How Has Intuitive Surgical’s Revenue Mix Changed In The Last 5 Years?

-11.23%
Downside
400
Market
355
Trefis
ISRG: Intuitive Surgical logo
ISRG
Intuitive Surgical

Over the last 5 years, Intuitive Surgical’s revenue from Instruments and Accessories and Services, as a percentage of the total revenue, has increased significantly. However, in the same time frame, the sales growth from Inutuitive’s daVinci surgical systems have slowed significantly and the segment’s revenue as a percentage of total has decreased by 17 percentage points.

The growth in instruments and accessories revenue can be attributed to the fact that instruments and accessories have limited lives, many times shorter than those of da Vinci Surgical Systems. Hence a customer’s need to purchase replacement instruments for the same da Vinci unit drives instrument and accessory spending higher on a per unit basis. Further, as surgeons begin to use these systems more often, the frequency with which these instruments need to be replaced increases, driving per unit spending higher.

However, the sales growth from daVinci surgical systems were limited by the  negative reports of laparoscopic power morcellators in hysterectomy (removal of the uterus) and myomectomy (fibroids) procedures. Further, cost-benefit concerns, coupled with a reluctance on the part of health insurers in approving hysterectomies procedures, weighed heavy on the sales of daVinci systems during this period. Nevertheless, the segment’s growth picked up in 2015 due to the increase in demand for its new daVinci Xi Systems. Going ahead, we expect the number of daVinci surgical systems sold to increase as Intuitive expands the range of procedures performed through the daVinci systems and expands its reach to other regions internationally.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Intuitive Surgical
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