Procedure Growth

FY 2025

13% to 16% "

15% to 17% " "

raised

Gross Profit Margin

FY 2025

67% to 68% "

65% to 66.5% " "

lowered

Operating Expense Growth

FY 2025

10% to 15% " "

10% to 14% " "

lowered

Stock Compensation Expense

FY 2025

$760 million to $790 million "

$770 million to $790 million " "

raised

Other Income

FY 2025

$370 million to $400 million "

$370 million to $400 million " "

no change

Capital Expenditures

FY 2025

$650 million to $800 million "

$650 million to $750 million " "

lowered

Income Tax Rate

FY 2025

22% to 23% "

22% to 23% " "

no change

Tariff Impact

FY 2025

no prior guidance

Approximately 1.7% of revenue, plus or minus 30 bps " "

no prior guidance

da Vinci 5 System Rollout and Adoption

Q4 2024: Strong first‐year limited launch with 362 total placements including 174 in Q4, dual-console mix and plans for mid‑2025 broad launch. " " Q3 2024: Early rollout with 110 placements, positive customer feedback including benefits like Force Feedback, and steady progress toward scaling manufacturing. " " " Q2 2024: A “measured” rollout with 70 placements and planned hardware/software updates affecting pace. " " "

Q1 2025: Continued rollout with 147 da Vinci 5 placements, over 32,000 procedures, strong U.S. customer adoption with increased trade-in volumes and planned regulatory etc. (e.g. pending clearance in Japan and Europe). " " "

Consistent adoption with enhanced features and trade-in upgrades. The system’s rollout remains robust while manufacturing and regulatory ramp‐up efforts are being scaled up for a broader launch mid‑2025.

Procedure Growth and Market Expansion

Q4 2024: Global procedure growth of ~17% YOY with robust performance on Ion and SP platforms and strong system placements globally. " " " Q3 2024: Reported 18% procedure growth driven by general surgery and healthy regional placements, with emerging placements for newer platforms. " " Q2 2024: Steady 17% global procedure growth with regional highlights, particularly in Europe and Japan, despite mixed conditions. " " "

Q1 2025: Continued robust growth with U.S. procedures up and strong performance in Ion (58% increase) and SP (94% growth) platforms. System placements totaled 367, reflecting both expansion and challenges (e.g. financial pressures in key OUS markets). " " " "

Steady and expanding with regional variations. While overall procedure volumes continue to grow substantially, market expansion efforts face challenges in select OUS regions, but overall sentiment remains positive with gradual international growth.

Technological Innovations in Surgical Robotics (Force Feedback Technology)

Q3 2024: Detailed discussion on Force Feedback yielding a 20% reduction in applied force and improved console efficiency, with early data and integration into digital tools. " " Q2 2024: Positive feedback on enhanced learning curves and operational efficiency, with integration into Case Insights and anticipated impact on outcomes. " " Q4 2024: Mild mentions via “force reflection” as part of digital features without deep dive. " "

Q1 2025: Emphasis on advanced Force Feedback technology integrated in da Vinci 5 systems with clinical studies demonstrating marked benefits (e.g. 83% vs. 25% recovery benchmarks), though constrained by instrument supply—which is expected to improve by year‑end. " " "

Increasing clinical validation and focus on scale. The technology’s role in enhancing surgical precision and outcomes is backed by emerging studies, with plans to overcome supply constraints and further integrate it into digital analytics tools, reinforcing its strategic value for future competitiveness.

Margin Pressure and Cost Management

Q2 2024: Improvements seen with gross margins nearing 70% (70% reported including onetime benefits) and cost efficiencies from lower inventory and component costs. " " Q3 2024: Margins slightly better than the previous year due to operational leverage, though anticipation of depreciation impacts noted. " " Q4 2024: Expectation of margin decline for 2025 due to rising depreciation, product mix dilution (da Vinci 5, Ion, SP lower margins), and FX effects. " " "

Q1 2025: Gross margin decline to 66.4% (down from 67.6% in Q1 2024) driven largely by higher facilities costs, increased depreciation due to new manufacturing capacity, and the higher revenue mix from newer products; ongoing cost management strategies and evaluations of tariff impacts. " " "

Persistent near‑term pressure amid strategic investments. Despite targeted cost management and manufacturing improvements, margin pressures continue due to product mix shifts and incremental depreciation—with a medium‑term aspiration to recover margins as scale and efficiency improve.

