Intuitive Surgical

“•If our products do not achieve and maintain customer acceptance, we will not be able to generate the revenue necessary to support our business. •If hospitals are unable to obtain coverage and reimbursement for procedures using our products, if reimbursement is insufficient to cover the costs of purchasing our products, or if limitations are imposed by governments on the amount hospitals can charge for certain procedures, we may be unable to generate sufficient sales to support our business. •If our products contain defects or encounter performance problems, we may have to recall our products and our reputation may suffer. •We utilize distributors for a portion of our sales and service of our products in certain countries, which subjects us to a number of risks that could harm our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“We have received national reimbursement status in Japan for a number of procedures since the approval of our first da Vinci surgical system in 2012. An additional eight da Vinci procedures were granted reimbursement in April 2022, including colon resection, and an additional five da Vinci procedures were granted reimbursement in April 2024, including lobectomy for benign conditions.”

Annual report 2025A · The company itself

“If these procedures are not adopted and we are not successful in obtaining adequate procedure reimbursements for additional procedures, then the demand for our products in Japan could be limited. The process of reimbursement for new da Vinci surgical procedures in Japan is led by the surgical societies. The societies submit for reimbursement or incremental reimbursement to the MHLW for their evaluation. The decision to reimburse requires in-country clinical data and is fixed in April of even-numbered years.”

Annual report 2025A · The company itself

“In the U.S., the CMS and its fiscal intermediaries (Medicare Administrative Contractors) and state Medicaid programs establish reimbursement policies for medical and surgical services at the state and federal level for the Medicare and Medicaid programs. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and payment policies but also have their own methods and approval processes.”

Annual report 2025A · The company itself

“CPT codes currently exist for minimally invasive surgical procedures, which may involve the da Vinci surgical system, as well as for robotic-assisted bronchoscopy, which may involve the Ion endoluminal system. In general, the majority of payors, including Medicare, consider robotic assistance as a tool used to perform the procedure and do not pay providers more for a procedure that involves robotic assistance using the da Vinci, Ion, or any other robotic system.”

Annual report 2025A · The company itself

“Because there is often no separate payment for the use of our products, the additional cost associated with the use of our products can affect the profit margin of the hospital or surgery center where the procedure is performed. If hospitals do not obtain sufficient payment from third-party payors for procedures performed with our products or if governmental and private payors’ policies do not cover surgical procedures performed using our products, hospital adoption or utilization of our products could be negatively impacted, and we may not be able to generate the revenue necessary to support our business.”

Annual report 2025A · The company itself

“Medicare and commercial payor payments to facilities for medical and surgical services may not always fully reimburse providers for all costs associated with furnishing these procedures. If payment is insufficient for procedures involving our technology, hospitals and physicians may decide not to use our products.”

Annual report 2025A · The company itself

“In countries outside of the U.S., payment for surgical services to physicians and facilities differs considerably and varies by country. In some markets, there is a single public payor who provides a global annual budget to hospitals to provide all care to the population served in a designated geographic area.”

Annual report 2025A · The company itself

“Further, in many global markets, access to procedures and technology is governed or heavily influenced by Health Technology Assessment (“HTA”) organizations, which conduct periodic and extensive evidence-based reviews of the clinical value and cost effectiveness of a new technology. To effectively conduct our business, we may need to seek OUS reimbursement approvals, and we do not know if these required approvals will be obtained in a timely manner or at all. In addition, in some markets, HTA organizations may publish reports with mixed conclusions about the clinical and economic value of our products to the population.”

Annual report 2025A · The company itself

“Future significant changes in the healthcare systems in the U.S. or other countries, including retroactive and prospective rate and coverage criteria changes, competitive bidding or tender processes for certain products and services, and other changes intended to reduce expenditures along with uncertainty about whether and how changes may be implemented, could have a negative impact on the demand for our products.”

Annual report 2025A · The company itself

“We expect additional state and federal healthcare reform measures to be adopted in the future that could have a material adverse effect on our industry generally and on our customers.”

Annual report 2025A · The company itself

“Our direct sales organization is composed of a capital sales team, responsible for selling systems, and a clinical sales team, responsible for supporting the systems used in procedures performed at our hospital accounts. Our hospital accounts include both individual hospitals and healthcare facilities as well as hospitals and healthcare facilities that are part of an integrated delivery network (“IDN groups”).”

Annual report 2025A · The company itself

“Third-Party Coverage and Payment Our customers, including physicians, hospitals, and outpatient facilities, typically bill third-party payors for the costs and fees associated with the procedures in which our products are used. In the U.S., in order to receive payment for the procedures performed using our products, our customers must report codes that describe the services or products furnished and determine the medical necessity of the service or whether the service is included in the payors’ policy. In the U.S. and most markets globally where we sell our products, payment for medical services and surgical procedures to hospitals, outpatient facilities, and surgeons (collectively “providers”) is determined by the government, commercial payors (insurers), or both.”

Annual report 2025A · The company itself

“In the U.S., hospitals generally bill for the services performed with our products to various third-party payors, such as Medicare, Medicaid, other government programs, and private insurance plans. If hospitals do not obtain sufficient reimbursement from third-party payors for procedures performed with our products, or if government and private payors’ policies do not cover surgical procedures performed using our products, we may not be able to generate the revenues necessary to support our business.”

Annual report 2025A · The company itself

“Sales of our products depend, in part, on the extent to which the costs of our products are reimbursed by governmental health administration authorities.”

Annual report 2025A · The company itself

“China China has its own regulatory agency, the National Medical Products Administration (“NMPA”). They require regulatory approvals and compliance with extensive safety and quality system regulations. Failure to obtain regulatory approval or failure to comply with any regulation may negatively impact our ability to generate revenue and harm our business.”

