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Why Intuitive Surgical Is Focusing on Imaging, Instruments, and Accessory Sales


Nov. 1 2017, Updated 9:00 a.m. ET


Intuitive Surgical (ISRG) makes up ~0.19% of the total portfolio holdings of the SPDR S&P 500 ETF (SPY). In recent years, Intuitive Surgical has focused on a four-pronged growth strategy. Advancing the company’s new imaging and advanced instruments platform is one of these key growth strategies.

In 3Q17, Intuitive Surgical reported ~$401 million in instruments and accessories revenues. Recurring revenues contributed ~68% to the company’s total sales in 3Q17. In fiscal 2016, recurring revenues made up ~71% of total sales.

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Expansion strategy

Intuitive Surgical is focused on expanding its imaging, instruments, and accessories portfolio for its Da Vinci systems. Since recurring revenue streams make up the majority of its revenues, it’s vital for ISRG to focus on improving the overall performance of its surgical systems by enabling improved imaging capabilities and bettering its innovative instruments and accessories.

In 3Q17, Intuitive Surgical launched two instruments and accessories for its Da Vinci X and Da Vinci Xi systems in seven countries. The company also conducted a limited launch of a refined vessel sealer in Europe. The company is also continuously looking for collaboration and partnership opportunities to enable better technologies in imaging, stapling, and advance energy—most recently, for providing better products that are high in efficiency and ease of use.

Outside the US, the company is focusing on improving its recurring revenue streams and is making investments in developing innovative instruments and accessories for its robotics systems, which can provide value to the customers in these countries.

ISRG’s major medical device peers that have been focused on developing robust business models and maintaining their market shares in this competitive industry include Medtronic (MDT), Abbott Laboratories (ABT), and Zimmer Biomet Holdings (ZBH).


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