Medical device leader Intuitive Surgical (NASDAQ:ISRG) delivered better-than-expected fourth-quarter earnings and revenue, driven by strong demand for its Da Vinci surgical robots. Despite the impressive results, shares dropped over 2% in pre-market today as the company revised its 2025 gross profit margin guidance downward.

The company reported adjusted earnings per share of $2.21, significantly surpassing analysts' forecasts of $1.75. Quarterly revenue climbed to $2.41 billion, beating the consensus estimate of $2.2 billion, reflecting robust growth in global procedure volumes.

Looking ahead, Intuitive Surgical projects its non-GAAP gross profit margin to decline to 67%–68% in 2025, compared to 69.1% in 2024. This forecast does not account for potential impacts from new tariffs, which the company cautioned could materially affect results.

The firm also expects global Da Vinci procedures to grow by 13% to 16% in 2025, signaling continued demand for its advanced surgical systems. However, rising costs are set to weigh on profitability, with non-GAAP operating expenses forecasted to increase by 10% to 15% in 2025, up from a 10% rise last year.

While Intuitive Surgical's growth outlook remains strong, the anticipated margin compression has left investors cautious about the company’s ability to maintain its profitability amid rising operational costs and tariff uncertainties.