The Real Money Machine Nobody's Talking About: Intuitive Surgical's Hidden Profit Engine

Intuitive Surgical (ISRG) keeps grabbing headlines for da Vinci surgical robot sales—Q3 2025 placed 427 new units, up from 379 YoY. But here’s what most investors miss: robots are just the loss leader. The actual cash cow is accessories and consumables.

Here’s the math that matters:

• Robot sales? About 25% of revenue
• Instruments & accessories? Around 60% of revenue
• Services? The remaining 15%

The killer stat: robots grew 13% YoY, but procedures using da Vinci systems jumped 20%. That’s the real story. Every surgery = consumable parts sold. Every installed system = recurring revenue stream.

This is textbook annuity business model. Fast forward a decade, and if the trend holds, parts/services could balloon to 80% of total revenue while robot sales shrink to just 20%.

The catch? At 72x P/E, ISRG isn’t cheap. But that valuation starts making sense once you realize you’re not buying a medical device company—you’re buying a recurring revenue machine disguised as one.

The question for the next 10 years: Can they keep expanding procedures faster than competitors? If yes, the flywheel keeps spinning.