Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $3 billion | 22% growth |
| Non-GAAP EPS | $3 per share | 25% growth |
| Non-GAAP Operating Margin | 42% | 41% excluding tariff refund |
| Da Vinci System Placements | 546 | 28% increase |
| Ion System Placements | 56 | up from 50 |
Guidance and outlook
- Full year 2026 procedure growth forecast narrowed to a range of 14% to 15%.
- Non-GAAP gross profit margin forecast updated to a range of 68.7% and 69.3% of revenue.
- Non-GAAP operating expense growth expected to be 11% to 13%.
- Non-GAAP other income forecast between $300 million and $310 million.
- Non-GAAP effective tax rate in Q4 expected to be 22%, plus or minus 50 basis points.
How management sounded
Positive (+6 on our -10 to +10 scale). Management reported strong procedure growth and system placements, raised the lower end of their procedure growth guidance, and highlighted successful innovation adoption, though they noted some headwinds from pricing actions and litigation. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
U.S. Procedure Growth
Asked: Larry Biegelsen (Wells Fargo) asked if the 10% U.S. growth was a temporary lull and if innovations/pricing would accelerate growth.
Answer: Management noted they are focused on adding capacity, expanding into ASCs, and progressing cardiac/breast procedures, emphasizing that the addressable opportunity remains significant.
Pricing Actions/Elasticity
Asked: Robert Marcus (JPMorgan) asked about the timeline for pricing impacts and potential volume elasticity.
Answer: Management expects the impact to build progressively through 2027 and believes the pricing actions will drive elasticity in high-volume benign procedures where cost is a barrier.
ASC Strategy/Competition
Asked: Rick Wise (Stifel) asked about ASC progress and competitive dynamics regarding modular systems.
Answer: Management stated they believe a cart-based architecture is the best balance of capability and usability and that they are well-positioned to serve ASC needs with their current portfolio.
Force Feedback Adoption
Asked: Adam Maeder (Piper Sandler) asked about the adoption of force sensing instruments.
Answer: Management stated that about 8% of da Vinci 5 cases involved Force Feedback in Q3 and they expect penetration to increase as they build evidence for the value proposition.
What to watch before the next call
- Implementation of pricing actions in China and the rollout of extended-use instruments starting in the first half of 2027.
- Progress on FDA clearances for new indications and instruments, including the SP vessel sealer.
- Court approval of the $450 million litigation settlement.
