ISRG US S&P 500NASDAQ-100Russell 1000 Earnings call · transcribed from the recording
Intuitive Surgical (ISRG) · Q3 2026 results and valuation
Share price: $449.53 · 2026-11-11
Intuitive Surgical provides a portfolio of robotic-assisted surgical systems, instruments, and accessories for minimally invasive procedures. The company serves healthcare providers and patients globally by offering products for various surgical and diagnostic specialties. Source: 10-K annual report (2026-02-03)
Results Q3 2026 vs Q2 2026 · previous quarter · published 20 Oct 2026 and 16 Jul 2026
Net income down 36.1% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
−36.1%
Net income vs Q2 2026
Net income 522.8M vs 818.1M
Revenue +5.4%
Against the same quarter last year (Q3 2025) it is −25.8%, so it is not just seasonal.
Why Against the same quarter last year (−25.8%), net income fell primarily because non-GAAP operating expenses increased 18% year-over-year due to higher variable compensation, higher headcount, and higher prototype expenses as several programs advanced in development.
2 · How management spoke
Typical
More upbeat than 54% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Intuitive Surgical's third quarter SP procedure growth was 55%, driven by 50% growth in the U.S. and 40% growth in Korea, its largest SP market.
Valuation
Is Intuitive Surgical undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 17.4% growth a year (3-year revenue growth), the model's fair value is $295.52 a share — the stock trades 52% above it. Today's price assumes 23.3% growth a year.
Current price
$449.53
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+23.3% for 10 yrs
Fair value / share
$295.52
Buy below
$221.64
Price vs fair value
Overvalued 52%
Price vs buy-below price
Overvalued 103%
Read between the lines
-
Figure
Revenue grew 22% to just over $3 billion, with 84% of that total coming from recurring revenue.
Source quote
“Revenue grew 22% to just over $3 billion, of which 84% was recurring revenue.”
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Figure
Quarter 3 systems revenue grew 30% to $769 million due to capital performance.
Source quote
“Given our capital performance, Quarter 3 systems revenue grew 30% to $769 million.”
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Figure
Total procedures increased 15% in Q3, driven by 14% growth in DaVinci procedures and 31% growth in ION procedures.
Source quote
“In Q3, total procedures increased 15%, driven by 14% growth in DaVinci procedures and 31% growth in ION procedures.”
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Figure
Quarter SP procedure growth was 55%, driven by 50% growth in the U.S. and 40% growth in Korea, the company's largest SP market.
Source quote
“Third quarter SP procedure growth was 55%, reflecting accelerated growth in the U.S. of 50% and growth of 40% in Korea, our largest SP market.”
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Figure
Cash generated from operating activities was more than offset by $2.9 billion in stock repurchases and $113 million in capital expenditures.
Source quote
“Cash generated from operating activities was more than offset by stock repurchases of $2.9 billion at an average price of $377 per share and capital expenditures of $113 million.”
4 more
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Figure
The estimate is updated to a range of 68.7 to 69.3 percent of revenue because of an estimated 90 basis point impact from tariffs and related refunds.
Source quote
“We are updating our estimate to be within a range of 68.7 and 69.3 percent of revenue, including an estimated 90 basis point impact from tariffs, as well as related refunds.”
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Figure
DaVinci system placements increased 28% worldwide, with DaVinci 5 and SP accounting for 65% of global placements.
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Figure
The company reported more than 13,200 DaVinci and ION systems installed worldwide by the end of the quarter.
Source quote
“We exited the quarter with more than 13,200 DaVinci and ION systems installed worldwide.”
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Figure
Da Vinci placements outside the U.S. increased 29 percent in the quarter due to broad-based global demand.
Source quote
“Da Vinci placements outside the U.S. increased 29 percent in the quarter with broad-based global demand.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“In Asia, Japan improved on both system placements and procedure growth for the second consecutive quarter, while India had another strong quarter with 42% procedure growth, surpassing 200,000 cumulative DaVinci...”
“Europe's performance reflected our broadening focus with record quarterly placements in Portugal, Turkey, and Austria, and solid growth in Poland, Croatia, and Romania.”
