Company: ISRG
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0001035267-25-000109
Chunk: 26

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-04-23
Form: 10-Q
Item: Item 1
Chunk 26
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68.2 Research and development69.0 57.7 Share-based compensation expense before income taxes189.7 155.6 Income tax benefit37.0 32.4 Share-based compensation expense after income taxes$152.7 $123.2 The fair value of each right to acquire stock granted under the ESPP was estimated using the Black-Scholes-Merton option-pricing model with the following weighted-average assumptions: Three Months Ended March 31, 20252024ESPPRisk-free interest rate4.2%4.6%Expected term (in years)1.21.2Expected volatility30%32%Fair value at grant date$170.50$115.48

NOTE 11.    INCOME TAXES

Income tax benefit for the three months ended March 31, 2025, was $35.2 million, or 5.3% of income before taxes, compared to $8.9 million, or 1.7% of income before taxes, for the three months ended March 31, 2024.

The effective tax rates for the three months ended March 31, 2025, and 2024, differed from the U.S. federal statutory rate of 21% primarily due to the excess tax benefits associated with employee equity plans, the federal research and development credit benefit, and the effect of income earned by certain overseas entities being taxed at rates lower than the federal statutory rate, partially offset by state income taxes (net of the federal benefit) and U.S. tax on foreign earnings.

The Company’s provision for income taxes for the three months ended March 31, 2025, and 2024, included excess tax benefits associated with employee equity plans of $145.4 million and $111.1 million, respectively, which reduced the Company’s effective tax rate by 21.8 and 20.6 percentage points, respectively.

The Company files federal, state, and foreign income tax returns in many jurisdictions in the U.S. and OUS. Years before 2017 are considered closed for significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including evolving interpretations of existing tax laws in the jurisdictions in which the Company operates, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. It is reasonably possible that our