It has been about a month since the last earnings report for Intuitive Surgical, Inc. (ISRG). Shares have added about 7.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Intuitive Surgical due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Intuitive Surgical, Inc. before we dive into how investors and analysts have reacted as of late.
ISRG Q3 Earnings & Revenue Beat, Gross Margin Declines
Intuitive Surgical reported third-quarter 2025 adjusted earnings per share of $2.40, which beat the Zacks Consensus Estimate of $1.99 by 20.6%. The bottom line improved 30.4% year over year.
GAAP earnings per share in the quarter was $1.95, up 25% from the year-ago quarter’s level.
Revenue Details
The company reported revenues of $2.51 billion, up 23% year over year, as well as at constant currency (cc). A higher number of installed systems and growth in the da Vinci procedure volume contributed to the improvement. The top line beat the Zacks Consensus Estimate by 3.9%.
Segmental Details
Instruments & Accessories
Revenues from this segment totaled $1.52 billion, indicating a year-over-year improvement of 20.1%. This can be attributed to the da Vinci procedure’s 19% volume growth. The sales growth also reflects approximately 52% growth in Ion procedures and 91% for the SP platform. The top-line improvement was also aided by higher system utilization, partially offset by a lower mix of bariatric procedures and a higher mix of cholecystectomy procedures.
Systems
This segment’s revenues totaled $590.4 million, up 32.7% year over year. The robust growth was driven by a higher system placement and a rise in average selling price. Intuitive Surgical shipped 427 da Vinci Surgical Systems compared with 379 in the prior-year quarter. The company placed 263 systems in the United States and 164 in international markets. During the third quarter, ISRG placed 240 of its latest da Vinci 5 systems compared with 180 during the second quarter of 2025.
Services
Revenues from this segment amounted to $395.9 million, up 20.4% from the year-ago quarter’s level.
Margins
Adjusted gross profit was $1.70 billion, up 21% year over year. As a percentage of revenues, the gross margin was 68%, down approximately 110 bps from the prior-year quarter’s figure.
Selling, general and administrative expenses totaled $573.3 million, up 12.3% year over year.
Research and development expenses totaled $329.4 million, up 15.2% on a year-over-year basis.
Adjusted operating income totaled $975.9 million, up 29.2% year over year. As a percentage of revenues, the operating margin was 38.9%, up approximately 190 bps from the prior-year quarter’s figure.
Financial Position
Intuitive Surgical exited the third quarter with cash, cash equivalents and investments of $8.43 billion compared with $9.53 billion in the previous quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 5.03% due to these changes.
VGM Scores
Currently, Intuitive Surgical has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Intuitive Surgical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Intuitive Surgical, Inc. (ISRG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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