Q : The gross margin guidance for 2025 seems lower than expected. Can you explain the drivers from 2024 to 2025 and the path back to 70%? A : Jamie Samath, CFO: The main drivers are increased depreciation expense, product mix with da Vinci 5, Ion, and SP, and FX impacts. Depreciation accounts for about 1 point of the 160-point delta. Over the midterm, we aim to exceed 70% gross margin through leveraging scale, improving product margins, and routine cost reductions.

Q : How are you thinking about the mix of da Vinci 5 versus Xi going forward, especially with the upcoming full launch and trade-in cycle? A : Gary Guthart, CEO: The broad launch depends on supply chain readiness and global clearances. The upgrade cycle will be driven by the differential value of da Vinci 5 features. Xi remains a capable system, and refurbished Xi could open opportunities in capital-sensitive markets.

Q : Can you provide an update on the capital equipment environment globally, particularly in China? A : Jamie Samath, CFO: The environment in China remains challenging due to domestic competition and government activities. In the US, capital interest is strong, partly due to da Vinci 5. Challenges persist in the UK and Germany, with some delays in Japan due to financial pressures.

Q : With R&D spending over $1 billion, what are the medium-term investment opportunities, and are there new green spaces to explore? A : Gary Guthart, CEO: Opportunities exist in extending existing platforms, developing new platforms, and expanding indications geographically. We balance investments across these areas, focusing on innovation that meets customer needs and opens new markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

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