Eighteen Hundred Systems on a MeterNarrow moat

Intuitive Surgical (ISRG) — moat facet

Intuitive owns the asset, the hospital supplies the traffic, and the revenue is the product of the two.

The usage-based installed base is the purest expression of Intuitive's economics, and the fastest-growing thing in the company that nobody discusses.

Da Vinci systems under usage-based arrangements1,02320231,49220241,8102025Plus 250 Ion systems. Variable lease revenue went $217M, $338M, $531M across the same years.
Intuitive owns the asset, the hospital supplies the traffic, and the revenue is the product of the two — about $293,000 per system a year.

At the end of 2025 there were 1,810 da Vinci systems and 250 Ion systems on usage-based operating leases, against 1,492 and 193 a year earlier and 1,023 and 118 the year before that1. Variable lease revenue from those arrangements — money that only arrives when an operation happens — was $531 million in 2025, $338 million in 2024 and $217 million in 20232. It has more than doubled in two years.

On such a system Intuitive is not selling equipment at all. It owns the machine, carries it on its own balance sheet, services it, supplies the instruments, and is paid a fee each time a surgeon uses it. The economics of the relationship are identical to a toll road: the asset is Intuitive's, the traffic is the hospital's, and the revenue is the product of the two.

The strategic appeal is obvious. It removes capital approval from the sales cycle entirely, which widens the addressable set of hospitals to anyone who can generate volume. And it aligns Intuitive with the outcome it most wants — more procedures — rather than with a one-off transaction.

The strategic risk is equally clear and is covered in the threats on this facet: no minimums, no exit penalty, and Intuitive's own warning that it may not recuperate the cost of a leased system if utilisation disappoints3.

Watch variable lease revenue against the usage-based system count. $531 million across 1,810 systems is roughly $293,000 per system per year4; a falling figure means the machines Intuitive financed are quieter than it underwrote.

Moat trajectory: Widening

1,810 usage-based systems, up from roughly 1,200 a year earlier. Every one converts a fixed asset into a variable toll on somebody else's operating schedule.

The number that tests this moat
Reported
Systems billing by usage
1,810

Intuitive owns the asset and the hospital supplies the traffic. It is the purest form of the toll, and the arrangement that moves volume risk from the customer onto Intuitive's own balance sheet.

Source: Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
Intuitive Now Owns the Underused Machines
$5.3 billion of property and equipment, a growing part of it systems sitting in somebody else's hospital.
References
  1. ReportedAt the end of 2025 there were 1,810 da Vinci systems and 250 Ion systems on usage-based operating leases, against 1,492 and 193 a year earlier and 1,023 and 118 the year before that.
    Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 - Item 7 MD&A, results of operations (instruments and accessories $6,018.9M, systems $2,473.7M, service $1,572.1M, recurring revenue $8,465.3M, gross margin 66.0%, operating income $2,945.5M, average selling price, lease revenue recognition, and the discussion of procedure categories) — FY2025 · publ. February 3, 2026 · source ↗
  2. ReportedVariable lease revenue from those arrangements — money that only arrives when an operation happens — was $531 million in 2025, $338 million in 2024 and $217 million in 2023.
    Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 - Item 7 MD&A, results of operations (instruments and accessories $6,018.9M, systems $2,473.7M, service $1,572.1M, recurring revenue $8,465.3M, gross margin 66.0%, operating income $2,945.5M, average selling price, lease revenue recognition, and the discussion of procedure categories) — FY2025 · publ. February 3, 2026 · source ↗
  3. ReportedThe strategic risk is equally clear and is covered in the threats on this facet: no minimums, no exit penalty, and Intuitive's own warning that it may not recuperate the cost of a leased system if utilisation disappoints.
    Intuitive Surgical Form 10-K, fiscal year ended December 31, 2025 - Item 1A Risk Factors (the 559-system Chinese quota and Intuitive's placements under it, provincial limits on what hospitals may charge for robotic surgery, hospital financial pressure, and the warning that it may not recuperate the cost of a leased system) — FY2025 · publ. February 3, 2026 · source ↗
  4. Moat Explorer calc$531 million across 1,810 systems is roughly $293,000 per system per year; a falling figure means the machines Intuitive financed are quieter than it underwrote.
    Moat Explorer calculation - arithmetic on figures reported in Intuitive's Form 10-K and Form 10-Q: instruments and accessories of $6,018.9M over 3,153,000 da Vinci plus 144,100 Ion procedures ($1,825 a procedure), service revenue of $1,572.1M over the installed base (about $134,000 a system), variable lease revenue of $531M over 1,810 usage-based systems (about $293,000), procedures over the average installed base (about 300 a system), each revenue line as a share of the $10,064.7M total, and US general surgery as a share of US procedures — FY2025 · publ. September 2026 · source ↗
Sources
Generated September 23, 2026