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Intuitive Surgical Announces Third Quarter Earnings

Intuitive Surgical Announces Third Quarter Earnings

SUNNYVALE, Calif., Oct. 16, 2012 (GLOBE NEWSWIRE) -- Intuitive Surgical, Inc.
(Nasdaq:ISRG), the industry leader in surgical robotics, today reported third
quarter of 2012 revenue of $538 million, up approximately 20% compared with
$447 million for the third quarter of 2011. Third quarter of 2012 revenue
growth was driven by continued adoption of da Vinci surgery procedures and
higher da Vinci Surgical System sales.

Third quarter of 2012 instruments and accessories revenue increased 24% to
$218 million from $176 million in the third quarter of 2011. The growth in
instruments and accessories revenue is the result of growth in da Vinci
surgical procedures and the introduction of new products. Third quarter
procedure growth of approximately 22% reflected U.S. gynecologic and general
surgery growth, partially offset by a decline in U.S. prostatectomy procedures
and slower growth in European procedures.

Third quarter of 2012 systems revenue was $232 million, an increase of 17%,
compared with $199 million during the third quarter of 2011. The growth in
third quarter 2012 systems revenue was driven by sales of 155 da Vinci
Surgical Systems compared with 133 system sales during the same period last
year. Third quarter of 2012 service revenue increased 22% to $88 million from
$72 million during the third quarter of 2011, reflecting growth in the
installed base of da Vinci Surgical Systems.

Third quarter of 2012 operating income increased to $211 million from $179
million in the third quarter of 2011. Operating results for the third quarter
of 2012 included $47 million of non-cash stock-based compensation expense
compared with $35 million for the third quarter of 2011.

Third quarter of 2012 net income was $183 million, or $4.46 per diluted share,
compared with $122 million, or $3.05 per diluted share, for the third quarter
of 2011. Included in net income are one-time tax benefits of approximately $38
million, including reserve reversals associated with the lapse of statutes of
limitations.

Intuitive ended the third quarter of 2012 with $2.7 billion in cash, cash
equivalents and investments, reflecting an increase of $70 million during the
quarter. $170 million of cash was used to repurchase 343 thousand shares in
the quarter.

Commenting on the announcement, Dr. Gary Guthart, President and CEO of
Intuitive Surgical, said, "Our third quarter highlighted both market strengths
and significant headwinds. Procedures came in below our expectations, driven
by conditions in Europe and changes in prostate cancer detection and
treatment. On the positive side, acceptance of da Vinci general and
gynecologic surgery continues to grow."

The Company will also announce these results at a conference call today at
1:30 pm PDT. The dial-in numbers for the call are (800) 230-1092 for
participants located in the United States and (612) 288-0337 for participants
located outside the United States. The host is Dr. Gary Guthart. To access
financial information that will be discussed on the call, please visit
Intuitive Surgical's website at www.intuitivesurgical.com.

About Intuitive's Products

Intuitive Surgical, Inc. (Nasdaq:ISRG), headquartered in Sunnyvale,
California, is the global technology leader in robotic-assisted, minimally
invasive surgery. Intuitive Surgical develops, manufactures and markets
robotic technologies designed to improve clinical outcomes and help patients
return more quickly to active and productive lives. The Company's mission is
to extend the benefits of minimally invasive surgery to the broadest possible
base of patients. Intuitive Surgical — Taking surgery beyond the limits of the
human hand™.

About the da Vinci® Surgical System

The da Vinci® Surgical System is a breakthrough surgical platform designed to
enable complex surgery using a minimally invasive approach. The da Vinci®
Surgical System consists of an ergonomic surgeon console or consoles, a
patient-side cart with three or four interactive robotic arms, a
high-performance vision system and proprietary EndoWrist® instruments. Powered
by state-of-the-art robotic and computer technology, the da Vinci® Surgical
System is designed to scale, filter and seamlessly translate the surgeon's
hand movements into more precise movements of the EndoWrist® instruments. The
net result is an intuitive interface with breakthrough surgical capabilities.
By providing surgeons with superior visualization, enhanced dexterity, greater
precision and ergonomic comfort, the da Vinci® Surgical System makes it
possible for more surgeons to perform minimally invasive procedures involving
complex dissection or reconstruction. This ultimately has the potential to
raise the standard of care for complex surgeries, translating into numerous
potential patient benefits, including less pain, a shorter recovery and
quicker return to normal daily activities.

Intuitive®, Intuitive Surgical®, da Vinci®, da Vinci S®, da Vinci® S HD
Surgical System, da Vinci® Si, da Vinci® Si-e^TM Surgical System, EndoWrist®,
EndoWrist^® One™, Single-Site^TM, DVSTAT®, Firefly™ and InSite® are trademarks
or registered trademarks of Intuitive Surgical, Inc.

