Company: ISRG
Filing Date: 2025-10-22
Form Type: 10-Q
Source: 0001035267-25-000209
Chunk: 123

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-10-22
Form: 10-Q
Item: Item 2
Chunk 123
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46

including depreciation expense, and the impact of tariffs, partially offset by lower excess and obsolete inventory charges and lower logistics costs.

Service gross profit for the nine months ended September 30, 2025, increased by 13% to $746 million, representing 64.9% of service revenue, compared to $662 million, representing 69.0% of service revenue, for the nine months ended September 30, 2024. The higher service gross profit for the nine months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, and a lower service gross profit margin. The lower service gross profit margin for the nine months ended September 30, 2025, was primarily driven by higher costs associated with the phased launch of our da Vinci 5 surgical system, an unfavorable repair mix, incremental fixed costs, including depreciation expense, and the impact of tariffs, partially offset by lower logistics costs and lower excess and obsolete inventory charges.

Service gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $8.8 million and $25.6 million, respectively, compared with $7.9 million and $22.5 million for the three and nine months ended September 30, 2024, respectively. Service gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $0.2 million and $0.6 million, respectively, compared with $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses include costs for sales, marketing, and administrative personnel, sales and marketing activities, trade show expenses, legal expenses, regulatory fees, and general corporate expenses.

Selling, general, and administrative expenses for the three months ended September 30, 2025, increased by 12% to $573 million, compared to $511 million for the three months ended September 30, 2024. The increase in selling, general, and administrative expenses for the three months ended September 30, 2025, was primarily driven by higher headcount and personnel-related expenses, including variable compensation and share-based compensation expense, and higher litigation charges, partially offset by lower legal expenses.

Selling, general, and administrative expenses for the nine