Intuitive Surgical: Enhancing Surgery with Robotic Precision

In a quiet operating room, a high-stakes surgery is entering its fifth hour. The surgeon's hand trembles ever so slightly as the procedure enters its most critical phase. But inside the patient, the instruments stay perfectly steady. Why? Because the robotic system controlled from a distance filters out every tremor. The reason is Intuitive Surgical. What began as an experiment to overcome human limits has become a force reshaping surgery and building one of the strongest business moats in modern healthcare.

• Interdisciplinary innovation: The company was founded on the belief that robotics could enable surgeons to perform more precise procedures by translating their movements into steady, controlled actions inside the body.

• The adoption curve: The first decades of Intuitive Surgical's journey were marked by ups and downs as it worked to establish robotic surgery in operating rooms worldwide. Today, it stands as the clear leader in the field.

• Procedure breadth: The company's da Vinci surgical systems now support over 70 clinical applications, with the offering continuously expanding across new procedures and specialties.

• The Ion system: Launched in 2019, Ion expanded Intuitive's portfolio into robotic-assisted lung biopsies, offering a minimally invasive approach to detect early-stage lung cancer.

• Razor-and-blade business: Intuitive Surgical's largest revenue driver is the recurring demand for instruments and accessories for each specific procedure.

• Increasing competition: In recent years, a growing field of competitors has emerged, hoping to challenge Intuitive's leading position in surgical robotics.

This story begins with a man called Frederic Moll. In the early 1980s, he had just graduated from medical school and was starting his career as a surgical resident. During this time, an observation in the operating room left a lasting impression that would shape the course of his career:

The invasiveness of traditional surgery didn’t sit right with Moll, who believed there had to be a better way. Motivated by that idea, he took a leave of absence to explore whether new instruments could overcome the limitations he had witnessed. Over the next decade, he founded and sold two medical device companies focused on laparoscopic technology – a surgical technique that uses small incisions, cameras, and specialized instruments to minimize trauma and speed recovery. One of these companies was acquired by Eli Lilly and turned into a subsidiary called Guidant (now partly owned by Abbott Laboratories and Boston Scientific).

While Moll was independently exploring new approaches to minimally invasive surgery, researchers at SRI International (formerly Stanford Research Institute) were conducting a parallel effort. Beginning in the late 1980s, they were developing a robotic system to assist surgeons, with a focus on “telesurgery” – the idea of operating robotic instruments remotely while viewing the procedure on a monitor. Originally intended for battlefield medicine, the project was developed in close collaboration with the Pentagon's Defense Advanced Research Projects Agency (DARPA).

When Moll saw SRI's prototype, he immediately recognized its potential. He believed the technology could allow surgeons to perform more precise procedures by translating their movements into steady, controlled actions inside the body, without directly handling the instruments.

By that time, Moll was working at Guidant, the very company that had grown out of his own startup. Guidant had quickly become a leader in endoscopic surgical tools and seemed like a natural fit for his next idea. Moll pitched the concept of acquiring SRI's robotic surgery technology, but his employer saw it as too futuristic and unlikely to become commercially viable.

Around this time, in 1995, he was introduced to venture capitalist Dr. John Freund and engineer Rob Younge. After digging into the idea, both quickly became equally convinced of its potential. The three teamed up, and Moll left Guidant to pursue the opportunity. With venture funding secured, they acquired the rights to SRI's robotic surgery technology, as well as licenses for various technologies from institutions like MIT and IBM, and founded a new company: Intuitive Surgical.

As they began building out the company, the trio brought together a multidisciplinary team of scientists and engineers to transform SRI's system into a viable surgical platform. Among them was Gary Guthart, an engineer who would steadily rise through the organization's ranks and eventually become CEO in 2010 – a position he still holds today.

Frederic Moll initially served as CEO of Intuitive Surgical, holding the role for two years before handing it over to Lonnie Smith in 1997. Robert Younge led the technical development of the company's surgical system as CTO.

The system was specifically designed for minimally invasive procedures. The goal was to overcome the limitations of traditional laparoscopy, such as restricted range of motion and counterintuitive hand movements, while reducing trauma to the patient and enabling faster recovery.

Under Younge's leadership, the team engineered a system that tracked the surgeon's hand, wrist, and finger movements using a network of 40 sensors mounted on joysticks and control handles. These inputs were digitized, processed 1,000 times per second, and converted into precise micro-movements at the instrument tips, aiming not only to replicate the hand's movement – but to enhance it.

