Intuitive Surgical Sees Procedure Growth Despite U.S. Slowdown and China Pressure

Global procedure growth remains intact despite a recent U.S. slowdown and Affordable Care Act-related uncertainty; Intuitive Surgical maintained its 13.5%–15.5% global procedure-growth outlook, expecting results near the midpoint. Ambulatory surgery centers and international markets remain important expansion opportunities, with second-quarter system placements rising in the U.S. and abroad. However, China remains pressured by local competition and slower tenders, with improved visibility not expected until 2027. Future growth could come from da Vinci 5 upgrades, Force Feedback instruments, new procedures and sites of care, and AI services such as Case Insights. The company also reported strong financial performance, including 21% revenue growth and operating and free-cash-flow margins above historical averages.

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.

Samath said Intuitive sees substantial remaining opportunity in U.S. benign general surgery, as well as earlier-stage opportunities in cardiac surgery and nipple-sparing mastectomy. He also said the company intends to add further procedures to the beginning of its adoption funnel over time. 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.

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.