Company: ISRG
Filing Date: 2025-10-22
Form Type: 10-Q
Source: 0001035267-25-000209
Chunk: 73

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-10-22
Form: 10-Q
Item: Item 1
Chunk 73
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 representing 66.0% of product revenue, compared to $3.33 billion, representing 66.9% of product revenue, for the nine months ended September 30, 2024. The lower product gross profit margin for the nine months ended September 30, 2025, was primarily driven by the impact of tariffs, higher costs associated with the phased launch of our da Vinci 5 surgical system, and incremental fixed overhead costs, including depreciation expense, associated with expanded manufacturing capacity in the U.S., partially offset by lower excess and obsolete inventory charges.

Product gross profit for the three and nine months ended September 30, 2025, included share-based compensation expense of $31.5 million and $92.0 million, respectively, compared with $24.9 million and $71.2 million for the three and nine months ended September 30, 2024, respectively. Product gross profit for the three and nine months ended September 30, 2025, included intangible assets amortization expense of $2.2 million and $6.7 million, respectively, compared with $2.2 million and $9.3 million for the three and nine months ended September 30, 2024, respectively.

Compared to historical levels, our capital expenditures increased in 2024 and 2025 as a result of the investments made to build the infrastructure needed to scale our business. Therefore, in 2025, depreciation expense has increased and is expected to continue to increase as additional projects are placed in service, which may impact our future gross profit margin.

Service

Service gross profit for the three months ended September 30, 2025, increased by 15% to $253 million, representing 63.8% of service revenue, compared to $220 million, representing 66.9% of service revenue, for the three months ended September 30, 2024. The higher service gross profit for the three months ended September 30, 2025, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, partially offset by a lower service gross profit margin. The lower service gross profit margin for the three 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, 

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