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Investing.com -- Shares of Intuitive Surgical Inc (NASDAQ:ISRG) fell slightly Tuesday despite a second-quarter earnings beat, as investors reacted to weaker-than-anticipated gross margin guidance for the remainder of the fiscal year. The stock dropped 1.4% in extended trading, underscoring growing concerns over cost pressures and tariff headwinds.
The maker of the da Vinci (EPA:SGEF) robotic-assisted surgical systems reported adjusted earnings of $2.19 per share, exceeding analysts’ forecast of $1.93, and significantly improved from $1.78 a year earlier. Revenue surged 21% year-over-year to $2.44 billion, also topping consensus estimates of $2.35 billion.
Despite these strong top- and bottom-line results, the company issued a revised non-GAAP gross margin forecast of 66% to 67% for 2025, compared with 69.1% in 2024. Management attributed the compression in part to an estimated 1% revenue impact from international tariffs, along with higher depreciation expense from recent infrastructure investments.
“We’re pleased with our solid performance this quarter, highlighted by continued customer adoption of our newer and existing platforms, including da Vinci 5,” said Chief Executive Dave Rosa. “We are committed to advancing care, and helping our customers provide better patient outcomes, better patient and care team experiences, broadening access to care and decreasing the total cost of care.”
The latest quarter saw the placement of 395 da Vinci surgical systems, up from 341 a year ago, including 180 of the new da Vinci 5 model. The global installed base reached 10,488 units, a 14% increase, while da Vinci procedure volumes grew approximately 17% year-over-year.
Intuitive’s instruments and accessories sales generated $1.47 billion in revenue, rising 18% and accounting for the majority of total sales. System revenue also grew to $575 million, supported by a mix of direct sales and operating lease arrangements.
The company exited the quarter with $9.53 billion in cash and investments, up $431 million, fueled primarily by operating cash flow. While international expansion and procedure growth remain tailwinds, investors are recalibrating expectations around margins as tariff costs and R&D spending weigh on profitability.
Looking forward, the company guided for da Vinci procedure growth of 15.5% to 17% in 2025, slightly down from 17% in 2024. Operating expense growth is expected to rise to up to 14%, as Intuitive balances scaling its innovation pipeline with ongoing macroeconomic pressures.