ISRG · 8-K · 20261020PR000067

Trade Policy and Tariffs

INTUITIVE SURGICAL INC · 2026-10-20 · Importance 44 · Surprise 42 · In source text

Intuitive recognized a $22 million net-of-tax benefit in third-quarter 2026 from refunds of tariffs paid in prior periods under the International Emergency Economic Powers Act (IEEPA), including $27.8 million of pre-tax refunds in cost of revenue. For the full year, management estimates currently effective tariffs will reduce non-GAAP gross profit margin by 0.9% of revenue, or approximately $27 million based on third-quarter revenue. The outlook assumes current tariffs remain in place through year-end, while additional tariffs could materially affect 2026 results. The company identifies U.S. tariffs on imports from Mexico, Germany, and China as relevant exposures, given manufacturing and sourcing in those jurisdictions.

Key facts

• The gross profit margin outlook reflects estimates of the adverse impact from tariffs currently in effect and assumes such tariffs remain in place through the end of the year; additional tariffs beyond expectations could have a material adverse impact on 2026 results. source
• Third quarter 2026 GAAP and non-GAAP net income included a benefit of $22 million, net of tax, or $0.06 per diluted share, related to refunds for tariffs paid in prior periods under IEEPA. source
• Cost of product revenue for Q3 2026 included IEEPA tariff refund benefits of $25.7 million for product and $2.1 million for service. source
• The ultimate effect of tariffs will depend on the proportion of components procured and finished goods manufactured outside of the United States and the amount, scope, nature, and timing of the tariffs. source
• The press release identifies Mexico as a country where the Company currently manufactures a significant majority of its instruments and accessories, Germany where the Company currently manufactures a majority of its endoscopes, and China where the Company currently imports certain materials, in the context of tariffs imposed by the U.S. source

Impact estimates