Annual report 2025A · The company itself

“In addition to product registration approvals, our system sales into China are also dependent on obtaining importation authorizations and provincial approvals, as well as hospitals completing a tender and hospital listing process under the authorization. In June 2023, the China National Health Commission published the 14th five-year plan quota for major medical equipment to be sold in China on its official website (the “2023 Quota”). Under the original 2023 Quota, the government will allow for the sale of 559 new surgical robots into China, which could include da Vinci surgical systems as well as surgical systems introduced by others. Sales of da Vinci surgical systems under the quota are uncertain, as they are dependent on hospitals completing a tender process and receiving associated approvals.”

Annual report 2025A · The company itself

“We are also subject to various foreign data privacy laws, including the European Union General Data Protection Regulation 2016/679 and applicable national supplementing laws and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, as well as applicable data privacy laws in China.”

Annual report 2025A · The company itself

“In China, since 2022, several provinces have implemented significant limits on what hospitals can charge patients for surgeries using robotic surgical technology, including soft tissue surgery. To date, these limits have impacted the number of procedures performed in those provinces as well as pricing of our instruments and accessories, which have impacted our instruments and accessories revenue.”

Annual report 2025A · The company itself

“Such arrangements may also expose us to numerous known and 43 Table of Contents unknown risks, including unique risks with respect to the economic, political, and regulatory environment of any foreign entities with whom we partner, including Fosun Pharma.”

Annual report 2025A · The company itself

“Manufacturing We manufacture our systems at our facilities in Sunnyvale, California, and Peachtree Corners, Georgia, as well as at our Joint Venture’s facility in Shanghai, China. Our instruments and accessories are produced at our facilities in Sunnyvale, California, and Mexicali, Mexico. Additionally, we have Ion-related manufacturing in Blacksburg, Virginia, and endoscope-related manufacturing in Parvomay, Bulgaria and at multiple sites in Germany.”

Annual report 2025A · The company itself

“Outside of the U.S., we own and/or lease properties in Mexicali, Mexico, Germany, and Bulgaria, primarily for manufacturing operations, and Aubonne, Switzerland, primarily for our international headquarters.”

Annual report 2025A · The company itself

“Disruptions caused by ongoing or future global conflicts, including those resulting from conflicts affecting or in close proximity to countries and regions in the Middle East, may result in extended lead times, delays in supplier deliveries, and increasing freight costs. The risk of supply disruptions may further result in delays in the delivery of our products.”

Annual report 2025A · The company itself

“The length, impact, and outcome of ongoing military conflicts is highly unpredictable and could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, trade disputes or trade barriers, changes in consumer or purchaser preferences, an increase in global shipping expenses, greater volatility in foreign exchange and interest rates, an increase in cyberattacks and espionage, and other unforeseen business disruptions.”

Annual report 2025A · The company itself

“Impacts to our business may include, but are not limited to, a reduction in procedures performed, reduced demand for our products, limitations on hospitals’ ability to spend on capital equipment and in healthcare spending in general, and supply disruption.”

Annual report 2025A · The company itself

“Such arrangements may also expose us to numerous known and 43 Table of Contents unknown risks, including unique risks with respect to the economic, political, and regulatory environment of any foreign entities with whom we partner, including Fosun Pharma.”

Annual report 2025A · The company itself

“There have been reports and articles published questioning patient safety and efficacy associated with robotic-assisted surgery with da Vinci surgical systems, their cost relative to other disease management methods, and the adequacy of surgeon training. Negative publicity, including statements made by public officials, whether accurate or inaccurate, concerning our products or our Company could reduce acceptance of our products and could result in decreased product demand and a decline in revenues.”

Annual report 2025A · The company itself

“Our success depends on the quality and reliability of our products. While we subject components sourced and products manufactured to stringent quality specifications and processes, our products incorporate mechanical parts, electrical components, optical components, and computer software, any of which may contain errors or exhibit failures, especially when products are first introduced.”

Annual report 2025A · The company itself

“Products Systems Our robotic-assisted platforms extend the care teams’ capabilities to deliver minimally invasive care. These platforms include da Vinci surgical systems, which are designed to enable a wide range of surgical procedures across a broad patient population using a minimally invasive approach, and the Ion endoluminal system, which extends our commercial offerings beyond surgery into diagnostic procedures, enabling minimally invasive biopsies in the lung.”

Annual report 2025A · The company itself

“Da Vinci Surgical Systems Intuitive launched its first da Vinci surgical system in 1999, with the goals of enhancing surgical capabilities and facilitating less invasive care through improved precision, vision, and control. In 2000, the FDA cleared da Vinci for use in general laparoscopic surgery. Since then, we have received numerous additional indications in the U.S. and in countries around the world, for a broad array of procedures across general surgery, urologic, gynecologic, cardiothoracic, and head and neck specialties, among others.”

Annual report 2025A · The company itself

“Ion Endoluminal System In 2019, the FDA cleared our Ion endoluminal system, which is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories for which the first cleared indication is minimally invasive biopsies in the lung. Our Ion system extends our commercial offering beyond surgery into diagnostic, endoluminal procedures.”

Annual report 2025A · The company itself

“Accessory Products. We sell various accessory products, which are used in conjunction with the da Vinci surgical systems. Accessory products include sterile drapes used to help ensure a sterile field during surgery, vision products, such as replacement 3D stereo endoscopes, camera heads, and light guides, and other items that facilitate the use of the da Vinci surgical systems.”

