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UNITED STATES
証券取引委員会
ワシントンDC20549
フォーム 10-Q
(表1)
証券取引法第13条または15(d)条に基づく四半期報告書
報告期間が終了した2023年6月30日をもって2024年9月30日
OR
移行期間:             から             まで
移行期間中の            to             
委員会ファイル番号 000-30713 
インテュイティブサージカル株式会社
(登録者の正式名称)
デラウェア 77-0416458
(設立地の州またはその他の管轄区域)
(設立または組織) (I.R.S.雇用者識別番号) (本社所在地の住所) (郵便番号) (Registrantの電話番号、市外局番を含む)
 (I.R.S. 雇用主識別番号)
識別番号)
1020キファーロード
サニーベール, カリフォルニア 94086
(主要執行事務所の住所)(郵便番号)
(408) 523-2100
(登録者の電話番号(市外局番を含む))
法第12条(b)に基づく登録証券
各クラスの名称取引シンボル登録されている各取引所の名称
普通株式 1株あたり0.001ドルの割当株式ISRGナスダックグローバルセレクトマーケット
証券取引法第13条または15条(d)に基づき過去12か月間(または登録者がそのような報告書を提出することを必要とされたより短い期間)に提出される必要のあるすべての報告書を提出したかつ過去90日間にわたってそのような報告義務を課せられたかを示してください。 はい  x    いいえ  ¨
規制S-tのルール405に基づき、過去12か月間(またはそのような短期間)、登録者が提出を求められたすべてのインタラクティブデータファイルを電子的に提出したかどうかをチェックマークで示す。はい  x    いいえ  ¨
登録者が大幅な加速ファイラー、加速ファイラー、非加速ファイラー、小規模な報告会社、または新興成長企業であるかどうかをチェックマークで示してください。 「大幅な加速ファイラー」、「加速ファイラー」、「小規模な報告会社」、および「新興成長企業」の定義は、取引所法のRule 12b-2を参照してください。
大型加速ファイラーx加速度ファイラー¨
非加速ファイラー¨小規模報告会社
新興成長企業
新興成長企業の場合、登録者が取引所法第13条(a)に基づく提供された新しいまたは改訂された財務会計基準に適合するための拡大移行期間を使用しないことを選択した場合は、チェックマークで示してください。¨  
登録申請者が取引所法12b-2の規定に定義されているシェル企業であるかどうかを示してください。 Yes ☐    いいえ  x
本登録者は356,179,445 2024年10月15日時点で1株当たり$0.001の普通株式が発行済み。




インテュイティブサージカル社
目次

  ページ番号
第I部 財務情報
第II部 その他の情報

2


第I部−財務情報
項目 1. 財務諸表
インテュイティブサージカル社
連結簡易貸借対照表
(未审核)
百万単位で(株式の額面を除く)9月30日
2024
12月31日
2023
資産
流動資産:
現金及び現金同等物$2,413.3 $2,750.1 
新規売投資1,818.4 2,473.1 
売掛金の純額1,153.0 1,130.2 
在庫1,481.7 1,220.6 
前払費用及びその他の流動資産349.2 314.0 
流動資産合計7,215.6 7,888.0 
固定資産、施設及び設備、純額4,433.0 3,537.6 
長期投資4,079.8 2,120.0 
繰延税資産997.0 910.5 
無形及びその他の資産、純額:5,860669.7 636.7 
のれん348.3 348.7 
総資産$17,743.4 $15,441.5 
負債及び純資産
流動負債:
支払調整$218.7 $188.7 
支払予定の賃金・福利厚生費377.5 436.4 
前払収益426.0 446.1 
その他の未払負債654.6 587.5 
流動負債合計1,676.8 1,658.7 
その他の長期負債389.1 385.5 
負債合計2,065.9 2,044.2 
不測事態(注8)
株主資本:
優先株式、2.5株式総数は、$1,284,194であり、承認済み株式数は162,301株です。0.001 割当て可能な法定価額、シリーズごとに発行可能; なし 2024年9月30日および2023年12月31日現在の発行済み株式数
  
普通株式、授権株式数$帳簿価額600.0株式総数は、$1,284,194であり、承認済み株式数は162,301株です。0.001市場価値、356.2株および352.3 2024年9月30日および2023年12月31日現在の発行済み株式数、それぞれ
0.4 0.4 
追加の資本金9,440.2 8,576.4 
留保利益6,129.8 4,743.0 
その他包括利益/損失差額額12.9 (12.2)
インテュイティブ・サージカル社の株主資産合計15,583.3 13,307.6 
合弁事業における非支配株主持分94.2 89.7 
純資産合計15,677.5 13,397.3 
負債および純資産合計$17,743.4 $15,441.5 
付属の注釈はこれらの要約連結財務諸表(未監査)の一部です。
3

インテュイティブサージカル社
総合利益計算書(連結)の簡易版
(未审核)
9月30日までの3か月間 9月30日までの9ヶ月間
百万単位で(1株当たりの金額を除く)2024202320242023
売上高:
製品$1,709.2 $1,450.8 $4,978.9 $4,332.4 
サービス328.9 292.9 959.7 863.4 
合計売上高2,038.1 1,743.7 5,938.6 5,195.8 
原価費用:
製品555.4 489.5 1,649.2 1,480.5 
サービス108.8 87.0 297.4 263.2 
原価費用合計664.2 576.5 1,946.6 1,743.7 
粗利益1,373.9 1,167.2 3,992.0 3,452.1 
営業費用:
販売・一般管理費用510.6 452.0 1,527.4 1,396.8 
研究開発286.0 249.4 850.6 738.7 
営業費用合計796.6 701.4 2,378.0 2,135.5 
営業利益577.3 465.8 1,614.0 1,316.6 
利息およびその他の収益、純上昇93.7 56.2 250.0 126.4 
税引き前利益671.0 522.0 1,864.0 1,443.0 
法人税等課税当期純利益100.4 102.2 214.5 236.4 
当期純利益570.6 419.8 1,649.5 1,206.6 
合弁企業に帰属する非支配的な利益による当期純利益の控除5.5 4.1 12.6 14.8 
インテュイティブ・サージカル株式会社に帰属する当期純利益$565.1 $415.7 $1,636.9 $1,191.8 
インテュイティブ・サージカル株式会社に帰属する1株当たりの当期純利益:
基本$1.59 $1.18 $4.61 $3.40 
希薄化後$1.56 $1.16 $4.53 $3.34 
インテュイティブ・サージカル・インクの希薄化後1株当たり当期純利益の計算に使用されるシェア数:
基本355.8 351.7 354.8 351.0 
希薄化後362.7 358.2 361.4 357.1 
その他の包括的利益(税引き後):
ヘッジインストゥルメンツの未実現利益(損失)$(15.5)$4.3 $(5.1)$12.8 
有価証券の売却利益未実現59.5 25.6 60.8 76.3 
外貨翻訳による利益(損失)(6.9)(6.8)(30.4)15.9 
従業員福利計画に係る前期サービスコスト(0.2) (0.3) 
その他の包括利益:36.9 23.1 25.0 105.0 
包括利益合計607.5 442.9 1,674.5 1,311.6 
非支配株主持ち分に帰属する包括利益の減少6.0 3.9 12.5 13.8 
イントゥイティブ・サージカル株式会社に帰属する総綜所得$601.5 $439.0 $1,662.0 $1,297.8 
付属の注釈はこれらの要約連結財務諸表(未監査)の一部です。
4

インテュイティブサージカル社
キャッシュフローの概要
(未审核)
9月30日までの9ヶ月間
百万ドル単位20242023
営業活動:
当期純利益$1,649.5 $1,206.6 
当期純利益に調整するための項目:
有形資産および備品・設備の減価償却および売却損失323.7 283.5 
無形資産の摘早償却13.6 15.1 
投資に関する損失(利益)、割引の賦課および割り増しの償却、純額(38.2)14.7 
繰延税金資産(104.5)(61.0)
シェアベースの報酬費用499.8 442.4 
契約獲得資産の償却27.0 22.6 
営業資産および負債の変動、買収効果を除く:
売掛金 (21.8)(19.7)
在庫(650.9)(528.2)
前払金およびその他の資産(79.6)37.5 
支払調整21.2 27.7 
支払予定の賃金・福利厚生費(58.9)(26.8)
前払収益(6.1)(1.0)
その他の負債17.6 172.1 
営業活動によるキャッシュフロー1,592.4 1,585.5 
投資活動:
投資の購入(3,709.6)(820.2)
投資の売却益100.2 47.7 
投資の満期による受取額2,400.0 2,092.4 
財産、工場及び設備の購入(799.2)(628.7)
事業の取得、現金授受、知的財産およびその他の投資活動に関する取引 (7.1)
投資活動による純現金提供(使用)(2,008.6)684.1 
財務活動:
従業員株式プランに関連する普通株式の発行による収益367.5 252.2 
株式報酬の実質配当の純額決済に伴う支払いの税金(257.5)(155.4)
普通株式の自己取得 (350.0)
非支配持分に支払われる合弁事業からの現金配当
(8.0) 
支払い遅延購入考慮(0.5)(2.9)
財務活動による純現金提供(使用)101.5 (256.1)
現金、現金同等物及び制限付き現金に対する為替レート変動の影響(9.1)8.7 
現金、現金同等物及び制限付き現金の純増減(323.8)2,022.2 
期初の現金及び現金同等物、制限付き現金2,770.1 1,600.7 
期初の現金、現金同等物、および制限付き現金$2,446.3 $3,622.9 
付属の注釈はこれらの要約連結財務諸表(未監査)の一部です。
5

インテュイティブサージカル社
コンデンスド連結財務諸表に関する注記
(未审核)




このレポートでは、「直感的」という言葉は Intuitive Surgical, Inc. およびその完全および過半数を所有する子会社を指します。
ノート1.    ビジネスの説明
Intuitiveは、ダ ヴィンチ外科手術システムとIon内腔システムを開発、製造、販売しています。® 会社の製品および関連サービスは、医師や医療提供者が低侵襲治療の質とアクセスを向上させるのに役立ちます。® ダ ヴィンチ外科手術システムは、外科医用コンソールまたはコンソール、患者側カート、高性能ビジョンシステムで構成されています。Ion内腔システムには、システムカート、コントローラ、カテーテル、ビジョンプローブが含まれています。両システムはソフトウェア、器具、アクセサリーを使用しています。
注意事項2.    見積もりの使用
「Performance-Based Awards(成果に基づく受賞)」は、第7.7条に基づき、委員会によって設定されたパフォーマンス目標や他の事業目標の達成に依存して現金、株式またはその他の受賞を受け取るための受賞です。
未検査の連結財務諸表(「財務諸表」)と付属の注記は、米国で一般に受け入れられている会計原則(「GAAP」)および証券取引委員会(「SEC」)の規則に従い、中間財務報告のために作成されました。経営陣の見解では、Intuitive Surgical, Inc.およびその完全子会社および主要子会社の当該財務諸表は、2023年12月31日に終了した会計年度の監査済み連結財務諸表と一貫した基準で作成され、ここに開示された情報を公正に示すために、通常の繰り返し調整だけで構成される全ての調整を含んでいます。
通常、年次の連結財務諸表に含まれる特定の情報や脚注開示は簡略化されたり省略されています。したがって、これらの財務諸表は、2023年12月31日に終了した会計年度に関する会社の年次報告書の中で開示された監査済連結財務諸表およびその注記と併せて読むべきです。2024年第1四半期までの業績結果は、当該会計年度全体や将来の期間に期待される結果を示すものではありません。
財務諸表には、インテュイティブサージカル-復星医薬テクノロジー(上海)有限公司、およびインテュイティブサージカル-復星(香港)有限公司(以下、「ジョイント」)、上海復星医薬(集団)有限公司(「復星医薬」)の企業の多数派持分を有するジョイントベンチャーの結果および残高が含まれています。会社は、ジョイントベンチャーに対して支配的な財務的利益を保有しており、非支配的な持分は、連結株主資本の別の部分として反映されています。非支配的持分のジョイントベンチャーにおける利益のシェアは、総合利益の要約連結財務諸表に別々に表示されています。
リスクと不確実性
米国とグローバルのマクロ経済および地政学的要因に不確実性があることは、サプライチェーン環境、インフレ圧力、高金利水準、グローバル金融市場の不安定さ、ロシアとウクライナとの紛争およびイスラエルを含む中東の紛争による商品市場の混乱、関税の導入または変更が不況を引き起こす可能性があり、これは企業のビジネスに重大な悪影響を及ぼす可能性があります。
サプライチェーンの制約は、一部のエンジニアリング原材料や特定の下請けサプライヤーにおいて、企業の生産要件を満たすのが困難な状況が残っているものの、一般的にCOVID-19パンデミック以前の水準に改善されています。これらのサプライチェーンの制約の一部は、2024年の最初の9ヶ月間には実質的な影響を及ぼしていません。さらに、一部の部品の材料価格は、市場需要の高まりやサプライチェーンの原価インフレにより、歴史的水準よりも高い水準を維持しています。利上げが行われている状況では、信用へのアクセスがより困難になっており、特定のサプライヤーにおける破産、特に単一又は唯一の供給元サプライヤーにおける破産は連続性のリスクを高める可能性があります。サイバーセキュリティの侵害事例は、現時点で企業のサプライチェーンにはほとんど影響を与えていませんが、持続的なサプライ連続性にとって現在も脅威となっています。企業は、自社の業務に対するサプライチェーンリスクや混乱の影響を緩和する活動に積極的に取り組んでいます。
多くの病院は、スタッフの課題や費用圧力などに苦しんでおり、これが患者ケアに影響を及ぼす可能性があります。さらに、病院は、供給チェーンの制約やインフレーションにより運営コストが上昇し、利子の高い金利により信用へのアクセスがより高額になるなど、重要な財務圧力に直面しています。病院は、広範なマクロ経済環境に起因する流動性懸念によっても不利な影響を受ける可能性があります。これらの要因のいずれかまたはすべてが影響を与える可能性があります。
6


ダ・ヴィンチ手術の手術件数や手術システムの設置件数に悪影響を与え、会社のビジネス、財務状況、または業績に重大な悪影響を及ぼす可能性があります。
最近発行された会計基準
2023年11月、財務会計基準委員会(FASB)は、報告可能セグメントの開示に関する情報の改善についての 会計基準更新(ASU)2023-07を発表しました。 セグメント報告(トピック280):報告対象セグメントの開示の改善 『ASU 2023-07』では、1つの報告セグメントを持つ公定法人を含むすべての公定法人が、中間および年次の期間に、最高経営責任者がリソースを割り当て、業績を評価するために使用するセグメント利益または損失の1つ以上の尺度を提供することが求められます。さらに、この基準は、重要なセグメント経費およびその他のセグメント項目の開示、および追加の質的開示を要求しています。この更新のガイダンスは、2023年12月15日以降に始まる会計年度および2024年12月15日以降の中間期間に適用されます。会社は現在、関連する開示に与えるこの発表の影響を評価中です。
2023年12月、FASBはASU 2023-09「所得税(課題740):所得税開示の改善」を発行し、公開会社に対して、定量的閾値を超える調整項目の調整に対する追加情報を含む、有効税率調整の特定のカテゴリを開示することを要求することで、さらに拡大された開示を要求します。 ASU 2023-09は、2024年12月15日以降の会計年度に適用され、早期採用が許可されています。当社は、ASU 2023-09の採用が当社の連結財務諸表および関連する開示に与える影響を現在評価しています。所得税(トピック740):所得税関連の開示の改善 (ASU 2023-09)により、強化された所得税開示が必要となり、実効税率調整における情報の特定のカテゴリや分解、支払った所得税に関する分解情報、所得税負担または利益前続落ち込み活動からの収益、所得税負担または利益などが含まれます。ASUの要件は、2024年12月15日以降の年次期間に適用され、早期採用が許可されています。会社は、現在、この公式が関連する開示に与える影響を評価中です。
会社は、FASBによって発行された新しい会計基準を引き続き監視し、この報告書の日付までに発行されたいかなる会計基準も会社の財務諸表に対する実質的な影響はないと考えています。
重要な会計方針
会社の年次報告書(フォーム10-K)で議論された重要な会計方針に新しい重要な変更や材料的な変更はないか、または会社にとって重要または潜在的に重要な変更はありません。
ノート3.    金融商品
現金、現金同等物、および投資
以下の表は、2024年9月30日および2023年12月31日時点での、現金及び現金同等物、短期投資、または長期投資として報告される主要投資カテゴリ別の現金及び売却可能債券の総償還原価格、総未実現利益、総未実現損失、信用損失引当金、および公正価値を要約した表です(百万単位):
以下に報告:
償却費用
コスト
手数料
未実現
利益
手数料
未実現
損失
償却・貸倒引当金公正価値
現金
現金
及び現金同等物
Short-
用語
投資
新規買-
用語
投資
2024年9月30日
現金$566.8 $— $— $— $566.8 $566.8 $— $— 
レベル1:
すべて投信1,709.4 — — — 1,709.4 1,709.4   
米国国債5,045.9 50.2 (7.0) 5,089.1 137.1 1,347.0 3,605.0 
小計6,755.3 50.2 (7.0) 6,798.5 1,846.5 1,347.0 3,605.0 
レベル2:
企業債務証券393.7  (5.1)(0.1)388.5  294.5 94.0 
アメリカ合衆国の政府機関540.7 4.7 (2.4) 543.0  163.6 379.4 
地方債務14.8  (0.1) 14.7  13.3 1.4 
小計949.2 4.7 (7.6)(0.1)946.2  471.4 474.8 
公正価値で測定された総資産$8,271.3 $54.9 $(14.6)$(0.1)$8,311.5 $2,413.3 $1,818.4 $4,079.8 
7