The setup consisted of two core components: a surgeon's console and a three-armed robotic tower. Two of the arms were designed to manipulate surgical instruments, while the third held a high-definition binocular endoscope, providing a magnified view of the surgical field.

Inside the console, surgeons rested their hands on ergonomic control grips, aligned with the visual axis and supported by 10x-15x magnification. The system offered a full range of motion similar to the human hand, fingers, and wrist, with built-in tremor and jitter filtration to help stabilize delicate movements. It was also engineered with seven degrees of freedom, allowing the instruments to move in all the ways a human hand and wrist can, and much more. These included:

• Insertion/Retraction (in and out movement)

• Rotation (twisting the instrument along its axis)

• Pitch (up and down, like nodding your head)

• Yaw (side to side, like shaking your head)

• Wrist Pitch (up and down at the instrument tip)

• Wrist Yaw (side to side at the tip)

• Grip (opening and closing of the instrument jaws)

This level of articulation made it possible to perform highly advanced procedures through tiny incisions. Importantly, the system also eliminated the fulcrum effect – the counterintuitive reversal of movements caused by traditional laparoscopic tools – by digitally translating motions without mechanical pivot points. This allowed for a more intuitive and natural operating experience.

Another key innovation was motion scaling: for instance, a 5 cm movement of the surgeon's hand could be reduced to just 1 cm at the instrument tip, allowing for finer precision. In addition, chips located at the end of each robotic arm could detect the attached tool – whether a grasper, forceps, or scalpel – and adjust the force and settings accordingly.

Although the earliest prototype didn't include all of these features right from the start, it laid the foundation for what was to come. The first version was completed in 1997 and was named Lenny, a nod to Leonardo da Vinci, who sketched designs of robotic concepts already in the 15th century. The second iteration was named Mona, after the Mona Lisa, and the final version received the name da Vinci.

Intuitive Surgical’s first surgeon console, 1996 – the origin of the da Vinci system.

Intuitive Surgical’s first surgeon console, 1996 – the origin of the da Vinci system.

In 1997, following successful tests on cadavers, Intuitive's prototype robot, Mona, performed its first procedure on a living patient in Belgium: a laparoscopic cholecystectomy (gallbladder removal). The procedure was a success, but the system still had some shortcomings. One key improvement ahead of the next iteration was the development of an endoscope that allowed the surgical field to be viewed in 3D.

After further testing in Europe in 1998, Intuitive began preparing for FDA approval in the U.S. While the system had received partial clearance in 1997, limited to visualization and tissue extraction, gaining full approval for the system would require separate applications for each specific procedure type.

In 2000, Intuitive Surgical went public, raising $46 million and giving the company the runway to pursue regulatory approvals, scale manufacturing, and invest in surgeon training programs. Shortly after its IPO, the FDA approved the da Vinci system for gallbladder surgery and procedures involving the gastroesophageal junction, such as treating reflux disease. However, these operations were relatively straightforward, and at the time, robotic assistance was not yet considered essential.

A more meaningful breakthrough came in 2001, when the FDA approved the da Vinci system for prostatectomy procedures. These surgeries require exceptional precision, making them an ideal fit for robotic assistance. The system's ability to operate around sensitive nerves and within confined spaces made it particularly well-suited for this application. Over the following years, Intuitive received additional approvals for procedures in thoracic, cardiac, and gynecologic surgery.

By the end of its first full year as a public company in 2001, Intuitive had sold 89 da Vinci systems across the U.S. and Europe. The technology had already been used in several thousand surgeries, covering over 100 different procedure types.

Throughout these years, Intuitive Surgical was engaged in a fierce rivalry with Computer Motion, another early innovator in robotic surgery. The competition between the two pioneering companies often spilled into courtrooms over patent disputes. In 2003, the two firms unexpectedly announced a merger agreement, under which Intuitive's shareholders received 68% of the combined company and Computer Motion's shareholders received 32%.

The merger not only ended the legal battles but also consolidated two leading development paths. Technologies from Computer Motion's Zeus system were integrated into the da Vinci platform, which became the combined entity's system to build further on.

Despite early momentum, skepticism remained. Many analysts and industry observers doubted whether robotic surgery would ever become commercially viable – and it's easy to understand why. At the time, the da Vinci system had only limited regulatory clearance, and its applications were still narrow. A single system cost around $1.3 to $1.5 million, plus about $1,500 in variable costs per procedure for instruments. On top of that, uncertainty around insurance reimbursement made hospitals hesitant to commit.

