8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report: January 22, 2009

(Date of earliest event reported)

INTUITIVE SURGICAL, INC.

(exact name of registrant as specified in its charter)

Delaware	000-30713	77-0416458
(State or other jurisdiction of incorporation or organization)	Commission File Number	(I.R.S. Employer Identification No.)

1266 Kifer Road

Sunnyvale, California 94086

(Address of Principal executive offices, including zip code)

(408) 523-2100

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 22, 2009, Intuitive Surgical, Inc. (“Intuitive”) issued a press release announcing its financial results for the quarter ended December 31, 2008. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Current Report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Intuitive under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

d) Exhibits.

The following exhibit is furnished with this report on Form 8-K:

99.1 Press release issued by Intuitive Surgical, January 22, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTUITIVE SURGICAL, INC.
Date: January 22, 2009	By	/s/ Marshall L. Mohr
		Name:	Marshall L. Mohr
		Title:	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release issued by Intuitive Surgical, January 22, 2009

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contacts:	Ben Gong	408-523-2175
		Rae Covington	408-523-2161

INTUITIVE SURGICAL ANNOUNCES FOURTH QUARTER EARNINGS

SUNNYVALE, CALIF. January 22, 2009 – Intuitive Surgical, Inc. (NASDAQ: ISRG), the industry leader in surgical robotics, today reported fourth quarter 2008 revenue, consistent with its pre-release of January 7, 2009, of $231.5 million, increasing 22% from $189.4 million for the fourth quarter of 2007. Fourth quarter 2008 revenue growth was driven by continued robotic procedure adoption.

Fourth quarter 2008 instruments and accessories revenue increased 45% to $81.6 million from $56.1 million during the fourth quarter of 2007. Fourth quarter 2008 da Vinci ^® Surgical Systems revenue increased 5% to $113.7 million from $108.6 million during the fourth quarter of 2007. Fourth quarter 2008 service revenue increased 46% to $36.2 million from $24.7 million during the fourth quarter of 2007.

Revenue for the year ended December 31, 2008 totaled $874.9 million, increasing 46% from $600.8 million for the year ended December 31, 2007.

	Three Months Ended December 31,						Twelve Months Ended December 31,
Revenue ($Millions)	2008		2007		Increase		2008		2007		Increase
Instruments/Accessories	$	81.6	$	56.1	$	25.5	$	293.0	$	191.7	$	101.3
Systems		113.7		108.6		5.1		455.3		324.4		130.9
Service		36.2		24.7		11.5		126.6		84.7		41.9
	$	231.5	$	189.4	$	42.1	$	874.9	$	600.8	$	274.1

Fourth quarter 2008 operating income increased 13% to $82.7 million, compared with $73.4 million for the fourth quarter of 2007. Operating results for the fourth quarter of 2008 included $21.4 million of non-cash stock-based compensation expense in accordance with the Financial Accounting Standards Board SFAS 123R, compared with $10.1 million for the fourth quarter of 2007.

Fourth quarter 2008 net income increased 3% to $50.8 million, compared with $49.2 million for the fourth quarter of 2007. Diluted earnings per share increased to $1.27 for the fourth quarter of 2008 from $1.24 for the fourth quarter of 2007.

Net income for the year ended December 31, 2008 was $204.3 million, or $5.12 per diluted share, compared to net income of $144.5 million, or $3.70 per diluted share for the year ended December 31, 2007.

Intuitive ended the fourth quarter of 2008 with cash, cash equivalents and investments of $902 million, up $80 million from September 30, 2008 and up $266 million from December 31, 2007.

Commenting on the announcement, Lonnie Smith, Chairman and CEO of Intuitive Surgical, said, “We are pleased with our continued worldwide procedure growth. While our fourth quarter system unit sales were lower than planned, we believe that our procedure momentum remains strong and patient demand for robotic surgery will continue to drive growth in 2009.”

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 877-909-3508 for participants located in the U.S. and 517-645-6051 for participants located outside the U.S. The passcode is ISRG and the meeting leader is Mr. Lonnie Smith. 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:

The da Vinci^® Surgical System consists of a surgeon’s viewing and control console having an integrated, high-performance InSite^® 3-D, high definition vision system, a patient-side cart consisting of three or four robotic arms that position and precisely maneuver endoscopic instruments and an endoscope, and a variety of articulating EndoWrist^® Instruments. By integrating computer-enhanced technology with surgeons’ technical skills, Intuitive believes that its system enables surgeons to perform better surgery in a manner never before experienced. The da Vinci^® Surgical System seamlessly and directly translates the surgeon’s natural hand, wrist and finger movements on instrument controls at the surgeon’s console outside the patient’s body into corresponding micro-movements of the instrument tips positioned inside the patient through small puncture incisions, or ports.