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are necessarily estimates reflecting the best judgment of our
management and involve a number of risks and uncertainties that could cause
actual results to differ materially from those suggested by the
forward-looking statements. These forward-looking statements should,
therefore, be considered in light of various important factors, including the
following: the impact of global and regional economic and credit market
conditions on health care spending; health care reform legislation in the
United States and its implications on hospital spending, reimbursement and
fees which will be levied on certain medical device revenues; timing and
success of product development and market acceptance of developed products;
procedure counts; regulatory approvals, clearances and restrictions;
guidelines and recommendations in the health care and patient communities;
intellectual property positions and litigation; competition in the medical
device industry and in the specific markets of surgery in which we operate;
unanticipated manufacturing disruptions or the inability to meet demand for
products; the results of legal proceedings to which we are or may become a
party; our ability to expand into foreign markets; and other risk factors
under the heading "Risk Factors"' in our report on Form 10-K for the year
ended December 31, 2011, as updated from time to time by our quarterly reports
on Form 10-Q and our other filings with the Securities and Exchange
Commission. Statements concerning forecasts, revenue growth, procedure growth,
future financial results and statements using Words such as "estimates,"
"projects," "believes," "anticipates," "plans," "expects," "intends," "may,"
"will," "could," "should," "would," "targeted" and similar words and
expressions are intended to identify forward-looking statements. You are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. We undertake no
obligation to publicly update or release any revisions to these
forward-looking statements to reflect events or circumstances after the date
of this press release or to reflect the occurrence of unanticipated events.

                                                              
                                                              
INTUITIVE SURGICAL, INC.
UNAUDITED QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
                                                              
                                         Three months ended
                                         September 30, June 30, September 30,
                                          2012          2012     2011
                                                              
Revenue:                                                       
Instruments and accessories               $218.0      $223.7 $175.8
Systems                                   232.0        229.4   199.1
Services                                  87.8         83.4    71.8
Total revenue                           537.8         536.5    446.7
                                                              
Cost of revenue:                                               
Product                                   119.3         122.9    96.2
Service                                   28.4          27.2     25.0
Total cost of revenue (1)                147.7         150.1    121.2
                                                              
Gross profit                              390.1         386.4    325.5
                                                              
Operating expenses:                                            
Selling, general, and administrative      129.0         120.9    111.2
Research and development                  49.7          40.2     35.4
Total operating expenses (1)             178.7         161.1    146.6
                                                              
Income from operations (2)                211.4        225.3   178.9
                                                              
Interest and other income (expense), net  4.3           4.0      1.9
                                                              
Income before taxes                       215.7        229.3   180.8
Income tax expense                        32.4          74.4     58.4
                                                              
Net income                                $183.3      $154.9 $122.4
                                                              
Net income per share:                                          
Basic                                    $4.59       $3.88  $3.13
                                                              
Diluted                                 $4.46       $3.75  $3.05
                                                              
Shares used in computing net income per                        
share:
Basic                                    39.9         39.9    39.1
                                                              
Diluted                                  41.1         41.3    40.1
                                                              
(1) Includes stock-based compensation                  
expense as follows:
Total cost of revenue                     $8.4        $5.8   $6.1
Total operating expenses                  $38.9       $27.5  $28.8
                                                              
(2) Includes amortization of purchased                 
intangibles as follows:
Income from operations                    $5.4        $6.1   $4.5

                                                             
                                                             
INTUITIVE SURGICAL, INC
UNAUDITED NINE MONTHS ENDED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
                                                             
                                                             
                                                             
                                               Nine months ended
                                                September 30,
                                               2012           2011
                                                             
Revenue:                                                      
Instruments and accessories                     $649.5       $504.7
Systems                                         668.0         552.8
Services                                        252.0         203.0
Total revenue                                  1,569.5        1,260.5
                                                             
Cost of revenue:                                              
Product                                         353.9          274.5
Service                                         83.2           75.1
Total cost of revenue (1)                      437.1          349.6
                                                             
Gross profit                                    1,132.4        910.9
                                                             
Operating expenses:                                           
Selling, general, and administrative            374.1          316.8
Research and development                        128.3          98.8
Total operating expenses (1)                   502.4          415.6
                                                             
Income from operations (2)                      630.0         495.3
                                                             
Interest and other income (expense), net        12.1           11.3
                                                             
Income before taxes                             642.1         506.6
Income tax expense                              160.4          162.7
                                                             
Net income                                      $481.7       $343.9
                                                             
Net income per share:                                         
Basic                                          $12.10       $8.77
                                                             
Diluted                                       $11.72       $8.55
                                                             
Shares used in computing net income per share:                 
Basic                                          39.8          39.2
                                                             
Diluted                                        41.1          40.2
                                                             
(1) Includes stock-based compensation expense as follows:      
Total cost of revenue                           $20.1        $17.4
Total operating expenses                        $94.9        $84.4
                                                             
(2) Includes amortization of purchased intangibles as follows: 
Income from operations                          $17.2        $13.1

                                                           
                                                           
INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
                                                           
                                                           
                                         September 30, 2012 December 31, 2011
Cash, cash equivalents and investments    $2,701.1         $2,171.8
Accounts receivable, net                  336.2             297.9
Inventory                                 125.8             112.1
Property and equipment, net               223.4             197.2
Goodwill                                  138.1             116.9
Deferred tax assets                       95.2              75.3
Other assets                              112.4             91.9
Total assets                             $3,732.2         $3,063.1
                                                           
Accounts payable and other accrued        $266.5           $262.3
liabilities
Deferred revenue                          172.2             155.2
Total liabilities                        438.7             417.5
Stockholders' equity                      3,293.5           2,645.6
Total liabilities and stockholders'      $3,732.2         $3,063.1
equity

CONTACT: Investor Relations
         (408) 523-2161