Company: ISRG
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0001035267-25-000192
Chunk: 30

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-07-23
Form: 10-Q
Item: Item 1
Chunk 30
---
4ESPPRisk-free interest rate—%—%4.2%4.6%Expected term (in years)0.00.01.21.2Expected volatility—%—%30%32%Fair value at grant date$—$—$170.50$115.48

NOTE 11.    INCOME TAXES

Income tax expense for the three months ended June 30, 2025, was $167.9 million, or 20.2% of income before taxes, compared to $123.0 million, or 18.8% of income before taxes, for the three months ended June 30, 2024. Income tax expense for the six months ended June 30, 2025, was $132.7 million, or 8.8% of income before taxes, compared to $114.1 million, or 9.6% of income before taxes, for the six months ended June 30, 2024.

The effective tax rates for the three and six months ended June 30, 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 June 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $32.9 million and $35.7 million, respectively, which reduced the Company’s effective tax rate by 4.0 and 5.5 percentage points, respectively. The provision for income taxes for the six months ended June 30, 2025, and 2024, included excess tax benefits associated with employee equity plans of $178.3 million and $146.8 million, respectively, which reduced the Company’s effective tax rate by 11.9 and 12.3 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