Annual report 2025A · The company itself

“Ion Instruments. Instruments utilized with our Ion system include our fully articulating catheter, which is employed to navigate the intricate and narrow airways of the lungs, our peripheral vision probe, an endoscope that provides real-time airway visualization for catheter navigation, and our Flexision biopsy needles, which are used to procure tissue samples from lung nodules.”

Annual report 2025A · The company itself

“Services We have a network of field service engineers across the U.S., Canada, Europe, and Asia and maintain relationships with various distributors around the globe. This infrastructure of customer service and support specialists offers a full complement of services, including installation, repair, maintenance, 24/7 technical support, and proactive system health monitoring.”

Annual report 2025A · The company itself

“Perioperative Consulting. We offer a suite of customized solutions to improve a hospital’s efficiency and performance with Intuitive technologies.”

Annual report 2025A · The company itself

“Our Custom Hospital Analytics program enables the integration of data sources so that individual health institutions can analyze their data in their own environment. Using this data, hospital and healthcare system executives, administrators, care teams, and surgeons can gain alignment around their programs based on their KPIs, determine best practices, assess gaps, and develop and implement actionable steps to address any gaps.”

Annual report 2025A · The company itself

“3D Modeling Services. Intuitive 3D Models is our augmented reality imaging product for use in kidney, prostate, lung, and rectal procedures.”

Annual report 2025A · The company itself

“The da Vinci surgical systems, Ion endoluminal system, and many of our other products represent a novel and advanced approach to performing medical procedures. Achieving and maintaining physician, patient, and third-party payor acceptance of robotic-assisted medical procedures as a preferred method of performing these procedures is crucial to our success. If our products fail to achieve or maintain customer acceptance, customers will not purchase our products, and we will not be able to generate the revenue necessary to support our business.”

Annual report 2025A · The company itself

“Research and Development We focus our research and development efforts on innovation and improvement for products and services that align with our mission: We believe that minimally invasive care is life-enhancing care. Through ingenuity and intelligent technology, we believe that we can expand the potential of physicians to heal without constraints. We employ engineering and research and development staff to focus on delivering future innovations and sustaining improvements that advance our mission.”

Annual report 2025A · The company itself

“We invest substantially in various research and development projects to expand our product offerings. Our research and development efforts are critical to our future success, and such research and development projects may not be successful.”

Annual report 2025A · The company itself

“SimNow. Our cloud-enabled SimNow simulation platform is a practice tool that gives a user the opportunity to practice their skills and gain familiarity with the surgeon console controls and supports the user’s progressive learning pathway.”

Annual report 2025A · The company itself

“3D Modeling Services. Intuitive 3D Models is our augmented reality imaging product for use in kidney, prostate, lung, and rectal procedures.”

Annual report 2025A · The company itself

“Our recently released da Vinci 5 surgical system builds on da Vinci Xi’s highly functional design, featuring force feedback technology and instruments that enable surgeons to sense and measure the force exerted on tissue during surgery. It also includes new surgeon controllers, powerful vibration and tremor controls, a next-generation 3D display and image system, and throughput and workflow enhancements, such as an integrated electrosurgical unit and insufflation capabilities technology.”

Annual report 2025A · The company itself

“Da Vinci 5 has more than 10,000 times the computing power of da Vinci Xi, allowing for innovative new system capabilities and advanced digital experiences, including integration with our My Intuitive app, SimNow (virtual reality simulator), Case Insights (computational observer), and Intuitive Hub (edge computing system). Additionally, the redesigned console provides greater surgeon comfort with customizable positioning, allowing surgeons to find their best fit for surgical viewing and comfort, including the ability to sit completely upright.”

Annual report 2025A · The company itself

“Research and Development We focus our research and development efforts on innovation and improvement for products and services that align with our mission: We believe that minimally invasive care is life-enhancing care. Through ingenuity and intelligent technology, we believe that we can expand the potential of physicians to heal without constraints. We employ engineering and research and development staff to focus on delivering future innovations and sustaining improvements that advance our mission.”

Annual report 2025A · The company itself

“Our Custom Hospital Analytics program enables the integration of data sources so that individual health institutions can analyze their data in their own environment. Using this data, hospital and healthcare system executives, administrators, care teams, and surgeons can gain alignment around their programs based on their KPIs, determine best practices, assess gaps, and develop and implement actionable steps to address any gaps.”

Annual report 2025A · The company itself

“My Intuitive. This mobile and web application was developed to be the single point for Intuitive customers to access individual or program-level data from Intuitive.”

Annual report 2025A · The company itself

“Da Vinci 5 has more than 10,000 times the computing power of da Vinci Xi, allowing for innovative new system capabilities and advanced digital experiences, including integration with our My Intuitive app, SimNow (virtual reality simulator), Case Insights (computational observer), and Intuitive Hub (edge computing system). Additionally, the redesigned console provides greater surgeon comfort with customizable positioning, allowing surgeons to find their best fit for surgical viewing and comfort, including the ability to sit completely upright.”

Annual report 2025A · The company itself

“Learning Intuitive provides a progressive learning journey to support the use of our technology. These training pathways leverage both learning engagements and learning technologies. Learning engagement touchpoints vary by specific pathway, skill level, and interest, while learning technologies enable and provide training directly to the customer.”

Annual report 2025A · The company itself

“Intuitive Learning. Intuitive Learning is our customer learning management system that empowers customers to complete technology and procedure education, while also being able to view, assign, and track technology and simulation learning.”

Annual report 2025A · The company itself

“SimNow. Our cloud-enabled SimNow simulation platform is a practice tool that gives a user the opportunity to practice their skills and gain familiarity with the surgeon console controls and supports the user’s progressive learning pathway.”

