Intuitive Surgical shares fall 7.3% after hours despite adjusted earnings beat
Key Facts
Intuitive Surgical shares fell 7.3% in after-hours trading to $406 on October 20, 2026, according to Investing.com, after the company reported quarterly adjusted earnings and revenue that exceeded expectations. Third-quarter adjusted earnings per share were $3.00, compared with analysts' estimates of $2.65, according to the website's coverage of the robotic surgery company's results. Adjusted earnings thus exceeded expectations by $0.35 per share, while the stock's reaction following the announcement moved in the opposite direction to the beat. The company reported these results as procedures using its platforms continued to expand and it incurred a charge related to the settlement of an antitrust class action. The legal charge weighed on reported earnings for the period, leaving a gap between adjusted and reported earnings alongside business growth and results that exceeded estimates.
Intuitive Surgical said in its earnings statement that third-quarter revenue reached $3.05 billion, up 22% year on year, as procedures grew and its installed systems business expanded. Revenue in the corresponding period of 2025 was $2.51 billion, according to the company's earnings announcement for that quarter, providing the basis for the current year-on-year comparison. Revenue also exceeded analysts' consensus forecast of $2.91 billion, according to Investing.com, alongside adjusted earnings per share that beat market estimates for the same period. The company attributed revenue growth to increased procedures, operating lease revenue and an expanding installed base, the factors it cited in explaining its quarterly performance. The statement listed "operating lease revenue" among the drivers of the increase, alongside greater platform use and a growing presence of its systems among customers.
On a reported basis, net income attributable to the company was $523 million in the third quarter, according to its statement, after including the legal charge in the period's results. Reported diluted earnings per share were $1.49, while the adjusted earnings measure excluded the impact of the settlement that the company included in calculating reported earnings. Intuitive Surgical recorded a $450 million pretax charge to settle an antitrust class action, according to the disclosure accompanying its quarterly results. The quarter's operating performance was thus accompanied by a legal charge that affected reported net income, while the beat against analysts' expectations was on an adjusted earnings-per-share basis. Adjusted earnings per share in the corresponding quarter of 2025 were $2.40, according to the company's previous results, meaning current earnings also rose year on year.
In the activity underpinning use of the company's platforms, combined worldwide procedures performed using "da Vinci" and "Ion" grew approximately 15% in the third quarter from the same period a year earlier. That expansion was slower than in the corresponding quarter of 2025, when combined worldwide procedure growth was approximately 20%, according to the earnings statement for that period. Within the current total, the number of procedures using the "da Vinci" platform rose approximately 14% year on year, according to the operating figures the company released with its results. Procedures using the "Ion" platform grew approximately 31%, a faster pace than the "da Vinci" platform during the same quarter and above the combined procedure growth rate. Use of both platforms thus continued to grow, with the overall pace slowing from the comparison period despite the annual increase recorded by each platform individually.
Alongside the increase in procedures, the company placed 546 "da Vinci" systems with customers during the third quarter, according to its statement, expanding the presence of the platform used in robotic surgery. The worldwide installed base of these systems reached approximately 12,094 at the end of the quarter on September 30, 2026, encompassing systems in place at customers around the world. Quarterly instruments and accessories revenue was $1.80 billion, according to the figures in the earnings announcement for the same period. This activity accompanied system placements with customers, while the company included the expanding installed base among the reasons for its revenue growth during the quarter. It also linked the revenue increase to higher procedure volumes and operating leases, combining an expanding systems base, increased use and leasing contributions in its explanation of performance.
For 2026, Intuitive Surgical expects worldwide procedures using "da Vinci" to grow within a range of 14% to 15%, according to the guidance in its third-quarter earnings statement. The company said it expected to be near the midpoint of that range, specifying where its forecast stood within the bounds it announced for full-year procedure growth. The guidance concerns worldwide "da Vinci" procedures, the platform whose installed base among customers the company said it expanded during the period ended in September. On the legal front, the antitrust settlement remains subject to preliminary and final court approval, according to the disclosure accompanying the results, after the related charge was recorded. The settlement awaits both approvals, while the company proceeds through the remainder of 2026 under its announced expectations for procedure growth using its platform.