Medical technology company Intuitive Surgical (NASDAQ:ISRG) announced better-than-expected revenue in Q4 CY2025, with sales up 18.8% year on year to $2.87 billion. Its non-GAAP profit of $2.53 per share was 11.6% above analysts’ consensus estimates.
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Intuitive Surgical (ISRG) Q4 CY2025 Highlights:
- Revenue: $2.87 billion vs analyst estimates of $2.74 billion (18.8% year-on-year growth, 4.6% beat)
- Adjusted EPS: $2.53 vs analyst estimates of $2.27 (11.6% beat)
- Adjusted EBITDA: $1.07 billion vs analyst estimates of $1.15 billion (37.4% margin, 6.8% miss)
- Operating Margin: 30.2%, in line with the same quarter last year
- Market Capitalization: $185.6 billion
Company Overview
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Intuitive Surgical’s 18.2% annualized revenue growth over the last five years was impressive. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Intuitive Surgical’s annualized revenue growth of 18.9% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. 
This quarter, Intuitive Surgical reported year-on-year revenue growth of 18.8%, and its $2.87 billion of revenue exceeded Wall Street’s estimates by 4.6%.
Looking ahead, sell-side analysts expect revenue to grow 12.8% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and implies the market sees success for its products and services.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.
Intuitive Surgical has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 27.9%.
Analyzing the trend in its profitability, Intuitive Surgical’s operating margin decreased by 2.6 percentage points over the last five years, but it rose by 4.5 percentage points on a two-year basis. We like Intuitive Surgical and hope it can right the ship.
In Q4, Intuitive Surgical generated an operating margin profit margin of 30.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Intuitive Surgical’s EPS grew at an astounding 21.6% compounded annual growth rate over the last five years, higher than its 18.2% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn’t improve and it didn’t repurchase its shares, meaning the delta came from reduced interest expenses or taxes.
In Q4, Intuitive Surgical reported adjusted EPS of $2.53, up from $2.21 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Intuitive Surgical’s full-year EPS of $8.93 to grow 8.5%.
Key Takeaways from Intuitive Surgical’s Q4 Results
We enjoyed seeing Intuitive Surgical beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 1.1% to $531.88 immediately following the results.
Sure, Intuitive Surgical had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).