以下に報告:
償却費用
コスト
手数料
未実現
利益
手数料
未実現
損失
債務引当金公正価値
現金
現金
及び現金同等物
Short-
用語
投資
新規買-
用語
投資
2023年12月31日
現金$526.2 $— $— $— $526.2 $526.2 $— $— 
レベル1:
すべて投信2,223.9 — — — 2,223.9 2,223.9   
米国国債2,850.2 20.1 (25.4) 2,844.9  1,276.0 1,568.9 
小計5,074.1 20.1 (25.4) 5,068.8 2,223.9 1,276.0 1,568.9 
レベル2:
企業債務証券1,300.4  (25.8)(1.1)1,273.5  974.6 298.9 
アメリカ合衆国の政府機関402.6 2.0 (7.3) 397.3  149.5 247.8 
地方債務79.4  (2.0) 77.4  73.0 4.4 
小計1,782.4 2.0 (35.1)(1.1)1,748.2  1,197.1 551.1 
公正価値で測定された総資産$7,382.7 $22.1 $(60.5)$(1.1)$7,343.2 $2,750.1 $2,473.1 $2,120.0 
次の表は、2024年9月30日時点の会社の現金及び準備債券(マネーマーケット・ファンドを除く)の契約満期を要約しています(百万単位):
償却費用
コスト
公正価値
1年未満で成熟$1,958.2 $1,955.5 
1年から5年で成熟4,036.9 4,079.8 
総計$5,995.1 $6,035.3 
実際の満期は、特定の借り手がコールまたは償還する権利を持っているため、契約満期とは異なる場合があります。投資品の売却により認識された総取得利益および損失は 物質的ではない 提示された期間のためです。
次の表は、2024年9月30日および2023年12月31日時点の未実現損失を抱える売買目的債券・債務証券の内訳を示しています(百万単位):
2024年9月30日
12ヶ月未満の未実現損失12ヶ月以上の未実現損失総計
公正価値
未実現
損失
公正価値
未実現
損失
公正価値
未実現
損失
米国国債$1,093.8 $(1.3)$305.2 $(5.7)$1,399.0 $(7.0)
企業債務証券35.3  324.6 (5.1)359.9 (5.1)
アメリカ合衆国の政府機関31.7 (0.1)144.1 (2.3)175.8 (2.4)
地方債務  14.7 (0.1)14.7 (0.1)
総計$1,160.8 $(1.4)$788.6 $(13.2)$1,949.4 $(14.6)
2023年12月31日
12か月未満の未実現損失12か月以上の含み損失合計
フェア
価値
未実現
損失
フェア
価値
未実現
損失
フェア
価値
未実現
損失
米国財務省$48.5 $ $1,112.9 $(25.4)$1,161.4 $(25.4)
企業債務証券54.2 (0.1)1,219.2 (25.8)1,273.4 (25.9)
米国政府機関29.8  185.6 (7.3)215.4 (7.3)
地方証券  77.4 (1.9)77.4 (1.9)
合計$132.5 $(0.1)$2,595.1 $(60.4)$2,727.6 $(60.5)
8


企業の投資はすべて投信、米国債および米国政府機関証券、高品質の企業ノートおよび債券、コマーシャルペーパー、非米国政府機関証券、課税および非課税の地方債のいずれかとなる場合があります。企業は定期的に未決済損失の位置にある証券を見直し、投資先の歴史的経験、市場データ、財務状況、および投資先の近い将来の見通しといった要因を考慮して現在の予想信用損失を評価します。企業は証券の潜在リスクプロファイルに基づいてポートフォリオをセグメント化し、米国債および米国政府機関証券に対してゼロロスの期待を持っています。この前提の基礎となるのは、これらの証券が一貫してレーティング機関によって高いクレジットレーティングを持ち、クレジット損失のない長い歴史があり、主権国家によって明示的に保証されており、独自の通貨を発行できること、中央銀行が頻繁に保有し、国際取引で使用され、準備通貨として一般的に見なされている通貨で建てられているためです。さらに、企業のすべての企業債券および地方債券への投資は、歴史的に低いデフォルト率を経験してきた高品質の信用格付けを受けている証券に行われています。
会社の売買時債権・債務証券の未実現損失は、金利上昇によるものです。これらの投資の契約条件では、発行者が投資の簿価より低い価格で証券を清算することを許可していません。2024年9月30日現在、会社は未実現損失ポジションの投資を売却する意向はなく、投資の簿価回収前に投資の一部を売却することが必要となる可能性が高くはないため、投資時の損失が発生する見込みはありません。未実現損失の処理を決定する際に考慮される追加要因には、投資先の財務状況や近未来の見通し、発行者の信用に関連する損失の程度、セキュリティからの予想されるキャッシュフローが含まれます。
2024年9月30日および2023年に終了する3か月と9か月では、 債券・債務証券の利用可能な損失は重要性がなかった。
株式投資
会社の株式投資は、いつでも、明確な公正価値のある株式投資と公正な価値の判定が容易でない株式投資から構成される場合があります。会社は通常、明確な公正価値がない株式投資を、コストマイナスインペアメント(ある場合)プラスまたはマイナスの額で認識し、同一発行者の同一または類似の投資についての観察可能な価格変動による変更も含みます。
以下の表は、株式投資に関連する活動の要約です(百万単位):
以下に報告:
¨
帳簿価額
公正価値の変更 (1)
購入 / 販売 / その他 (2)
2024年9月30日
帳簿価額
前払費用及びその他の流動資産無形及びその他の資産、純額:5,860
公正な価値を容易に決定できない株式投資(レベル2)
$74.5 $2.6 $18.0 $95.1 $ $95.1 
(1) 利子およびその他の収入に記録されています。
(2) その他には外国通貨の為替差益(損失)が含まれます。
2024年9月30日終了時点で、企業は容易に決定可能な公正価値(レベル1)を有する株式投資を保有していませんでした。
2024年9月30日までの9か月間、その他の公允価値の純増加額として、企業は評定しやすい公允価値(レベル2)を持たない株式投資についてドルの増加を認識しました。これは、特定の株式投資の観測可能価格の変化に起因し、一部の株式投資の減損によって部分的に相殺されました。これは、利子等純収益額に反映されました。2.6 観測可能価格の変化に主による評定しやすい公允価値(レベル2)を持たない株式投資のための百万ドルの純増加額を、その他の収益、純利息に反映された適格株式投資の価格の変動による一部の株式投資の減損に一部相殺されました。
外貨デリバティブ
企業のヘッジプログラムの目的は、米ドル(“USD”)以外の通貨で売上高、経費、企業間残高、およびその他の通貨で表された財務資産または負債からの純現金流量に対する為替レートの変動の影響を緩和することです。企業のデリバティブ契約の条件は一般的に、 13か月 以下です。デリバティブ資産および負債は、レベル2の公正価値計算の入力を使用して計測されます。
キャッシュフローヘッジ
会社は特定の売上高取引をヘッジするために、主にユーロ(EUR)、ブリティッシュポンド(GBP)、日本円(JPY)、韓国ウォン(KRW)、および新台湾ドル(TWD)で表される通貨以外の通貨で表される予測売上高取引をヘッジするために、通貨先物契約をキャッシュフローヘッジとして締結しています。また、ユーロ(EUR)およびスイスフラン(CHF)で表示される一部の予測費用取引をヘッジするために、通貨先物契約に参加しています。
9


これらのデリバティブについて、会社はヘッジからの未実現の税引後の利益または損失を株主資本のその他包括利益(損失)の構成要素として報告し、ヘッジされた取引が利益に影響を及ぼした同じ期間にその金額を収益に再分類します。ヘッジ取引に関連する収益および費用への再分類金額、およびキャッシュ・フロー・ヘッジの有効でない部分は、売上高に再分類された金額、 提示期間においては、ヘッジ取引およびキャッシュ・フロー・ヘッジの無効な部分は無視できるほどの金額ではありません。
その他の選択ヘッジインストゥルメントと指定されていない派生商品
その他のデリバティブは、主にUSD以外の通貨で表される企業間の残高やその他の金銭資産または負債をヘッジするために会社が使用するフォワード契約から構成されています。主にEUR、GBP、JPY、KRW、CHF、TWD、インドルピー(INR)、メキシコペソ(MXN)、中国人民元(CNY)、およびカナダドル(CAD)が含まれています。
これらの派生金融商品は貸借対照表の外貨建てのリスクヘッジに使用されています。関連する利益および損失は以下の通りです(百万単位で):
9月30日までの3か月間 9月30日までの9ヶ月間
2024202320242023
利子およびその他の収益における認識された利益(損失)$(27.3)$10.4 $2.8 $21.8 
貸借対照表の再計測に関連する外国為替の利益(損失)$31.5 $(13.1)$(1.1)$(24.0)
派生金融商品の名目金額は取引の出来高の一つの指標を提供します。 各期末の未決済デリバティブの総名目金額(usd表記)および総名目公正価値は、次のようでした(百万単位で):
ヘッジ契約指定のデリバティブ同社の金融商品の名義額は次のとおりです(百万):
9月30日
2024
12月31日
2023
9月30日
2024
12月31日
2023
概算金額:
先物契約$365.2 $292.1 $688.9 $699.7 
記録された総公正価値:
前払費用及びその他の流動資産$1.2 $3.1 $1.7 $5.0 
その他の未払負債$10.1 $5.9 $8.4 $6.6 
注4.    貸借対照表の詳細およびその他の財務情報
バランスシートの詳細
以下の表は、選択された簡約連結貸借対照表の各項目の詳細を提供しています(百万単位):
 2024年3月31日現在の
売掛金の純額9月30日
2024
12月31日
2023
買掛金及び未収入金等の流動資産相殺差額勘定による当座資産、正味$984.7 $1,042.2 
未請求の売掛金およびその他191.9 105.0 
売上高の返品および手当(23.6)(17.0)
純粋な債権勘定の総額$1,153.0 $1,130.2 
2024年3月31日現在の
在庫9月30日
2024
12月31日
2023
原材料$522.6 $454.7 
作業中214.9 159.9 
製品744.2 606.0 
総在庫$1,481.7 $1,220.6 
10


2024年3月31日現在の
前払費用及びその他の流動資産9月30日
2024
12月31日
2023
売掛型リースへの純投資 - 新規売$137.0 $137.3 
その他前払費用およびその他の流動資産212.2 176.7 
前払費用およびその他の流動資産の合計$349.2 $314.0 
 2024年3月31日現在の
固定資産、施設及び設備、純額9月30日
2024
12月31日
2023
土地$464.1 $457.3 
建設および建設/賃貸改良1,428.5 1,002.1 
機械装置859.2 724.2 
運転リース資産 - 直感システムリース1,455.1 1,149.7 
コンピューターおよびオフィス用品173.4 153.8 
資本化されたソフトウェア280.7 257.8 
建設工程中1,583.5 1,354.7 
固定資産減価償却前資産6,244.5 5,099.6 
減価償却累計額を減じたもの(1,811.5)(1,562.0)
有形固定資産合計純額$4,433.0 $3,537.6 
オペレーティングリース資産に関連する減価償却* - 直感システムリース$(526.1)$(434.3)
2024年3月31日現在の
その他の短期負債9月30日
2024
12月31日
2023
退職及び退職後給付$164.6 $111.4 
建設関連の建設用資本支出178.5 143.3 
その他の未払負債311.5 332.8 
短期のその他の総引当負債$654.6 $587.5 
2024年3月31日現在の
その他の長期負債9月30日
2024
12月31日
2023
所得税 - 新規買$202.8 $233.8 
遅延売上高 - 新規買59.6 45.6 
その他の長期負債126.7 106.1 
その他の長期負債の総額$389.1 $385.5 
補足的なキャッシュ・フロー情報
次の表は、補足的な非現金投資および財務活動を提供しています(百万単位):
9月30日までの9ヶ月間
20242023
機器の移転、運用リース資産を含む、棚卸資産から有形固定資産へ$423.8 $303.8 
支払予定及び未払費用における有形固定資産の取得$194.9 $135.2 
11


注意事項5.    フォーマット
次の表は、売上高を種類別および地域別に分解したものです(百万単位):
9月30日までの3か月間 9月30日までの9ヶ月間
米国2024202320242023
器具および付属品$904.8 $775.7 $2,618.6 $2,240.4 
システム265.4 216.0 702.2 627.6 
サービス
209.2 188.5 616.3 564.6 
全米売上高
$1,379.4 $1,180.2 $3,937.1 $3,432.6 
米国外(「OUS」)
器具および付属品$359.4 $295.7 $1,048.9 $892.5 
システム179.6 163.4 609.2 571.9 
サービス
119.7 104.4 343.4 298.8 
OUS売上高合計
$658.7 $563.5 $2,001.5 $1,763.2 
総額
器具および付属品$1,264.2 $1,071.4 $3,667.5 $3,132.9 
システム445.0 379.4 1,311.4 1,199.5 
サービス
328.9 292.9 959.7 863.4 
合計売上高
$2,038.1 $1,743.7 $5,938.6 $5,195.8 
残りの業務履行義務
残存業績義務に割り当てられた取引価格は、売上高がまだ認識されていない商品とサービスに割り当てられた金額に関連しています。 これらの業績義務の大部分は、将来の期間に売上高として満足され認識される会社のシステム販売およびリース契約のサービス義務に関連しています。 残存業績義務に割り当てられた取引価格は、2024年9月30日時点で$2.52 十億ドルになりました。残存業績義務は、システム販売、リース、およびサービス契約の期間中に満たされることが期待されます。 残存業績義務の約 45%が、次の12ヶ月以内に認識されると見込まれ、残りは一般的に最大 5年数。
契約資産および負債
以下の情報は、会社の契約資産および負債を要約したものです(百万単位で):
2024年3月31日現在の
 2024年9月30日2023年12月31日
契約資産$17.7 $20.2 
前払収益$485.6 $491.7 
会社は、販売契約に基づいて請求スケジュールに基づいて顧客に請求書を発行しています。支払いは一般的に請求書日から30〜60日の間に支払われます。提示された期間の契約資産は主に、関連する履行義務に基づいて認識された売上高と契約上の請求条件の相対的な独立した販売価格との差を表しています。提示された期間の前受収益は、サービス契約に関連し、サービス料金が前払いで請求されるものであり、一般的にサービスの提供が行われる前に四半期ごとまたは年次に請求されます。関連する前受収益は一般的にサービス期間全体にわたって認識されます。会社は、提示された期間の契約資産については 重大な減損損失は発生していません 提示された期間において。
2024年9月30日までの3か月と9か月間に、会社は売上高として認識した売上高はそれぞれ億ドルで、2023年12月31日時点の遅延売上高残高に含まれていました。81 百万ドル $388百万 2023年9月30日までの3か月と9か月間に、会社は売上高として認識した売上高はそれぞれ億ドルで、2022年12月31日時点の遅延売上高残高に含まれていました。75$百万の売上高を認識しました372 百万ドル
12


