stockrowWhat it does
Intuitive Surgical, founded in 1995 and headquartered in Sunnyvale, provides technology used by hospitals, surgeons, physicians and care teams in minimally invasive procedures. Its core offering is the da Vinci robotic-assisted surgical platform, which is used across general, urologic, gynecologic, cardiothoracic, head and neck, and other surgical specialties. The company also sells the Ion endoluminal system, a robotic catheter platform for minimally invasive lung biopsies.
A da Vinci system lets a surgeon sit at a console and view a three-dimensional, high-definition image of the surgical field. The surgeon’s hand movements are translated into small movements of instruments inside the patient. The range includes multi-port da Vinci 5, X, Xi and Si systems, plus the single-port da Vinci SP system for procedures through one incision or a natural orifice.
The company supplies the instruments, staplers, energy products, imaging products and accessories used with these systems. It also provides training, simulation, remote learning, installation, maintenance, technical support, analytics and digital applications. Ion uses an articulating catheter, real-time shape sensing and biopsy tools to help physicians navigate the lung and collect tissue from small or hard-to-reach lesions.
Intuitive’s digital products include My Intuitive, Case Insights, SimNow, Telepresence and hospital analytics. These offerings connect procedure, training and system data with customer workflows.
How it makes money
Intuitive earns revenue from system sales or leases, procedure-related instruments and accessories, and service contracts. Systems are the capital equipment component. Instruments and accessories include reusable products with prescribed procedure limits, single-use products such as staplers, and products needed to operate and maintain da Vinci and Ion systems. This makes procedure volume relevant to recurring product sales after a system is installed.
Service revenue comes from installation, repair, maintenance, around-the-clock technical support, monitoring, software updates and service-care plans. The company also offers time-and-material programs. Learning, consulting, analytics and digital tools support customers’ programs and can be tied to the installed base.
FY2025 revenue mix: instruments and accessories were $6.0 billion, systems were $2.5 billion, and service was $1.6 billion. Q3 2026 revenue was just over $3 billion, of which 84% was recurring revenue.
In FY2025, instruments and accessories represented 59.8% of revenue and grew 18.5%; systems represented 24.6% and grew 25.8%; service represented 15.6% and grew 20.3%. In Q3 2026, instruments and accessories revenue was $1.8 billion and service revenue was $482 million.
The company plans pricing actions beginning in the first half of 2027 that include longer useful lives for selected core EndoWrist instruments and volume-based pricing. It expects the combined pricing actions and China price reduction to lower da Vinci instruments-and-accessories revenue per procedure by approximately 3% to 5% on a mix-constant basis once fully implemented. The company is concentrating these actions in high-volume benign procedures where customer cost can constrain adoption.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Instruments and accessories | $6.0 billion | 59.8% | 18.5% |
| Systems | $2.5 billion | 24.6% | 25.8% |
| Service | $1.6 billion | 15.6% | 20.3% |
Customers and how it sells
Intuitive sells to hospitals, healthcare systems, surgeons, physicians, operating-room teams and ambulatory surgery centers. Its customers use da Vinci in surgery and Ion in diagnostic lung-biopsy procedures. The company supports customers with direct field-service and technical-support engineers in the U.S., Canada, Europe and Asia, and through distributor relationships in other markets.
The installed customer base spans established and newer programs. In Q3 2026, almost 7,000 customers in more than 70 countries performed da Vinci procedures. Nearly 4,000 international customers had da Vinci programs, and nearly 25% operated two or more systems. The company had more than 13,200 da Vinci and Ion systems installed worldwide at quarter-end.
The company is expanding its focus on ambulatory surgery centers. It placed 18 systems at U.S. ambulatory surgery centers in Q3 2026, including 15 XiR systems. It describes this as an early-stage, multiyear effort. It also offers a tiered system portfolio intended to fit different customer economics, including more cost-sensitive markets and ambulatory settings.
Outside the U.S., Q3 2026 total and da Vinci procedures grew 20%; Europe grew 20%, Asia 19%, and Rest of World geographies 22%. The company reported growth in Europe led by the U.K., Germany and Italy; in Asia by India and Taiwan; and in Rest of World markets by Canada, Australia and Brazil.
Suppliers and costs
Intuitive manufactures a significant majority of the instruments and accessories it sells in Mexicali, Mexico. Most of those products qualify under the USMCA and had not been subject to U.S. import tariffs at the time described. The company also imports raw materials and finished goods, including endoscopes, a majority of which are manufactured in Germany. Its China operations involve raw-material imports, sub-assemblies for local da Vinci Xi manufacturing and sales of U.S.-manufactured da Vinci Xi systems into China.
Tariffs and other trade measures increased 2025 cost of revenues by approximately $63.0 million. The company expects tariff-driven cost of revenues to continue increasing in 2026 if announced and implemented tariffs remain in place. Suppliers have incurred incremental tariffs and may pass those costs to Intuitive.
Manufacturing costs and margins can also be affected by production volumes, yields, materials, labor, foreign exchange, product mix, inventory obsolescence, product recalls, delays and changes in system sale, lease and trade-in mix. No sole-source supplier is identified here. The company plans a new instruments-and-accessories manufacturing facility in Penang, Malaysia, expected to begin operations in 2028.
