ISRG · Earnings call · 2026Q3T · Full report

Tariff Refund and Gross Margin

INTUITIVE SURGICAL INC · 2026-10-20 · Importance 39 · Surprise 50

Q3 non-GAAP gross margin was 69.9%, up from 68.0% in Q3 2025. The quarter included a one-time $28 million refund of previously paid IEEPA tariffs; excluding it, gross margin was 68.9%, a 90-basis-point year-over-year improvement. Management attributed the underlying improvement primarily to product-cost reductions and fixed-overhead leverage, with cost-reduction programs continuing across platforms.

Key facts

• Q3 2026 non-GAAP operating margin was 42% of revenue, or 41% excluding a one-time pretax tariff refund of $28 million.
• Q3 2026 non-GAAP gross margin was 69.9%, compared with 68% in Q3 2025; excluding the $28 million tariff refund, it was 68.9%, up 90 basis points year over year.