インテュイティブシステムリース
次の表は、イントゥイティブ・システム・リーシング契約からの製品の売上高を百万単位で示しています:
9月30日までの3か月間 9月30日までの9ヶ月間
2024202320242023
売上型リースの売上高$30.2 $19.2 $88.6 $54.5 
運転リースの売上高*$167.8 $127.1 $472.7 $361.8 
*変数リース売上高に関連する、運転リースの収益額内の使用量に基づく取り決め
$87.0 $54.2 $237.1 $153.4 
取引債権
貸倒引当金は、会社が顧客口座の回収可能性を評価することに基づいています。会社は、歴史的な経験、信用の質、売掛金残高の年齢、および顧客の支払能力に影響を与える可能性のある現在の経済状況などの要因を考慮して、引当金を定期的に見直しています。2024年と2023年9月30日に終了した3か月と9か月では、貸倒債権損失は重要ではありませんでした。
会社のクレジット損失への露出は、健康法の変更、手続きのカバレッジと払い戻し、経済的圧力、または地域やグローバルな経済の不況、その他顧客固有の要因の影響を受ける場合、増加する可能性があります。 会社は過去に重大なクレジット損失を経験していませんが、病院のキャッシュフローがインフレーション、高い金利、スタッフ不足を含むマクロ経済要因に影響を受けることで、リースおよび取引債権の繰越金額の潜在的な調整による重大な影響がある可能性があります。
ノート6.    リース
直感的システムリースに関連する賃貸人情報
セールスタイプのリース。 セールスタイプ・リースの関連するリース債権は、簡易連結貸借対照表に次のように表示されています(百万ドル単位):
2024年3月31日現在の
2024年9月30日2023年12月31日
総賃借料金$362.8 $384.5 
未獲得収益(12.7)(12.9)
小計350.1 371.6 
信用損失引当金(2.6)(2.7)
営業リースへの純投資$347.5 $368.9 
以下に報告:
前払費用及びその他の流動資産$137.0 $137.3 
無形及びその他の資産、純額:5,860210.5 231.6 
営業形式のリースへの資本投資$347.5 $368.9 
2024年9月30日時点の総賃貸賃料債権の契約満期は以下の通りです(百万単位):
会計年度数量
2024年の残りの期間
$39.0 
2025133.5 
202694.0 
202757.1 
202826.0 
2029年以降13.2 
総計$362.8 
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会社は、一部の適格な顧客とのセールス型リース契約を締結して、自社システムを購入しています。セールス型リースの契約期間は一般的に〔範囲〕かかり、通常は基礎資産に対するセキュリティ担保が付されています。 36売上高 調整後 EBITDA の84 ローンロス引当金額は、現在想定されるリース債権の売掛金に対する潜在的な損失を会社が評価したものです。会社は、歴史的経験、信用の質、リース債権残高の経過日数、および顧客の支払能力に影響するかもしれない現在の経済状況などの要因を考慮して、引当金を定期的に見直しています。リース債権は、請求書から90日経過した時点で遅延していると見なされます。
会社は、売り方リースの純投資にかかる信用リスクを、以下の要素に関連する顧客の数を利用して管理しています:事業規模;収益性、流動性、および負債比率;支払い履歴;および過去の未決締め金額。会社はまた、信用品質を決定するための主要指標として、外部プロバイダーから得た信用スコアを使用しています。 次の表は、2024年9月30日時点での売り方リースの純投資の発生年と信用品質別の猶予償還費用ベースを、百万単位でまとめたものです:
20242023202220212020前回純投資額
信用格付け:
高い$31.0 $31.8 $47.6 $38.1 $11.0 $1.8 $161.3 
中等度60.0 26.4 49.2 31.3 14.1 2.0 183.0 
低い2.7 1.1  1.7 0.3  5.8 
総計$93.7 $59.3 $96.8 $71.1 $25.4 $3.8 $350.1 
2024年9月30日および2023年9月30日に終了した3か月と9か月の間に、販売型リースへの純投資に関連する信用損失は、重要ではありませんでした。
ノート7. GOODWILLおよび無形資産
買収
2024年9月30日までの9か月間には、物資の取得はありませんでした。2023年も同様です。
のれん
以下の表は、ウィル・ノートの帳簿価額の変化を要約しています(百万単位):
数量
2023年12月31日時点の残高
$348.7 
取得活動 
翻訳とその他(0.4)
2024年9月30日の残高
$348.3 
無形固定資産
次の表は2024年9月30日および2023年12月31日時点の総無形資産、累積償却、純有形資産残高の部品を要約しています(百万単位):
2024年9月30日2023年12月31日
総簿価額累積償却額純簿価額総簿価額累積償却額純簿価額
特許と開発されたテクノロジー$202.5 $(183.7)$18.8 $206.3 $(178.4)$27.9 
配布権利とその他1.3 (1.0)0.3 10.8 (9.2)1.6 
顧客関係28.1 (21.9)6.2 32.5 (22.9)9.6 
無形資産合計$231.9 $(206.6)$25.3 $249.6 $(210.5)$39.1 
無形資産に関する償却費は、それぞれ2024年3月31日と2023年3月31日において、それぞれ$百万でした。3.5百万ドルと$5.1 2024年9月30日までの3ヶ月間および2023年のそれぞれについて、該当資産に関連する無形資産の償却費はそれぞれ$ 資産百万でした。13.6百万ドルと$15.1 2024年9月30日までの9ヶ月間および2023年のそれぞれについて、該当資産に関連する無形資産の償却費はそれぞれ$ 資産百万でした。
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2024年9月30日時点での無形資産に関連する将来の償却費見積額は、次の通りです(百万単位):
会計年度数量
2024年の残りの期間
$3.3 
202512.0 
20265.2 
20272.8 
20281.3 
2029年以降0.7 
総計$25.3 
先行する予想される償却費は見積もりです。実際の償却費額は、追加の無形資産取得、無形資産の計測期間の調整、外国通貨の為替レートの変動、無形資産の損耗、無形資産の加速償却、その他の出来事により、見積もられた金額と異なる場合があります。
ノート8。 コンティンジェンシー
会社は時折、証券法、商品責任、知的財産、商業、保険、契約紛争、雇用、およびその他の問題に関連する種々の請求、訴訟、調査、および手続きに巻き込まれます。これらの訴訟および請求のうちいくつかについて詳細を以下に記載します。これらの問題の結果は予測することはできず、会社はこれらの問題について商業的に合理的な条件で、あるいは全く解決する保証をすることはできません。
財務諸表には、負債および関連する費用が記録されます、訴訟が法的な条件から考慮された損失が起こった場合やその金額が合理的に見積もられた場合。評価は各会計期間ごとに再評価され、交渉の影響、和解、判決、法的助言、各ケースに関するその他の情報やイベントを含む全ての利用可能な情報に基づいています。ただし、将来の追加の法的費用(和解金、判決、法的費用、その他のディフェンスコストを含む)が会社のビジネス、財務状態、または今後の業績に重大な悪影響を与える可能性があります。
製品責任訴訟
会社は現在、様々な州や連邦裁判所に提訴された個々の製品責任訴訟の被告として名前がつけられています。原告は一般的に、ダ・ヴィンチ手術システムを使用した手術を受けたか、家族の誰かがそのような手術の結果としてさまざまな個人的な怪我や場合によっては死傷を被ったと主張しています。提訴されたケースのいくつかは、今後12か月以内に裁判が予定されています。
訴訟は、原告の怪我が、一部では、ダ・ヴィンチ手術システムの據えられた欠陥や原告の手術を行った医療関係者に十分なトレーニングリソースを提供しなかったことによるとされる失敗、などの様々な主張を引き起こしています。さらに、訴訟では、会社がダ・ヴィンチ手術システムの潜在的なリスクや恩恵を適切に開示しなかったとか/または誤った説明をしたと主張しています。原告は、デザイン上の欠陥を根拠とした厳格責任、過失、詐欺、明示及び暗示の保証違反、不当得利、配偶者との死別に基づく損害賠償など、様々な訴因を主張しています。原告は、主に個人の怪我と、多くの場合、懲罰的損害賠償を求めています。会社はこれらの主張を否認し、これらの請求に対して防御しています。
会社が予想する未解決の事件の解決コストは、請求者の弁護士との交渉に基づいています。 未解決の訴訟や請求、および発生する可能性のあるその他の事柄の最終的な結果は、予測が難しい多くの変数に依存し、これらの製品の責任に関する訴訟や請求に係る最終的なコストは、現在の見積額や負債計上額と実質的に異なる可能性があり、会社の事業、財務状態、または今後の業績に重大な悪影響を及ぼす可能性があります。 認識された金額を超える損失の可能性が合理的に存在するものの、会社は現時点では認識された金額を超える損失やその範囲を見積もることができません。
特許訴訟
2022年10月19日、陪審団は医療関連の特許侵害訴訟で、Rex Medical, L.P.に$の賠償金を認定しました。102023年9月20日、裁判所は会社の審理後請願を認め、Rex Medical, L.P.への損害賠償金を名目の$に減額しました。12023年10月18日、Rex Medicalが米連邦巡回控訴裁判所に控訴の通知を提出し、そして10月31日、Intuitiveが対抗控訴の通知を提出しました。
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連邦控訴裁判所において当事者間での説明が完了しました。現時点で得られている情報に基づいて、会社はこの問題から生じる損失が重大ではないと考えています。
商事訴訟
2021年5月10日、Surgical Instrument Service Company, Inc.(以下「SIS」)が、EndoWristのサービス、メンテナンス、および修理プロセスに関連する独占禁止法違反の申し立てを行った北カリフォルニア地区裁判所に苦情を提出しました。裁判所は、一部を認める部分的な棄却決定を下し、証拠開示が開始されました。会社は反トラストの主張を否定する回答を提出し、SISに対する反訴も提起しました。反訴は、SISが連邦ランハム法、カリフォルニアの不当競争法、カリフォルニアの虚偽広告法に違反したと主張し、またSISが不当競争および契約妨害で会社に対しても責任を負うと主張しています。当事者は、判決差し支えおよびダウバート動議を提出し、裁判所はこれらの動議について2023年9月7日に審理を行いました。
2024年3月31日、裁判所はIntuitiveと原告双方の異議申立てを一部認め、一部否認し、専門家証人に関連する追加の裁定をした。裁判所は、FDAがEndoWristsに関して原告のサービスに対して510(k)の許可を必要とするかどうかについて、いずれかの当事者に有利な判決を下していない。この判決に基づき、裁判所は原告の独占禁止法違反の訴えを退け、これらの訴えが審理に進むと判断した。また、裁判所はIntuitiveと共に、Intuitiveによる原告の虚偽の主張を却下し、一部のIntuitiveの反訴を原告によって却下した。裁判所は、この件の審理を2025年1月6日に開始するように決定した。現時点で利用可能な情報に基づいて、会社は、この問題から生じる場合の損失または損失の範囲について合理的な見積もりを行うことができません。
Companyに対してカリフォルニア州北地区裁判所に提訴された集団訴訟の申立書では、同社が製造した特定の機器のサービスと修理に関連する独占禁止法違反の主張が行われました。Larkin Community Hospitalによる申立書は2021年5月20日に、Franciscan Alliance, Inc.とKing County Public Hospital District No. 1による申立書は2021年7月6日に、そしてKaleida Healthによる申立書は2021年7月8日に提出されました。裁判所は、Franciscan Alliance, Inc.とKing County Public Hospital District No. 1、およびKaleida Healthの事件をLarkin Community Hospitalの事件と統合し、現在のLarkinの記録では「In Re: da Vinci Surgical Robot Antitrust Litigation」としてキャプションされています。早い段階で提訴された各原告を代表して一本化修正集団訴訟申立書が提出されました。2022年1月14日に、Kaleida Healthは自己をこの事件の当事者として自発的に取り下げました。2022年1月18日に、Companyはこの問題について原告に対する回答を提出し、証拠開示が開始されました。
この集団訴訟事件に関して、2023年9月7日に裁判所は当事者のそれぞれの異議申立てや専門家証人に関連する動議についての口頭弁論を行った。2024年3月31日に裁判所は、市場定義の特定の問題に関する原告の異議申立てを一部認め、一部却下し、反トラスト訴訟のイントゥイティブの動議を却下した。イントゥイティブの動議を却下する際、裁判所は第三者企業がEndoWristsに関するサービスについて510(k)の許認可を取得する必要があるかどうかを決定しないことを決定し、FDAの公式判決がない状態でその問題に関する原告の立場を否定する要因としてイントゥイティブの動議を却下した。専門家証人の問題に関しても追加の判決がありました。裁定により、裁判所は、反トラストの観点から、ダ・ヴィンチ・ロボットとエンドリスト器具が異なる製品市場を占有していると判決しました。裁判所はまた、EndoWrist器具の修理および交換のためのアフターマーケットが存在し、そのアフターマーケットにおいてイントゥイティブが独占力を持っていると判決しました。裁判所は、ソフト組織手術ロボットが関連する反トラスト市場を構成するか、反トラストの観点でレイパロスコピックおよび開腹手術を含む大きな市場の一部であるかに関する原告の異議申立てを却下しました。2024年7月30日に、裁判所はイントゥイティブの再考動議を認め、2024年3月31日の裁定において、EndoWristの修理と交換のための米国市場の定義およびイントゥイティブの市場力に関するサマリージャッジメントを取り消しました。裁判所は、2025年1月23日に集団認定審問会を設定しました。現時点で入手可能な情報に基づくと、会社は、この問題に起因する損失または損失の範囲について合理的な見積もりをすることができず、この問題のための裁判日はまだ設定されていません。
On September 18, 2024, Restore Robotics Repairs (“Restore”) filed a complaint in the United States District Court for the Northern District of Florida alleging antitrust claims against the Company relating to the service and replacement of X/Xi EndoWrist instruments for use with the da Vinci X and Xi surgical systems. The Company has agreed to accept service of the complaint, and the parties agreed that Intuitive would have until December 9, 2024, to file a response. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
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NOTE 9.    STOCKHOLDERS’ EQUITY
Stockholders’ Equity
The following tables present the changes in stockholders’ equity (in millions):
Three Months Ended September 30, 2024
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Intuitive Surgical, Inc. Stockholders’ EquityNoncontrolling Interest in Joint VentureTotal Stockholders’ Equity
SharesAmount
Beginning balance355.3 $0.4 $9,149.7 $5,581.7 $(23.5)$14,708.3 $88.2 $14,796.5 
Issuance of common stock through employee stock plans1.0 — 115.6 — — 115.6 — 115.6 
Shares withheld related to net share settlement of equity awards(0.1)— (0.4)(17.0)— (17.4)— (17.4)
Share-based compensation expense related to employee stock plans— — 175.3 — — 175.3 — 175.3 
Net income attributable to Intuitive Surgical, Inc.— — — 565.1 — 565.1 — 565.1 
Other comprehensive income— — — — 36.4 36.4 0.5 36.9 
Net income attributable to noncontrolling interest in joint venture— — — — — — 5.5 5.5 
Ending balance356.2 $0.4 $9,440.2 $6,129.8 $12.9 $15,583.3 $94.2 $15,677.5 

Three Months Ended September 30, 2023
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Intuitive Surgical, Inc. Stockholders’ EquityNoncontrolling Interest in Joint VentureTotal Stockholders’ Equity
SharesAmount
Beginning balance
351.3 $0.4 $8,150.8 $3,807.7 $(79.8)$11,879.1 $80.6 $11,959.7 
Issuance of common stock through employee stock plans0.7 — 77.4 — — 77.4 — 77.4 
Shares withheld related to net share settlement of equity awards — (0.6)(14.2)— (14.8)— (14.8)
Share-based compensation expense related to employee stock plans— — 158.3 — — 158.3 — 158.3 
Net income attributable to Intuitive Surgical, Inc.— — — 415.7 — 415.7 — 415.7 
Other comprehensive income (loss)— — — — 23.3 23.3 (0.2)23.1 
Net income attributable to noncontrolling interest in joint venture— — — — — — 4.1 4.1 
Ending balance
352.0 $0.4 $8,385.9 $4,209.2 $(56.5)$12,539.0 $84.5 $12,623.5 

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Nine Months Ended September 30, 2024
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Intuitive Surgical, Inc. Stockholders’ EquityNoncontrolling Interest in Joint VentureTotal Stockholders’ Equity
SharesAmount
Beginning balance
352.3 $0.4 $8,576.4 $4,743.0 $(12.2)$13,307.6 $89.7 $13,397.3 
Issuance of common stock through employee stock plans4.6 — 367.5 — — 367.5 — 367.5 
Shares withheld related to net share settlement of equity awards(0.7)— (7.4)(250.1)— (257.5)— (257.5)
Share-based compensation expense related to employee stock plans— — 503.7 — — 503.7 — 503.7 
Net income attributable to Intuitive Surgical, Inc.— — — 1,636.9 — 1,636.9 — 1,636.9 
Other comprehensive income (loss)— — — — 25.1 25.1 (0.1)25.0 
Cash dividends declared and paid by joint venture
— — — — — — (8.0)(8.0)
Net income attributable to noncontrolling interest in joint venture— — — — — — 12.6 12.6 
Ending balance
356.2 $0.4 $9,440.2 $6,129.8 $12.9 $15,583.3 $94.2 $15,677.5 

Nine Months Ended September 30, 2023
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Intuitive Surgical, Inc. Stockholders’ EquityNoncontrolling Interest in Joint VentureTotal Stockholders’ Equity
SharesAmount
Beginning balance
350.0 $0.4 $7,703.9 $3,500.1 $(162.5)$11,041.9 $70.7 $11,112.6 
Issuance of common stock through employee stock plans4.1 — 252.2 — — 252.2 — 252.2 
Shares withheld related to net share settlement of equity awards(0.6)— (6.9)(148.5)— (155.4)— (155.4)
Share-based compensation expense related to employee stock plans— — 452.5 — — 452.5 — 452.5 
Repurchase and retirement of common stock(1.5)— (15.8)(334.2)— (350.0)— (350.0)
Net income attributable to Intuitive Surgical, Inc.— — — 1,191.8 — 1,191.8 — 1,191.8 
Other comprehensive income (loss)— — — — 106.0 106.0 (1.0)105.0 
Net income attributable to noncontrolling interest in joint venture— — — — — — 14.8 14.8 
Ending balance
352.0 $0.4 $8,385.9 $4,209.2 $(56.5)$12,539.0 $84.5 $12,623.5 
Stock Repurchase Program
The Company’s Board of Directors (the “Board”) has authorized an aggregate of $10.0 billion of funding for the Company’s common stock repurchase program (the “Repurchase Program”) since its establishment in March 2009. The most recent authorization occurred in July 2022, when the Board increased the authorized amount available under the Repurchase Program to $3.5 billion, including amounts remaining under previous authorization. As of September 30, 2024, the remaining amount of share repurchases authorized by the Board under the Repurchase Program was approximately $1.1 billion.
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The following table summarizes stock repurchase activities (in millions, except per share amounts):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Shares repurchased   1.5 
Average price per share$ $ $ $238.1 
Value of shares repurchased$ $ $ $350.0 
Accumulated Other Comprehensive Income (Loss), Net of Tax, Attributable to Intuitive Surgical, Inc.
The components of accumulated other comprehensive income (loss), net of tax, attributable to Intuitive Surgical, Inc. are as follows (in millions):
Three Months Ended September 30, 2024
 Gains (Losses) on Hedge InstrumentsUnrealized Gains (Losses) on Available-for-Sale SecuritiesForeign Currency Translation LossesEmployee Benefit PlansTotal
Beginning balance$7.9 $(28.4)$(3.5)$0.5 $(23.5)
Other comprehensive income (loss) before reclassifications(15.7)59.5 (7.4) 36.4 
Amounts reclassified from accumulated other comprehensive income (loss)0.2   (0.2) 
Net current-period other comprehensive income (loss)(15.5)59.5 (7.4)(0.2)36.4 
Ending balance$(7.6)$31.1 $(10.9)$0.3 $12.9 
 Three Months Ended September 30, 2023
 Gains on Hedge InstrumentsUnrealized Losses on Available-for-Sale SecuritiesForeign Currency Translation GainsEmployee Benefit PlansTotal
Beginning balance$5.6 $(103.5)$16.9 $1.2 $(79.8)
Other comprehensive income (loss) before reclassifications2.0 25.6 (6.6) 21.0 
Amounts reclassified from accumulated other comprehensive income2.3    2.3 
Net current-period other comprehensive income (loss)4.3 25.6 (6.6) 23.3 
Ending balance$9.9 $(77.9)$10.3 $1.2 $(56.5)
Nine Months Ended September 30, 2024
Losses on Hedge InstrumentsUnrealized Gains (Losses) on Available-for-Sale SecuritiesForeign Currency Translation Gains (Losses)Employee Benefit PlansTotal
Beginning balance$(2.5)$(29.7)$19.4 $0.6 $(12.2)
Other comprehensive income (loss) before reclassifications(10.5)60.6 (30.3) 19.8 
Amounts reclassified from accumulated other comprehensive income (loss)5.4 0.2  (0.3)5.3 
Net current-period other comprehensive income (loss)(5.1)60.8 (30.3)(0.3)25.1 
Ending balance$(7.6)$31.1 $(10.9)$0.3 $12.9 
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Nine Months Ended September 30, 2023
Gains (Losses) on Hedge InstrumentsUnrealized Losses on Available-for-Sale SecuritiesForeign Currency Translation Gains (Losses)Employee Benefit PlansTotal
Beginning balance$(2.9)$(154.2)$(6.6)$1.2 $(162.5)
Other comprehensive income before reclassifications12.6 76.5 16.9  106.0 
Amounts reclassified from accumulated other comprehensive income (loss)0.2 (0.2)   
Net current-period other comprehensive income12.8 76.3 16.9  106.0 
Ending balance$9.9 $(77.9)$10.3 $1.2 $(56.5)
The tax impacts for amounts recognized in other comprehensive income before reclassifications were as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
Available-for-sale securities2024202320242023
Income tax benefit (expense) for net gains (losses) recorded in other comprehensive income
$(17.5)$(7.4)$(17.8)$(22.0)
The tax impacts for amounts recognized in other comprehensive income before reclassifications for hedge instruments, foreign currency translation gains (losses), and employee benefit plans for the three and nine months ended September 30, 2024, and 2023, were not material to the Company’s Financial Statements. The tax impacts for amounts reclassified from accumulated other comprehensive income (loss) relating to hedge instruments, available-for-sale securities, foreign currency translation gains (losses), and employee benefit plans for the three and nine months ended September 30, 2024, and 2023, were not material to the Company’s Financial Statements.
NOTE 10.    SHARE-BASED COMPENSATION
In April 2024, the Company’s shareholders approved an amended and restated 2010 Incentive Award Plan to provide for an increase in the number of shares of common stock reserved for issuance thereunder from 110,350,000 to 115,350,000. As of September 30, 2024, approximately 20.6 million shares were reserved for future issuance under the Company’s stock plans, and a maximum of approximately 8.9 million of these shares can be awarded as restricted stock units (“RSUs”).
Restricted Stock Units
A summary of RSU activity under all stock plans for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
 SharesWeighted-Average
Grant-Date Fair Value
Unvested balance as of December 31, 2023
5.0 $245.75 
RSUs granted2.4 $390.22 
RSUs vested(1.8)$236.63 
RSUs forfeited(0.3)$282.86 
Unvested balance as of September 30, 2024
5.3 $311.73 
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Stock Options
A summary of stock option activity under all stock plans for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
 Stock Options Outstanding
 Number
Outstanding
Weighted-Average
Exercise Price Per
Share
Balance as of December 31, 2023
9.8 $174.90 
Options granted $ 
Options exercised(2.2)$117.26 
Options forfeited or expired
(0.1)$255.85 
Balance as of September 30, 2024
7.5 $190.36 
As of September 30, 2024, options to purchase an aggregate of 6.3 million shares of common stock were exercisable at a weighted-average price of $176.05 per share.
Performance Stock Units
In 2022, the Company began granting performance stock units (“PSUs”) to officers and other key employees subject to three-year cliff vesting and pre-established, quantitative goals. Whether any PSUs vest, and the amount that do vest, is tied to completion of service over three years and the achievement of three equally-weighted, quantitative goals that directly align with or help drive the Company’s strategy and long-term total shareholder return.
The 2022 PSU grant metrics are focused on relative total shareholder return (“TSR”), year-over-year da Vinci procedure growth for 2023, and two-year compound annual da Vinci procedure growth for 2024. The 2023 PSU grant metrics are focused on relative TSR, da Vinci and Ion procedure growth in 2024 compared to 2022, and da Vinci and Ion procedure growth in 2025 compared to 2022. The 2024 PSU grant metrics are focused on relative TSR, da Vinci and Ion procedure growth in 2025 compared to 2023, and da Vinci and Ion procedure growth in 2026 compared to 2023. The TSR metric is considered a market condition, and the expense is determined at the grant date. The procedure growth metrics are considered performance conditions, and the expense is recorded based on the forecasted performance, which is reassessed each reporting period based on the probability of achieving the performance conditions. The number of shares earned at the end of the three-year period will vary, based on actual performance, from 0% to 125% of the target number of PSUs granted. PSUs are subject to forfeiture if employment terminates prior to the vesting date. PSUs are not considered issued or outstanding shares of the Company.
The Company calculates the fair value for each component of the PSUs individually. The fair value for the component with the TSR metric was determined using a Monte Carlo simulation. The fair value per share for the components with the procedure growth metrics is equal to the closing stock price on the grant date.
A summary of PSU activity for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
 
