Intuitive Surgical reported a strong Q1 but cautioned that future tariffs could have an “adverse impact” on its 2025 financial results.
The US company, the market leader in robotic surgical systems, has already lowered its full-year profit margin forecast because of the estimated impact from tariffs. Intuitive predicts a margin within a range of 65% and 66.5% of revenue in 2025, compared to 69.1% in 2024.
Intuitive joins a long list of medical device and pharma companies weighing up their 2025 prospects in the wake of blanket tariffs implemented by US President Donald Trump. US drugmaker Johnson & Johnson (J&J), for example, projected a $400m tariff-induced hit in 2025.
Tariff talk was a recurring theme in Intuitive’s Q1 earnings call, with one of the main points relating to US-China trade channels. Chief financial officer Jamie Samath stated that whilst Intuitive has a strong US manufacturing presence, it does rely on some imported components from China. These products, which are used in the assembly of its Da Vinci line, will be subject to a US tariff of 145%. The company also exports some components for domestic Da Vinci production in China, now expected to incur Chinese tariffs of 125%.
Around 80% of Intuitive’s instruments and accessories are made in Mexico, the majority of which – Samath said – meet US-Mexico-Canada Agreement requirements. Only a small portion of these will incur 25% tariffs when they reach US shores.
“We estimate this is a 4.5-percentage-point headwind to earnings per share, which we think is in line with expectations and leave room for improvement if Intuitive executes on mitigation efforts,” William Blair analyst Brandon Vazquez said in a research note.
Meanwhile, Samath said the company hopes to see the tariffs stabilise but added: “Given that tariff costs are capitalised into inventory and then recognised in cost of sales as products are sold, we would expect the impact of tariffs to increase each quarter over the remainder of the year.”
Vazquez’s analysis concurred, with the analyst saying: “We note that tariff headwinds will worsen each quarter tariffs remain in place so there could be some lasting effects in 2026 (as for most other companies), depending on how tariffs evolve.”
Intuitive’s CEO Gary Guthart affirmed that the company does not plan to execute reflexive changes in pricing – significant cost increases of medical devices have been a pertinent concern in the industry. Production costs and rebalancing of product flows within its existing manufacturing and supply chain footprint will be a priority for Intuitive, though the caveat was added that this will happen “when policies begin to stabilise.”
