Intuitive Surgical ISRG
The surgical robot most hospitals already own, earning most of its money on the instruments used in every operation. The open question is whether procedure growth near 14% can carry revenue per operation lower as extended-use instruments and rival robots arrive. Seven questions that follow the money through the business, the price and the tape. Every number comes from SEC filings and market data, and every score from a rule printed next to it.
What this File stands on. Annual figures: FY2025 10-K (year to 2025-12-31, filed 2026-02-03). "Last 12 months" figures add the quarters through 2026-09-30 (10-Q, filed 2026-10-21). Prices to 2026-10-21. "Last 12 months" figures leave out a one-off: the antitrust settlement charge, after tax (-$347M, quarter to 2026-09-30, Q3 2026 results release (8-K, Oct 2026)), taken out of net income. "Last 12 months" figures leave out a one-off: the antitrust settlement charge inside operating profit (-$450M, quarter to 2026-09-30, Q3 2026 results release (8-K, Oct 2026)), taken out of operating_income. The numbers rebuild every Monday, so each new 10-Q or 10-K appears within a week of filing. The written parts (business, defences, risks, the read) are from the FY2025 10-K, and the terminal read is dated 2026-10-22.
60 cents of every revenue dollar come from instruments and accessories, up 19% on the year.
What it does
Makes the da Vinci robot that surgeons use for keyhole operations, and the Ion robot for lung biopsies. 12,094 da Vinci systems were installed worldwide at the end of September 2026.
How it charges
Every operation uses instruments and accessories only Intuitive sells: 60% of revenue. Systems, sold or leased, are 25%, and service contracts 16%. Half of new da Vinci systems in 2025 were leased, many paid per use.
Who buys, and why
Hospitals and hospital groups, which pay for the robot once and for the instruments in every operation after that. Surgeons who trained on da Vinci keep asking for it.
Of every $100 of sales, $24 is left for owners once staff stock pay is counted as a cost.
Owner earnings = operating cash flow minus capital spending minus stock-based pay. Stock pay is a real cost: it is paid in shares instead of cash.
What it is building Paying off
It reinvests heavily, and past investment has earned its keep.
R&D is treated as an investment written off over 5 years. Capital spending up to depreciation keeps the business standing; anything above it is growth spending. A company that puts more than 10% of sales into R&D and growth capex is building; it is paying off when after-tax profit has grown by at least 12 cents for every extra dollar of capital it put in.
Dilution is held to 0.1% a year, so the company's growth mostly reaches each share.
CEO Dave Rosa, in the seat since 2025.
The strongest defence is switching costs. Gross margin has been steady, within 3 points over 6 periods.
A hospital that owns or leases a da Vinci, and whose surgeons trained on it, rarely runs a second robot from another maker beside it.
More than 3 million procedures a year build the training, data and clinical evidence that draw the next surgeon, but one more hospital does not make the robot better for another.
Instrument factories and a service network sized for 12,000 robots spread fixed cost no newcomer can match yet, though Medtronic and J&J have the money to try.
More than 5,600 patents in force and over two decades of published clinical results behind every procedure type it is cleared for.
Sources are rated from the annual report (notes file). The two evidence checks are computed: margins that hold and high returns on capital are what a real defence looks like in the numbers.
A reverse discounted cash flow: the growth today's price requires, set against what the business has actually delivered, and how that changes if you demand a different return.
The IVT terminal read on the weekly and daily charts: bias, money flow, strength, whether the entry window is open, and the sharp captures.
The worst fall of the last five years, the balance sheet, the pressure points and the specific conditions that would break the case.
Where the business sits on quality against price, the quality score line by line, and the conclusion.
The rest of the ISRG File
Chapters 5 to 8: the growth today\'s price assumes, the full IVT terminal read with sharp captures, what would break the case, and the final read.
Where every number comes from 12 figures, each linked to its SEC filing
| Figure | Value | Period | Filing |
|---|---|---|---|
| Revenue | $10.1B | FY25 | 10-K, filed 2026-02-03RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | $6.6B | FY25 | 10-K, filed 2026-02-03GrossProfit |
| Cost of sales | $3.4B | FY25 | 10-K, filed 2026-02-03CostOfGoodsAndServicesSold |
| Operating income | $2.9B | FY25 | 10-K, filed 2026-02-03OperatingIncomeLoss |
| Net income | $2.9B | FY25 | 10-K, filed 2026-02-03NetIncomeLoss |
| Operating cash flow | $3.0B | FY25 | 10-K, filed 2026-02-03NetCashProvidedByUsedInOperatingActivities |
| Capital spending | $540M | FY25 | 10-K, filed 2026-02-03PaymentsToAcquireProductiveAssets |
| Stock-based pay | $788M | FY25 | 10-K, filed 2026-02-03ShareBasedCompensation |
| Buybacks | $2.3B | FY25 | 10-K, filed 2026-02-03PaymentsForRepurchaseOfCommonStock |
| Diluted shares | 363M | FY25 | 10-K, filed 2026-02-03WeightedAverageNumberOfDilutedSharesOutstanding |
| Cash and investments | $3.0B | 2026-09-30 | 10-Q, filed 2026-10-21CashAndCashEquivalentsAtCarryingValue |
| Shareholders' equity | $16.0B | 2026-09-30 | 10-Q, filed 2026-10-21StockholdersEquity |
Educational research, not investment advice and not a recommendation to buy or sell any security. Scores are mechanical and reproducible from public filings; the notes are the author's judgment. Author position in ISRG: none. Sources: SEC EDGAR XBRL company facts (filings to 2026-09-30), daily prices to 2026-10-21. Past performance does not predict future returns.