Shares
Weighted-Average
Grant Date Fair Value Per Share
Unvested balance as of December 31, 20230.2 $259.60 
Granted0.1 $395.92 
Vested $276.20 
Performance change $290.33 
Forfeited $294.75 
Unvested balance as of September 30, 20240.3 $306.94 
Employee Stock Purchase Plan
Under the Employee Stock Purchase Plan (“ESPP”), employees purchased approximately 0.6 million shares for $114.9 million and approximately 0.5 million shares for $104.5 million during the nine months ended September 30, 2024, and 2023, respectively.
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Share-Based Compensation Expense
The following table summarizes share-based compensation expense for the three and nine months ended September 30, 2024, and 2023 (in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Cost of revenue – product (before capitalization)
$27.5 $24.7 $75.7 $70.4 
Amounts capitalized into inventory
(25.6)(23.2)(70.7)(63.1)
Amounts recognized in income for amounts previously capitalized in inventory23.0 21.1 66.2 53.0 
Cost of revenue – product
$24.9 $22.6 $71.2 $60.3 
Cost of revenue – service
7.9 7.3 22.5 21.3 
Total cost of revenue
32.8 29.9 93.7 81.6 
Selling, general, and administrative77.6 71.9 225.4 206.6 
Research and development65.4 55.3 188.7 157.7 
Share-based compensation expense before income taxes175.8 157.1 507.8 445.9 
Income tax benefit36.9 28.7 105.4 85.2 
Share-based compensation expense after income taxes$138.9 $128.4 $402.4 $360.7 
The Black-Scholes-Merton option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans and the rights to acquire stock granted under the ESPP. The weighted-average estimated fair values of stock options and the rights to acquire stock under the ESPP, as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock under the ESPP that were granted during the three and nine months ended September 30, 2024, and 2023, were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Stock Options
Risk-free interest rate4.5%4.6%
Expected term (in years)2.93.2
Expected volatility32%33%
Fair value at grant date$82.63$77.41
ESPP
Risk-free interest rate4.6%5.2%4.6%5.0%
Expected term (in years)1.21.21.21.2
Expected volatility29%31%29%33%
Fair value at grant date$131.01$98.96$130.00$89.42
NOTE 11.    INCOME TAXES
Income tax expense for the three months ended September 30, 2024, was $100.4 million, or 15.0% of income before taxes, compared to $102.2 million, or 19.6% of income before taxes, for the three months ended September 30, 2023. Income tax expense for the nine months ended September 30, 2024, was $214.5 million, or 11.5% of income before taxes, compared to $236.4 million, or 16.4% of income before taxes, for the nine months ended September 30, 2023.
The effective tax rates for the three and nine months ended September 30, 2024, and 2023, 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 U.S. tax on foreign earnings and state income taxes (net of the federal benefit).
The provision for income taxes for the three months ended September 30, 2024, and 2023, included excess tax benefits associated with employee equity plans of $42.2 million and $22.0 million, respectively, which reduced the Company’s effective tax rate by 6.3 and 4.2 percentage points, respectively. The provision for income taxes for the nine months ended September 30, 2024, and 2023, included excess tax benefits associated with employee equity plans of $189.0 million and $86.2 million, respectively, which reduced the Company’s effective tax rate by 10.1 and 6.0 percentage points, respectively.
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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 in which the Company operates, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. Due to the uncertainty related to the timing and potential outcome of audits, the Company cannot estimate the range of reasonably possible changes in unrecognized tax benefits that may occur in the next 12 months.
The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.
NOTE 12.    NET INCOME PER SHARE
The following table presents the computation of basic and diluted net income per share attributable to Intuitive Surgical, Inc. (in millions, except per share amounts):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Numerator:
Net income attributable to Intuitive Surgical, Inc.$565.1 $415.7 $1,636.9 $1,191.8 
Denominator:
Weighted-average shares outstanding used in basic calculation355.8 351.7 354.8 351.0 
Add: dilutive effect of potential common shares6.9 6.5 6.6 6.1 
Weighted-average shares outstanding used in diluted calculation362.7 358.2 361.4 357.1 
Net income per share attributable to Intuitive Surgical, Inc.:
Basic$1.59 $1.18 $4.61 $3.40 
Diluted$1.56 $1.16 $4.53 $3.34 
Share-based compensation awards of approximately 0.0 million and 1.4 million shares for the three months ended September 30, 2024, and 2023, respectively, and approximately 0.3 million and 1.9 million shares for the nine months ended September 30, 2024, and 2023, respectively, were outstanding but were not included in the computation of diluted net income per share attributable to Intuitive Surgical, Inc. common stockholders, because the effect of including such shares would have been anti-dilutive in the periods presented.
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of financial condition as of September 30, 2024, and results of operations for the three and nine months ended September 30, 2024, and 2023, should be read in conjunction with management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.
This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to expectations concerning matters that are not historical facts. Statements using words such as “estimates,” “projects,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “may,” “will,” “could,” “should,” “would,” “targeted,” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements related to future results of operations, future financial condition, the expected impacts of COVID-19 on our business, financial condition, and results of operations, our financing plans and future capital requirements, our potential tax assets or liabilities, and statements based on current expectations, estimates, forecasts, and projections about the economies and geographic markets in which we operate and our beliefs and assumptions regarding these economies and markets. These forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should be considered in light of various important factors, including, but not limited to, the following: the overall macroeconomic environment, which may impact customer spending and our costs, including the levels of inflation and interest rates; the conflict in Ukraine; conflicts in the Middle East, including Israel and Iran; disruption to our supply chain, including difficulties in obtaining a sufficient supply of materials; curtailed or delayed capital spending by hospitals; the impact of global and regional economic and credit market conditions on healthcare spending; delays in obtaining new product approvals, clearances, or certifications from the United States (“U.S.”) Food and Drug Administration (“FDA”), comparable regulatory authorities, or notified bodies; the risk of our inability to comply with complex FDA and other regulations, which may result in significant enforcement actions; regulatory approvals, clearances, certifications, and restrictions or any dispute that may occur with any regulatory body; healthcare reform legislation in the U.S. and its impact on hospital spending, reimbursement, and fees levied on certain medical device revenues; changes in hospital admissions and actions by payers to limit or manage surgical procedures; the timing and success of product development and customer acceptance of developed products; the results of any collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships, including the joint venture with Shanghai Fosun Pharmaceutical (Group) Co., Ltd.; our completion of and ability to successfully integrate acquisitions; intellectual property positions and litigation; risks associated with our operations and any expansion outside of the U.S.; unanticipated manufacturing disruptions or the inability to meet demand for products; our reliance on sole- and single-sourced suppliers; the results of legal proceedings to which we are or may become a party; adverse publicity regarding us and the safety of our products and adequacy of training; the impact of changes to tax legislation, guidance, and interpretations; changes in tariffs, trade barriers, and regulatory requirements; and other risks and uncertainties, including those listed under the caption “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report and which are based on current expectations and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those risk factors described throughout this filing and identified under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by our other filings with the Securities and Exchange Commission (“SEC”). Our actual results may differ materially and adversely from those expressed in any forward-looking statement, and we undertake no obligation to publicly update or release any revisions to these forward-looking statements, except as required by law.
Intuitive®, Intuitive Surgical®, da Vinci®, da Vinci S®, da Vinci Si®, da Vinci X®, da Vinci Xi®, da Vinci 5™, da Vinci SP®, Advanced Insights Suite™, Case Insights™, EndoWrist®, Firefly®, Insights Engine™, Intuitive Hub™, Intuitive Learning™, Ion®, My Intuitive™, SimNow®, and SureForm® are trademarks or registered trademarks of the Company.
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Overview
As part of our mission, we believe that minimally invasive care is life-enhancing care. We are committed to advancing minimally invasive care through a comprehensive ecosystem of products and services. This ecosystem includes systems, instruments and accessories, learning, and services connected by a digital portfolio that enables precision and control, seamless interactions and experiences, and meaningful insights to drive better care.
We bring nearly three decades of experience and technical innovation to our robotic-assisted surgical solutions. While surgery and acute interventions have improved significantly in the past few decades, there remains a significant need for better outcomes and decreased variability of these outcomes across care teams. The current healthcare environment continues to stress critical resources, including the professionals who staff care teams: surgeons, anesthesiologists, nurses, and other staff. At the same time, governments continue to strain to cover the healthcare needs of their populations and demand lower total cost per patient to treat disease. In the face of these challenges, we believe scientific and technological advances in biology, computing, imaging, algorithms, and robotics may offer new methods to solve continued and difficult problems.
We address our customers’ needs by sharing their goals reflected in the quintuple aim. First, we aim to improve patient outcomes through an ecosystem of advanced robotic systems, instruments and accessories, progressive technology learning pathways, and comprehensive support and program assistance services. Second, we aim to improve the patient experience by minimizing disruption to lives and creating greater predictability during procedures. Third, we aim to improve care team satisfaction by creating products and services that are dependable, smart, and optimized for the care environment in which they are used. Fourth, we aim to expand access to high-quality minimally invasive care and effectively address implementation barriers that are the causes of heath inequities. Finally, we aim to lower the total cost to treat per patient episode using our technology when compared with existing treatment alternatives, providing a return on investment for hospitals and healthcare systems and value for payers.
Open surgery remains a prevalent form of surgery and is used in almost every area of the body. However, the large incisions required for open surgery create trauma to patients, typically resulting in longer hospitalization and recovery times, increased hospitalization costs, and additional pain and suffering relative to minimally invasive surgery (“MIS”), where MIS is available. For over four decades, MIS has reduced trauma to patients by allowing selected surgeries to be performed through small ports rather than large incisions. MIS has been widely adopted for certain surgical procedures.
Da Vinci surgical systems enable surgeons to extend the benefits of MIS to many patients who would otherwise undergo a more invasive surgery by using computational, robotic, and imaging technologies to overcome many of the limitations of traditional open surgery or conventional MIS. Surgeons using a da Vinci surgical system operate while seated comfortably at a console viewing a 3D, high-definition image of the surgical field. This immersive console connects surgeons to the surgical field and their instruments. While seated at the console, the surgeon manipulates instrument controls in a natural manner, similar to open surgical technique. Our technology is designed to provide surgeons with a range of articulation of the surgical instruments used in the surgical field analogous to the motions of a human wrist, while filtering out the tremor inherent in a surgeon’s hand. In designing our products, we focus on making our technology easy and safe to use.
Our da Vinci products fall into five broad categories: da Vinci surgical systems, da Vinci instruments and accessories, da Vinci stapling, da Vinci energy, and da Vinci vision, including Firefly fluorescence imaging systems and da Vinci endoscopes. We provide a comprehensive suite of systems, learning, and services offerings. Digitally enabled for nearly three decades, these three offerings aim to decrease variability by providing dependable, consistent functionality and an integrated user experience. Our systems category includes robotic platforms, software, vision, energy, and instruments and accessories. Our learning category includes learning and enabling technology, such as simulation and telepresence as well as technical training programs and personalized peer-to-peer learning opportunities. We have a global network of field service engineers and distributors through which we deliver a suite of services, including installation, repair, maintenance, around-the-clock technical support, and system monitoring. We also offer customized analytics and consultation to hospitals for program optimization.
We have commercialized the following da Vinci surgical systems: the da Vinci standard surgical system in 1999, the da Vinci S surgical system in 2006, the da Vinci Si surgical system in 2009, the fourth-generation da Vinci Xi surgical system in 2014, and the fifth-generation da Vinci 5 surgical system in 2024. We extended our fourth-generation platform by adding the da Vinci X surgical system, commercialized in 2017, and the da Vinci SP surgical system, commercialized in 2018. The da Vinci SP surgical system accesses the body through a single incision, while the other da Vinci surgical systems access the body through multiple incisions. All da Vinci systems include a surgeon’s console (or consoles), imaging electronics, a patient-side cart, and computational hardware and software.
We are in the early stages of launching our da Vinci SP surgical system, and we have an installed base of 243 da Vinci SP surgical systems as of September 30, 2024. We have received FDA clearance for the da Vinci SP surgical system for urologic, general thoracoscopic, and certain transoral procedures. Additionally, the da Vinci SP surgical system has received regulatory clearance in South Korea for a broad set of procedures. The da Vinci SP surgical system has also received regulatory clearance in Japan for the same set of procedures that are currently allowed with the da Vinci Xi surgical system in Japan. In January
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2024, the da Vinci SP surgical system received European certification in accordance with Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices (the “EU MDR”) for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures, and we are commercializing the da Vinci SP surgical system in select major European countries throughout 2024 as part of a measured rollout strategy. In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. We plan to seek FDA clearances for additional indications for the da Vinci SP surgical system and expand the system’s regulatory approvals (including for additional indications) in outside of the U.S. (“OUS”) markets over time. The success of the da Vinci SP surgical system is dependent on positive experiences and improved clinical outcomes for the procedures for which it has been cleared as well as securing additional clinical clearances.
In March 2024, we obtained FDA clearance for our da Vinci 5 surgical system, our next-generation multi-port robotic system, for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac and pediatric indications. In October 2024, we obtained regulatory clearance in South Korea for the da Vinci 5 system for use in in urologic, general, gynecologic, thoracoscopic, thoracoscopically-assisted cardiotomy, and transoral otolaryngology surgical procedures. We are in the early stages of launching da Vinci 5, and we have an installed base of 188 da Vinci 5 surgical systems as of September 30, 2024. We are in the midst of a phased launch over several quarters, giving us time to mature our supply and manufacturing processes for the new system. Additionally, we are in the regulatory process in Japan and Europe for da Vinci 5.
We offer approximately 70 different multi-port da Vinci instruments to provide surgeons with flexibility in choosing the types of tools needed to perform a particular surgery. These multi-port instruments are generally robotically controlled and provide end effectors (tips) that are similar to those used in either open or laparoscopic surgery. We offer advanced instrumentation for the da Vinci X, da Vinci Xi, and da Vinci 5 surgical systems, including da Vinci energy and da Vinci stapler products, to provide surgeons with sophisticated, computer-aided tools to precisely and efficiently interact with tissue. The da Vinci X, da Vinci Xi, and da Vinci 5 surgical systems generally share the same instruments, whereas the da Vinci Si surgical system uses instruments that are not compatible with the da Vinci X, da Vinci Xi, or da Vinci 5 systems. Additionally, we have introduced a unique set of force feedback instruments that are only compatible with our da Vinci 5 surgical system. We also currently offer nine core instruments on our da Vinci SP surgical system. We plan to expand the da Vinci SP instrument offering over time.
Our learning and enabling technology offerings facilitate access to education and training on our products. Our enabling technologies include telepresence and Advanced Insights Suite (which includes Case Insights and Insights Engine), and our learning technology solutions include Intuitive Learning, SimNow, customized training models, remote case observations, and remote proctoring.
In 2019, we commercialized our Ion endoluminal system, which is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories for which the first cleared indication is minimally invasive biopsies in the lung. Our Ion system extends our commercial offering beyond surgery into diagnostic, endoluminal procedures. The system features an ultra-thin, ultra-maneuverable catheter that can articulate 180 degrees in all directions and allows navigation far into the peripheral lung and provides the stability necessary for precision in a biopsy. Many suspicious lesions found in the lung may be small and difficult to access, which can make diagnosis challenging, and Ion helps physicians obtain tissue samples from deep within the lung, which could help enable earlier diagnosis. Our Ion endoluminal system has received FDA clearance, and regulatory clearances OUS include European certification in accordance with the EU MDR, regulatory clearance in South Korea, and National Medical Products Administration (“NMPA”) regulatory clearance in China. We plan to seek additional clearances, approvals, and certifications for the Ion endoluminal system in OUS markets over time.
The success of new product introductions depends on a number of factors including, but not limited to, pricing, competition, geographic market and consumer acceptance, the effective forecasting and management of product demand, inventory levels, the management of manufacturing and supply costs, and the risk that new products may have quality or other defects in the early stages of introduction.
Macroeconomic Environment
Uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, elevated interest rates, disruptions in the commodities’ markets as a result of the conflict between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran, and the introduction of or changes in tariffs or trade barriers may result in a recession, which could have a material adverse effect on our business.
Supply chain constraints have generally improved to pre-COVID-19 pandemic levels, with some isolated residual stresses, particularly for engineered raw materials and at certain subcontract suppliers that are operationally challenged to meet our production requirements. These isolated instances of supply chain constraints have not had a material impact during the first nine months of 2024. Additionally, prices of materials for some components remain elevated from historical levels due to strong market demand or supply chain cost inflation. With elevated interest rates, access to credit is more difficult, and any
26


