Intuitive Surgical Inc. (NASDAQ:ISRG)

Reported net income attributable to Intuitive Surgical, Inc. experienced fluctuations between 2021 and 2025. A decrease was observed from 2021 to 2022, followed by increases in subsequent years, culminating in the highest reported net income in 2025. Adjusted net income attributable to Intuitive Surgical, Inc. mirrored this trend, though the magnitude of the changes differed slightly.

Overall Trend

Both reported and adjusted net income demonstrate an overall upward trajectory from 2021 to 2025, despite the dip experienced in 2022. The growth rate appears to accelerate in the later years of the period.

Year-over-Year Changes

From 2021 to 2022, reported net income decreased by US$382.3 million, while adjusted net income decreased by US$137.2 million. This suggests a difference in the impact of adjustments between these two years. From 2022 to 2023, both reported and adjusted net income increased significantly, by US$475.7 million and US$738.4 million respectively. Continued increases were observed from 2023 to 2024 (US$524.6 million and US$415.2 million) and from 2024 to 2025 (US$533.4 million and US$563.4 million).

Impact of Adjustments

The difference between reported and adjusted net income is consistent across all years, indicating a recurring adjustment. The adjustment amount is approximately US$45.5 million each year. This consistent adjustment suggests it relates to a specific, ongoing item impacting net income. The nature of this adjustment is mark to market available-for-sale securities.

The consistent adjustment to net income suggests the company holds a portfolio of available-for-sale securities whose market value fluctuates, requiring periodic revaluation. The increasing net income figures, even after adjustment, indicate strong underlying business performance.

The period under review demonstrates fluctuations in profitability and returns, with adjustments impacting reported figures. Generally, adjusted ratios are lower than their reported counterparts, suggesting the presence of items influencing net income and equity that are excluded from the adjusted calculations. A recovery in profitability metrics is evident from 2022 through 2025.

Net Profit Margin

Reported net profit margin experienced a decline from 29.85% in 2021 to 21.25% in 2022, followed by a recovery to 28.38% in 2025. The adjusted net profit margin mirrors this trend, decreasing from 29.06% to 19.03% in 2022 and subsequently increasing to 28.82% in 2025. The difference between reported and adjusted margins remains relatively consistent across the period, indicating a stable impact from the adjustments.

Return on Equity (ROE)

Reported ROE decreased from 14.32% in 2021 to 11.98% in 2022, then increased to 16.02% in 2025. Adjusted ROE follows a similar pattern, declining to 10.72% in 2022 before rising to 16.28% in 2025. The adjustments consistently lower the ROE values, and the gap between reported and adjusted ROE narrows slightly in the later years of the period.

Return on Assets (ROA)

Reported ROA decreased from 12.58% in 2021 to 10.19% in 2022, and then increased to 13.96% in 2025. Adjusted ROA exhibits the same trend, falling to 9.13% in 2022 and recovering to 14.18% in 2025. Similar to ROE, the adjustments result in lower ROA values, and the difference between reported and adjusted ROA remains relatively stable throughout the period.

The year 2022 represents a low point for all reported and adjusted profitability ratios. The subsequent years demonstrate a consistent upward trend, suggesting improved operational performance or a favorable shift in the factors impacting the adjustments. The consistent difference between reported and adjusted ratios indicates that the nature of the adjustments remains relatively constant over the observed timeframe.

The period between December 31, 2021, and December 31, 2025, demonstrates fluctuating, but generally positive, trends in both reported and adjusted net income attributable to the company. While both metrics experienced a decline from 2021 to 2022, they subsequently increased through 2025. The adjusted net profit margin mirrors this pattern, exhibiting a recovery following the 2022 dip and approaching levels similar to those observed in 2021.

Adjusted Net Profit Margin Trend

The adjusted net profit margin decreased from 29.06% in 2021 to 19.03% in 2022. This represents the most significant single-year decline in the observed period. Following this decrease, the margin increased steadily, reaching 26.99% in 2023, 27.99% in 2024, and 28.82% in 2025. While not fully recovering to the 2021 level, the trend indicates improving profitability as measured by this metric.

Relationship between Reported and Adjusted Margins

The reported net profit margin and adjusted net profit margin exhibit a strong correlation, moving in the same direction across all years. The difference between the two margins remains relatively consistent, typically ranging between 0.79% and 1.46% throughout the period. This suggests that the adjustments made to net income have a consistent, though not substantial, impact on the overall profit margin.

Overall Profitability

Despite the initial decline in 2022, the company demonstrates a recovery in profitability as evidenced by both reported and adjusted net income and margins. The upward trend in the adjusted net profit margin from 2023 to 2025 suggests improving operational efficiency or favorable changes in the cost structure. The 2025 adjusted net profit margin of 28.82% is approaching the 2021 level, indicating a return to previous performance levels.