Annual report 2025A · The company itself

“Our customers place orders to replenish their supplies of instruments and accessories on a regular basis. Orders received are typically shipped within one business day.”

Annual report 2025A · The company itself

“My Intuitive+. My Intuitive+ is a digital subscription package available with the da Vinci 5 platform.”

Annual report 2025A · The company itself

“RISKS RELATING TO OUR REGULATORY ENVIRONMENT •Complying with FDA and foreign regulations is a complex process, and our failure to fully comply could subject us to significant enforcement actions. •Our products are subject to a lengthy and uncertain domestic regulatory review process. If we do not obtain and maintain the necessary domestic regulatory authorizations, we will not be able to sell our products in the U.S. •Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA and foreign regulatory authorities and, if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“If we do not obtain and maintain the necessary regulatory requirements, we will not be able to sell our products in other countries. •Changes in healthcare legislation and policy may have an adverse effect on our business, financial condition, or results of operations. •We are subject to federal, state, and foreign laws governing our business practices, which, if violated, could result in substantial penalties.”

Annual report 2025A · The company itself

“Regulation FDA Our products are subject to regulation as medical devices in the United States under the Federal Food, Drug, and Cosmetic Act (“FFDCA”), as implemented and enforced by the FDA. The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, recordkeeping, complaint and adverse event reporting, clearance, approval, certification, promotion, marketing, export, import distribution, and service of medical devices in the U.S. to ensure that medical devices distributed domestically are safe and effective for their intended uses.”

Annual report 2025A · The company itself

“The PMA process is more demanding than the 510(k) premarket notification process. In a PMA application, the manufacturer must demonstrate that the device is safe and effective, and the PMA application must be supported by extensive data, including data from preclinical studies and human clinical trials. The FDA, by statute and regulation, has 180 days to review a PMA application, although the review more often occurs over a significantly longer period of time and can take up to several years.”

Annual report 2025A · The company itself

“After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or de novo classification. The FDA requires each manufacturer to determine whether a proposed change requires submission of a 510(k), de novo classification, or a PMA or PMA supplement in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until it receives the appropriate marketing authorization.”

Annual report 2025A · The company itself

“China China has its own regulatory agency, the National Medical Products Administration (“NMPA”). They require regulatory approvals and compliance with extensive safety and quality system regulations. Failure to obtain regulatory approval or failure to comply with any regulation may negatively impact our ability to generate revenue and harm our business.”

Annual report 2025A · The company itself

“Table of Contents Japan Most medical devices must undergo thorough safety examinations and demonstrate medical efficacy before they receive regulatory approval to be sold in Japan. We obtained approval from the Japanese Ministry of Health, Labor, and Welfare (“MHLW”) for our da Vinci Si surgical system in October 2012, for our da Vinci Xi surgical system in March 2015, and for our da Vinci X surgical system in April 2018. In September 2022, we received regulatory clearance for the da Vinci SP surgical system in Japan for the same set of procedures as can be performed on the da Vinci Xi surgical system in Japan. In July 2025, we received regulatory clearance for our latest da Vinci 5 surgical system for use in all surgical specialties and procedures indicated for da Vinci Xi, except for cardiac indications.”

Annual report 2025A · The company itself

“European Union The EU has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling, and adverse event reporting for medical devices. Until and including May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC (the “EU Medical Devices Directive” or “EU MDD”), which has been repealed and replaced by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation” or “EU MDR”).”

Annual report 2025A · The company itself

“Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU MDR. In the EU, there is currently no premarket government review of medical devices.”

Annual report 2025A · The company itself

“Compliance with the general safety and performance requirements of the EU MDR is a prerequisite for European Conformity (“CE”) marking, without which medical devices cannot be marketed or sold in the EU. To demonstrate compliance with the general safety and performance requirements, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification.”

Annual report 2025A · The company itself

“All manufacturers placing medical devices on the market in the EU must comply with the EU medical device vigilance system, which has been reinforced by the EU MDR. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of the EU member states.”

Annual report 2025A · The company itself

“Brexit and the UK Regulatory Framework Since January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (“MHRA”) has been the sovereign regulatory authority responsible for Great Britain (i.e., England, Wales, and Scotland) medical device clearances. Following the end of the Brexit transitional period on January 1, 2021, new regulations require all medical devices to be registered with the MHRA before being placed on the Great Britain market. From January 1, 2022, non-UK manufacturers were required to appoint a UK Responsible Person for the purposes of registering devices placed on the Great Britain market.”

Annual report 2025A · The company itself

“Other countries Regulations in other countries, including the requirements for approvals, certification, or clearance and the time required for regulatory review, vary from country to country. Certain countries, such as South Korea, Brazil, Australia, India, and Canada, have their own regulatory agencies. These countries typically require regulatory approvals and compliance with extensive safety and quality system regulations included in the MDSAP (Medical Device Single Audit Program) that we comply with every year as part of our annual audit program.”

Annual report 2025A · The company itself

“The QMSR, which became effective on February 2, 2026, incorporates certain elements of ISO 13485:2016 by reference and covers, among other things, the methods used in, and the facilities and controls used for, the design, testing, controlling, documenting, manufacture, packaging, labeling, storage, installation, and servicing of all medical devices intended for human use.”

Annual report 2025A · The company itself

“For instance, on December 13, 2021, the EU Regulation No 2021/2282 on HTA, amending Directive 2011/24/EU, was adopted. While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once applicable, it will have a phased implementation depending on the concerned products. This Regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.”

Annual report 2025A · The company itself

“Many of our products to date have been or would be considered significant risk devices requiring IDE approval prior to investigational use.”