insolvency of certain suppliers, including sole- and single-sourced suppliers, may have heightened continuity risks. Incidents of cybersecurity breaches, which have not significantly impacted our supply chain to date, also remain an active threat to sustained supply continuity. We are actively engaged in activities that seek to mitigate the impact of any supply chain risks and disruptions on our operations.
A number of hospitals continue to experience challenges with staffing and cost pressures that could affect their ability to provide patient care. Additionally, hospitals are facing significant financial pressure as supply chain constraints and inflation have driven up operating costs and elevated interest rates have made access to credit more expensive. Hospitals may also be adversely affected by the liquidity concerns as a result of the broader macroeconomic environment. Any or all of these factors could negatively impact the number of da Vinci procedures performed or surgical systems placed and have a material adverse effect on our business, financial condition, or results of operations.
COVID-19 Pandemic
COVID-19 has had a negative impact on our procedure volumes during periods with COVID-19 outbreaks due to patient delays in both the diagnosis and treatment of diseases. While such delays have negatively impacted our procedure volumes in periods with COVID-19 outbreaks, we believe that these delays have also resulted in increased procedure volumes during those periods following such outbreaks, due to the creation of patient treatment backlogs.
In January 2023, COVID-19 resurgences in China negatively impacted our procedure volumes in the region. However, as infections and hospitalization decreased in February 2023 and March 2023, our procedure volumes recovered. We did not experience significant procedure volume disruptions due to COVID-19 outbreaks in any of our geographic markets during the remainder of 2023. Instead, throughout 2023, we saw a positive impact on procedure volumes and believe that such positive impacts were partially attributable to patients who had deferred treatment returning for diagnosis and treatment.
During the first nine months of 2024, we did not experience noticeable procedure volume disruptions due to COVID-19. We also believe that a large portion of the patients in the backlog that required treatment during the COVID-19 pandemic have now been treated. Therefore, we expect that the impact of patient backlogs has been, and will continue to be, less significant on procedure volumes in 2024 than in the prior year.
Business Model
Overview
We generate up-front revenue from the placement of da Vinci systems through sales or sales-type lease arrangements and recurring revenue over time through fixed-payment or usage-based operating lease arrangements. We also earn recurring revenue from the sales of instruments, accessories, and services.
The da Vinci surgical system generally sells for between $0.7 million and $3.1 million, depending on the model, configuration, and geography, and represents a significant capital equipment investment for our customers when purchased. Our instruments and accessories have limited lives and will either expire or wear out as they are used in surgery, at which point they need to be replaced. We generally earn between $800 and $3,600 of instruments and accessories revenue per surgical procedure performed, depending on the type and complexity of the specific procedures performed and the number and type of instruments used. We typically enter into service contracts at the time systems are sold or leased at an annual fee between $80,000 and $225,000, depending on the configuration of the underlying system and the composition of the services offered under the contract. Our system sale arrangements generally include a five-year period of service, with the first year of service provided for free. These service contracts have generally been renewed at the end of the initial contractual service periods.
We generate revenue from our Ion endoluminal system in a business model consistent with the da Vinci surgical system model described above. We generate up-front revenue from the placement of Ion systems through sales or sales-type lease arrangements and recurring revenue over time through fixed-payment or usage-based operating lease arrangements. We also earn recurring revenue from the sales of instruments, accessories, and services. The Ion endoluminal system generally sells for between $500,000 and $815,000. Our instruments and accessories have limited lives and will either expire or wear out as they are used in procedures, at which point they need to be replaced. We typically enter into service contracts at the time systems are sold or leased at an annual fee between $55,000 and $80,000.
Additionally, as part of our ecosystem of products and services, we provide a portfolio of learning offerings and digital solutions. We do not currently generate material revenue from these offerings.
Recurring Revenue
Recurring revenue consists of instruments and accessories revenue, service revenue, and operating lease revenue. Recurring revenue increased to $5.94 billion, or 83% of total revenue in 2023, compared to $4.92 billion, or 79% of total revenue in 2022, and $4.3 billion, or 75% of total revenue in 2021.
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Instruments and accessories revenue has grown at a faster rate than systems revenue over time. Instruments and accessories revenue increased to $4.28 billion in 2023, compared to $3.52 billion in 2022 and $3.10 billion in 2021. The increase in instruments and accessories revenue largely reflects continued procedure adoption.
Service revenue was $1.17 billion in 2023, compared to $1.02 billion in 2022 and $0.92 billion in 2021. The increase in service revenue was primarily driven by the growth of the base of installed da Vinci surgical systems producing service revenue. The installed base of da Vinci surgical systems grew 14% to approximately 8,606 as of December 31, 2023; 12% to approximately 7,544 as of December 31, 2022; and 12% to approximately 6,730 as of December 31, 2021.
We use the installed base, number of placements, and utilization of systems as metrics for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that the installed base, number of placements, and utilization of systems provide meaningful supplemental information regarding our performance, as management believes that the installed base, number of placements, and utilization of systems are indicators of the rate of adoption of our robotic-assisted medical procedures as well as an indicator of future recurring revenue. Management believes that both it and investors benefit from referring to the installed base, number of placements, and utilization of systems in assessing our performance and when planning, forecasting, and analyzing future periods. The installed base, number of placements, and utilization of systems also facilitate management’s internal comparisons of our historical performance. We believe that the installed base, number of placements, and utilization of systems are useful to investors as metrics, because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by institutional investors and the analyst community to help them analyze the performance of our business. The vast majority of our installed systems are connected via the internet. System logs can also be accessed by field engineers for systems that are not connected to the internet. We utilize this information as well as other information from agreements and discussions with our customers that involve estimates and judgments, which are, by their nature, subject to substantial uncertainties and assumptions. Estimates and judgments for determining the installed base, number of placements, and utilization of systems may be impacted over time by various factors, including system internet connectivity, hospital and distributor reporting behavior, and inherent complexities in new agreements. Such estimates and judgments are also susceptible to technical errors. In addition, the relationship between the installed base, number of placements, and utilization of systems and our revenues may fluctuate from period to period, and growth in the installed base, number of placements, and utilization of systems may not correspond to an increase in revenue. The installed base, number of placements, and utilization of systems are not intended to be considered in isolation or as a substitute for, or superior to, revenue or other financial information prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
Intuitive System Leasing
Since 2013, we have entered into sales-type and fixed-payment operating lease arrangements directly with certain qualified customers as a way to offer customers flexibility in how they acquire systems and expand their robotic-assisted programs while leveraging our balance sheet. These leases generally have commercially competitive terms as compared to other third-party entities that offer equipment leasing. More recently, we have also entered into usage-based operating lease arrangements with qualified customers that have committed da Vinci programs where we charge for the system and service as the systems are utilized. We believe that all of these alternative financing structures have been effective and well-received, and we are willing to expand the proportion of any of these structures based on customer demand. We include systems placed under fixed-payment and usage-based operating lease arrangements, as well as sales-type lease arrangements, in our system placement and installed base disclosures. We exclude operating lease-related revenue, including usage-based revenue, and Ion system revenue from our da Vinci surgical system average selling price (“ASP”) computations.
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The following table summarizes our system placements under leasing arrangements for the years ended December 31, 2023, 2022, and 2021:
Year Ended December 31,
202320222021
Da Vinci System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements304 276 333 
Usage-based operating lease arrangements355 216 184 
Total da Vinci system placements under operating lease arrangements659 492 517 
% of Total da Vinci system placements48 %39 %38 %
Sales-type lease arrangements45 99 151 
Total da Vinci system placements under leasing arrangements704 591 668 
Ion System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements63 61 43 
Usage-based operating lease arrangements54 40 
Total Ion system placements under operating lease arrangements117 101 50 
% of Total Ion system placements55 %53 %54 %
Sales-type lease arrangements11 
Total Ion system placements under leasing arrangements122 112 57 
Revenue from fixed-payment operating lease arrangements is recognized on a straight-line basis over the lease term, and revenue from usage-based operating lease arrangements is recognized as the systems are used. We generally set fixed-payment and usage-based operating lease arrangements’ pricing at a modest premium relative to purchased systems reflecting the time value of money and, in the case of usage-based operating lease arrangements, the risk that system utilization may fall short of anticipated levels. Variable lease revenue recognized from usage-based operating lease arrangements has been included in our operating lease metrics herein. Operating lease revenue has grown at a faster rate than overall systems revenue and was $501 million, $377 million, and $277 million for the years ended December 31, 2023, 2022, and 2021, respectively, of which $217 million, $133 million, and $78 million, respectively, was variable lease revenue related to our usage-based operating lease arrangements. As revenue for fixed-payment and usage-based operating lease arrangements is recognized over time, total systems revenue growth is reduced in a period when the number of operating lease placements increases as a proportion of total system placements. Generally, lease transactions generate similar gross margins as our sale transactions.
The following table summarizes our systems installed at customers under operating leasing arrangements for the years ended December 31, 2023, 2022, and 2021:
Year Ended December 31,
202320222021
Da Vinci System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements1,204 1,018 841 
Usage-based operating lease arrangements1,023 665 453 
Total da Vinci system installed base under operating lease arrangements2,227 1,683 1,294 
Ion System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements96 72 50 
Usage-based operating lease arrangements118 60 11 
Total Ion system installed base under operating lease arrangements214 132 61 
Our exposure to the credit risks relating to our lease financing arrangements may increase if our customers are adversely affected by economic pressures or uncertainty, changes in healthcare laws, coverage and reimbursement, or other customer-specific factors. As a result of these macroeconomic factors impacting our customers, we may be exposed to defaults under our lease financing arrangements. Moreover, usage-based operating lease arrangements generally contain no minimum payments; therefore, customers may exit such arrangements without paying a financial penalty to us.
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For some operating lease arrangements, our customers are provided with the right to purchase the leased system at certain points during and/or at the end of the lease term. Revenue generated from customer purchases of systems under operating lease arrangements (“Lease Buyouts”) was $74 million, $72 million, and $96 million for the years ended December 31, 2023, 2022, and 2021, respectively. We expect that revenue recognized from customer exercises of buyout options will fluctuate based on the timing of when, and if, customers choose to exercise their buyout options.
Systems Revenue
System placements are driven by procedure growth in most geographic markets. In some markets, system placements are constrained by regulation. In geographies where da Vinci procedure adoption is in an early stage or system placements are constrained by regulation, system sales will precede procedure growth. System placements also vary due to seasonality, largely aligned with hospital budgeting cycles. On an annual basis, we typically place a higher proportion of systems in the fourth quarter and a lower proportion in the first quarter as many customer budgets are reset. Systems revenue is also affected by the proportion of system placements under operating lease arrangements, recurring fixed-payment and usage-based operating lease revenue, Lease Buyouts, product mix, ASPs, trade-in activities, customer mix, and specified-price trade-in rights. We generally do not provide specified-price trade-in rights or upgrade rights at the time of a system purchase; however, we expect that the number of arrangements that may contain these specified-price trade-in rights will increase as we continue the phased launch of our next-generation multi-port platform, da Vinci 5. Systems revenue remained flat at $1.68 billion in 2023. Systems revenue declined 1% to $1.68 billion in 2022. Systems revenue grew 44% to $1.69 billion in 2021.
Procedure Mix / Products
Our da Vinci surgical systems are generally used for soft tissue surgery for areas of the body between the pelvis and the neck, primarily in general, gynecologic, urologic, cardiothoracic, and head and neck surgical procedures. Within these categories, procedures range in complexity from cancer and other highly complex procedures to less complex procedures for benign conditions. Cancer and other highly complex procedures tend to be reimbursed at higher rates than less complex procedures for benign conditions. Thus, hospitals are more sensitive to the costs associated with treating less complex, benign conditions. Our strategy is to provide hospitals with attractive clinical and economical solutions across the spectrum of procedure complexity. Our fully featured da Vinci Xi and da Vinci 5 surgical systems with advanced instruments (including da Vinci energy and da Vinci stapler products) and our Integrated Table Motion product target the more complex procedure segment. Our da Vinci X surgical system is targeted toward price-sensitive geographic markets and procedures. Our da Vinci SP surgical system complements the da Vinci X, da Vinci Xi, and da Vinci 5 surgical systems by enabling surgeons to access narrow workspaces.
Procedure Seasonality
More than half of the da Vinci procedures performed are for benign conditions, most notably hernia repairs, hysterectomies, and cholecystectomies. These benign procedures and other short-term elective procedures tend to be more seasonal than cancer operations and surgeries for other life-threatening conditions. Seasonality in the U.S. for procedures for benign conditions typically results in higher fourth quarter procedure volume when more patients have met annual deductibles and lower first quarter procedure volume when deductibles are reset. Seasonality outside of the U.S. varies and is more pronounced around local holidays and vacation periods, which have lower procedure volume.
Distribution Channels
We provide our products through direct sales organizations in the U.S., Europe (excluding Italy, Spain, Portugal, Greece, and Eastern European countries), China (through our majority-owned joint ventures, Intuitive Surgical-Fosun Medical Technology (Shanghai) Co., Ltd. and Intuitive Surgical-Fosun (HongKong) Co., Ltd. (collectively, the “Joint Venture”), with Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”)), Japan, South Korea, India, Taiwan, and Canada. In the remainder of our OUS markets, we provide our products through distributors.
Regulatory Activities
Overview
Our products must meet the requirements of a large and growing body of international standards that govern the product safety, efficacy, advertising, labeling, safety reporting design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use, and disposal of our products. Examples of such standards include electrical safety standards, such as those of the International Electrotechnical Commission, and composition standards, such as the Reduction of Hazardous Substances and the Waste Electrical and Electronic Equipment Directives in the European Union (“EU”). Failure to meet these standards could limit our ability to market our products in those regions that require compliance with such standards.
Our products and operations are also subject to increasingly stringent medical device, privacy, and other regulations by regional, federal, state, and local authorities. After a device is placed on the market, numerous FDA and comparable foreign
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regulatory requirements continue to apply. These requirements include establishment registration and device listing with the FDA or other foreign regulatory authorities and compliance with medical device reporting regulations, which require that manufacturers report to the FDA or other foreign regulatory authorities if their device caused or contributed, or may have caused or contributed, to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.
We anticipate that timelines for the introduction of new products and/or indications may be extended relative to past experience as a result of these regulations. For example, we have seen elongated regulatory approval timelines in the U.S. and Europe.
Clearances, Approvals, and Certifications
We have generally obtained the regulatory clearances, approvals, and certifications required to market our products associated with our da Vinci multi-port surgical systems (da Vinci S, da Vinci Si, da Vinci Xi, da Vinci X, and da Vinci 5 systems) for our targeted surgical specialties within the U.S., South Korea, Japan, and the European markets in which we operate. We have additionally obtained regulatory clearances, approvals, and certifications for the following products over the past several years:
In October 2024, we obtained regulatory clearance in South Korea for our da Vinci 5 surgical system, our next-generation multi-port robotic system, for use in urologic, general, gynecologic, thoracoscopic, thoracoscopically-assisted cardiotomy, and transoral otolaryngology surgical procedures. In March 2024, we obtained FDA clearance for our da Vinci 5 surgical system for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac and pediatric indications as well as one contraindication related to the use of force feedback in hysterectomy and myomectomy surgical procedures. Da Vinci 5 was made available to customers in the U.S. who had collaborated with us during the development period and those with mature robotic surgery programs. We will continue working with surgeons to generate additional data on the system’s use and on expansion of our manufacturing and supply capacity before a wider commercial introduction.
In September 2024, we obtained FDA clearance for our redesigned 8 mm SureForm 30 Stapler and 8 mm SureForm 30 Curved-Tip Stapler instruments and reloads for use in general, thoracic, gynecologic, urologic, and pediatric surgical procedures. In April 2024, we obtained European certification in accordance with the EU MDR for our redesigned 8 mm SureForm 30 Stapler and 8 mm SureForm 30 Curved-Tip Stapler instruments and reloads for use in general, thoracic, gynecologic, urologic, and pediatric surgical procedures.
In August 2024, we obtained regulatory clearance in Taiwan for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, transanal total mesorectal excision, and breast surgical procedures. In January 2024, we obtained European certification in accordance with the EU MDR for our da Vinci SP surgical system for use in endoscopic abdominopelvic, thoracoscopic, transoral otolaryngology, transanal colorectal, and breast surgical procedures. We are commercializing the da Vinci SP surgical system in select major European countries throughout 2024 as part of a measured rollout strategy. During the third quarter of 2024, we placed 7 da Vinci SP systems in Europe. In September 2022, we obtained regulatory clearance for our da Vinci SP surgical system in Japan for use in general, thoracic (excluding cardiac procedures and intercostal approaches), urologic, gynecologic, and transoral head and neck surgical procedures.
In July 2024, we obtained FDA clearance for the use of our da Vinci SP surgical system in general thoracoscopic surgical procedures. In April 2023, we obtained FDA clearance for the use of our da Vinci SP surgical system in simple prostatectomy procedures. We also obtained FDA clearance for the use of our da Vinci SP surgical system in transvesical approaches to simple and radical prostatectomy.