But among the people who mattered most – the surgeons using the technology – excitement was building. Some of these early adopters, who saw firsthand how robotics could improve surgical outcomes, became informal ambassadors. While they may not have been focused on costs or commercialization, they believed in the system's potential to transform their field over the long term.

Following a common playbook in healthcare, Intuitive made a deliberate push to win over what it called "thought leaders", surgeons known for handling the most complex procedures. The thinking was simple: if top-tier surgeons embraced the da Vinci system, others would follow. And gradually, they did. A shift was beginning in operating rooms.

One of those early thought leaders was Dr. Mani Menon, a urologic surgeon at Henry Ford Hospital. In 2001, Dr. Menon performed the first robotic prostatectomy using the da Vinci system, something which would later prove to be a turning point in surgical robotics.

In his published study, Menon noted that the system offered practical benefits for the surgeon and simplified the overall procedure. The initial reception was mixed. Some in the medical community questioned the methodology, arguing it was unclear whether the robot truly added value compared to conventional laparoscopic techniques.

But rather than stalling progress, the skepticism sparked further research. Over time, more surgeons began adopting, refining, and sharing their own experiences with the robotic approach.

Gradually, as more data emerged, a clearer picture began to form. Compared to previous methods, robotic prostatectomy not only gave surgeons better tools to complete the procedure but also offered meaningful patient benefits such as reduced blood loss, lower complication rates, and shorter hospital stays.

It was no longer just a matter of surgeon preference or personal impression. Scientific evidence was starting to back what early adopters had been convinced from the start: that robotic-assisted surgery could offer better outcomes in specific procedure types.

Looking back, this was one of Intuitive Surgical's first major breakthroughs in clinical adoption, and robotic surgery has since become the standard of care in prostate cancer treatment. This also marked the very beginning of a true adoption curve for the da Vinci system – one that would eventually extend far beyond urology.

But before following that curve forward, it's worth stepping back to understand the evolution of surgery itself and why robots entered the conversation in the first place.

The act of surgery has existed in various shapes and forms for thousands of years. Yet it wasn't until the last couple of centuries that it truly evolved – from a desperate, often dangerous act into a controlled and increasingly predictable science. The development of anesthesia, antiseptics, sterilization techniques, and a deeper understanding of germs transformed it from a last resort into a reliable path to recovery.

Even with these advancements, surgery remained deeply human: a test of steady hands, sharp eyes, and seasoned judgment. But for all their skill, even the best surgeons face natural human limitations: unsteady hands, momentary lapses in focus, physical fatigue. Precision can falter, and in the operating room, even the smallest deviation can carry serious consequences.

The potential benefits of robotic surgery are increasingly hard to ignore. Robotic systems improve dexterity, allowing for far more precise movements than the human hand alone. They offer a wider range of tools with advanced features, enabling techniques that would otherwise be difficult or simply impossible by hand. This opens the door to smaller incisions, fewer complications, faster recovery times for patients, and even entirely new types of procedures.

From the surgeon's perspective, robotic systems help ease some of the most physically and mentally demanding parts of the job. Long, high-stress operations can take a heavy toll. In many cases, surgeons are more than willing to hand off the most delicate parts of the procedure to robotic systems, not as a replacement, but as an assistant. The surgeon remains firmly in control, but now with tools that allow for greater precision, reduced fatigue, and better outcomes.

Of course, the shift to robotic surgery doesn't come without challenges. One challenge has been the reluctance to embrace new technology. While some surgeons became early advocates of robotic systems, others met them with skepticism. For those at the top of their field, the idea that a machine might outperform decades of hard-earned expertise could feel threatening. And for younger surgeons just emerging from residency, it was demoralizing to realize that some of what they had just invested years in mastering might already be rendered obsolete.

But as robotic systems improved, so did their reputation. The technology expanded, more surgeons embraced it, and the early skepticism gradually faded. Today, resistance among surgeons is far less common. The focus has shifted from "if" robots belong in the operating room, to "how" and "where" they can be used most effectively.

While resistance to new technology has faded in many parts of the world, one significant obstacle remains: cost. Robotic systems are expensive – not just to purchase, but to maintain, train for, and integrate into existing surgical workflows.

Hospitals face both financial and operational challenges when introducing them, including the need to retrain staff and adapt clinical processes. A major part of that is time, particularly the lengthy training required to become a surgeon. Even experienced professionals often face a steep learning curve, needing dedicated practice to master the tools and interfaces.

