The Revenue LinesWide moat

Intuitive Surgical (ISRG) — moat facet

Three lines that grow together because the robots and the contracts exist to sell the instruments.

Intuitive reports three revenue lines, and the smallest two exist to produce the largest. In 2025 instruments and accessories had revenue of $6,018.9 million, systems $2,473.7 million and service $1,572.1 million, out of $10,064.7 million 1. Instruments are 60% of the company 2.

Revenue growth by line (%)+18.5%Instruments2025+25.8%Systems 2025+20.3%Service 2025+17.7%InstrumentsQ2 2026+19.2%Systems Q2 2026+20.8%Service Q2 2026Intuitive Surgical Form 10-K FY2025 and 10-Q Q2 2026
All three lines grow at close to the same rate, which is what a razor-and-blade business looks like when the razor is being replaced.

The three grew at similar rates last year: instruments 19%, systems 26% and service 20% 3. That is unusual for a razor-and-blade business, where the razor normally grows more slowly; here the new da Vinci 5 lifted the price of the razor, and more of the systems are leased, which spreads their revenue over time.

The company reports two margins rather than three. Product gross margin, covering instruments and systems together, was 66.3% in 2025, and service gross margin 64.6% 4. Both fell during 2025 on tariffs, depreciation from new manufacturing capacity and the cost of da Vinci 5 5, and both rose in the June 2026 quarter 6. Intuitive does not split instrument margin from system margin.

Recurring revenue, which is instruments, service and operating lease revenue, was $8,465.3 million, 84% of the total 7. The operating lease revenue sits inside the systems line, so systems are more recurring than the name suggests.

The leaves follow the chart's bands. The moat arguments, the chip that counts down each instrument's uses, the surgeon's training and the patents, are under The Moat; the leaves keep to each line's revenue and what drives it. Taken together, the test is whether instrument revenue keeps growing at least as fast as procedures once the Extended Use Program lowers the number of instruments each operation needs, from the first half of 2027 8.

Moat trajectory: Holding steady

All three lines grew 18-21% in the June 2026 quarter; recurring revenue was 85% of the total.

The number that tests this moat
Reported
Instrument revenue growth against procedure growth, latest quarter
+18% against about +15% da Vinci procedures in Q2 2026

Instrument revenue falling below procedure growth after the Extended Use Program starts would show its cost.

Source: Intuitive Surgical Form 10-Q and Q2 2026 release ↗
Dig deeper
DIG DEEPER 01
Instruments and accessories
Sixty percent of revenue, paid per operation, and about to be asked to earn the same on fewer instruments.
DIG DEEPER 02
Systems
The robots, half of them now leased rather than sold, which turns a capital sale into a meter.
DIG DEEPER 03
Service
Maintenance on 11,000 robots: steady revenue, and the one line whose margin the new platform has dented.
References
  1. ReportedIn 2025 instruments and accessories had revenue of $6,018.9 million, systems $2,473.7 million and service $1,572.1 million, out of $10,064.7 million .
    Intuitive Surgical Form 10-K FY2025 - revenue by line 2023-2025 (instruments and accessories, systems, service), recurring revenue and operating lease revenue, product and service gross margins, placements and leases, procedures and installed base, and the drivers of each — FY2023-FY2025 · publ. February 2026 · source ↗
  2. Moat Explorer calcInstruments are 60% of the company .
    Moat Explorer calculation from Intuitive Surgical's Form 10-K FY2025 and Q2 2026 Form 10-Q: shares of revenue and growth rates — FY2023 to Q2 2026 · publ. 2026-09-23 · source ↗
  3. ReportedThe three grew at similar rates last year: instruments 19%, systems 26% and service 20% .
    Intuitive Surgical Form 10-K FY2025 - revenue by line 2023-2025 (instruments and accessories, systems, service), recurring revenue and operating lease revenue, product and service gross margins, placements and leases, procedures and installed base, and the drivers of each — FY2023-FY2025 · publ. February 2026 · source ↗
  4. ReportedProduct gross margin, covering instruments and systems together, was 66.3% in 2025, and service gross margin 64.6% .
    Intuitive Surgical Form 10-K FY2025 - revenue by line 2023-2025 (instruments and accessories, systems, service), recurring revenue and operating lease revenue, product and service gross margins, placements and leases, procedures and installed base, and the drivers of each — FY2023-FY2025 · publ. February 2026 · source ↗
  5. ReportedBoth fell during 2025 on tariffs, depreciation from new manufacturing capacity and the cost of da Vinci 5 , and both rose in the June 2026 quarter .
    Intuitive Surgical Form 10-K FY2025 - revenue by line 2023-2025 (instruments and accessories, systems, service), recurring revenue and operating lease revenue, product and service gross margins, placements and leases, procedures and installed base, and the drivers of each — FY2023-FY2025 · publ. February 2026 · source ↗
  6. ReportedBoth fell during 2025 on tariffs, depreciation from new manufacturing capacity and the cost of da Vinci 5 , and both rose in the June 2026 quarter .
    Intuitive Surgical Form 10-Q, quarter ended 30 June 2026 - revenue by line and region for Q2 and H1 2026, product and service gross margins, installed base — Q2 2026 · publ. July 2026 · source ↗
  7. ReportedRecurring revenue, which is instruments, service and operating lease revenue, was $8,465.3 million, 84% of the total .
    Intuitive Surgical Form 10-K FY2025 - revenue by line 2023-2025 (instruments and accessories, systems, service), recurring revenue and operating lease revenue, product and service gross margins, placements and leases, procedures and installed base, and the drivers of each — FY2023-FY2025 · publ. February 2026 · source ↗
  8. ReportedTaken together, the test is whether instrument revenue keeps growing at least as fast as procedures once the Extended Use Program lowers the number of instruments each operation needs, from the first half of 2027 .
    Intuitive Surgical Q2 2026 earnings call, as reported by BigGo Finance - the Extended Use Program raising permitted uses on selected EndoWrist instruments from the first half of 2027 — Q2 2026 · publ. July 2026 · source ↗
Sources
Generated September 23, 2026