In April 2024, we obtained FDA clearance to extend the number of uses of our catheter instrument used with our Ion endoluminal system from five to eight uses.
In March 2024, we received NMPA regulatory clearance for our Ion endoluminal system in China. We placed our first Ion systems in China during the third quarter of 2024 and will continue our rollout of the Ion system in China in a measured fashion while we optimize training pathways and collect additional clinical data. In September 2023, we received regulatory clearance in South Korea for our Ion endoluminal system. We expect the introduction of the Ion system in South Korea to follow the refinement of our training pathways in the region and the gathering of local clinical and economic data. In March 2023, we obtained European certification in accordance with the EU MDR for our Ion endoluminal system. In Europe, we are seeing continued progress in our commercialization in the United Kingdom (“UK”) and are beginning to place Ion systems in continental Europe with a similar approach of initially focusing on the collection of clinical data in support of our European reimbursement strategy.
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In August 2023, following approval by China’s NMPA for a local version of our da Vinci Xi surgical system in June 2023, our Intuitive-Fosun Pharma Joint Venture received a manufacturing license that permits the Joint Venture to manufacture our da Vinci Xi surgical system for sale to customers in China.
In July 2023, we received regulatory clearance for our E-200 generator in Japan and South Korea. In November 2022, we obtained FDA clearance for our E-200 generator. The E-200 generator can be used in da Vinci robotic procedures, as well as non-robotic open and laparoscopic procedures, to deliver high-frequency energy for cutting, coagulation, and vessel sealing of tissues. The E-200 generator includes the same advanced energy capability as the E-100 generator and supports the same vessel sealing instruments.
In March 2022, we received regulatory clearance in China to market our da Vinci Endoscope Plus. We have also received regulatory clearances in Japan and South Korea to market our da Vinci Endoscope Plus in May 2020 and December 2019, respectively. In July 2019, we obtained FDA clearance for our da Vinci Endoscope Plus, and in June 2019, we obtained European certification for our da Vinci Endoscope Plus for the da Vinci Xi and da Vinci X surgical systems.
In February 2022, we received regulatory clearance in China to market both our 12 mm SureForm 45 Stapler and SureForm 60 Stapler and corresponding reloads.
In January 2022, we received regulatory clearance in China to market our da Vinci Vessel Sealer Extend with up to 7 mm vascular indications.
Refer to the descriptions of our new products that received regulatory clearances, approvals, or certifications in 2024, 2023, and 2022 in the Recent Product Introductions section below.
In June 2023, the China National Health Commission published the 14th five-year plan quota for major medical equipment to be sold in China on its official website (the “2023 Quota”). Under the 2023 Quota, the government will allow for the sale of 559 new surgical robots into China, which could include da Vinci surgical systems as well as surgical systems introduced by others. As of September 30, 2024, including systems that were sold in prior quarters, we have placed 103 da Vinci surgical systems under the 2023 Quota. Future sales of da Vinci surgical systems under this and any previously published open quotas are uncertain, as they are open to other medical device companies that have introduced robotic-assisted surgical systems and are dependent on hospitals completing a tender process and receiving associated approvals. Our ability to track the number of systems that could be sold under these quotas in the future is limited by provincial and national agencies making such information publicly available.
Since 2022, several provinces in China have implemented significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery and orthopedics. These limits have significantly impacted the number of procedures performed and have impacted our instruments and accessories revenue in those provinces. However, as of the date of this report, these limits have not had a material impact on our business, financial condition, or results of operations, as only a small portion of our installed base in China is currently located in the impacted provinces. Companies providing robotic surgical technology, including our Joint Venture in China, have been meeting with Chinese government healthcare agencies to discuss these developments and to provide feedback. We cannot assure you that additional provincial or national healthcare agencies and administrations will not impose similar limits, and we expect to continue to face increased pricing pressure, both of which could further impact the number of procedures performed and our instruments and accessories revenue in China.
The Japanese Ministry of Health, Labor, and Welfare (“MHLW”) considers reimbursement for procedures in April of even-numbered years. The process for obtaining reimbursement requires Japanese university hospitals and surgical societies, with our support, to seek reimbursement. There are multiple pathways to obtain reimbursement for procedures, including those that require in-country clinical and economic data. An additional five da Vinci procedures were granted reimbursement in April 2024, including lobectomy for benign conditions. In addition, we received higher reimbursement for certain da Vinci rectal resection procedures, as compared to open procedure reimbursements. The additional reimbursed procedures have varying levels of conventional laparoscopic penetration and will generally be reimbursed at rates equal to the conventional laparoscopic procedures. Given the reimbursement level and laparoscopic penetration for these additional procedures, there can be no assurance that the adoption pace for these procedures will be similar to prostatectomy or partial nephrectomy, given their higher reimbursement, or any other da Vinci procedure.
Recalls and Corrections
Medical device companies have regulatory obligations to correct or remove medical devices in the field that could pose a risk to health. The definition of “recalls and corrections” is expansive and includes repair, replacement, inspections, relabeling, and issuance of new or additional instructions for use or reinforcement of existing instructions for use and training when such actions are taken for specific reasons of safety or compliance. These field actions require stringent documentation, reporting,
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and monitoring worldwide. There are other actions that a medical device manufacturer may take in the field without reporting including, but not limited to, routine servicing and stock rotations.
As we determine whether a field action is reportable in any regulatory jurisdiction, we prepare and submit notifications to the appropriate regulatory agency for the particular jurisdiction. Regulators can require the expansion, reclassification, or change in scope and language of the field action. In general, upon submitting required notifications to regulators regarding a field action that is a recall or correction, we will notify customers regarding the field action, provide any additional documentation required in their national language, and arrange, as required, the return or replacement of the affected product or a field service visit to perform the correction.
Field actions, as well as certain outcomes from regulatory activities, can result in adverse effects on our business, including damage to our reputation, delays by customers of purchase decisions, reduction or stoppage of the use of installed systems, and reduced revenue as well as increased expenses.
Procedures
We model patient value as equal to procedure efficacy / invasiveness. In this equation, procedure efficacy is defined as a measure of the success of the procedure in resolving the underlying disease, and invasiveness is defined as a measure of patient pain and disruption of regular activities. When the patient value of a robotic-assisted procedure is greater than that of alternative treatment options, patients may benefit from seeking out surgeons or physicians and hospitals that offer robotic-assisted medical procedures, which could potentially result in a local market share shift. Adoption of robotic-assisted procedures occurs by procedure and by market and is driven by the relative patient value and total treatment costs of robotic-assisted procedures as compared to alternative treatment options for the same disease state or condition.
We use the number and type of procedures as metrics for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that the number and type of procedures provide meaningful supplemental information regarding our performance, as management believes procedure volume is an indicator of the rate of adoption of our robotic-assisted medical procedures as well as an indicator of future revenue (including revenue from usage-based operating lease arrangements). Management believes that both it and investors benefit from referring to the number and type of procedures in assessing our performance and when planning, forecasting, and analyzing future periods. The number and type of procedures also facilitate management’s internal comparisons of our historical performance. We believe that the number and type of procedures are useful to investors as metrics, because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by institutional investors and the analyst community to help them analyze the performance of our business. The vast majority of our installed systems are connected via the internet. System logs can also be accessed by field engineers for systems that are not connected to the internet. We utilize certain methods that rely on information collected from the installed systems for determining the number and type of procedures performed that involve estimates and judgments, which are, by their nature, subject to substantial uncertainties and assumptions. Estimates and judgments for determining the number and type of procedures may be impacted over time by various factors, including changes in treatment modalities, hospital and distributor reporting behavior, and system internet connectivity. Such estimates and judgments are also susceptible to algorithmic or other technical errors. In addition, the relationship between the number and type of procedures and our revenues may fluctuate from period to period, and procedure volume growth may not correspond to an increase in revenue. The number and type of procedures are not intended to be considered in isolation or as a substitute for, or superior to, revenue or other financial information prepared and presented in accordance with GAAP.
Da Vinci Procedures
The adoption of robotic-assisted surgery using the da Vinci surgical system has the potential to grow for those procedures that offer greater patient value than to non-da Vinci alternatives and competitive total economics for healthcare providers. Our da Vinci surgical systems are used primarily in general, gynecologic, urologic, cardiothoracic, and head and neck surgical procedures. We focus our organization and investments on developing, marketing, and training products and services for procedures in which da Vinci can bring patient value relative to alternative treatment options and/or economic benefit to healthcare providers. Target procedures in general surgery include hernia repair (both ventral and inguinal), colorectal, cholecystectomy, and bariatric procedures. Target procedures in urology include prostatectomy and partial nephrectomy. Target procedures in gynecology include hysterectomy for both cancer and benign conditions and sacrocolpopexy. In cardiothoracic surgery, target procedures include lung resection. In head and neck surgery, target procedures include transoral surgery. Not all indications, procedures, or products described may be available in a given country or region or on all generations of da Vinci surgical systems. Surgeons and their patients need to consult the product labeling in their specific country and for each product in order to determine the cleared uses, as well as important limitations, restrictions, or contraindications.
In 2023, approximately 2,286,000 surgical procedures were performed with da Vinci surgical systems, compared to approximately 1,875,000 and 1,594,000 surgical procedures performed with da Vinci surgical systems in 2022 and 2021,
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respectively. The increase in our overall procedure volume in 2023 was largely attributable to growth in U.S. general surgery, OUS urologic surgery, OUS general surgery (particularly cancer), and U.S. gynecologic surgery procedures. The overall procedure volumes in the comparative 2022 and 2021 years reflect the disruption caused by the COVID-19 pandemic in 2022 and 2021.
U.S. da Vinci Procedures
Overall U.S. procedure volume with da Vinci surgical systems grew to approximately 1,532,000 in 2023, compared to approximately 1,282,000 in 2022 and approximately 1,109,000 in 2021. General surgery was our largest and fastest growing U.S. specialty in 2023 with procedure volume that grew to approximately 896,000 in 2023, compared to approximately 720,000 in 2022 and approximately 588,000 in 2021. Gynecology was our second largest U.S. surgical specialty in 2023 with procedure volume that grew to approximately 390,000 in 2023, compared to approximately 341,000 in 2022 and approximately 316,000 in 2021. Urology was our third largest U.S. surgical specialty in 2023 with procedure volume that grew to approximately 173,000 in 2023, compared to approximately 162,000 in 2022 and approximately 153,000 in 2021.
OUS da Vinci Procedures
Overall OUS procedure volume with da Vinci surgical systems grew to approximately 754,000 in 2023, compared to approximately 593,000 in 2022 and approximately 485,000 in 2021. Urology was our largest OUS specialty in 2023 with procedure volume that grew to approximately 381,000 in 2023, compared to approximately 316,000 in 2022 and approximately 264,000 in 2021. General surgery was our second largest and fastest growing OUS specialty in 2023 with procedure volume that grew to approximately 188,000 in 2023, compared to approximately 133,000 in 2022 and approximately 101,000 in 2021. Gynecology was our third largest OUS specialty in 2023 with procedure volume that grew to approximately 110,000 in 2023, compared to approximately 86,000 in 2022 and approximately 70,000 in 2021.
Ion Procedures
The adoption of robotic-assisted bronchoscopy using the Ion endoluminal system has the potential to grow if it can offer greater patient value than non-Ion alternatives and competitive total economics for healthcare providers.
In 2023, approximately 53,800 biopsy procedures were performed with Ion systems, compared to approximately 23,500 in 2022 and approximately 7,400 in 2021. The increase in our overall procedure volume in 2023 reflects a larger installed base of approximately 534 systems, an increase of 66% compared to the installed base of approximately 321 systems as of 2022. Currently, the vast majority of Ion biopsy procedures are performed in the U.S.
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Recent Business Events and Trends
Procedures
Overall. Total da Vinci procedures performed by our customers grew approximately 18% for the three months ended September 30, 2024, compared to approximately 19% for the three months ended September 30, 2023. Total da Vinci procedures performed by our customers grew approximately 17% for the nine months ended September 30, 2024, compared to approximately 22% for the nine months ended September 30, 2023. The third quarter 2024 procedure growth was largely attributable to growth in U.S. general surgery, OUS general surgery (particularly cancer), OUS urologic surgery, U.S. gynecologic surgery, and OUS gynecologic surgery.
U.S. Procedures. U.S. da Vinci procedures grew approximately 16% for the three months ended September 30, 2024, compared to approximately 17% for the three months ended September 30, 2023. U.S. da Vinci procedures grew approximately 15% for the nine months ended September 30, 2024, compared to approximately 20% for the nine months ended September 30, 2023. The third quarter 2024 U.S. procedure growth was largely attributable to strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and colorectal procedures. The number of U.S. da Vinci bariatric procedures performed declined modestly in the third quarter of 2024 compared to the third quarter of 2023. It is unclear whether the overall decline in the U.S. for surgical bariatric procedures will continue as patients evaluate new drug therapies and, if the decline continues, it is unclear what the rate of decline will be.
OUS Procedures. OUS da Vinci procedures grew approximately 24% for the three months ended September 30, 2024, compared to approximately 24% for the three months ended September 30, 2023. OUS da Vinci procedures grew approximately 22% for the nine months ended September 30, 2024, compared to approximately 27% for the nine months ended September 30, 2023. The third quarter 2024 OUS procedure growth was driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures. We saw strong procedure growth in Japan, Germany, the UK, India, France, and Italy during the third quarter of 2024. While geographic market maturity and levels of adoption differ by region and country, OUS da Vinci procedure growth is generally being driven by procedures beyond urology, reflecting surgeons’ growing adoption of general surgery, gynecologic, and thoracic procedures. In Korea, we believe that the number of procedures performed were significantly negatively impacted by doctor strikes in the country during the first nine months of 2024. The extent of the continued impact of these strikes on procedures in Korea remains uncertain.
System Demand
We placed 379 da Vinci surgical systems in the third quarter of 2024, compared to 312 systems in the third quarter of 2023. The increase in system placements reflects incremental demand for our next-generation da Vinci 5 system and continued demand for additional capacity by our customers as a result of procedure growth, partially offset by a smaller number of third-generation da Vinci systems available for trade-in. During the third quarter of 2024, we placed 110 da Vinci 5 systems.
We continue to see some customers challenged by staffing shortages, decreased government funding in healthcare (particularly in Europe), and other financial pressures. As a result, we expect our customers to continue to be cautious in their overall capital spending. In addition, system demand in China has been impacted by increasing robotic-assisted surgical system competition from domestic companies as well as a broader central government focus on systematic governance. Targeting the healthcare sector, this campaign was initially launched by the Chinese government in July 2023 and has resulted in heightened scrutiny by medical institutions with respect to initiating tenders, with some tenders being canceled or delayed without a timeline. In the third quarter of 2024, the effect of this campaign contributed to fewer systems being placed in China. Currently, the extent of the impact of this campaign on our business remains uncertain.
We expect that future placements of da Vinci surgical systems will be impacted by a number of factors: supply chain risks; economic and geopolitical factors; inflationary pressures; high interest rates; hospital staffing shortages; procedure growth rates; evolving system utilization and point-of-care dynamics; capital replacement trends, including a declining number of older generation systems available for trade-in transactions; additional reimbursements in various global markets, such as in Japan; the timing around governmental tenders and authorizations, as well as governmental actions impacting the tender process, such as the governance campaign in China; hospitals’ response to the evolving healthcare environment; the timing of when we receive regulatory clearance in our other OUS markets for our da Vinci Xi, da Vinci X, da Vinci SP, and da Vinci 5 surgical systems and related instruments; and the market response.
Demand may also be impacted by competition, including from companies that have introduced products in the field of robotic-assisted medical procedures or have made explicit statements about their efforts to enter the field including, but not limited to, the following companies: Beijing Surgerii Robotics Company Limited; CMR Surgical Ltd.; Harbin Sizhe Rui Intelligent Medical Equipment Co., Ltd.; Johnson & Johnson; Karl Storz SE & Co. KG; Medicaroid Corporation; Medtronic plc; meerecompany Inc.; Noah Medical; Shandong Weigao Group Medical Polymer Company Ltd.; Shanghai Microport Medbot (Group) Co., Ltd.; Shenzhen Edge Medical Co., Ltd.; and SS Innovations International, Inc.
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Many of the above factors will also impact future demand for our Ion endoluminal system, as we extend our commercial offering into diagnostics, along with additional factors associated with a new product introduction, including, but not limited to, our ability to optimize manufacturing and our supply chain, competition, clinical data to demonstrate value, and market acceptance.
Recent Product Introductions
Da Vinci 5. Da Vinci 5 builds on da Vinci Xi’s highly functional design, featuring force feedback technology and instruments that enable surgeons to sense and measure the force exerted on tissue during surgery. It also includes new surgeon controllers, powerful vibration and tremor controls, a next-generation 3D display and image system, and throughput and workflow enhancements, such as an integrated electrosurgical unit and insufflation capabilities technology. Da Vinci 5 has more than 10,000 times the computing power of da Vinci Xi, allowing for innovative new system capabilities and advanced digital experiences, including integration with our My Intuitive app, SimNow (virtual reality simulator), Case Insights (computational observer), and Intuitive Hub (edge computing system). Additionally, the redesigned console provides greater surgeon comfort with customizable positioning, allowing surgeons to find their best fit for surgical viewing and comfort, including the ability to sit completely upright.