Still, the potential rewards for hospitals are substantial. Mainly, it's about offering the best care possible, where advanced tools and improved patient outcomes play a key role in enhancing a hospital's reputation. Also, positioning at the forefront of innovation makes a hospital more attractive to top-tier surgical talent. Ambitious surgeons want the best tools to deliver the best results, and robotic systems are increasingly seen as part of that equation.

It's also important to recognize that robotic systems aren't suited for every type of surgery. In certain procedures where immediate manual intervention is critical, such as some cardiac or trauma surgeries, human hands may still be the better choice. But the trend is clear: with each passing year, robots are finding their place in more and more operating rooms.

Since Dr Menon's early applications of Intuitive's systems, a snowball effect took place in the decades that followed. From the limited clearances of the first da Vinci system, the company steadily expanded, introducing the da Vinci S in 2006 and the da Vinci Si in 2009. With each new generation, Intuitive gained broader regulatory approvals across new procedure types and instruments, all backed by growing scientific support and an increasing base of procedures performed.

However, it's important to emphasize that this journey wasn't without setbacks – a reality for many young companies trying to establish themselves in the healthcare industry, where critical gatekeepers must be won over to achieve wider adoption.

For Intuitive, the biggest set of challenges began in the early 2010s, culminating in a wave of backlash in 2013.

First came warnings from heavyweight professional bodies, including the American Congress of Obstetricians and Gynecologists (ACOG), about the use of robotic surgery for hysterectomy (removal of the uterus), raising doubts among healthcare providers and drawing media attention. Then came reports of surgical complications and device malfunctions, leading the FDA to issue a warning letter to Intuitive. The FDA's actions, in turn, amplified the reporting of adverse events related to da Vinci procedures. As scrutiny intensified, the company became the target of numerous lawsuits.

These coinciding events led to several waves of negative publicity, which in turn affected its financial performance in the short term. Mainly, due to the fact that sales slowed down after some hospitals decided to delay or reconsider their plans to acquire da Vinci systems. But also due to that the company completed settlements and its associated legal costs related to the aforementioned lawsuits.

In 2014, Intuitive had the opportunity to turn the page with the release of the next-generation da Vinci Xi system, and it capitalized on it. Growth started picking up again as the company entered a new expansion phase in the mid-to-late 2010s. While much of the company's earlier growth had been driven by U.S. penetration, this new phase saw accelerating traction in global markets as well.

The result? A decade later, Intuitive had expanded globally with new procedure approvals, launched the da Vinci X, 5, and SP systems, and introduced a new business line diagnosing lung cancer with the Ion platform. Together, these advances accelerated surgeon adoption and broadened its clinical uses – driving performance that speaks for itself.

The annual da Vinci system shipment since the company's 2000 IPO.

The annual da Vinci system shipment since the company's 2000 IPO.

We'll soon see what this has meant in terms of the company's financials. But as a hint, consider what it has meant for Intuitive's stock: since its IPO in 2000, it has achieved a CAGR of 25%.

Since the early prototypes – Lenny, Mona, and the original da Vinci – Intuitive Surgical's robotic system has undergone continuous and significant evolution. Though it still carries the same name, each new generation is distinguished by its model number. Since the first commercial release in the late 1990s, five new versions have been introduced, culminating most recently in the da Vinci 5, launched in 2024.

At its core, the system is based on a three-component design:

• The surgeon console, where the surgeon sits and operates the robot. On the left of the image below.

• The vision cart, which manages system communication and provides visuals for the broader surgical team. In the middle of the image below.

• The patient-side cart, which now houses the four robotic arms (one for the endoscope and three for surgical instruments). On the right of the image below.

The da Vinci 5 surgical system, released in 2024.

The da Vinci 5 surgical system, released in 2024.

While the overall structure of the da Vinci system remains familiar, its capabilities have been significantly refined across nearly every dimension. With more than two decades of accumulated knowledge integrated, it can handle increasingly complex procedures with a level of control and consistency that was unthinkable in the early days of surgical robotics.

One key advancement is its enhanced force feedback technology, providing surgeons with real-time awareness of tissue tension and helping ensure the right amount of pressure is applied. Meanwhile, the system's advanced 3D imaging delivers high-definition visuals of the surgical field, offering exceptional depth perception and detail of the internal anatomy throughout the procedure.

The surgeon console has also evolved. It's now more ergonomically designed for long procedures, with added foot controls that allow for seamless switching between instruments and functions.