“In Asia, India and Taiwan led growth, and Japan, procedure growth accelerated, reflecting early signs of a response to the June reimbursement changes.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.05B | 2.89B | +5.4% | 2.51B | +21.7% |
| Gross profit | 2.08B | 1.96B | +6.3% | 1.66B | +25.4% |
| Operating income | 592.6M | 971.9M | −39.0% | 759.7M | −22.0% |
| Net income | 522.8M | 818.1M | −36.1% | 704.4M | −25.8% |
| EPS | 1.49 | 2.29 | −34.9% | 1.95 | −23.6% |
| P/E today 54.8 | 49.2 | 45.6 | +3.6 | 59.2 | −10.0 |
Topics
Most discussed now
- New On its Q4 2024 earnings call, Intuitive Surgical described the landmark compare study, a meta-analysis where the authors reported multiple…
- Net DaVinci placements, that is placements that expand the installed base, grew 40%.
- Supported by both the INA pricing actions that Intuitive Surgical has described and its tiered portfolio.
Faded since Q2 2026
- Fading The global installed base of da Vinci and ION systems increased by 12% and 21%, respectively, and Intuitive Surgical exited the...
- Fading Q2 marked another strong financial quarter for Intuitive, Revenue rose 19%, non GAAP operating margin was 42%, and non GAAP...
- Fading It shows the extent to which customers are up interested in upgrading embedded in that given how Intuitive Surgical designed da...
- Fading The other 1 is that Intuitive Surgical is able to adjust multiple arms either preoperatively or during the case will help...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
Intuitive Surgical reported third-quarter revenue of $3.05 billion, an increase of 22% compared to $2.51 billion in the third quarter of 2025.
- Articles or bylaws amended · SEC 8-K · routine
- Results of operations · SEC 8-K
Intuitive Surgical reported second-quarter revenue of $2.89 billion, an increase of 19% compared to $2.44 billion in the second quarter of 2025.
- Director or officer change · SEC 8-K
Effective July 1, 2026, Taylor Patton will become Chief Commercial and Marketing Officer, while Henry L. Charlton will transition to Senior Vice President of Global Business Operations.
- Director or officer change; Shareholder vote results; Regulation FD disclosure · SEC 8-K
Stockholders approved the amendment of the 2010 Incentive Award Plan, increasing the number of shares reserved for issuance from 120,350,000 to 125,350,000 and extending the term to January 29, 2036.
- Results of operations · SEC 8-K
Intuitive Surgical reported first quarter 2026 revenue of $2.77 billion, an increase of 23% compared to $2.25 billion in the first quarter of 2025.
- Other events · SEC 8-K
Intuitive Surgical completed the acquisition of the da Vinci and Ion distribution business from ab medica, Abex, and Excelencia Robótica on March 1, 2026.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-26.
Cash & runway
Cash & equivalents
$2.98B
2026-09-30
Short-term investments
$1.06B
Long-term investments
$2.76B
total liquidity $6.80B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -2.1% YoY, -1.4% QoQ.
| Quarter | Shares |
|---|---|
| Q1 2025 | 357.5M |
| Q2 2025 | 358.5M |
| Q3 2025 | 356.6M |
| Q1 2026 | 354.9M |
| Q2 2026 | 354.1M |
| Q3 2026 | 349.0M |
Shares outstanding: 346.6M (2026-10-15)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 90 filings; 50 filings parsed.
Sold by insiders
32.7K shares
$14.4M · 47 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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in 2028
new INA manufacturing facility in Penang, Malaysia to begin operations
Source quote
“We expect this facility to begin operations in 2028.”
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in the coming quarters
further reimbursement actions in other geographies for ION
Source quote
“During Q3, we received reimbursement for ION in Korea, and we expect further reimbursement actions in other geographies in the coming quarters.”
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first half of 2028
regulatory clearances for telesurgery on DaVinci 5
Source quote
“Telepresence on DaVinci 5 serves as a foundation for our efforts in telesurgery where we expect several regulatory clearances in the first half of 2028.”
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first half of 2027
implementation of pricing actions including expansion of extended use program
Source quote
“The first is a set of pricing actions we will implement beginning in the first half of 2027, including the expansion of our extended use program announced in May.”
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next month
policy-driven price reduction in China
Source quote
“The second is a policy-driven price reduction in China that starts to take effect next month.”