Intuitive Surgical (ISRG)

Business Overview

Intuitive Surgical sells a surgical robot once and then earns on every operation it performs, and it is the only company in this medtech set that files the share of revenue that repeats. FY2025 revenue was $10,064.7M, up 21%; that is total growth, since the company publishes no organic rate. Recurring revenue was 84% of the total.

The filed operating figures are the installed base and the procedures run on it. At 31 December 2025 there were 11,106 da Vinci surgical robots in the field (+12% from 9,902) and 995 Ion systems, Intuitive's robot for lung biopsies. Worldwide da Vinci procedures reached about 3.15 million (+18%), and Ion procedures rose about 51%. Instruments and accessories (I&A), the single-use tools each operation consumes, brought in $6,018.9M (59.8% of revenue, +19%), against $2,473.7M (24.6%) from selling systems. Pull-through, the I&A revenue per da Vinci procedure, was $1,810, flat on the year.

GAAP gross margin was 66.0% and GAAP operating margin 29.3%, the highest of the six. R&D was $1,311.8M, 13.0% of sales.

How the Numbers Read

84% recurring, on Intuitive's definition. The 10-K builds it from three lines: I&A $6,018.9M, service $1,572.1M and operating-lease rent on robots $874.3M, together $8,465.3M of $10,064.7M. The lease rent is booked inside systems revenue, so about a tenth of the recurring figure is robot rent rather than consumables; the razor-and-blade guide sets out the full split. Medtronic, Abbott, Stryker, Boston Scientific and Edwards file no group recurring share. We class above 70% recurring as the razor-blade archetype, and Intuitive clears it on filed data.

Systems × procedures × pull-through. 11,106 systems, each running about 284 procedures a year, at $1,810 of I&A per da Vinci procedure gives about $5.7B, against $6.0B of I&A reported. The $1,810 counts da Vinci only; most of the other $0.3B is instruments for Ion procedures. The installed-base guide teaches the chain on these figures. Procedure growth (+18% da Vinci, +51% Ion) shows up first, and I&A revenue (+19%) follows it.

Growth input: 21% total. With no organic line, 21% total growth is the figure for peer tables. Boston Scientific grew 15.8% organic (19.9% reported), Stryker 10.3% organic, Edwards +10.7% at constant currency, Abbott 5.5% organic and Medtronic 4.9% organic (year to 25 April 2025). The growth-adjusted P/E guide explains why a headline P/E compares poorly across growth rates this far apart.

Free cash flow about $2.5B. Operating cash flow of $3,030M less $539.8M of property and equipment purchases, from the 10-K.

Valuation Framework

Intuitive shows in filed numbers what a high-recurring franchise looks like, so a valuation starts from procedures. Pull-through was flat at $1,810 while procedures grew 18%, so FY2025 revenue growth came from volume alone.

That makes procedure growth the input that matters most. A fall in pull-through would reach the recurring 84% of revenue directly, while a slowdown in system sales would touch only the 24.6% that is capital.

What to Watch in the Financials

Procedure growth (~3.15M, +18%). I&A revenue tracks procedures, so a slowdown shows up there first.

Pull-through ($1,810 per da Vinci procedure). Flat in FY2025. More complex procedures could lift it; competitive instrument pricing could push it down.

Systems against recurring mix. Systems were 24.6% of revenue. A burst of placements can dilute the recurring share for a while without any change in the economics.

Ion is early and growing fast: 995 systems and +51% procedures. Whether its pull-through matches da Vinci's as it scales is still open.

Key Risks

Competing robots. Medtronic, Johnson & Johnson and others are placing rival systems. Intuitive's defence is its installed base and surgeons' familiarity with the workflow as much as its patents.

Hospital capital budgets. The 84% is not fully insulated from them. Lease rent on robots is part of it, and system sales are the other 16% of revenue, so a squeeze on hospital budgets would slow placements even with procedure volumes holding.

Growth duration. At 21% growth, much of a long-range forecast rests on procedure growth lasting for years, which no single quarter of I&A can confirm.

What the Screening Shows

Against the Medtech Sector Primer screens:

• Recurring revenue: 84% disclosed, including operating-lease systems; above the 70% razor-blade line, and the only filed group share in the set.
• Installed base: 11,106 da Vinci and 995 Ion systems at 31 Dec 2025.
• Procedures: ~3.15M da Vinci (+18% YoY).
• I&A: $6,018.9M (59.8% of revenue); $1,810 per da Vinci procedure.
• Operating margin: 29.3% GAAP, highest of the six.
• Growth: 21% total revenue; no organic rate filed.