Intuitive Surgical revenue rises 22% as legal settlement weighs on GAAP earnings
Key Facts
Intuitive Surgical reported a 22% year-on-year increase in third-quarter 2026 revenue to $3.05 billion, with adjusted earnings per share beating analysts' estimates. Adjusted diluted earnings per share were $3.00, according to the earnings release filed with the U.S. Securities and Exchange Commission, alongside a legal settlement charge that affected GAAP profitability. Revenue estimates were around $2.91 billion, according to the consensus reported by Investing.com, putting quarterly revenue above expectations. Adjusted earnings per share also exceeded analysts' average estimate of about $2.65, according to the website, on the profitability measure underpinning the earnings beat. The company's results, announced on October 20, combined sales growth and higher adjusted earnings per share with lower GAAP profitability than in the same period last year.
GAAP diluted earnings per share were $1.49 in the third quarter of 2026, down from $1.95 in the third quarter of 2025, according to company disclosures. Intuitive Surgical recorded a pretax charge of $450 million during the period to settle an antitrust class action, among the material items accompanying the quarterly announcement. Adjusted diluted earnings per share in the same period a year earlier were $2.40, according to the third-quarter 2025 earnings release. Adjusted profitability therefore rose year on year, while GAAP profitability declined in the quarter in which the company incurred the legal settlement charge. The settlement weighed on earnings as revenue expanded, leaving the year-on-year earnings-per-share comparison dependent on whether the GAAP or adjusted measure was used.
The company attributed part of the revenue increase to "growth in procedure volume," according to the wording in its earnings release, as activity on its systems increased during the third quarter. Procedures performed using da Vinci systems worldwide grew about 14% from the same period a year earlier, according to operating figures released with the company's quarterly results. Those procedures had grown about 19% in the third quarter of 2025, indicating a slowdown in the pace of year-on-year growth compared with the corresponding period. Procedures using Ion systems grew about 31% year on year during the third quarter of the current year, alongside growth in da Vinci procedures. Intuitive Surgical placed 546 da Vinci systems with customers during the quarter, while the installed base reached 12,094 systems as of September 30, 2026.
In its guidance for 2026, Intuitive Surgical forecast worldwide da Vinci procedure growth of between 14% and 15% year on year, according to its latest earnings release. The company had previously forecast a wider growth range of between 13.5% and 15.5%, according to its second-quarter release published on July 16, 2026. The update raised the lower end of the annual forecast and lowered the upper end, narrowing expected growth around the midpoint of the previous range rather than shifting the entire range higher. The revision followed third-quarter da Vinci procedure growth at the lower end of the company's newly announced annual range. Procedures remained on track to increase under management's forecast for the current year, with a narrower gap between its low and high growth estimates than in the July guidance.
The company also raised its 2026 adjusted gross profit margin forecast to a range of between 68.7% and 69.3%, according to the guidance accompanying its third-quarter results. Its previous forecast for the margin was between 68.0% and 69.0%, according to the second-quarter release issued in July, before the outlook was updated with the latest quarterly announcement. Unlike the procedure growth range, which narrowed at both ends, both the lower and upper ends of the adjusted gross profit margin range rose from the company's previous estimates. On expenses, Intuitive Surgical forecast adjusted operating expense growth of between 11% and 13% for the current year, according to its earnings release. The guidance thus covered operating activity, gross margin and spending as the company reported year-on-year revenue growth and a slowdown in da Vinci procedure growth compared with the same period a year earlier.
In the market, Investing.com reported that the company's shares fell 7.3% in trading following the earnings announcement on the evening of October 20, 2026, despite adjusted earnings and revenue exceeding analysts' estimates. The decline came in the after-hours trading session as the company announced the antitrust settlement charge and updated its annual guidance for procedure growth and adjusted gross profit margin. The negative share-price reaction accompanied results showing diverging trends, with adjusted profitability rising from the corresponding period while GAAP earnings per share declined. For 2026, the company set a narrower procedure growth forecast than its July estimates, while raising its adjusted gross margin range in the update accompanying the results. Intuitive Surgical had scheduled a call to discuss its third-quarter results for October 20, 2026, at 1:30 p.m. Pacific Daylight Time, according to its investor relations page.