How ISRG (Intuitive Surgical) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a medical technology leader like Intuitive Surgical (ISRG) makes money is essential for investors and anyone interested in the business of robotic-assisted surgery and healthcare innovation. In this post, we break down Intuitive Surgical's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Intuitive Surgical Overview

Intuitive Surgical operates at the forefront of robotic-assisted surgery, designing and manufacturing the da Vinci Surgical System and related instruments. Revenue comes primarily from the sale of surgical systems, instruments, and accessories, as well as ongoing services such as system maintenance and training. The company’s business model is built around recurring revenue from consumables and services, alongside capital sales of new systems.

Revenue Breakdown

• Total Revenue (Q3 2025): $2.51B (+22.9% YoY)
  • Product Revenue: $2.11B (84.2% of total, +23.4% YoY)
  • Services Revenue: $396M (15.8% of total, +20.4% YoY)
  • Growth is powered by increased adoption of robotic-assisted surgery, expansion into new procedure types, and international market penetration.

Gross Profit and Margins

• Gross Profit: $1.66B (66.4% gross margin)
  • Cost of Revenue: $843M (+26.9% YoY)
  • Intuitive Surgical maintains robust margins due to its scalable digital business model and high-value consumables.
• Most costs come from manufacturing surgical systems, instruments, and accessories, as well as service delivery and support.

Operating Income and Expenses

• Operating Income: $760M (+31.6% YoY, 30.3% margin)
• Operating Expenses: $903M (+13.3% YoY)
  • R&D: $329M (+15.2% YoY, 13.1% of revenue) — focused on next-generation surgical platforms, AI integration, and expanding clinical indications.
  • SG&A: $573M (+12.3% YoY, 22.9% of revenue) — includes sales force expansion, global marketing, and administrative support.
  • Intuitive Surgical continues to prioritize innovation and invest in growth while maintaining operational efficiency.

Net Income

• Pre-Tax Income: $855M (+27.5% YoY, 34.1% margin)
• Income Tax: $146M (17.1% effective tax rate)
• Net Income: $704M (+24.7% YoY, 28.1% net margin)
• Intuitive Surgical converts a significant portion of sales into profit due to its scalable business model and strong pricing power.

What Drives Intuitive Surgical's Money Machine?

• Product Revenue: 84%+ of revenue comes from sales of da Vinci systems, instruments, and accessories, reflecting the company’s dominance in robotic surgery.
• Procedure Volume Growth: Over 20% YoY increase in procedures drives recurring instrument and accessory sales.
• R&D Investment: $329M in Q3 2025, targeting new surgical platforms and AI-powered analytics.
• International Expansion: Growth in Europe and Asia, though these segments are not yet profitable due to upfront investments.

Visualizing Intuitive Surgical's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and R&D) taking the largest chunk.
• Even after heavy investment in innovation and global expansion, 28% of revenue drops to the bottom line.

Key Takeaways

• Intuitive Surgical's money comes overwhelmingly from product sales and recurring instrument revenue
• High gross and net margins illustrate the power of Intuitive Surgical's scalable, consumables-driven business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by procedure volume, new indications, and international expansion

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FAQ About Intuitive Surgical's Income Statement

1. What is the main source of Intuitive Surgical's revenue in 2025?

Intuitive Surgical generates over 84% of its revenue from product sales—including da Vinci surgical systems, instruments, and accessories. The remaining revenue comes from services such as system maintenance and training.

2. How profitable is Intuitive Surgical in Q3 2025?

Intuitive Surgical reported net income of $704M in Q3 2025, with a net margin of approximately 28.1%, reflecting strong profitability driven by high-margin consumables and operational scale.

3. What are the largest expense categories for Intuitive Surgical?

The biggest expenses on Intuitive Surgical's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $329M in Q3 2025, as Intuitive Surgical prioritizes next-generation surgical platforms and AI integration.

4. Why does international expansion operate at a loss?

International segments, despite generating substantial revenue, posted operating losses in Q3 2025. This is because Intuitive Surgical aggressively invests in market development, regulatory approvals, and local infrastructure, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does Intuitive Surgical's effective tax rate compare to previous years?

Intuitive Surgical's effective tax rate in Q3 2025 was 17.1%, consistent with previous years. This moderate rate is primarily due to tax benefits from share-based compensation and international structuring.