Annual report 2025A · The company itself

“Certainty that clinical trials will meet desired endpoints, produce meaningful or useful data, and be free of unexpected adverse effects or that the FDA will accept the validity of foreign clinical study data cannot be assured, and such uncertainty could preclude or delay market clearance or authorizations resulting in significant financial costs and reduced revenue. Failure to obtain such approvals or to comply with such regulations could have a material adverse effect on our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“European Union The EU has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling, and adverse event reporting for medical devices. Until and including May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC (the “EU Medical Devices Directive” or “EU MDD”), which has been repealed and replaced by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation” or “EU MDR”).”

Annual report 2025A · The company itself

“Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU MDR. In the EU, there is currently no premarket government review of medical devices.”

Annual report 2025A · The company itself

“Compliance with the general safety and performance requirements of the EU MDR is a prerequisite for European Conformity (“CE”) marking, without which medical devices cannot be marketed or sold in the EU. To demonstrate compliance with the general safety and performance requirements, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification.”

Annual report 2025A · The company itself

“All manufacturers placing medical devices on the market in the EU must comply with the EU medical device vigilance system, which has been reinforced by the EU MDR. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of the EU member states.”

Annual report 2025A · The company itself

“Brexit and the UK Regulatory Framework Since January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (“MHRA”) has been the sovereign regulatory authority responsible for Great Britain (i.e., England, Wales, and Scotland) medical device clearances. Following the end of the Brexit transitional period on January 1, 2021, new regulations require all medical devices to be registered with the MHRA before being placed on the Great Britain market. From January 1, 2022, non-UK manufacturers were required to appoint a UK Responsible Person for the purposes of registering devices placed on the Great Britain market.”

Annual report 2025A · The company itself

“We are also subject to various foreign data privacy laws, including the European Union General Data Protection Regulation 2016/679 and applicable national supplementing laws and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, as well as applicable data privacy laws in China.”

Annual report 2025A · The company itself

“The UK is in the process of overhauling its medical device regulatory framework following its departure from the European Union (“EU”). The UK regulatory framework will apply in Great Britain only, as Northern Ireland continues to follow the EU Medical Devices Regulation (“MDR”). New post-market surveillance requirements took effect on June 16, 2025, while a draft of additional rules governing device classification and pre-market approval pathways are expected to be published in 2026.”

Annual report 2025A · The company itself

“For example, in the EU, the GDPR requires controllers and processors of data relating to an identifiable living individual or “personal data” to adhere to certain key principles whenever accessing or processing personal data. The GDPR imposes comprehensive data privacy compliance obligations in relation to our collection and use of personal data, including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training, and audit, as well as regulating cross-border transfers of personal data out of the EEA and the UK.”

Annual report 2025A · The company itself

“In addition, on December 16, 2025, the European Commission published a targeted revision proposal of the EU MDR to address structural issues, certification delays, and burdens on small and medium-sized enterprises (SMEs). The proposal will enter the ordinary legislative procedure and is not expected to be adopted before 2027.”

Annual report 2025A · The company itself

“In the EU, subject to the transitional provisions and in order to sell our products in EU member states, our products must comply with the general safety and performance requirements of the EU MDR, which repeals and replaces the MDD. Compliance with these requirements is a prerequisite to be able to affix the CE mark to our products, without which they cannot be sold or marketed in the EU.”

Annual report 2025A · The company itself

“Outside of the U.S., we own and/or lease properties in Mexicali, Mexico, Germany, and Bulgaria, primarily for manufacturing operations, and Aubonne, Switzerland, primarily for our international headquarters.”

Annual report 2025A · The company itself

“Additionally, challenges to, or investigation into, our practices could cause adverse publicity and be costly to respond to and, thus, could harm our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“We are subject to inspection and marketing surveillance by the FDA to determine our compliance with regulatory requirements. If the FDA finds that we have failed to comply, it can institute a wide variety of enforcement actions, ranging from inspectional observations (as set forth on FDA Form-483) to a public Warning Letter to more severe civil and criminal sanctions, including the seizure of our products and equipment or ban on the import or export of our products.”

Annual report 2025A · The company itself

“This facility has an FDA Establishment Registration but has not been inspected by the FDA to date. If the FDA were to identify non-conformances in our product documentation or quality system compliance, it could hold indefinitely the importation of instruments at the border, which would deprive us of the ability to sell and supply the majority of our customers until the FDA requirements have been satisfied.”

Annual report 2025A · The company itself

“To demonstrate compliance with the general safety and performance requirements, we must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. A conformity assessment procedure generally requires the intervention of a notified body.”

Annual report 2025A · The company itself

“Clearance under Section 510(k) requires demonstration that a new device is substantially equivalent to another device with 510(k) clearance or grandfathered (“pre-amendment”) status and for which a PMA is not required. If we develop products in the future that are not considered to be substantially equivalent to a device with 510(k) clearance or grandfathered status, we may be required to obtain marketing authorization through the more burdensome PMA process or alternatively through the de novo classification process, which is a path to market for novel devices that are low to moderate risk and for which a predicate device is not available.”

Annual report 2025A · The company itself

“A PMA is typically a much more complex, lengthy, and burdensome application than a 510(k) and generally takes from one to three years, or even longer, from the time the application is submitted to the FDA. In the PMA process, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical study, manufacturing, and labeling data.”

Annual report 2025A · The company itself

“In addition, a PMA application or de novo classification requests generally require the performance of one or more clinical studies. In some cases, such studies may also be required to support a 510(k) application, and any requirements to conduct clinical studies beyond those we anticipate for our current or future products could add significantly to our costs and have a material adverse effect on our business.”

