Intuitive cuts da Vinci revenue per procedure 3% to 5%, stock falls 8% to $405 despite a beat

The market sold a beat

Intuitive, the Sunnyvale maker of the da Vinci surgical robot, reported its biggest quarter in at least three years on October 20↗: revenue of $3.05 billion, up 22%, against a $2.91 billion consensus, and adjusted earnings of $3.00 a share against a $2.65 estimate ¹³.

Reported profit fell to $523 million, or $1.49 a share, because the accounts absorbed a $450 million antitrust settlement, worth 99 cents a share after tax ¹. The stock still dropped about 8% in premarket trading on October 21↗, to roughly $405, and is down about 23% in 2026, on pace for its worst year since 2022 ²³.

The number the release never printed

The figure that moved the money came on the call, not in the tables. Chief financial officer Jamie Samath said pricing actions finalized this quarter, a US extended-use instrument program rolling out from the first half of 2027, and a China price cut taking effect in November will together reduce da Vinci instrument and accessory revenue per procedure by 3% to 5% on constant mix↗ ⁴⁵.

That stream is the core of the company: instruments and accessories brought in $1.80 billion this quarter, up 18%, recurring revenue is 84% of the total, and each da Vinci procedure carries about $1,860 of instrument revenue today ¹⁴. If volume does not replace price, the cut is worth roughly $54 million to $90 million a quarter ¹⁴.

The settlement itself was reported here on October 20; the call priced the other side of it (/article/intuitive-surgical-settles-hospitals-da-vinci-antitrust-case-for-450-million-the-conduct-terms-are-unread) ¹⁴. The demand backdrop explains the timing. US da Vinci procedures grew 10%, international ones 20%, and the 2026 growth guide narrowed to 14% to 15% from 13.5% to 15.5% ¹⁴. A year ago, procedures grew 18% ².

A discount read as offense or defense

Management calls the cut "a deliberate choice to broaden adoption in high-volume benign procedures," landing on an installed base of 12,094 da Vinci systems, 12% larger than a year ago, with 546 new placements in the quarter ¹⁴. The play is not new: the 2020 extended-use program carried an estimated 7% hit, this one 3% to 5%, and the gross-margin guide still rose, to 68.7% to 69.3% ¹⁴.

The bear case answers that Johnson & Johnson's▼−0.61% — Johnson & Johnson, down 0.61 percent today Ottava robot won FDA authorization on July 22↗ for cholecystectomy and hernia repair, the same benign procedures now being discounted, and Medtronic's·−1.69% — Medtronic, down 1.69 percent as of its last quote Hugo was cleared for urology in December 2025 ⁶⁷. Wall Street trimmed rather than fled: RBC cut its target to $550 from $575 but kept Outperform, JPMorgan raised to $475, and the average target of $478 sits well above $405 ³⁸.

What the next year prices

Three dated events decide the argument. China prices fall this quarter. The country-by-country rollout builds through 2027, under a 35% to 40% operating-margin framework Samath says leans toward investment ⁴⁵. And a judge rules on the settlement next year, its injunctive terms, the part hospitals can actually use, still unpublished ¹⁴.

Intuitive bought back $2.94 billion of stock at an average $377 in the quarter, more than six times the settlement, and ended with $6.80 billion in cash ¹. It spent 25 years selling razors at full price; this quarter it cut the price of the blades ¹.