (P/E) ratio near 56x. However, having already established itself as a leader in robotics-assisted surgery, it has built trust within the healthcare industry. As the company looks to enter new markets, this trust should give it a key advantage over aspiring competitors, making strong, sustained growth a realistic possibility. Still, the company will need to continue innovating to sustain growth rates that justify its current valuation and further increases in its stock price.
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