Intuitive Surgical
(Nasdaq: ISRG)
is warning that President Donald Trump’s import taxes and retaliation from trade partners could have a significant impact.
Yesterday evening, ISGR stock was down about 2% after-hours on the announcement, which also included Street-beating first-quarter results. By midday today, however, the stock was up more than 3% to $495.23 per share as the overall markets rose in response to Trump softening his tone about China and the Federal Reserve.
The Sunnyvale, California–based surgical robotics developer and manufacturer reported net income of $703.7 million on sales of $2.25 billion for the first quarter (ended March 31).
Sales and profits both climbed 19% from the same period a year ago.
Net income attributable to Intuitive came in at $1.92 per diluted share, and adjusted earnings per share (EPS) of $1.81.
Analysts were expecting adjusted EPS of $1.73 on revenue of $2.19 billion.
Intuitive reported 17% growth in worldwide da Vinci procedures and the placement of 367 da Vinci surgical systems, up from 313 a year ago. Those latest placements included 147 of the company’s fifth-generation da Vinci 5 systems, compared to eight a year ago.
“Core measures of our business were healthy this quarter, and we are pleased by continued customer adoption of our platforms, including da Vinci 5,” Intuitive CEO Gary Guthart said in a news release. “As we look ahead, we remain focused on enabling our customers to deliver on their goals: better patient outcomes, improved patient and care team experiences, lower total cost to treat, and increased access to care.”
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Intuitive expects worldwide procedure growth of 15% to 17% in 2025, compared to 17% in 2o24 and the 13% to 16% range the company previously offered for 2025.
The company also said operating expenses will likely increase from 10% in 2024 to a range of 10% to 14% in 2025.
The company also expects gross profit margin to fall from 69.1% in 2024 to somewhere between 65% and 66.5% in 2025.
“This range includes an estimated impact from tariffs of 1.7% of revenue, plus or minus 30 basis points,” the company said.
Previously: Intuitive stock slips after company warns of potential tariff impact
“The updated range for expected non-GAAP gross profit margin reflects the company’s estimates of the impact from tariffs that are in effect or have been announced with both a firm percentage and implementation date as of the time of this press release and assumes such tariffs remain in place,” Intuitive later continued. “Should additional tariffs be implemented, the adverse impact on the company’s financial results in 2025 (including the decrease in expected non-GAAP gross profit margin) could be material. The ultimate impact from any tariffs will depend on various factors, including the volume of system sales in China, the proportion of components procured and finished goods manufactured outside of the United States, and the amount, scope, nature, and timing of the tariffs.”
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Intuitive’s tariff exposure
In 2024, Intuitive manufactured 98% of its robotic systems in the U.S., 70% of its endoscopes in Europe, and about 80% of its instruments and accessories in Mexico, Intuitive CFO Jamie Samath said.
“We source raw materials and other components that go into these finished products from suppliers around the world,” he said. “The net result of our manufacturing footprint and global customer demand is that Intuitive is both a significant U.S. manufacturer and has become a significant net U.S. exporter.”
About half of Intuitive’s projected tariff impact in 2025 is from trade in both directions between U.S. and China, Samath said. About 40% is imports or raw materials and components into the U.S. (except from China, Mexico and Canada), including imports of endoscopes from Intuitive’s European operations.
“In terms of the impacts of tariffs to intuitive, broadly in order of magnitude, I would characterize tariffs into the following three buckets,” he continued. “First, those tariffs relating to U.S.-China trade. We import into China subassemblies for domestic Xi production and completely finished Xis, both of which are expected to incur Chinese tariffs at 125%. We also import components from Chinese-based suppliers into the U.S. to be incorporated into the manufacture of our products which incur U.S. tariffs of 145%. In addition, our China [joint venture] manufactures certain products for our Ion platform that are subject to U.S. tariffs when imported for U.S. procedure demand. Second, imports into the U.S. or procured components from OUS-based suppliers and imports of endoscopes from our factories in Europe are subject to the 10% baseline tariffs and then increased tariff rates after the current 90-day pause period has elapsed. Third, while most of our products manufactured in Mexico are certified under the requirements of USMCA and therefore are not subject to current U.S. import tariffs, a small portion do not currently meet the requirements and therefore incur 25% tariffs upon import to the U.S.”
Samath said Intuitive expects the impact of tariffs to increase each quarter through the rest of 2025.
“To the extent that tariffs and their derivative impact have a durable impact on our cost of sales and/or demand for our products, we will consider implementation over time of a range of mitigating operational actions,” he said. “However, we do not expect any such measures to have a significant beneficial impact in 2025.”
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This story originally ran on April 22, 2025. Updated April 23 with next-day stock price.