E-200 Generator. The E-200 generator is an advanced electrosurgical generator designed to provide high-frequency energy for cutting, coagulation, and vessel sealing of tissues. The E-200 generator is integrated with the da Vinci 5 surgical system, is compatible with the da Vinci Xi and X surgical systems, and can also function as a standalone electrosurgical generator. When connected to a da Vinci system, the E-200 delivers high-frequency energy to da Vinci instruments, with control and status messages communicated through an Ethernet cable. The E-200 generator is also compatible with third-party handheld monopolar and bipolar instruments, as well as fingerswitch-equipped instruments and Intuitive-provided auxiliary footswitches. The E-200 generator includes the same advanced energy capability as the E-100 generator and supports the same vessel sealing instruments.
SureForm 30 Curved-Tip Stapler and Reloads. The 8 mm SureForm 30 Curved-Tip Stapler and reloads (gray, white, and blue) was designed to help surgeons better visualize and reach anatomy through a combination of the 8 mm diameter instrument shaft and jaws, 120-degree cone of wristed articulation, and the curved tip. As it fits through the 8 mm da Vinci surgical system instrument cannula, the stapler allows different angles for surgeons to approach patient anatomy. Consistent with our other SureForm staplers, the 8 mm SureForm 30 Curved-Tip Stapler integrates SmartFire technology, which makes automatic adjustments to the firing process as staples are formed and the transection is made. The technology makes more than 1,000 measurements per second, helping achieve a consistent staple line.
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Third Quarter 2024 Operational and Financial Highlights
Total revenue increased by 17% to $2.04 billion for the three months ended September 30, 2024, compared to $1.74 billion for the three months ended September 30, 2023.
Approximately 670,000 da Vinci procedures were performed during the three months ended September 30, 2024, an increase of 18% compared to approximately 567,000 da Vinci procedures for the three months ended September 30, 2023.
Approximately 25,000 Ion procedures were performed during the three months ended September 30, 2024, an increase of 73% compared to approximately 14,500 Ion procedures for the three months ended September 30, 2023.
Instruments and accessories revenue increased by 18% to $1.26 billion for the three months ended September 30, 2024, compared to $1.07 billion for the three months ended September 30, 2023.
Systems revenue increased by 17% to $445 million for the three months ended September 30, 2024, compared to $379 million during the three months ended September 30, 2023.
During the three months ended September 30, 2024, we placed 379 da Vinci surgical systems compared to 312 systems during the three months ended September 30, 2023. The third quarter 2024 da Vinci surgical system placements included 110 da Vinci 5 systems.
As of September 30, 2024, we had a da Vinci surgical system installed base of approximately 9,539 systems, an increase of 15% compared to an installed base of approximately 8,285 systems as of September 30, 2023.
Utilization of da Vinci surgical systems, measured in terms of procedures per system per year, increased 3% relative to the third quarter of 2023.
During the three months ended September 30, 2024, we placed 58 Ion systems compared to 55 systems during the three months ended September 30, 2023.
As of September 30, 2024, we had an Ion system installed base of approximately 736 systems, an increase of 50% compared to an installed base of approximately 490 systems as of September 30, 2023.
Gross profit as a percentage of revenue was 67.4% for the three months ended September 30, 2024, compared to 66.9% for the three months ended September 30, 2023.
Operating income increased by 24% to $577 million for the three months ended September 30, 2024, compared to $466 million during the three months ended September 30, 2023. Operating income included $176 million and $157 million of share-based compensation expense related to employee stock plans and $3.5 million and $12.6 million of intangible asset-related charges for the three months ended September 30, 2024, and 2023, respectively.
As of September 30, 2024, we had $8.31 billion in cash, cash equivalents, and investments. Cash, cash equivalents, and investments increased by $0.97 billion, compared to $7.34 billion as of December 31, 2023, primarily as a result of cash provided by operating activities and proceeds from stock option exercises and employee stock purchases, partially offset by cash used for capital expenditures and taxes paid related to net share settlements of equity awards.
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Results of Operations
The following discussion should be read in conjunction with our unaudited Condensed Consolidated Financial Statements (“Financial Statements”) and Notes thereto.
The following table sets forth, for the periods indicated, certain unaudited Condensed Consolidated Statements of Income information (in millions, except percentages):
Three Months Ended September 30,Nine Months Ended September 30,
 2024% of Total
Revenue
2023% of Total
Revenue
2024% of Total
Revenue
2023% of Total
Revenue
Revenue:
Product$1,709.2 84 %$1,450.8 83 %$4,978.9 84 %$4,332.4 83 %
Service328.9 16 %292.9 17 %959.7 16 %863.4 17 %
Total revenue2,038.1 100 %1,743.7 100 %5,938.6 100 %5,195.8 100 %
Cost of revenue:
Product555.4 27 %489.5 28 %1,649.2 28 %1,480.5 29 %
Service108.8 %87.0 %297.4 %263.2 %
Total cost of revenue664.2 33 %576.5 33 %1,946.6 33 %1,743.7 34 %
Product gross profit1,153.8 57 %961.3 55 %3,329.7 56 %2,851.9 54 %
Service gross profit220.1 10 %205.9 12 %662.3 11 %600.2 12 %
Gross profit1,373.9 67 %1,167.2 67 %3,992.0 67 %3,452.1 66 %
Operating expenses:
Selling, general and administrative
510.6 25 %452.0 26 %1,527.4 26 %1,396.8 27 %
Research and development286.0 14 %249.4 14 %850.6 14 %738.7 14 %
Total operating expenses796.6 39 %701.4 40 %2,378.0 40 %2,135.5 41 %
Income from operations577.3 28 %465.8 27 %1,614.0 27 %1,316.6 25 %
Interest and other income, net93.7 %56.2 %250.0 %126.4 %
Income before taxes671.0 33 %522.0 30 %1,864.0 31 %1,443.0 27 %
Income tax expense100.4 %102.2 %214.5 %236.4 %
Net income570.6 28 %419.8 24 %1,649.5 28 %1,206.6 23 %
Less: net income attributable to noncontrolling interest in joint venture5.5 — %4.1 — %12.6 — %14.8 — %
Net income attributable to Intuitive Surgical, Inc.$565.1 28 %$415.7 24 %$1,636.9 28 %$1,191.8 23 %
Total Revenue
Total revenue increased by 17% to $2.04 billion for the three months ended September 30, 2024, compared to $1.74 billion for the three months ended September 30, 2023, resulting from 18% higher instruments and accessories revenue, 17% higher systems revenue, and 12% higher service revenue.
Total revenue increased by 14% to $5.94 billion for the nine months ended September 30, 2024, compared to $5.20 billion for the nine months ended September 30, 2023, resulting from 17% higher instruments and accessories revenue, 9% higher systems revenue, and 11% higher service revenue.
We generally sell our products and services in local currencies where we have direct distribution channels. Revenue denominated in foreign currencies as a percentage of total revenue was approximately 24% and 25% for the three and nine months ended September 30, 2024, and 24% and 25% for the three and nine months ended September 30, 2023, respectively. Fluctuations in foreign currency exchange rates had an unfavorable impact on OUS total revenue of $2 million and $29 million for the three and nine months ended September 30, 2024, respectively. Fluctuations in foreign currency exchange rates had a favorable impact on OUS total revenue of $8 million and an unfavorable impact on OUS total revenue of $38 million for the three and nine months ended September 30, 2023, respectively. The impact of fluctuations in foreign currency exchange rates was determined by comparing current period revenue converted to USD using exchange rates that were effective in the comparable prior year period, net of the impacts from foreign currency hedging.
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Revenue generated in the U.S. accounted for 68% and 66% of total revenue for the three and nine months ended September 30, 2024, respectively, and 68% and 66% of total revenue for the three and nine months ended September 30, 2023, respectively. We believe that U.S. revenue has accounted for the large majority of total revenue due to U.S. patients’ ability to choose their provider and method of treatment, reimbursement structures supportive of innovation and MIS, and our initial investments focused on U.S. infrastructure. We have been investing in our business in OUS markets, and our OUS procedures have grown faster in proportion to U.S. procedures. We expect that our OUS procedures and revenue will make up a greater portion of our business in the long term.
The following table summarizes our revenue and system unit placements for the three and nine months ended September 30, 2024, and 2023 (in millions, except percentages and unit placements):
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Revenue
Instruments and accessories$1,264.2 $1,071.4 $3,667.5 $3,132.9 
Systems445.0 379.4 1,311.4 1,199.5 
Total product revenue1,709.2 1,450.8 4,978.9 4,332.4 
Service
328.9 292.9 959.7 863.4 
Total revenue$2,038.1 $1,743.7 $5,938.6 $5,195.8 
U.S.$1,379.4 $1,180.2 $3,937.1 $3,432.6 
OUS658.7 563.5 2,001.5 1,763.2 
Total revenue$2,038.1 $1,743.7 $5,938.6 $5,195.8 
% of Revenue – U.S.68%68%66%66%
% of Revenue – OUS32%32%34%34%
Instruments and accessories$1,264.2 $1,071.4 $3,667.5 $3,132.9 
Service
328.9 292.9 959.7 863.4 
Operating lease revenue167.8 127.1 472.7 361.8 
Total recurring revenue$1,760.9 $1,491.4 $5,099.9 $4,358.1 
% of Total revenue 86%86%86%84%
Da Vinci Surgical System Placements by Region
U.S. unit placements219 159 516 457 
OUS unit placements160 153 517 498 
Total unit placements*379 312 1,033 955 
*Systems placed under fixed-payment operating lease arrangements (included in total unit placements)79 70 227 212 
*Systems placed under usage-based operating lease arrangements (included in total unit placements)141 93 327 246 
Da Vinci Surgical System Placements involving System Trade-ins
Unit placements involving trade-ins38 62 88 189 
Unit placements not involving trade-ins341 250 945 766 
Ion System Placements**58 55 202 169 
**Systems placed under fixed-payment operating lease arrangements (included in total unit placements)19 17 61 49 
**Systems placed under usage-based operating lease arrangements (included in total unit placements)17 10 54 39 
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Product Revenue
Three Months Ended September 30, 2024
Product revenue increased by 18% to $1.71 billion for the three months ended September 30, 2024, compared to $1.45 billion for the three months ended September 30, 2023.
Instruments and accessories revenue increased by 18% to $1.26 billion for the three months ended September 30, 2024, compared to $1.07 billion for the three months ended September 30, 2023. The increase in instruments and accessories revenue was primarily driven by approximately 18% higher da Vinci procedure volume and approximately 73% higher Ion procedure volume. The third quarter 2024 U.S. da Vinci procedure growth was approximately 16%, driven primarily by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and colorectal procedures. The number of U.S. da Vinci bariatric procedures performed declined modestly in the third quarter of 2024 compared to the third quarter of 2023. It is unclear whether the overall decline in the U.S. for surgical bariatric procedures will continue as patients evaluate new drug therapies and, if the decline continues, it is unclear what the rate of decline will be. The third quarter 2024 OUS da Vinci procedure growth was approximately 24%, driven by growth in general surgery procedures, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures. Geographically, the third quarter 2024 OUS da Vinci procedure growth was driven by several markets with particular strength in Japan, Germany, the UK, India, France, and Italy.
Systems revenue increased by 17% to $445 million for the three months ended September 30, 2024, compared to $379 million for the three months ended September 30, 2023. The higher third quarter 2024 system revenue was primarily driven by an increase in da Vinci system placements, higher operating lease revenue, and higher third quarter 2024 ASPs, partially offset by a higher proportion of da Vinci system placements under operating leases.
During the third quarter of 2024, 379 da Vinci surgical systems were placed compared to 312 systems during the third quarter of 2023. By geography, 219 systems were placed in the U.S., 65 in Europe, 74 in Asia, and 21 in other markets during the third quarter of 2024, compared to 159 systems placed in the U.S., 60 in Europe, 72 in Asia, and 21 in other markets during the third quarter of 2023. The increase in system placements was primarily driven by 110 da Vinci 5 system placements and continued demand for additional capacity by our customers as a result of procedure growth, partially offset by a smaller number of third-generation da Vinci systems available for trade-in. As of September 30, 2024, we had a da Vinci surgical system installed base of approximately 9,539 systems, compared to an installed base of approximately 8,285 systems as of September 30, 2023. The incremental system installed base reflects continued procedure growth and further customer validation that robotic-assisted surgery addresses their quintuple aim objectives.
The following table summarizes our da Vinci system placements and systems installed at customers under leasing arrangements for three months ended September 30, 2024, and 2023:
Three Months Ended September 30,
20242023
Da Vinci System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements79 70 
Usage-based operating lease arrangements141 93 
Total da Vinci system placements under operating lease arrangements220 163 
% of Total da Vinci system placements58%52%
Sales-type lease arrangements13 11 
Total da Vinci system placements under leasing arrangements233 174 
Da Vinci System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements1,289 1,151 
Usage-based operating lease arrangements1,352 913 
Total da Vinci system installed base under operating leasing arrangements2,641 2,064 
Operating lease revenue, including the contribution from Ion systems, was $168 million for the three months ended September 30, 2024, of which $87 million was variable lease revenue related to usage-based arrangements, compared to $127 million for the three months ended September 30, 2023, of which $54 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $24 million for the three months ended September 30, 2024, compared to $17 million for the three months ended September 30, 2023. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
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The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.51 million for the three months ended September 30, 2024, compared to approximately $1.40 million for the three months ended September 30, 2023. The higher third quarter 2024 ASP was largely driven by favorable product mix and fewer trade-ins, partially offset by higher pricing discounts. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the third quarter of 2024, 58 Ion systems were placed compared to 55 systems during the third quarter of 2023. By geography, 53 systems were placed in the U.S., three in Europe, and two in Asia during third quarter of 2024, compared to 55 systems placed in the U.S. during the third quarter of 2023. The increase in system placements was primarily driven by the demand for additional capacity by our customers due to procedure growth and OUS expansion. As of September 30, 2024, we had an Ion system installed base of approximately 736 systems, compared to an installed base of approximately 490 systems as of September 30, 2023.
The following table summarizes our Ion system placements and systems installed at customers under leasing arrangements for three months ended September 30, 2024, and 2023:
Three Months Ended September 30,
20242023
Ion System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements19 17 
Usage-based operating lease arrangements17 10 
Total Ion system placements under operating lease arrangements36 27 
% of Total Ion system placements62%49%
Sales-type lease arrangements
— 
Total Ion system placements under leasing arrangements38 27 
Ion System Installed Base under Operating Leasing Arrangements
Fixed-payment operating lease arrangements117 92 
Usage-based operating lease arrangements179 102 
Total Ion system installed base under operating leasing arrangements296 194 
Nine Months Ended September 30, 2024
Product revenue increased by 15% to $4.98 billion for the nine months ended September 30, 2024, compared to $4.33 billion for the nine months ended September 30, 2023.
Instruments and accessories revenue increased by 17% to $3.67 billion for the nine months ended September 30, 2024, compared to $3.13 billion for the nine months ended September 30, 2023. The increase in instruments and accessories revenue was primarily driven by approximately 17% higher da Vinci procedure volume, approximately 81% higher Ion procedure volume, and higher pricing for da Vinci instruments and accessories, partially offset by customer buying patterns. The year-to-date 2024 U.S. da Vinci procedure growth was approximately 15%, driven by strong growth in general surgery procedures, most notably cholecystectomy, hernia repair, and colorectal procedures. The number of U.S. bariatric procedures performed declined modestly in the first nine months of 2024 compared with the first nine months of 2023. It is unclear whether the decline in U.S. bariatric procedures will continue to be a temporary pause as patients evaluate new drug therapies or if growth in U.S. bariatric procedures will return in future periods. The year-to-date 2024 OUS da Vinci procedure growth was approximately 22%, driven by growth in general surgery, most notably colorectal and hernia repair procedures, urologic procedures, most notably prostatectomy and partial nephrectomy procedures, and gynecologic procedures. Geographically, the year-to-date 2024 OUS da Vinci procedure growth was driven by several markets with particular strength in Germany, the UK, India, and Italy.
Systems revenue increased by 9% to $1.31 billion for the nine months ended September 30, 2024, compared to $1.20 billion for the nine months ended September 30, 2023. The higher year-to-date 2024 system revenue was primarily driven by higher operating lease revenue, an increase in da Vinci system placements, and higher lease buyout revenue, partially offset by a higher proportion of da Vinci system placements under operating leases.
During the nine months ended September 30, 2024, a total of 1,033 da Vinci surgical systems were placed compared to 955 systems during the nine months ended September 30, 2023. By geography, 516 systems were placed in the U.S., 220 in Europe, 225 in Asia, and 72 in other markets during the nine months ended September 30, 2024, compared to 457 systems placed in the
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U.S., 237 in Europe, 195 in Asia, and 66 in other markets during the nine months ended September 30, 2023. The increase in system placements was primarily driven by 188 da Vinci 5 system placements and continued demand for additional capacity by our customers as a result of procedure growth, partially offset by a smaller number of third-generation da Vinci systems available for trade-in.
The following table summarizes our da Vinci system placements at customers under leasing arrangements for nine months ended September 30, 2024, and 2023:
Nine Months Ended September 30,
20242023
Da Vinci System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements227 212 
Usage-based operating lease arrangements327 246 
Total da Vinci system placements under operating lease arrangements554 458 
% of Total da Vinci system placements54%48%
Sales-type lease arrangements45 31 
Total da Vinci system placements under leasing arrangements599 489 
Operating lease revenue, including the contribution from Ion systems, was $473 million for the nine months ended September 30, 2024, of which $237 million was variable lease revenue related to usage-based arrangements, compared to $362 million for the nine months ended September 30, 2023, of which $153 million was variable lease revenue related to usage-based arrangements. Revenue from Lease Buyouts was $81 million for the nine months ended September 30, 2024, compared to $54 million for the nine months ended September 30, 2023. We expect revenue from Lease Buyouts to fluctuate period to period depending on the timing of when, and if, customers choose to exercise buyout options embedded in their leases.
The da Vinci surgical system ASP, excluding systems placed under fixed-payment or usage-based operating lease arrangements, Ion systems, and the impact of specified-price trade-in rights, was approximately $1.44 million for the nine months ended September 30, 2024, compared to approximately $1.42 million for the nine months ended September 30, 2023. The higher year-to-date 2024 ASP was largely driven by favorable product mix and fewer trade-ins, partially offset by higher pricing discounts and an unfavorable geographic mix. ASP fluctuates from period to period based on geographic and product mix, product pricing, systems placed involving trade-ins, and changes in foreign exchange rates.
During the nine months ended September 30, 2024, 202 Ion systems were placed compared to 169 systems during the nine months ended September 30, 2023. By geography, 191 systems were placed in the U.S., nine in Europe, and two in Asia during nine months ended September 30, 2024, compared to 168 systems placed in the U.S. and one in Europe during the nine months ended September 30, 2023. The increase in system placements was primarily driven by the demand for additional capacity by our customers due to procedure growth and OUS expansion. As of September 30, 2024, we had an Ion system installed base of approximately 736 systems, compared to an installed base of approximately 490 systems as of September 30, 2023.
The following table summarizes our Ion system placements at customers under leasing arrangements for nine months ended September 30, 2024, and 2023:
Nine Months Ended September 30,
20242023
Ion System Placements Under Leasing Arrangements
Fixed-payment operating lease arrangements61 49 
Usage-based operating lease arrangements54 39 
Total Ion system placements under operating lease arrangements115 88 
% of Total Ion system placements57%52%