Perhaps most notably, recent generations of the system have become increasingly data-driven with its Case Insights platform. Powered by NVIDIA's computing technology, the da Vinci system now tracks and analyzes performance metrics in real time, giving surgeons immediate feedback and helping them make small workflow adjustments during procedures. This supports more consistent decision-making and adds an extra layer of intelligence to an already precise platform. Additionally, the ability to share procedural insights and performance data more easily helps broaden adoption and influence within the surgical community:

Since receiving its first FDA clearance in 2000, Intuitive's da Vinci system has made significant strides in expanding the range of procedures it supports. Today, the system has over 70 different clinical applications, with most having received or awaiting regulatory clearance across multiple global markets.

In March 2024, the newly launched da Vinci 5 received FDA approval for all surgical specialties previously cleared for the da Vinci Xi, excluding cardiac and pediatric procedures, which remain under review. This positions the latest model with broad applicability from the outset. Outside the U.S., regulatory progress continues, with South Korea granting early clearance, while approvals in Europe and Japan remain in the pipeline.

From day one, the da Vinci system has been dedicated to soft tissue minimally invasive surgery, particularly in the abdomen and pelvic regions where precision and access are critical. Across a growing range of procedures, it is steadily taking market share from traditional open and laparoscopic techniques.

Take prostatectomy, for example: in the U.S., robotic-assisted surgery using the da Vinci has become the standard of care, almost entirely replacing both open surgery and laparoscopy. While prostatectomy and partial nephrectomy (surgical removal of part of the kidney) together account for close to 25% of total da Vinci procedures, they now represent the second largest procedural category.

The largest category today is general surgery, which includes hernia repairs, colorectal surgeries (addressing benign conditions or cancers in the lower digestive tract), gallbladder removal, and bariatric procedures for obesity. General surgery now makes up nearly half of Intuitive's procedure volume and has seen the highest growth rate in recent years.

Meanwhile, gynecologic procedures – such as hysterectomy and sacrocolpopexy (surgical repair of vaginal vault prolapse) – represent roughly 20% of the procedure mix.

The da Vinci utilization growth – highlighting its expanding applications and procedure breadth.

The da Vinci utilization growth – highlighting its expanding applications and procedure breadth.

Beyond expanding across specialties, Intuitive has also diversified the way its systems are applied. A prime example is the da Vinci SP platform, commercially launched in 2018 and designed for single-port access.

Unlike the standard multi-arm setup, the SP system uses one flexible robotic arm containing multiple instruments and a built-in 3D camera. This design is particularly valuable for surgeries in confined areas, such as the throat, deep pelvis, or certain urologic procedures, where space is limited and visibility is critical.

Just as Dr. Menon once pushed the frontier with the first robotic prostatectomy, today's surgeons are continuing to expand what's possible with the da Vinci. Of course, adoption still varies by procedure type, region, and individual surgeon preferences, but there's a clear shift underway. Procedures that once weren't targeted by Intuitive, for reasons like simplicity or established alternatives, are now seeing growing robotic uptake.

As the da Vinci platform continues to expand and prove its versatility, more hospitals are taking notice. Its value is no longer limited to just one or two complex surgeries – it's evolving into a broadly applicable platform that can handle a growing set of procedures, making it a more attractive investment.

In 2019, Intuitive Surgical expanded its portfolio beyond soft tissue procedures with the introduction of Ion, a robotic system designed specifically for minimally invasive lung biopsies. Ion received FDA clearance for bronchoscopy that same year and has since gained regulatory approval in key international markets, including Europe, South Korea, and China.

The system enables robotic-assisted bronchoscopies – a non-surgical method for reaching and sampling lung nodules that may indicate early-stage cancer. Traditional bronchoscopic techniques often struggle to access nodules located deep within the lung's narrow, branching airways. These limitations make it difficult to diagnose lung cancer at an early, more manageable stage without introducing additional risks, such as a lung collapse. Early detection plays a crucial role in improving survival rates.

Visually, Ion is compact and streamlined, designed for precision in tighter spaces. Unlike the da Vinci system's three-part setup, Ion features a mobile base unit that supports a thin, flexible robotic catheter, roughly the diameter of a pencil. This catheter can be precisely steered through the lung's airway network with millimeter accuracy. At its tip, a built-in camera provides real-time 3D visuals, guiding the catheter to its target.

The system is operated through a standing control console, where the doctor uses a touchscreen and joystick-style controller to navigate the catheter through the lung's airways. A built-in camera provides real-time 3D visuals, and once the target nodule is reached, instruments can be deployed through the catheter to collect tissue samples – all with minimal disruption to the surrounding tissue.

