Intuitive Surgical Beats Q1 Estimates But Expects Margin Compression

Intuitive Surgical (NASDAQ:ISRG) delivered strong first-quarter results that surpassed expectations on both earnings and revenue.

The company reported adjusted earnings of $1.81 per share, topping the consensus forecast of $1.74. Revenue reached $2.25 billion, beating estimates of $2.19 billion and reflecting continued demand for its da Vinci robotic surgery systems.

While procedure volumes remain a bright spot—projected to grow between 15% and 17% globally in 2025—this marks a slight slowdown from last year’s 17% growth rate. The real concern, however, lies in profitability expectations.

Intuitive Surgical anticipates gross margins to compress to a range of 65% to 66.5% of revenue, down from 69.1% in 2024. This includes an expected tariff-related drag of around 1.7% on revenue, plus or minus 30 basis points. Meanwhile, operating expenses are set to rise 10% to 14%, consistent with last year’s spending pace.