Sales-type lease arrangements
Total Ion system placements under leasing arrangements117 93 
Service Revenue
Service revenue increased by 12% to $329 million for the three months ended September 30, 2024, compared to $293 million for the three months ended September 30, 2023. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue, partially offset by a higher proportion of early-stage usage-based operating lease arrangements where procedures are ramping up.
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Service revenue increased by 11% to $960 million for the nine months ended September 30, 2024, compared to $863 million for the nine months ended September 30, 2023. The increase in service revenue was primarily driven by a larger installed base of systems producing service revenue, partially offset by a higher proportion of early-stage usage-based operating lease arrangements where procedures are ramping up.
Gross Profit
Product
Product gross profit for the three months ended September 30, 2024, increased by 20% to $1.15 billion, representing 67.5% of product revenue, compared to $0.96 billion, representing 66.3% of product revenue, for the three months ended September 30, 2023. The higher product gross profit margin for the three months ended September 30, 2024, was primarily driven by leverage on fixed overhead costs, partially offset by higher costs associated with our da Vinci 5 surgical system launch.
Product gross profit for the nine months ended September 30, 2024, increased by 17% to $3.33 billion, representing 66.9% of product revenue, compared to $2.85 billion, representing 65.8% of product revenue, for the nine months ended September 30, 2023. The higher product gross profit margin for the nine months ended September 30, 2024, was primarily driven by leverage on fixed overhead costs and lower logistics costs, partially offset by higher costs associated with our da Vinci 5 surgical system launch.
Product gross profit for the three and nine months ended September 30, 2024, included share-based compensation expense of $24.9 million and $71.2 million, respectively, compared with $22.6 million and $60.3 million for the three and nine months ended September 30, 2023, respectively. Product gross profit for the three and nine months ended September 30, 2024, included intangible assets amortization expense of $2.2 million and $9.3 million, respectively, compared with $3.6 million and $10.1 million for the three and nine months ended September 30, 2023, respectively.
Service
Service gross profit for the three months ended September 30, 2024, increased by 7% to $220 million, representing 66.9% of service revenue, compared to $206 million, representing 70.3% of service revenue, for the three months ended September 30, 2023. The higher service gross profit for the three months ended September 30, 2024, 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, 2024, was primarily driven by higher inventory reserves and an unfavorable repair mix.
Service gross profit for the nine months ended September 30, 2024, increased by 10% to $662 million, representing 69.0% of service revenue, compared to $600 million, representing 69.5% of service revenue, for the nine months ended September 30, 2023. The higher service gross profit for the nine months ended September 30, 2024, was primarily driven by higher service revenue, reflecting a larger installed base of da Vinci surgical systems, and a lower service gross profit margin. The lower service gross profit margin for the nine months ended September 30, 2024, was primarily driven by higher inventory reserves and an unfavorable repair mix, partially offset by overhead leverage from higher repair volume.
Service gross profit for the three and nine months ended September 30, 2024, included share-based compensation expense of $7.9 million and $22.5 million, respectively, compared with $7.3 million and $21.3 million for the three and nine months ended September 30, 2023, respectively. Service gross profit for the three and nine months ended September 30, 2024, included intangible assets amortization expense of $0.2 million and $0.6 million, respectively, compared with $0.1 million and $0.5 million for the three and nine months ended September 30, 2023, respectively.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include costs for sales, marketing, and administrative personnel, sales and marketing activities, trade show expenses, legal expenses, regulatory fees, and general corporate expenses.
Selling, general and administrative expenses for the three months ended September 30, 2024, increased by 13% to $511 million, compared to $452 million for the three months ended September 30, 2023. The increase in selling, general and administrative expenses for the three months ended September 30, 2024, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense, higher legal expenses, higher litigation charges, and increased infrastructure costs to support our growth.
Selling, general, and administrative expenses for the nine months ended September 30, 2024, increased by 9% to $1.53 billion, compared to $1.40 billion for the nine months ended September 30, 2023. The increase in selling, general, and administrative expenses for the nine months ended September 30, 2024, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense, increased infrastructure costs to support our growth, higher litigation charges, and higher legal expenses.
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Selling, general, and administrative expenses for the three and nine months ended September 30, 2024, included share-based compensation expense of $77.6 million and $225.4 million, respectively, compared with $71.9 million and $206.6 million for the three and nine months ended September 30, 2023, respectively. Selling, general, and administrative expenses for the three and nine months ended September 30, 2024, included intangible assets amortization expense of $0.6 million and $2.2 million, respectively, compared with $0.8 million and $2.5 million for the three and nine months ended September 30, 2023, respectively.
Research and Development Expenses
Research and development costs are expensed as incurred. Research and development expenses include costs associated with the design, development, testing, and significant enhancement of our products. Our main product development initiatives include multi-port, Ion, and SP platform investments and our digital products and services.
Research and development expenses for the three months ended September 30, 2024, increased by 15% to $286 million, compared to $249 million for the three months ended September 30, 2023. Research and development expenses for the nine months ended September 30, 2024, increased by 15% to $851 million, compared to $739 million for the nine months ended September 30, 2023. The increase in research and development expenses for the three and nine months ended September 30, 2024, was primarily driven by higher headcount and personnel-related expenses, including share-based compensation expense, and other project costs incurred to support a broader set of product development initiatives, partially offset by lower intangible asset charges.
Research and development expenses for the three and nine months ended September 30, 2024, included share-based compensation expense of $65.4 million and $188.7 million, respectively, compared with $55.3 million and $157.7 million for the three and nine months ended September 30, 2023, respectively. Research and development expenses for the three and nine months ended September 30, 2024, included intangible asset charges of $0.5 million and $1.7 million, respectively, compared with $8.1 million and $11.0 million for the three and nine months ended September 30, 2023, respectively.
Research and development expenses fluctuate with project timing. Based upon our broader set of product development initiatives and the stage of the underlying projects, we expect to continue to make substantial investments in our product development initiatives through research and development and anticipate that research and development expenses will continue to increase in the future.
Interest And Other Income, Net
Interest and other income, net, for the three months ended September 30, 2024, increased by 67% to $93.7 million, compared to $56.2 million for the three months ended September 30, 2023. The increase in interest and other income, net, for the three months ended September 30, 2024, was primarily driven by higher interest income earned due to an increase in average interest rates and higher average cash and investment balances, as well as foreign exchange rate gains (compared to foreign exchange rate losses for the three months ended September 30, 2023).
Interest and other income, net, for the nine months ended September 30, 2024, increased by 98% to $250.0 million, compared to $126.4 million for nine months ended September 30, 2023. The increase in interest and other income, net, for the nine months ended September 30, 2024, was primarily driven by higher interest income earned due to an increase in average interest rates and higher average cash and investment balances, as well as unrealized gains on investments resulting from strategic arrangements (compared to unrealized losses on investments resulting from strategic arrangements for the nine months ended September 30, 2023).
Income Tax Expense
Income tax expense for the three months ended September 30, 2024, was $100.4 million, or 15.0% of income before taxes, compared to $102.2 million, or 19.6% of income before taxes, for the three months ended September 30, 2023. Income tax expense for the nine months ended September 30, 2024, was $214.5 million, or 11.5% of income before taxes, compared to $236.4 million, or 16.4% of income before taxes, for the nine months ended September 30, 2023.
Our lower effective tax rate for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily due to higher federal research and development credit benefits, the release of unrecognized tax benefits due to expiration of the statute of limitations in various jurisdictions, and higher excess tax benefits, as discussed below, partially offset by higher foreign taxes.
Our lower effective tax rate for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to higher excess tax benefits, as discussed below, and lower U.S. taxes on foreign earnings, partially offset by higher foreign taxes.
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Our provision for income taxes for the three months ended September 30, 2024, and 2023, included excess tax benefits associated with employee equity plans of $42.2 million and $22.0 million, respectively, which reduced our effective tax rate by 6.3 and 4.2 percentage points, respectively. Our provision for income taxes for the nine months ended September 30, 2024, and 2023, included excess tax benefits associated with employee equity plans of $189.0 million and $86.2 million, respectively, which reduced our effective tax rate by 10.1 and 6.0 percentage points, respectively. The amount of excess tax benefits or deficiencies will fluctuate from period to period based on the price of our stock, the volume of share-based awards settled or vested, and the value assigned to employee equity awards under GAAP, which results in increased income tax expense volatility.
In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate. On December 15, 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%. The OECD issued Pillar Two model rules and continues to release guidance on these rules. The inclusive framework calls for tax law changes by participating countries to take effect in 2024 and 2025. Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax. We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there is no material impact to our tax provision for the three and nine months ended September 30, 2024. We will continue to evaluate the impact of these tax law changes on future reporting periods.
We file 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 our unrecognized tax benefits could change due to activities of various tax authorities, including evolving interpretations of existing tax laws in the jurisdictions in which we operate, potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect our effective tax rate in the period in which they change. Due to the uncertainty related to the timing and potential outcome of audits, we cannot estimate the range of reasonably possible changes in unrecognized tax benefits that may occur in the next 12 months.
We are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. Management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. If any issues addressed in our tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.
Liquidity and Capital Resources
Sources and Uses of Cash and Cash Equivalents
Our principal source of liquidity is cash provided by our operations and by the issuance of common stock through the exercise of stock options and our employee stock purchase program. Cash and cash equivalents plus short- and long-term investments increased by $0.97 billion to $8.31 billion as of September 30, 2024, from $7.34 billion as of December 31, 2023, primarily as a result of cash provided by operating activities and proceeds from stock option exercises and employee stock purchases, partially offset by cash used for capital expenditures and taxes paid related to net share settlements of equity awards.
Our cash requirements depend on numerous factors, including market acceptance of our products, the resources we devote to developing and supporting our products, and other factors. We expect to continue to devote substantial resources to expand procedure adoption and acceptance of our products. We have made substantial investments in our commercial operations, product development activities, facilities, and intellectual property. Based on our business model, we anticipate that we will continue to be able to fund future growth through cash provided by our operations. We believe that our current cash, cash equivalents, and investment balances, together with income to be derived from our business, will be sufficient to meet our liquidity requirements for the foreseeable future. However, we may experience reduced cash flow from operations as a result of macroeconomic and geopolitical headwinds.
See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K for the fiscal year ended December 31, 2023, for discussion on the impact of interest rate risk and market risk on our investment portfolio.
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Condensed Consolidated Cash Flow Data
The following table summarizes our cash flows for the nine months ended September 30, 2024, and 2023 (in millions):
Nine Months Ended September 30,
2024
2023
Net cash provided by (used in):
Operating activities$1,592.4 $1,585.5 
Investing activities(2,008.6)684.1 
Financing activities101.5 (256.1)
Effect of exchange rates on cash, cash equivalents, and restricted cash(9.1)8.7 
Net increase (decrease) in cash, cash equivalents, and restricted cash$(323.8)$2,022.2 
Operating Activities
For the nine months ended September 30, 2024, net cash provided by operating activities of $1.59 billion was less than our net income of $1.65 billion, primarily due to the following factors:
1.Our net income included non-cash charges of $721 million, consisting primarily of share-based compensation of $500 million and depreciation expense and losses on the disposal of property, plant, and equipment of $324 million, partially offset by deferred income tax benefits of $105 million.
2.The non-cash charges outlined above were offset by changes in operating assets and liabilities that resulted in $779 million of cash used in operating activities during the nine months ended September 30, 2024. Inventory, including the transfer of equipment from inventory to property, plant, and equipment, increased by $651 million, primarily to address the growth in our business, including the expansion of our leasing business, and to mitigate risks of disruption that could arise from global supply chain shortages. Refer to Note 4 to the Financial Statements for further details in the supplemental cash flow information. Prepaid and other assets increased by $80 million, primarily driven by an increase in deferred commissions as a result of operating leasing arrangements; accrued compensation and employee benefits decreased by $59 million, primarily due to payments of 2023 incentive compensation and payments for stock purchases related to our ESPP; and accounts receivable increased by $22 million, primarily due to the timing of billings and collections. The unfavorable impact of these items on cash provided by operating activities was partially offset by an increase in accounts payable of $21 million, primarily due to the timing of invoicing and payments.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024, consisted primarily of purchases of investments, net of proceeds from maturities and sales of investments, of $1.21 billion and $799 million paid for the acquisition of property, plant, and equipment. We invest predominantly in high quality, fixed income securities. Our investment portfolio may, at any time, contain investments in money market funds, U.S. treasury and U.S. government agency securities, high-quality corporate notes and bonds, commercial paper, non-U.S. government agency securities, and taxable and tax-exempt municipal notes.
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024, consisted primarily of cash proceeds from stock option exercises and employee stock purchases of $368 million, partially offset by cash used for taxes paid on behalf of employees related to net share settlements of vested employee equity awards of $258 million.
Capital Expenditures
Our capital expenditures are increasing as we continue to build the Company to supply our customers with highly differentiated products manufactured in highly automated factories to facilitate outstanding performance in product quality, availability, and cost. A significant portion of this investment involves the construction of facilities to expand our manufacturing and commercial capabilities. We have also been vertically integrating key technologies to develop a more robust supply chain and bring important products to market at attractive price points. These investments include increased ownership of our imaging pipelines and investments in strategic instruments and accessories technologies that allow us to serve our customers better. We expect these capital investments to range between $1 billion and $1.2 billion in 2024, the majority of which will be facilities-related investments. We intend to fund these capital investments with cash generated from operations.
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Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate our critical accounting estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no new or material changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, that are of significance, or potential significance, to the Company.
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the nine months ended September 30, 2024, compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 4.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
The information included in Note 8 to the Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Quarterly Report is incorporated herein by reference.
ITEM 1A.    RISK FACTORS
You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which could materially affect our business, financial position, or future results of operations. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the period covered by this report.
(c) Issuer Purchases of Equity Securities
The table below summarizes our stock repurchase activity for the quarter ended September 30, 2024:
Fiscal PeriodTotal Number of
Shares
Repurchased
Average
Price Paid
Per Share
Total Number of
Shares Purchased As
Part of a Publicly
Announced Program
Approximate Dollar
Amount of Shares That
May Yet be Purchased
Under the Program (1)
July 1 to July 31, 2024
— $— — $1.1  billion
August 1 to August 31, 2024
— $— — $1.1  billion
September 1 to September 30, 2024
— $— — $1.1  billion
Total during quarter ended September 30, 2024
— $— — 
(1) Since March 2009, we have had an active stock Repurchase Program. As of September 30, 2024, our Board had authorized an aggregate amount of up to $10.0 billion for stock repurchases, of which the most recent authorization occurred in July 2022, when our Board increased the authorized amount available under our stock Repurchase Program to $3.5 billion. The remaining $1.1 billion represents the amount available to repurchase shares under the authorized stock Repurchase Program as of September 30, 2024. The authorized stock Repurchase Program does not have an expiration date.
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5.    OTHER INFORMATION
Rule 10b5-1 Plans
On August 13, 2024, Myriam J. Curet, M.D., FACS, the Company’s Executive Vice President and Chief Medical Officer, adopted a Rule 10b5-1 trading plan. Dr. Curet’s trading plan provides for the potential sale of up to 33,581 shares of the Company’s common stock, including the potential exercise and sale of up to 21,966 shares of the Company’s common stock subject to stock options, until August 13, 2025. This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s policies regarding transactions in the Company’s securities.
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ITEM 6.    EXHIBITS
Exhibit
Number
Exhibit
Description
3.1(1)
3.2(2)
3.3(3)
31.1
31.2
32.1
32.2
101
The following materials from Intuitive Surgical, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the unaudited Condensed Consolidated Balance Sheets, (ii) the unaudited Condensed Consolidated Statements of Comprehensive Income, (iii) the unaudited Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements (unaudited), tagged at Level I through IV.
104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL and contained in Exhibit 101.
1.Incorporated by reference to Exhibit 3.1 filed with the Company’s Quarterly Report on Form 10-Q filed on July 23, 2020 (File No. 000-30713).
2.Incorporated by reference to Exhibit 3.1 filed with the Company’s Quarterly Report on Form 10-Q filed on October 20, 2021 (File No. 000-30713).
3.Incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K filed on February 1, 2021 (File No. 000-30713).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTUITIVE SURGICAL, INC.
By: 
/s/ JAMIE E. SAMATH
Jamie E. Samath
Senior Vice President and Chief Financial Officer
(Principal Financial Officer and duly authorized signatory)
Date: October 18, 2024
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