Intuitive^®, da Vinci^®, da Vinci^® S™, InSite^®, and EndoWrist^® 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 the global economic recession and tightening credit market and related impact on health care spending; timing and success of product development and market acceptance of developed products; 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 Intuitive Surgical operates; unanticipated manufacturing disruptions; delays in regulatory approvals of new manufacturing facilities or the inability to meet demand for products, the results of the year end audit, and the other factors detailed from time to time under the heading “Risk Factors” in our report on Form 10-K for the year ended December 31, 2007, 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 “estimate”, “project”, “plan”, “intend”, “expect”, “anticipate”, “believe” and similar 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 THOUSANDS, EXCEPT PER SHARE DATA)

	Three months ended
	December 31, 2008		September 30, 2008		December 31, 2007
Revenue:
Instruments & Accessories	$	81,575	$	75,941	$	56,095
Systems		113,752		126,326		108,607
Services		36,218		33,725		24,744
Total revenue		231,545		235,992		189,446
Cost of revenue:
Products		51,669		53,517		42,587
Services		14,536		12,900		11,659
Total cost of revenue (1)		66,205		66,417		54,246
Gross profit		165,340		169,575		135,200
Operating expenses:
Selling, general and administrative		61,739		62,692		45,694
Research and development (2)		20,864		21,851		16,124
Total operating expenses (1)		82,603		84,543		61,818
Income from operations		82,737		85,032		73,382
Interest and other income, net		5,525		4,594		8,432
Income before income taxes		88,262		89,626		81,814
Provision for income taxes		37,504		32,032		32,660
Net lncome	$	50,758	$	57,594	$	49,154
Earnings per share:
Basic	$	1.30	$	1.48	$	1.28
Diluted	$	1.27	$	1.44	$	1.24
Shares used in computing earnings per share:
Basic		39,138		39,015		38,364
Diluted		39,837		40,108		39,756

(1) Includes stock compensation expense of $3.1 million, $3.1 million and $1.6 million in total cost of revenue and $18.3 million, $17.9 million and $8.5 million in total operating expenses for the three months ended December 31, 2008, September 30, 2008 and December 31, 2007, respectively.

(2) Includes amortization of purchased intellectual property of $3.4 million, $2.7 million and $0.5 million in research and development expenses for the three months ended December 31, 2008, September 30, 2008 and December 31, 2007, respectively.

INTUITIVE SURGICAL, INC.

UNAUDITED ANNUAL CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Year ended December 31,
	2008		2007
Revenue:
Instruments & Accessories	$	292,989	$	191,651
Systems		455,336		324,438
Services		126,594		84,739
Total revenue		874,919		600,828
Cost of revenue:
Products		200,074		145,654
Services		54,068		40,888
Total cost of revenue (1)		254,142		186,542
Gross profit		620,777		414,286
Operating expenses:
Selling, general and administrative		230,570		158,685
Research and development (2)		79,372		48,859
Total operating expenses (1)		309,942		207,544
Income from operations		310,835		206,742
Interest and other income, net		24,368		30,492
Income before income taxes		335,203		237,234
Provision for income taxes		130,888		92,697
Net lncome	$	204,315	$	144,537
Earnings per share:
Basic	$	5.26	$	3.82
Diluted	$	5.12	$	3.70
Shares used in computing earnings per share:
Basic		38,877		37,831
Diluted		39,943		39,021

(1) Includes stock compensation expense of $11.4 million and $5.8 million in total cost of revenue and $65.3 million and $30.5 million in total operating expenses for the year ended December 31, 2008 and 2007, respectively.

(2) Includes amortization of purchased intellectual property of $9.8 million and $1.3 million in research and development expenses for the year ended December 31, 2008 and 2007, respectively.

INTUITIVE SURGICAL, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	12/31/2008		9/30/2008		12/31/07
Cash, cash equivalents, and investments	$	901,873	$	821,431	$	635,381
Accounts receivable, net		170,107		173,708		130,370
Inventory		63,460		52,498		32,416
Property and equipment, net		117,021		98,081		68,093
Goodwill		110,740		110,740		110,740
Deferred tax assets		45,357		38,973		24,577
Other assets		66,066		69,240		38,421
Total assets	$	1,474,624	$	1,364,671	$	1,039,998
Accounts payable and other accrued liabilities	$	128,606	$	108,442	$	96,632
Deferred revenue		79,252		72,801		54,692
Total liabilities		207,858		181,243		151,324
Stockholders’ equity		1,266,766		1,183,428		888,674
Total liabilities and stockholders’ equity	$	1,474,624	$	1,364,671	$	1,039,998