Annual report 2025A · The company itself

“Certain hospitals have experienced, and may continue to experience, financial and operational pressures as a result of staffing constraints, other labor-related pressures, the supply chain environment, a decrease in government funding in healthcare, and elevated inflation, which could impact their ability to access capital markets and other funding sources, increase the cost of funding, or impede their ability to comply with debt covenants, all of which could impede their ability to provide patient care and impact their profitability.”

Annual report 2025A · The company itself

“•The failure to attract and retain key personnel could harm our ability to compete, and changes in our existing labor relationships could materially adversely impact our business, financial condition, or results of operations. •Incorporating artificial intelligence technologies into our products, services, and operations may result in legal and regulatory risks or have other adverse consequences to our business, financial condition, or results of operations. •Negative publicity, whether accurate or inaccurate, concerning our products or our company could reduce acceptance of our products and could result in decreased product demand and reduced revenues. •We could be subject to significant, uninsured losses, which may have a material adverse impact on our business, financial condition, or results of operations. •We experience long and variable contracting cycles and seasonality in our business, which may cause fluctuations in our financial results.”

Annual report 2025A · The company itself

“As of December 31, 2025, we had approximately 17,021 full-time employees, with approximately 2,288 in research and development, 7,625 in manufacturing operations, 4,837 in commercial and service operations, and 2,271 in administrative activities.”

Annual report 2025A · The company itself

“During 2025, our turnover rate was approximately 9.3%.”

Annual report 2025A · The company itself

“For example, our product development plans depend, in part, on our ability to attract and retain software, mechanical, electrical, manufacturing, and robotics engineers. Attracting and retaining qualified personnel is critical to our success, and competition for qualified personnel is intense.”

Annual report 2025A · The company itself

“•Third parties may offer to sell remanufactured or unauthorized instruments and accessories to our customers or provide unauthorized service on our systems, which could adversely impact safety, our financial results, and our reputation. •Our business is subject to complex and evolving laws and regulations regarding data privacy, data protection, artificial intelligence, and responsible use of data, and any failure to comply may result in significant liability, negative publicity, and/or erosion of trust, which may adversely affect our business, financial condition, or results of operations. •Ongoing and future global conflicts could adversely affect our business, financial condition, or results of operations. •Disruptions at the FDA and other government agencies or notified bodies could prevent our products from being cleared, certified, approved, or commercialized in a timely manner or at all, or could hinder their ability to procure our products, which may adversely affect our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“Data Privacy and Security Laws In connection with operating our business, we receive, store, use, and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws. Numerous state, federal, and foreign laws, regulations, standards, and other obligations govern the collection, use, disclosure, confidentiality, and security of personal information, including health-related information.”

Annual report 2025A · The company itself

“We are also subject to various foreign data privacy laws, including the European Union General Data Protection Regulation 2016/679 and applicable national supplementing laws and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, as well as applicable data privacy laws in China.”

Annual report 2025A · The company itself

“Our use of AI technologies may involve the storage and transmission of confidential or sensitive information, including personal information of employees, customers, and others, as well as protected health information of clients’ patients. In addition, due to the sensitive nature of the information, the security features of our computers and systems, network, and communications systems infrastructure are critical to the success of our business.”

Annual report 2025A · The company itself

“•Public health crises or epidemic diseases, or the perception of their effects, could materially adversely affect our business, financial condition, or results of operations. •If we do not successfully manage our collaboration, licensing, joint venture, strategic alliance, or partnership arrangements with third parties, we may not realize the expected benefits from such arrangements, which may have a 4 Table of Contents material adverse effect on our business, financial condition, or results of operations. •If we fail to successfully acquire or integrate new businesses, products, and technology, we may not realize expected benefits, or our business may be harmed. •We are exposed to credit risk and fluctuations in the market value of our investments. •Changes in tax laws or exposure to additional tax liabilities may adversely affect our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“Our global operations expose us to risks arising from public health crises and outbreaks of epidemic, pandemic, or contagious diseases, such as, historically, the COVID-19 pandemic, the Ebola virus, Middle East Respiratory Syndrome 42 Table of Contents (MERS), Severe Acute Respiratory Syndrome (SARS), and the H1N1 virus. These public health crises can divert medical resources and priorities toward disease treatment and adversely affect global economies and financial markets, which can negatively impact the number of procedures performed and our customers’ capital expenditures.”

Annual report 2025A · The company itself

“Due to these factors, we experienced significant and unpredictable reductions in the demand for our products as customers delayed or canceled planned procedures and capital expenditures.”

Annual report 2025A · The company itself

“In addition, public health crises and outbreaks of epidemic, pandemic, or contagious diseases can negatively impact global economies and financial markets, leading to economic slowdowns or recessions. Such conditions may reduce hospital spending, delay product demand, and increase the risk of customer payment defaults or agreement terminations due to liquidity constraints or funding issues.”

Annual report 2025A · The company itself

“Tariffs increase the cost of our products and the components and raw materials that go into making them. These increased costs adversely impact the gross margin that we earn on our products. Tariffs can also make our products more expensive for customers, which could make our products less competitive when compared to those products offered by domestic companies and reduce consumer demand.”

Annual report 2025A · The company itself

“In addition, during 2025, the U.S. federal government imposed new tariffs on imports from various countries including Mexico, Germany, and China, among others. Such tariffs and, if enacted, any further legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by governments in other countries, including reciprocal tariffs, limitations on government procurement, or technology export restrictions, could adversely impact our global operations and our ability to sell products and services in our OUS markets. Tariffs could increase the cost of our products and the components and raw materials that go into making them.”