The Ion system, launched in 2019 for robotic-assisted bronchoscopies.

The Ion system, launched in 2019 for robotic-assisted bronchoscopies.

The combination of an expensive system and a technology that had yet to gain widespread approval or acceptance made Intuitive's adoption curve slow in its early years. Understandably, switching costs created further resistance, especially among veteran surgeons who were deeply entrenched in traditional methods. We'll return to the role of switching costs later, because ironically, it's a barrier that has ultimately become one of Intuitive's key strengths.

To help overcome early reluctance, Intuitive introduced leasing arrangements in 2013, alongside its traditional up-front sales model. Leasing significantly lowered the entry barrier for hospitals. Today, customers who lease the systems can choose between a fixed-payment lease or a usage-based plan tied to procedural volume. Under this structure, leased da Vinci and Ion systems remain on Intuitive's balance sheet and are amortized over a period of less than seven years.

Of the approximately 10,000 da Vinci systems in operation today (pun intended), more than half are under lease agreements, and for the newer Ion system, roughly 40% of its 850 installed units are leased. Leasing has steadily gained share over the past decade and is expected to continue doing so. While it increases customer stickiness by building long-term relationships, the trade-off is a delay in cash flow, since payments for the systems are spread out over time rather than being received upfront.

Intuitive operates on a classic razor-and-blade business model, where the robotic platforms drive recurring revenue from consumable instruments and accessories. Each surgical procedure requires a range of specialized tools – including scissors, forceps, needle drivers, retractors, energy devices, staplers, and vessel sealers. The variety of these instruments has expanded significantly over the years, now totaling around 70 different types. Each tool is embedded with a chip that limits the number of uses, ensuring consistent performance and safety across procedures.

The company's most recent average selling price for the da Vinci system was $1.62 million as of Q1 2025. This has increased slightly over the last year due to the addition of da Vinci 5. The Ion endoluminal system generally sells for between $500,000 and $815,000.

Beyond the system purchase, hospitals must also account for recurring consumable costs. In 2024, the average instrument and accessory revenue per da Vinci procedure was $1,860. With roughly 2.7 million procedures performed across the installed base, that translates to about 271 procedures per system. Multiplying the numbers and you get to over $500,000, which is then only the variable cost per system annually (an average based on rough estimates).

For hospitals evaluating a purchase, it's not as simple as comparing the cost of a robotic procedure to a non-robotic one. Costs can vary substantially depending on the procedure type, and with over 70 clinical use cases supported, there's a lot for potential buyers to weigh.

Generally, robotic procedures carry materially higher variable costs compared to traditional laparoscopic or open surgeries, not to mention the capital investment in the system itself. However, these higher costs can often be offset over time through broader hospital-level benefits: shorter hospital stays, fewer complications, faster patient recovery, and greater patient throughput.

Ever since the introduction of the da Vinci in 2001, it has never been a simple black-or-white scenario when it comes to deciding whether a hospital should invest in a system. But as time goes on – and as clinical data and procedural breadth continue to build – the picture is becoming less grey, with robotic surgery increasingly standing out as the rational and strategic choice for many hospitals.

Now, let's see what these dynamics look like from Intuitive's perspective.

For 2024, Intuitive Surgical reported revenue of roughly $8.4 billion. The company doesn't split between the da Vinci and Ion systems, but since the da Vinci has over 10x more systems in operation and more than double the selling price, we can assume that it contributes to most of the revenue.

Of that total, a little less than 25% came from Systems revenue, which includes upfront system sales, lease revenue, and lease buyout, for the company's different surgical systems. During the year, Intuitive shipped 1,526 da Vinci systems and 271 Ion systems, growing their installed bases by 15% and 27%, respectively. Services revenue, consisting of system installation, support, and maintenance, contributed around 15%.

The remaining 60% came from Instruments & Accessories, fueled by the roughly 2.7 million procedures performed in 2024 across its installed base. During the last decade, although revenue has increased by a strong CAGR of 14.8%, the growth rate of its instruments segment has expanded by a CAGR of 16.5%. The same trend can be seen in the installed base compared to overall procedures performed, with the latter growing at a faster rate.

Both trends highlight the growing adoption of Intuitive's systems across a wider range of procedure types. Once a system is incorporated into a hospital's workflow, its utilization naturally rises as more surgeons become proficient using it. Another factor is its consistently broadening regulatory clearance, which continues to support growth in the consumables business.

