Intuitive reported third-quarter 2026 results on Tuesday, October 20, after the close. Revenue: $3.05 billion, up 22%, and worldwide procedures grew about 15%. But GAAP earnings fell - to $1.49 per share from $1.95 - because of a $450 million charge for an antitrust class action settlement.
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What was reported
| Q3 2026 | Q3 2025 | |
|---|---|---|
| Revenue (billions of dollars) | 3.05 | 2.51 |
| Of which: instruments and accessories | 1.80 | 1.52 |
| Of which: systems (millions of dollars) | 769 | 590 |
| GAAP income from operations (millions of dollars) | 593 | 760 |
| Non-GAAP income from operations (billions of dollars) | 1.27 | 0.976 |
| GAAP net income (millions of dollars) | 523 | 704 |
| GAAP diluted earnings per share (dollars) | 1.49 | 1.95 |
| Non-GAAP net income (billions of dollars) | 1.05 | 0.867 |
| Non-GAAP diluted earnings per share (dollars) | 3.00 | 2.40 |
Source: Intuitive's third-quarter 2026 press release, October 20, 2026, filed with the SEC on Form 8-K as Exhibit 99.1. The non-GAAP measures are defined and reconciled in the release.
‼ The charge that explains the gap
In October 2026, following a mediation in the In re: da Vinci Surgical Robot Antitrust Litigation class action, the company reached a written agreement - without any admission of liability or wrongdoing - to settle the litigation for a one-time payment of $450 million and mutually agreed injunctive relief.
The charge was recorded in selling, general and administrative expenses in the third quarter. The after-tax expense: $347 million, or $0.99 per share.
The settlement remains subject to preliminary and final court approval, and according to the company there is no assurance the court will approve it or that individual class members will not object.
Without the charge, both earnings lines would point the same way. GAAP earnings fell 23.6% per share, and non-GAAP earnings rose 25% - and the difference is mainly the $0.99 of the settlement. Both measures also include a benefit of $22 million after tax, or $0.06 per share, for refunds of tariffs paid in prior periods under the IEEPA.
The business: volume, systems and the installed base
Here is the business itself, and it grows on every front:
| Q3 2026 | Q3 2025 | Change | |
|---|---|---|---|
| da Vinci procedures | about +14% | ||
| Ion procedures | about +31% | ||
| Total procedures | about +15% | ||
| da Vinci systems placed | 546 | 427 | +27.9% |
| Of which da Vinci 5 | 315 | 240 | +31.3% |
| Ion systems placed | 56 | 50 | +12.0% |
| da Vinci installed base | 12,094 | 10,763 | +12% |
| Ion installed base | 1,152 | 954 | +21% |
Change rates for placements and the installed base are calculated from the figures in the release; procedure growth rates are as the company states them, approximately.
The company's revenue model rests on the installed base, not on selling systems - and that is what makes this table meaningful. Instruments and accessories revenue, $1.80 billion, is about 59% of revenue, and it rose 18% on the back of volume growth.
And one mix shift worth noting: of the 546 systems placed, 291 were under operating lease arrangements - 160 of them usage-based - against 231 and 115 in the year-ago quarter. So more systems are moving to a model where revenue accrues with usage rather than being recognised on sale. That smooths revenue forward and reduces immediate recognition.
According to chief executive Dave Rosa, customers used the company's systems to perform, on average, more than 10,000 procedures per day during the period.
The buyback, and the cash
The company repurchased 7.8 million shares for $2.94 billion in the quarter. As a result, and together with purchases of property, plant and equipment, cash and investments fell $1.83 billion to $6.80 billion - partially offset by cash generated from operations.
2026 outlook
- da Vinci worldwide procedure growth of about 14% to 15%, and the company notes it expects to be closer to the midpoint of the range
- Non-GAAP gross margin of 68.7% to 69.3% of revenue. The range includes an estimated impact of 0.9% of revenue from tariffs, excluding recognised tariff refunds
- Non-GAAP operating expense growth of 11% to 13%
The company stresses that the margin range assumes the tariffs currently in effect remain in place through the end of the year, and that if additional tariffs are implemented the impact could be material.
The stock
The report was published after the close on Tuesday, and the earnings call was held at 1:30 p.m. Pacific. So the trading reaction is Wednesday, October 21.
And that day was dramatic: the stock opened at $402.50 - 8.1% below the day-of-report close of $438.00 - fell as low as $398.99, then recovered and closed at $428.12, down 2.26%. Volume: 4.8 million shares, versus 3.4 million.
The next day, Thursday October 22, the stock closed at $443.85 - above the level it started from before the report.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This report is a clean case where the one-time charge is real, flagged, and not the story.
$450 million is a material sum, and it takes $0.99 off earnings per share. But it is a one-time payment to close litigation, it is subject to court approval, and it says nothing about the pace of procedures. Anyone looking at $1.49 against $1.95 and concluding the business weakened is reading the settlement, not the business.
And the business grows in three layers, which is what catches my attention:
First, volume: about 15% more procedures, and Ion at 31%. Second, the installed base: 12,094 da Vinci systems, up 12%, and 1,152 Ion systems, up 21%. Third, recurring revenue: instruments and accessories at $1.80 billion, about 59% of revenue, up 18%. The installed base is what generates the third layer - and every system placed today is recurring revenue for years.
And what I would flag as a point to follow: the shift to operating leases. 291 of 546 systems were placed under lease arrangements, against 231 of 427. That is a model that smooths revenue forward instead of recognising it on sale - good for long-term revenue quality, and a drag on the top line in the short term. Anyone comparing systems revenue across quarters needs to know that.
And one line I would read carefully: cash fell $1.83 billion in the quarter, mainly because of a $2.94 billion buyback. That is a return of capital, not a problem - but it reduces the cushion that funds growth in the installed base and in inventory.
What I will follow: the share of usage-based arrangements within placements, and the tariff impact on gross margin against the 0.9% the company assumes.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