Annual report 2025A · The company itself

“More generally, several governments, including the U.S., have raised the possibility of policies to induce “re-shoring” of supply chains, less reliance on imported supplies, and greater national production. Examples include potential “Buy America” requirements in the U.S. If such steps by local governments triggered retaliation in other markets restricting access to foreign products in purchases by their government-owned healthcare systems, the result may have an adverse impact on our business, financial condition, or result of operations.”

Annual report 2025A · The company itself

“More recently, the One Big Beautiful Bill Act (the “OBBBA”), enacted on July 4, 2025, contains provisions that, among other changes, may cause a decrease in enrollment in Medicaid and ACA marketplace plans, which could adversely affect demand for our products.”

Annual report 2025A · The company itself

“Additionally, individual U.S. states are increasingly enacting laws to control product pricing, reimbursement, and marketing cost transparency.”

Annual report 2025A · The company itself

“Other federal or state healthcare reform measures that may be adopted in the future could have a material adverse effect on our business. Any regulatory or legislative developments in domestic or foreign markets that eliminate or reduce reimbursement rates for procedures performed with our products could harm our ability to sell our products or cause downward pressure on the prices of our products, either of which would adversely affect our business, financial condition, and results of business operations.”

Annual report 2025A · The company itself

“Table of Contents The regulatory landscape surrounding AI is also evolving, and the use of machine learning technologies may expose us to an increased risk of regulatory enforcement and litigation. As the FDA and other regulatory authorities continue to develop and incorporate such principles into their regulation of MLMDs, it is possible that medical products using AI and machine learning will become subject to significant additional oversight, including with respect to premarket review, modification, monitoring, maintenance, and device performance.”

Annual report 2025A · The company itself

“In particular, the AI Act, European Health Data Space Regulation, and Data Act and Data Governance Acts regulate personal and non-personal data as well as artificial intelligence. These obligations may be interpreted in ways that require us to modify our business practices and products to maintain compliance, potentially increasing costs and operational complexity. Moreover, some of the AI features of our products involve, or may involve, the processing of personal data and may be subject to laws, policies, legal obligations, and codes of conduct related to privacy and data protection, each of which may be interpreted in ways that may affect the way in which we engage with machine learning and require us to make changes to our business practices and products to comply with such obligations.”

Annual report 2025A · The company itself

“The healthcare industry has been consolidating, and organizations continue to consolidate purchasing decisions for many of our healthcare provider customers. Numerous initiatives and reforms by legislators, regulators, and third-party payers to curb the rising cost of healthcare have catalyzed a consolidation of aggregate purchasing power within the markets in which we sell our products.”

Annual report 2025A · The company itself

“As the healthcare industry consolidates, competition to provide products and services is expected to continue to intensify, resulting in pricing pressures and decreased average selling prices.”

Annual report 2025A · The company itself

“•If our products do not achieve and maintain customer acceptance, we will not be able to generate the revenue necessary to support our business. •If hospitals are unable to obtain coverage and reimbursement for procedures using our products, if reimbursement is insufficient to cover the costs of purchasing our products, or if limitations are imposed by governments on the amount hospitals can charge for certain procedures, we may be unable to generate sufficient sales to support our business. •If our products contain defects or encounter performance problems, we may have to recall our products and our reputation may suffer. •We utilize distributors for a portion of our sales and service of our products in certain countries, which subjects us to a number of risks that could harm our business, financial condition, or results of operations.”

Annual report 2025A · The company itself

“We have increased, and will continue to increase, our operations in China. There is inherent risk, based on the complex and changing dynamic between China and the U.S., that political, diplomatic, military, or other events could result in business disruptions, including, but not limited to, increased policy or regulatory enforcement against companies, tariffs, trade embargoes, or export restrictions. Tariffs increase the cost of our products and the components and raw materials that go into making them.”

Annual report 2025A · The company itself

“For example, in 2025, the Chinese government announced export controls and licensing requirements applicable to certain products containing Chinese-origin rare earth elements and may implement additional controls in the future. Rare earth elements are critical to certain components contained in our products, and China is a predominant producer of these materials. If implemented in their current or a similar form, these measures may require us to obtain export licenses for certain of our products, and we may further experience supply chain disruptions as a result of limited availability of critical materials and minerals due to the restrictions.”

Annual report 2025A · The company itself

“The manufacture of our products requires the timely delivery of a sufficient amount of quality components and materials and is highly exacting and complex, due in part to complex trade and strict regulatory requirements. Some of the components necessary for the assembly of our products are currently provided to us by sole-sourced suppliers or single-sourced suppliers due to, among other things, quality considerations, unique intellectual property considerations, or constraints associated with regulatory requirements. We generally purchase components through purchase orders rather than long-term supply agreements 30 Table of Contents and generally do not maintain large volumes of components within our inventory.”

Annual report 2025A · The company itself

“Other adverse impacts of recent macroeconomic conditions have been, and may continue to be, supply chain constraints, logistics challenges, liquidity concerns in the broader financial services industry, and fluctuations in labor availability. We have experienced, and may continue to experience, supply chain constraints due to the current supply chain environment, including difficulties obtaining a sufficient supply of specific component materials used in our products.”

Annual report 2025A · The company itself

“The length, impact, and outcome of ongoing military conflicts is highly unpredictable and could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, trade disputes or trade barriers, changes in consumer or purchaser preferences, an increase in global shipping expenses, greater volatility in foreign exchange and interest rates, an increase in cyberattacks and espionage, and other unforeseen business disruptions.”