As a result, Intuitive has enjoyed a steadily increasing recurring revenue over time. In 2024, recurring revenue, which consists of instruments and accessories revenue, service revenue, and operating lease revenue, accounted for 84% of the company's total revenue, underscoring the strength and stickiness of its model.

Intuitive Surgical’s revenue growth since 2001, broken down by its three segments.

Intuitive Surgical’s revenue growth since 2001, broken down by its three segments.

Breaking down revenue geographically, about two-thirds comes from the United States, a share that has declined slightly over the last decade but remains dominant. The remaining one-third is spread across roughly 70 countries internationally, where Europe and East Asia hold increasing growth opportunities going forward.

However, expansion rates vary significantly across regions, often dependent on regulatory clearances, reimbursement structures, and broader macroeconomic conditions. Given the considerable investment required for acquisition, training, and implementation, full-scale adoption in many newer markets tends to be gradual.

From its revenue base, the company has maintained a gross margin of just under 70% over the past five years. Across its different revenue sources, although not explicitly broken out, newer platforms such as Ion and the da Vinci 5 are reported to have lower margin profiles compared to its more established segments like Instruments and Accessories. From its gross profit, the company typically allocates between 25-28% to SG&A expenses and between 12-14% to R&D.

Investments into R&D go toward updating existing systems, developing new models, and most recently, enhancing its Case Insights platform – efforts aimed at maintaining its wide lead in the surgical robotics space. After these expenses, Intuitive has sustained an operating margin ranging between 24% and 32% during this period, with some fluctuations mainly tied to the pandemic. For 2024, the company reported a 28% operating margin. This ultimately translated into an EBIT of $2.35 billion, which has grown at a CAGR of 15.7% over the last ten years.

In terms of their capital allocation of the cash generated, the company has been consistent in its priorities, outlined as follows:

During 2022 and 2023, the company ramped up its share repurchases, spending over $3 billion across the two years. However, it did not conduct any buybacks in 2024, which helped further strengthen an already solid cash position.

Intuitive Surgical's competitive position is underpinned by a virtuous cycle, where a combination of reinforcing advantages has created a wide moat and a substantial lead over competitors. At the foundation of this moat lies nearly three decades of relentless innovation and R&D dedicated to advancing its robotic systems.

As you might imagine, catching up to this accumulated expertise is no easy task. Over the years, Intuitive's systems have been used in more than 17 million procedures worldwide, steadily expanding across an increasing number of procedure types. Listening to CEO Gary Guthart, the importance of this procedural growth is clear:

Beyond procedural volume, another pillar of Intuitive's moat is its robust regulatory foundation and scientific credibility. The company's systems have received extensive regulatory approvals worldwide and are backed by more than 43,000 peer-reviewed articles validating their safety and efficacy across different procedure types. As the systems become the standard of care in more specialties, this institutional acceptance strengthens their position further, smoothing the path for additional regulatory approvals and deepening integration into medical practices.

Another critical element of Intuitive's ecosystem is its long-standing relationship with hospitals and educational institutions. Once a hospital adopts a system as complex as da Vinci, significant switching costs arise, stemming from the investment in surgeon training, operational integration, and institutional expertise. Although this complexity initially slowed adoption in many regions, it now serves as a powerful retention mechanism, making it increasingly difficult for competitors to displace Intuitive's systems.

This ties back to Intuitive's early strategy of targeting “thought leaders.” Surgeons who first championed robotic surgery have now become ambassadors for the company, reinforcing trust within their hospitals and professional networks.

Further strengthening Intuitive's moat are its simulation tools, digital platform, and educational resources – most developed in-house, but some in collaboration with specialized partners like Surgical Science (whose headquarters is just down the road from the Quartr Gothenburg office). Together, they allow surgeons to engage with the technology early in their training. By embedding itself at the very start of a surgeon's learning curve, Intuitive ensures that the next generation of surgical talent becomes familiar and proficient with its systems from day one, making competitive displacement even more difficult.

Today, Intuitive Surgical stands as the clear leader in robotic-assisted surgery. But staying at the top will demand just as much effort as getting there.

Throughout its history, Intuitive Surgical has undoubtedly faced the challenges that come with being a first mover. Countless patent disputes, lawsuits, media scrutiny, and skepticism from parts of the medical community have been a constant backdrop. Naturally, much of this scrutiny is reasonable: pioneering complex and sometimes controversial technologies in healthcare demands a higher level of examination.

