Company: ISRG
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0001035267-25-000109
Chunk: 61

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-04-23
Form: 10-Q
Item: Item 1
Chunk 61
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 following table summarizes our Ion system placements and systems installed at customers under leasing arrangements:

Three Months Ended March 31,20252024Ion System Placements under Leasing ArrangementsFixed-payment operating lease arrangements14 26 Usage-based operating lease arrangements15 13 Total Ion system placements under operating lease arrangements29 39 % of Total Ion system placements59%56%Sales-type lease arrangements3 — Total Ion system placements under leasing arrangements32 39 Ion System Installed Base under Operating Leasing ArrangementsFixed-payment operating lease arrangements124 111 Usage-based operating lease arrangements210 133 Total Ion system installed base under operating leasing arrangements334 244 

Service Revenue

Service revenue increased by 16% to $363 million for the three months ended March 31, 2025, compared to $314 million for the three months ended March 31, 2024. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue.

Gross Profit

Product

Product gross profit for the three months ended March 31, 2025, increased by 19% to $1.22 billion, representing 64.5% of product revenue, compared to $1.02 billion, representing 64.8% of product revenue, for the three months ended March 31, 2024. The lower product gross profit margin for the three months ended March 31, 2025, was primarily driven by higher costs associated with our da Vinci 5 surgical system, incremental fixed overhead costs, including depreciation expense, associated with expanded manufacturing capacity, and higher scrap, partially offset by lower excess and obsolete inventory charges. The impact of tariffs for the three months ended March 31, 2025, was immaterial.

Product gross profit for the three months ended March 31, 2025, and 2024, included share-based compensation expense of $30.2 million and $22.7 million, respectively, and intangible assets amortization expense of $2.2 million and $3.6 million, respectively.

Our capital expenditures increased during 2024, as we continued to build the infrastructure needed to scale our business. As a result, in 2025, depreciation expense has increased and will 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 March 31, 2025, increased by 7% to $238.0 million,