Surgical Revenue Soars on Strong Demand

By Panos Mourdoukoutas

Intuitive Surgical (ISRG), a developer, manufacturer, and marketer of robotic surgery products, saw its earnings and revenues soar in 2024 due to strong demand for surgeries.

On Wednesday morning, the California-based company said it expects fourth-quarter 2024 revenue of approximately $2.41 billion, a 25 percent jump from $1.93 billion in the fourth quarter of 2023. In addition, it sees 2024 revenue of roughly $8.35 billion, up 17 percent from $7.12 billion in 2023.

That’s thanks to the company’s da Vinci robotic surgical system, which performs procedures in the United States and overseas. The highly sophisticated system performed approximately 2,683,000 procedures in 2024, a rise of 18 percent year over year, and the company expects the strong growth to continue into 2025.

Meanwhile, ISRG continues to quickly place new da Vinci surgical systems, a sign that these systems are winning customer adoption.

“We are pleased with customer adoption of da Vinci 5, Ion, and SP during the quarter and full year,” said Intuitive CEO Gary Guthart, commenting on the announcement of the preliminary results. “We remain focused on delivering the goals we share with our customers, centered on improving patient outcomes.”

The company’s shares rose sharply during Wednesday’s regular trading session following the news. Over the past five years, they have risen 191 percent, more than double the gains of the S&P 500 Index.

Several factors could explain the company’s success on Main Street and Wall Street. One of them is the right market for medical products and devices. This fast-growing market is thanks to the aging baby boomers, who create a strong demand for medical procedures, including robotic surgeries.

Second, ISRG belongs to the upper segment of this market, where barriers to entry limit competition, allowing medical device makers to charge premium prices, a critical revenue and profit driver.

“The market dynamics for medical devices can vary greatly depending on the device,” says a government report on the industry.

“Markets for conventional devices such as surgical gloves and other routine surgical supplies are more competitive; companies compete heavily on price and often need high sales volumes to be profitable. In contrast, markets for advanced products like implantable medical devices involve opaque pricing, are harder to enter, and are less competitive, which allows device companies to charge higher prices and earn substantial profits. Large medical device companies are consistently profitable and typically have 20 percent to 30 percent profit margins.”

Third, legislation such as the Affordable Care Act in the United States, which makes health insurance available to more people, has increased demand for health services.

“A big boost came from the launch of their new da Vinci 5 system, which sold more than expected,” Georgios Koimisis, economics and finance associate professor at Manhattan University, told The Epoch Times via email.

However, he added one more factor to the list of the company’s success: its business model, which involves selling surgical robots and the necessary instruments to operate them.

“This strategy creates recurring income, as hospitals that invest in a da Vinci system must continue purchasing instruments, accessories, and services from Intuitive Surgical for maintenance and operation,” he said.

“This steady revenue stream boosts investor confidence in the company’s future, making investors more willing to support the stock at higher valuations.”

Koimisis is optimistic about ISRG’s outlook.

“The combination of groundbreaking technology, a strong market leader, and a stable revenue model within a rapidly growing sector suggests promising long-term potential,” he said.

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