- Revenue$10.1B
- Cost of revenue−$3.4B
- Research and development−$1.3B
- Selling, general and administrative−$2.4B
- Operating income$2.9B
Competitive position
Intuitive competes with open surgery, conventional minimally invasive surgery such as laparoscopy, drug therapies, radiation treatment, diagnostic approaches and other interventional approaches. In robotic-assisted medical procedures and robotic bronchoscopy, named competitors include Beijing Surgerii Robotics Company Limited, CMR Surgical Ltd., Distalmotion SA, Johnson & Johnson, Karl Storz SE & Co. KG, Medtronic plc, Noah Medical Corporation, Shanghai Microport Medbot (Group) Co., Ltd. and SS Innovations International, Inc.
Johnson & Johnson and Medtronic plc are also identified as competitors for robotically controlled products such as da Vinci stapling and energy products, areas where the company faces larger and established companies. The company expects increasing competition for robotic-assisted systems in China. It states that competitors may exert pricing pressure by offering products that are more effective or less expensive, while customers may delay purchases in anticipation of alternatives.
Our reading: The installed base, procedure-linked instruments and accessories, service infrastructure, training pathways and connected digital tools provide a meaningful ecosystem-based moat because customers use multiple connected components after placing a system. [item1; call_prepared]
Our reading: This moat is qualified by the presence of established medical-device companies, emerging robotic-platform suppliers and entrenched laparoscopic and open-surgery alternatives; it is therefore strongest where customer training, support and installed-system integration matter most. [item1; call_qa]
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Johnson & Johnson | robotic surgery, stapling and energy products | High |
| Medtronic plc | robotic surgery, stapling and energy products | High |
| CMR Surgical Ltd. | robotic-assisted medical procedures | Medium |
| Beijing Surgerii Robotics Company Limited | robotic-assisted medical procedures | Medium |
| Noah Medical Corporation | robotic-assisted medical procedures | Medium |
Growth opportunities
The company’s growth initiatives include placing more da Vinci and Ion systems, increasing use at existing sites, expanding into benign procedures, entering additional countries, addressing ambulatory surgery centers and adding cleared applications. In Q3 2026, the company placed 546 da Vinci systems, including 315 da Vinci 5 systems, and 56 Ion systems. Da Vinci placements increased 28% worldwide, with da Vinci 5 and SP representing 65% of global placements.
Newer platforms are a central part of this effort. The da Vinci 5 installed base exceeded 1,700 systems since launch, used by more than 15,000 surgeons. The SP installed base was 487 systems across 27 countries, while SP procedure growth was 55% in Q3 2026. Force Feedback was used in about 8.00% of da Vinci 5 cases in the quarter.
The company is pursuing wider adoption of benign general surgery, including hernia repair and cholecystectomy, particularly outside the U.S. Benign procedures represented over one-quarter of international volume in Q3 2026, and international benign-procedure adoption grew 41%. The company is also pursuing cardiac and breast procedures, although it describes both as early-stage opportunities. It sizes the cleared cardiac opportunity at 300,000 to 400,000 procedures annually in regions where it is cleared.
Product-development programs include advanced visualization using hyperspectral imaging and artificial-intelligence features for da Vinci, plus ROSE and integrated endobronchial ultrasound programs for Ion. The company expects these Ion developments to support diagnosis and staging, and it is seeking additional regulatory clearances and indications across markets.
- $5.7BFY2021
- $6.2BFY2022
- $7.1BFY2023
- $8.4BFY2024
- $10.1BFY2025
Structural risks
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Competition and adoption: Customers may choose competing products or services, may continue using open surgery or conventional minimally invasive surgery, or may not accept robotic-assisted medical procedures. Competitors can introduce more effective or less expensive products and create pricing pressure.
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Regulation and reimbursement: Medical-device clearances, approvals, certifications, inspections, reporting obligations and healthcare laws apply across markets. Longer regulatory timelines can delay new products or indications. Reimbursement and policy changes can affect procedure adoption and customer economics.
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International exposure: Foreign operations face tariffs, trade barriers, changing regulations, currency movements, local protectionism, political and economic conditions, limits on cross-border goods movement and challenges in staffing or managing operations. China is described as a challenging operating environment, with domestic robotic competition and policy-driven pricing pressure.
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Manufacturing and supply chain: Production depends on quality control, yields, component availability, qualified personnel and cross-border supplies. Shortages, import or export restrictions, trade measures, tariff costs or disruption in critical materials could affect production costs and product availability.
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Margin and product risk: Gross margins can vary with system and geographic mix, leases, trade-ins, new-product launches, pricing, manufacturing costs, foreign exchange, inventory obsolescence, recalls and shipment delays. Product defects, recalls, liability claims or regulatory actions could lead to lost revenue, higher service or warranty costs and reputational damage.
Bottom line
Our reading
Our reading: Intuitive is a medical-technology platform business built around installed surgical and diagnostic systems, procedure-linked instruments and accessories, and service revenue. Its recurring revenue model is supported by the use of systems already placed with customers, while system placements extend that base. [item1; call_prepared]
Our reading: Growth rests on broader procedure adoption, newer da Vinci platforms, Ion, international expansion and additional indications, but is exposed to competitive pricing, regulation, reimbursement, trade costs and uneven capital spending by healthcare providers. [item1; item1a; call_prepared]