The observed fluctuations warrant further investigation to understand the underlying drivers of the 2022 decline and the subsequent recovery. A deeper analysis of the adjustments made to net income would provide additional insight into the company’s financial performance.

The period between December 31, 2021, and December 31, 2025, demonstrates fluctuating performance in both reported and adjusted net income, which subsequently influences return on equity metrics. A general upward trend in both net income figures and ROE is observable over the five-year period, though with intermediate declines.

Reported Net Income

Reported net income attributable to the company decreased from US$1,704.6 million in 2021 to US$1,322.3 million in 2022, representing a decline of approximately 22.4%. It then recovered, increasing to US$1,798.0 million in 2023, followed by further growth to US$2,322.6 million in 2024, and reaching US$2,856.0 million in 2025. This indicates a recovery and subsequent acceleration in reported profitability.

Adjusted Net Income

Adjusted net income mirrors the trend of reported net income, declining from US$1,659.1 million in 2021 to US$1,184.1 million in 2022, a decrease of roughly 28.9%. Similar to reported figures, adjusted net income rebounded to US$1,922.5 million in 2023, then increased to US$2,337.7 million in 2024, and finally reached US$2,901.1 million in 2025. The adjusted net income consistently trends lower than the reported net income, suggesting the impact of certain adjustments to reported earnings.

Reported Return on Equity (ROE)

Reported ROE followed a similar pattern to net income. It decreased from 14.32% in 2021 to 11.98% in 2022. A recovery was then observed, with ROE increasing to 13.51% in 2023, 14.13% in 2024, and culminating in 16.02% in 2025. This suggests improving efficiency in generating profits from shareholder equity.

Adjusted Return on Equity (ROE)

Adjusted ROE exhibited a comparable trajectory, declining from 13.94% in 2021 to 10.72% in 2022. It then rose to 14.45% in 2023, 14.23% in 2024, and reached 16.28% in 2025. The adjusted ROE consistently falls below the reported ROE, aligning with the differences observed in net income. The increase in adjusted ROE from 2023 to 2025 indicates improved profitability when considering the adjustments made to net income.

The convergence of reported and adjusted ROE towards the end of the period suggests that the impact of adjustments to net income may be lessening, or that the underlying profitability improvements are broad-based. Overall, the period demonstrates a recovery from a dip in 2022, with both reported and adjusted ROE reaching their highest levels in 2025.

The period under review demonstrates fluctuating performance in both reported and adjusted net income, which correspondingly impacts reported and adjusted return on assets (ROA). A general upward trend in both ROA metrics is observable over the five-year period, though with intermediate variations.

Reported Net Income & ROA

Reported net income attributable to Intuitive Surgical, Inc. decreased from US$1,704.6 million in 2021 to US$1,322.3 million in 2022, representing a decline. However, it subsequently increased to US$1,798.0 million in 2023, US$2,322.6 million in 2024, and further to US$2,856.0 million in 2025. This income trend is reflected in the reported ROA, which decreased from 12.58% in 2021 to 10.19% in 2022, before rising to 11.64% in 2023, 12.39% in 2024, and reaching 13.96% in 2025. The ROA mirrors the net income fluctuations, indicating a strong correlation between profitability and asset utilization.

Adjusted Net Income & ROA

Adjusted net income follows a similar pattern to reported net income, decreasing from US$1,659.1 million in 2021 to US$1,184.1 million in 2022, then increasing to US$1,922.5 million in 2023, US$2,337.7 million in 2024, and US$2,901.1 million in 2025. The adjusted ROA exhibits a corresponding trend, declining from 12.24% in 2021 to 9.13% in 2022, and then increasing to 12.45% in 2023, 12.47% in 2024, and 14.18% in 2025. The adjusted ROA generally tracks closely with the reported ROA, though slight differences are present in each year.

ROA Comparison

The reported ROA consistently exceeds the adjusted ROA across all observed years. The difference between the two metrics varies slightly year to year, but generally remains within a range of approximately 0.3 to 0.7 percentage points. This suggests that adjustments to net income have a moderate, but consistent, downward impact on the calculated ROA. The convergence of the two ROA figures in 2024 and 2025 may indicate a lessening impact from the adjustments.

Overall Trend

Despite the dip in 2022, both reported and adjusted ROA demonstrate an overall positive trend throughout the period. The increasing ROA values in the later years suggest improving efficiency in asset utilization and/or enhanced profitability. The consistent upward trajectory in both net income and ROA from 2023 to 2025 indicates strengthening financial performance.