Medical technology company Intuitive Surgical (NASDAQ: ISRG) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 23% year on year to $2.77 billion. Its non-GAAP profit of $2.50 per share was 18.7% above analysts’ consensus estimates.

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Company Overview

Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Intuitive Surgical’s 18.4% annualized revenue growth over the last five years was impressive. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Intuitive Surgical’s annualized revenue growth of 20.2% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Intuitive Surgical reported robust year-on-year revenue growth of 23%, and its $2.77 billion of revenue topped Wall Street estimates by 5.8%.

Looking ahead, sell-side analysts expect revenue to grow 12% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and implies the market sees success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Intuitive Surgical’s adjusted operating margin has risen over the last 12 months and averaged 36.5% over the last five years. On top of that, its profitability was elite for a healthcare business, showing it’s a well-oiled machine with an efficient cost structure that benefits from immense operating leverage as it scales.

Analyzing the trend in its profitability, Intuitive Surgical’s adjusted operating margin of 38.3% for the trailing 12 months may be around the same as five years ago, but it has increased by 4.3 percentage points over the last two years. This dynamic unfolded because its sales growth gave it operating leverage and shows it has some momentum on its side.

This quarter, Intuitive Surgical generated an adjusted operating margin profit margin of 38.4%, up 4.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Intuitive Surgical’s EPS grew at 21.3% compounded annual growth rate over the last five years, higher than its 18.4% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its adjusted operating margin didn’t improve.

Diving into the nuances of Intuitive Surgical’s earnings can give us a better understanding of its performance. A five-year view shows that Intuitive Surgical has repurchased its stock, shrinking its share count by 1.2%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q1, Intuitive Surgical reported adjusted EPS of $2.50, up from $1.81 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Intuitive Surgical’s full-year EPS of $9.62 to grow 7.8%.

Key Takeaways from Intuitive Surgical’s Q1 Results

We were impressed by how significantly Intuitive Surgical blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 3.6% to $470.06 immediately following the results.

Sure, Intuitive Surgical had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).