Annual report 2025A · The company itself

“The results of these macroeconomic conditions, and the actions taken by governments, central banks, companies, and consumers in response, have previously resulted in, and may again in the future result in, higher inflation in the U.S. and globally, which could, in turn, lead to an increase in costs and may cause changes in fiscal and monetary policy, including increases in interest rates.”

Annual report 2025A · The company itself

“Certain hospitals have experienced, and may continue to experience, financial and operational pressures as a result of staffing constraints, other labor-related pressures, the supply chain environment, a decrease in government funding in healthcare, and elevated inflation, which could impact their ability to access capital markets and other funding sources, increase the cost of funding, or impede their ability to comply with debt covenants, all of which could impede their ability to provide patient care and impact their profitability.”

Annual report 2025A · The company itself

“If interest rates remain elevated, access to credit may become more difficult, which may result in the insolvency of key suppliers, including single-source suppliers, which would exacerbate supply chain challenges.”

Annual report 2025A · The company itself

“If interest rates rise, the market value of our investments may decline, which could result in a realized loss if we are forced to sell an investment before its scheduled maturity.”

Annual report 2025A · The company itself

“In certain markets, our OUS sales are denominated in U.S. dollars. As a result, an increase in the value of the U.S. dollar relative to foreign currencies could make our products less competitive and/or less affordable in those OUS markets.”

Annual report 2025A · The company itself

“We also purchase certain product components from non-U.S. suppliers in local currency.”

Annual report 2025A · The company itself

“Our business is subject to seasonal fluctuations. Historically, placements of our da Vinci surgical systems have tended to be heavier in the fourth quarter and lighter in the first quarter, as hospital budgets are reset. In addition, we have historically experienced lower procedure volume in the first and third quarters and higher procedure volume in the second and fourth quarters.”

Annual report 2025A · The company itself

“Moreover, global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects. The impacts of climate change may include physical risks (such as frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs, transition risks, shifts in market trends, and other adverse effects.”

Annual report 2025A · The company itself

“Additionally, with economic uncertainty, an increase in unemployment rates, and increasing health insurance premiums, co-payments and deductibles may result in cost-conscious consumers pursuing fewer elective surgical procedures, which, in turn, could adversely affect procedure volumes and system demand.”

Annual report 2025A · The company itself

“For example, policymakers in various jurisdictions (including the EU and the State of California) have adopted or are considering adopting requirements for companies to make disclosures or take additional actions, including value chain diligence, related to various ESG matters. These laws are not always consistent, and, in some instances, other policymakers have taken actions to constrain companies’ consideration of such matters, which increases the complexity and cost of compliance.”

Annual report 2025A · The company itself

“For example, in 2023, certain drugs initially approved for use in diabetes patients gained acceptance for use in weight loss treatment following FDA approvals for weight loss indications. The availability and effectiveness of weight loss drugs have reduced the number of bariatric procedures performed, including those bariatric procedures performed using our da Vinci surgical system, as some patients reconsider the surgical treatment option.”

Annual report 2025A · The company itself

“A prolonged government shutdown could impact inspections, regulatory review and certifications, grants, or approvals or could cause other situations that could impede their ability to effectively deliver healthcare, including attempts to reduce payments and other reimbursements to hospitals by federal healthcare programs. These situations could adversely affect our customers’ ability to perform procedures with our devices and/or their decisions to purchase additional products from us.”

Annual report 2025A · The company itself

“Manufacturing We manufacture our systems at our facilities in Sunnyvale, California, and Peachtree Corners, Georgia, as well as at our Joint Venture’s facility in Shanghai, China. Our instruments and accessories are produced at our facilities in Sunnyvale, California, and Mexicali, Mexico. Additionally, we have Ion-related manufacturing in Blacksburg, Virginia, and endoscope-related manufacturing in Parvomay, Bulgaria and at multiple sites in Germany.”

Annual report 2025A · The company itself

“Our products and operations are subject to extensive regulation in the U.S. by the FDA. The FDA regulates the development and clinical testing, manufacturing, labeling, storage, record keeping, promotion, sales, distribution, and post-market support and medical device reporting in the U.S. to ensure that medical products distributed domestically are safe and effective for their intended uses. In order for us to market products for use in the U.S., we generally must first obtain clearance from the FDA pursuant to Section 510(k) of the FFDCA or approval of the product through the PMA pathway.”

Annual report 2025A · The company itself

“PROPERTIES As of December 31, 2025, we own approximately 4.1 million square feet of space on 128 acres of land in Sunnyvale, California, where we house our principal headquarters, research and development, service, and support functions, as well as certain of our manufacturing operations.”

Annual report 2025A · The company itself

“(collectively, the “Joint Venture”), with Fosun Pharma), Japan, South Korea, India, Taiwan, and Canada.”

Annual report 2025A · The company itself

“In Japan, to date, we received approvals from the Japanese Ministry of Health, Labor and Welfare for our da Vinci Si, Xi, X, 5, and SP surgical systems and various associated instruments and accessories for use in certain da Vinci procedures.”

Annual report 2025A · The company itself

“For example, electric utilities in certain areas where we operate have previously used planned power outages in response to wildfire risks. If prolonged or frequent, such blackouts could impact our operations and the operations of our suppliers and service providers.”

Annual report 2025A · The company itself

“An information technology systems interruption, including cyberattacks, could adversely affect the ordering, distribution, and manufacturing processes of our suppliers.”

Annual report 2025A · The company itself

“Furthermore, the impacts of global climate change on water resources may result in water scarcity, which could impact our ability to access sufficient quantities of water in certain locations and result in increased costs.”

Annual report 2025A · The company itself