Capital Spending Constraints and System Rollout Delays

Q2 2024: Rollout of da Vinci 5 proceeding in a “measured” phase, with placements constrained by planned hardware/software updates and capital spending limitations in Europe. " " Q3 2024: Discussions noted constraints, with steady U.S. adoption contrasted with delays in regions like Japan and challenges in China’s dynamic environment. " " Q4 2024: Reported delays in Japan and dynamic market conditions in China, with European CapEx constraints impacting placements. " "

Q1 2025: While the da Vinci 5 rollout has progressed with 147 systems placed, regulatory approvals in Japan remain pending and European clearance is expected near the end of 2025; OUS markets continue to face capital spending limitations due to financial pressures and shifting government budgets. " " " "

Continued constraints with cautious ramp-up. International capital spending limitations remain a challenge, though U.S. growth is strong; the measured rollout approach persists as manufacturing and regulatory capacity are scaled up for mid‑2025, indicating a steady yet constrained expansion.

International Market Challenges and Regional Competition

Q2 2024: Noted challenges in China (domestic competitors, anticorruption, and pricing pressures) and constrained placements in Europe due to budget resets, with mixed performance in Asia. " " " Q3 2024: Highlighted stresses in China from value‑based pricing and “popcorn” domestic competition; European challenges due to government budget pressures, with additional issues in Japan and Korea. " " Q4 2024: Continued mention of increasing domestic competition in China, delayed investments in Japan, and capital constraints in Europe. " " "

Q1 2025: Detailed dynamics with China showing slightly improved procedure growth but continued impact from domestic competition and policy pressures (including significant tariffs), while European placements are modestly up but still constrained by financial pressures; Japan sees a decline in system placements. " " "

Persistent headwinds alongside regional growth. Major international markets continue to face competitive pressures and capital constraints while the company makes modest gains in select regions (e.g. India, parts of Europe); overall, international challenges remain a significant factor for future growth.

Regulatory Approvals and Expansion of Clinical Indications

Q2 2024: Discussion of FDA clearance for thoracic procedures on the SP platform, progress on an IDE study for colorectal procedures, and early regulatory discussions for da Vinci 5 and Ion in key markets. " " " Q3 2024: Received clearance in Korea, submission of CE technical file for Europe, and U.S. 510(k) activities for SP and Ion systems. " " Q4 2024: Noted new clearances for SP indications, expansion of Ion clearances, and broad clinical applications across over 40 procedure types for da Vinci 5. " " "

Q1 2025: Ongoing regulatory processes with pending clearance in Japan and expected European approval near the end of 2025 for da Vinci 5, alongside continued expansion of clinical indications for SP and Ion platforms as part of a broader strategy to increase utilization and convert more procedures. " "

Steady regulatory progress critical for growth. The company remains focused on securing key regulatory approvals and expanding clinical indications to drive adoption across platforms; this is essential for enabling the full commercial potential of new systems in upcoming markets.

Tariff Management and Operational Resilience

Q4 2024: First detailed mentions of tariff management. Discussions focused on monitoring tariff impacts—including potential effects on instruments manufactured in Mexico—and the possibility of pricing adjustments, while also noting efforts to expand manufacturing capacity (e.g. new facilities in Germany and Bulgaria) for operational resilience. " " Q2 & Q3 2024: No mention of these topics.

Q1 2025: Extensive focus on tariff management with detailed impact estimates (approx. 1.7% of revenue), breakdowns by U.S.-China trade and other import tariffs, and strategies for short-, mid-, and long-term mitigation; operational resilience is reinforced through global manufacturing expansion and robust supply chain management. " " " " "

Emerging as a major focus. Initially not discussed in early quarters, tariff management and operational resilience have become key topics as the company faces a dynamic global trade environment—efforts to mitigate tariff impacts and strengthen the supply chain are now central to ensuring long‑term stability and cost control.