Intuitive Surgical stock falls on slowing US procedure growth despite strong Q2 earnings

Intuitive Surgical shares fell approximately 11 percent on Friday following the release of its second-quarter financial results. Although the robotic surgery company exceeded Wall Street revenue and earnings estimates, investors reacted negatively to signs of decelerating procedure growth in the United States and a tempered full-year forecast.

The company posted second-quarter revenue of $2.89 billion, a 19 percent increase from the prior year and above the $2.82 billion analyst consensus. Adjusted earnings per share reached $2.80, comfortably surpassing the expected $2.51.

Despite the top-line beat, market attention centered on a slowdown in domestic procedure volume. US procedure growth decelerated to 12 percent in the second quarter, down from 14 percent in the first quarter. Management cited deferred treatments and shifts in patient insurance coverage following the expiration of enhanced Affordable Care Act premium subsidies as primary drivers.

This moderation has prompted the company to issue a cautious full-year guidance. Intuitive maintained its 2026 forecast for worldwide da Vinci procedure growth between 13.5 percent and 15.5 percent, but indicated results will likely land closer to the midpoint. This implied growth rate of roughly 14.5 percent falls short of the 15.3 percent anticipated by analysts.

Globally, procedures across the da Vinci and Ion platforms rose about 16 percent year over year. The da Vinci platform saw a 15 percent increase, while the Ion platform grew by 36 percent. System placements also accelerated, with 468 da Vinci units placed in the quarter compared to 395 a year earlier, including 246 of the newer da Vinci 5 systems.

Systems revenue climbed to $685 million from $575 million in the same period last year, supported by higher leasing revenue, increased average selling prices, and greater placement volumes. Instruments and accessories revenue grew 18 percent to $1.73 billion, reflecting the broader increase in procedure volumes.

Looking ahead, Intuitive reaffirmed its non-GAAP gross profit margin outlook of 68 percent to 69 percent of revenue, noting an estimated 1 percent headwind from tariffs. The company also projected non-GAAP operating expense growth of 11 percent to 13 percent for the year.

The company ended the quarter with a robust balance sheet, holding $8.63 billion in cash, cash equivalents, and investments, an increase of $650 million from the previous quarter. During the period, Intuitive returned capital to shareholders by repurchasing approximately 0.9 million shares for $380 million.