Intuitive Surgical (NASDAQ:ISRG) executives said the company remains focused on global procedure growth, while acknowledging a recent deceleration in U.S. procedures and policy-related uncertainty affecting hospitals.
Speaking at a Wells Fargo conference, Executive Vice President, CFO and Enterprise Technology Leader Jamie Samath said the company evaluates U.S. growth procedure by procedure rather than using a single market-level framework. He described prostate procedures as being in the fourth quartile of adoption, cholecystectomy in the second quartile and appendectomy in the first quartile.
Intuitive previously cited a modest effect from lower Affordable Care Act subsidies on U.S. procedures. Samath said the company does not provide regional growth guidance, but reiterated global procedure-growth guidance of 13.5% to 15.5%, with growth expected to be toward the midpoint of that range. The outlook incorporates more difficult second-half comparisons and the company’s estimate of Affordable Care Act-related dynamics, he said.
ASC Expansion and Capital Environment
Head of Investor Relations Dan Connally said ambulatory surgery centers represent a significant long-term opportunity, though growth is not expected to be linear. Intuitive placed 27 systems into ASCs during the second quarter, more than the cumulative number placed over the prior couple of years, according to Connally. Twenty of those placements were reconditioned da Vinci Xi systems.
Connally said U.S. capital demand was stable and relatively strong through the second quarter. The company placed 267 systems in the U.S., up 24% year over year, supported by adoption of da Vinci 5 and system upgrades. Approximately 70% to 75% of U.S. systems are typically deployed through non-purchase arrangements, he added.
Outside the U.S., Intuitive placed 201 systems in the second quarter, up 12% from a year earlier. Connally said Asia placements rose 9%, Europe rose 8% and rest-of-world placements increased 27%.
On possible changes to the 340B program, Samath said it was too early to assess the impact. He noted that reduced funding related to pharmaceutical programs could pressure hospital finances, while potentially higher outpatient surgical reimbursement from CMS could benefit companies operating in surgery.
Competition and International Markets
Samath said Intuitive views competition as extending beyond the robotic system itself to include software, artificial intelligence capabilities, product updates and the broader ecosystem. Discussing table-mounted robotic architectures, he said Intuitive believes the deployment and configuration of arms may restrict patient size and the range of procedures compared with the company’s boom-mounted Xi and da Vinci 5 systems.
Regarding international competition, Samath said the company’s X and XiR platforms are suited for more cost-constrained markets, while da Vinci 5 serves premium accounts. He said competition remains intense in China, where local competitors and slower tender activity have weighed on system placements.
China remains a large strategic market, Samath said, but Intuitive has limited visibility on when momentum could improve. He cited roughly 250 systems remaining under the existing quota and said the company expects greater clarity in 2027 around new charge codes and a centralized tender process.
In Japan, Samath said recently expanded reimbursement, including for inguinal hernia procedures, should begin to support adoption. However, he said the impact on the company’s overall business is not expected to become meaningful until 2027, after surgeons are trained and procedure volumes ramp.
Extended-Use Instruments and New Platforms
Samath said Intuitive’s planned 2027 Extended Use Instruments program is intended to reduce per-use instrument and accessory costs for customers in cost-sensitive procedures and markets. The company expects the structure of the initiative to be directionally similar to its 2020 program, but Samath emphasized that Intuitive has not yet disclosed the financial magnitude of the program and plans to provide details during its third-quarter earnings call.
The company aims to target areas where lower costs could stimulate procedure volume through greater customer elasticity, Samath said. He added that the program could affect the relative economics of third-party remanufactured instruments, though Intuitive has no plans to introduce its own remanufactured instrument offering.
On Intuitive’s endoluminal gastrointestinal system, Samath said remaining work includes engineering, regulatory planning, clinical evidence development and potentially reimbursement work. He declined to provide a timeline or market-size estimate, saying progress will depend on product-specific requirements.
Samath also said Intuitive is investing in next-generation versions of its existing MultiPort, da Vinci SP and Ion platforms, as well as additional platforms beyond its gastrointestinal system.
AI, Revenue Drivers and Financial Profile
Connally said Case Insights, included in the My Intuitive+ offering alongside telepresence and simulation, has received a positive early response. The service is complimentary for the first year with a da Vinci 5 acquisition, and no customers opted out when the first contracts reached their anniversaries in the second quarter, he said. The list price is about $40,000 per system annually.
Intuitive expects broader availability of Force Feedback instrumentation in the second half of 2026. Connally said force data could eventually enhance Case Insights capabilities.
For 2027, Samath identified procedure growth, da Vinci 5 upgrades, adoption of Force Feedback instruments and expansion into new sites of care, indications and countries as potential revenue drivers. He also noted that a greater mix of benign procedures and cost-constrained international markets could gradually reduce instrument and accessory revenue per procedure over time.
Samath said Intuitive reported 21% revenue growth in both the first half and the prior year, compared with a long-term average of roughly 14% to 15%. He said first-half operating margin was 41%, versus a long-term average of approximately 37%, while first-half free-cash-flow margin was 31% compared with a historical average closer to 22%.
About Intuitive Surgical (NASDAQ:ISRG)
Intuitive Surgical, Inc is a medical technology company that develops and manufactures robotic-assisted surgical systems and related products. Its technology is designed to support surgeons during minimally invasive procedures by providing enhanced visualization, instrument control and dexterity.
The company’s principal product is the da Vinci Surgical System, which is used across a range of specialties, including general surgery, urology, gynecology, cardiothoracic surgery and other procedures.