Until now, we haven't focused much on the competitive landscape beyond Intuitive’s 2003 merger with Computer Motion. For many years, competition was limited. One key reason is that many of Intuitive's earliest and most foundational patents, including those covering core robotic control systems and imaging technologies, have reached the end of their 20-year terms. These protections long served as a barrier to entry, but their expiration is now creating opportunity for a new generation of challengers.

One such threat is CMR Surgical, with its Versius robotic system. Founded in 2014 in the UK, CMR has completed over 30,000 procedures across more than 30 countries. While this is minuscule compared to Intuitive's 17 million procedures, CMR is progressing. It received its first FDA clearance in 2024 for cholecystectomy and is expected to compete with Intuitive across several procedure types in the future. Although it remains privately held, its most recent funding round valued the company at around $3 billion, with SoftBank among its backers.

Another serious competitor is Medtronic, the +$100 billion medical device giant, with its Hugo system. Hugo has been approved for several procedure types in Europe since 2021 and has been positioned as a more cost-friendly alternative to the da Vinci. Medtronic is close to seeking FDA approval for urology indications, with further filings likely to follow.

A third potential competitor on the horizon is Johnson & Johnson and its Ottava surgical system. J&J brings decades of experience in adjacent medical fields that could bolster its efforts and has had a focus on robotic surgery for at least a decade now. Specifically, in 2015, it announced an investment in the startup Verb Surgical, originally a joint venture with Alphabet, that J&J later fully acquired. Its next effort was through its acquisition of Auris Health in 2019, a company co-founded by Frederic Moll.

Although still in the development and testing stages, Ottava is designed to target the full spectrum of soft tissue surgical procedures. The system is currently progressing through clinical trials ahead of its FDA submission for initial market approval, which appears close. If approved, it would position J&J to compete across several of Intuitive's core procedure areas.

Both Hugo and Ottava are backed by industry giants with the resources to support heavy R&D investment. Their longstanding relationships within the healthcare industry could also help with smoother market integration. However, one clear advantage Intuitive retains is focus. While Medtronic and J&J are sprawling giants across many healthcare fields, Intuitive's singular focus on surgical robotics has certainly been a competitive advantage looking back.

Beyond these bigger players, other emerging competitors include Moon Surgical with its Maestro system, and Asensus Surgical (formerly TransEnterix) with its Senhance platform. While these efforts are at earlier stages, they reflect the growing interest in the field.

In the bronchoscopy space, Ion's primary competitor is Johnson & Johnson’s MONARCH platform, which actually was the primary target in its acquisition of Auris Health. As of the last reported figures in 2023, MONARCH had been used in approximately 35,000 procedures, compared to Ion's 54,000 at the time.

Another emerging player is Noah Medical, whose Galaxy System received FDA clearance in 2023 and has been growing rapidly since.

After decades of overcoming the hurdles of being first, Intuitive is now reaping the rewards. The barriers that once slowed its progress are now facing its competitors, while Intuitive continues to strengthen its position.

Although Intuitive Surgical has grown extensively over the past few decades, there is still meaningful opportunities ahead. Looking into the near term, the company expects procedure volumes to grow by 15-17% in 2025, up from approximately 2.7 million procedures in 2024.

Beyond that, Intuitive estimates it has a line-of-sight opportunity of 8 million procedures annually, meaning operations currently performed manually, within jurisdictions where Intuitive already has regulatory clearance, and where the company believes robotic assistance offers a rational economic case for adoption. Looking even further ahead, the company believes that figure could rise as high as 22 million procedures annually, assuming broader acceptance and adoption across its target markets.

Turning to Ion, the installed base of roughly 850 systems performed about 95,000 procedures in 2024. Here, the company estimates a line-of-sight opportunity of 0.7 million procedures, with the longer-term opportunity potentially reaching 1.5 million. While Ion remains a smaller part of Intuitive's business today, it addresses a critical need, with lung cancer still the leading cause of cancer-related deaths worldwide.

So, how will Intuitive Surgical reach these targets? Its history offers a clear roadmap: continuous innovation, steady market share gains, expansion into new markets and procedures, and the strengthening of an already deep moat.

When most people picture the world's best surgeon, they don't imagine someone seated at a console, hands on controls, operating robotic arms deep inside a patient from a distance. Yet that's the reality Intuitive Surgical has helped create. With over 17 million procedures performed, a global installed base of more than 11,000 systems, and over 43,000 peer-reviewed articles supporting its technologies, Intuitive has turned a once futuristic idea into an industry-disruptive and life-saving innovation in modern medicine.