NET INCOME PER SHARE
The following table presents the computation of basic and diluted net income per share attributable to Intuitive Surgical, Inc. (in millions, except per share amounts):
 
Year Ended December 31,
 202520242023
Numerator:
Net income attributable to Intuitive Surgical, Inc.$2,856.0 $2,322.6 $1,798.0 
Denominator:
Weighted-average shares outstanding used in basic calculation356.9 355.2 351.2 
Add: dilutive effect of potential common shares5.8 6.8 6.2 
Weighted-average shares outstanding used in diluted calculation362.7 362.0 357.4 
Net income per share attributable to Intuitive Surgical, Inc.:
Basic$8.00 $6.54 $5.12 
Diluted$7.87 $6.42 $5.03 
Share-based compensation awards of approximately 1.0 million, 0.2 million, and 1.9 million shares for the years ended December 31, 2025, 2024, and 2023, respectively, were outstanding but were not included in the computation of diluted net income per share attributable to Intuitive Surgical, Inc. common stockholders, because the effect of including such shares would have been anti-dilutive in the periods presented.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.