“As a result, we expect higher levels of inventory relative to historical norms into 2025.”

In context

“mately 50 basis points related to the favorable conclusion of certain indirect tax matters. The remaining year-over-year difference in pro forma gross margin is primarily due to a higher mix of the Ion revenue, which currently carries significantly lower margins as compared to the da Vinci business and lower system ASP, partially offset by the I&A price increase. Inventory increased to approximately 180 days in Q3, higher than historical averages, driven by two factors: first, we have modestly increased our inventory targets given supply chain stresses over the last couple of years; and secondly, given significant capital investments we are making in manufacturing facilities and capacity, we are building bridge inventory to facilitate an elevated number of line transfers to new locations. As a result, we expect higher levels of inventory relative to historical norms into 2025. Third quarter pro forma operating expenses increased 8% year-over-year, driven primarily by higher headcount-related costs. During the quarter, our head count increased by 489 employees, of which approximately 275 were for our manufacturing operations in support of revenue growth. SG&A expenses as a percentage of revenue were lower by 100 basis points as compared to Q3 of last year and largely reflected planned leverage in our enabling functions. Pro forma other income in Q3 was $58 million compared to $42 million last quarter and $7 million last year. Other income primarily consists of interest income and the increase as compared to last quarter was driven by higher interest rates and higher average cash and investment balances. Pro forma other income in Q3 of last year also reflected hi”