ServiceNarrow moat

Intuitive Surgical (ISRG) — moat facet

Maintenance on 11,000 robots: steady revenue, and the one line whose margin the new platform has dented.

Service is the maintenance contract that comes with nearly every robot. The line had revenue of $1,572.1 million in 2025, from $1,307.1 million in 2024 and $1,167.8 million in 2023 1, 16% of the company 2. It grew 20% in 2025, which the filing attributes to a larger installed base producing service revenue and a favourable product mix, particularly from da Vinci 5 placements 3.

Service gross margin (%)69.8%202369.0%202464.6%202565.3%Q2 202567.2%Q2 2026Intuitive Surgical Form 10-K FY2025 and 10-Q Q2 2026
The new platform cost five points of service margin in 2025; two have come back.

It is paid per system per year, so it grows with the installed base rather than with procedures. The da Vinci installed base was about 11,106 systems at the end of 2025, up 12% from about 9,902 4, and service revenue grew faster than that because the newer systems carry larger contracts.

It is the one line with its own disclosed margin, and the margin fell. Service gross margin was 69.8% in 2023, 69.0% in 2024 and 64.6% in 2025 5. The filing attributes the fall to higher costs associated with da Vinci 5, an unfavourable repair mix, incremental fixed costs including depreciation, and new tariffs 6. A new platform costs more to keep running while its reliability record is being built.

The latest quarter recovered. Service revenue was $472.4 million in the June 2026 quarter against $391.2 million, up 21% 7, and service gross margin was 67.2% against 65.3% 8.

Service is also what makes switching away from Intuitive expensive in practice: the hospital's maintenance history, spare parts and uptime all sit with one vendor. That argument is made under The Surgeon's Hands; here the line is simply revenue that arrives every year for as long as the robot is in use.

The outlook follows the installed base, which was 11,710 da Vinci systems at June 2026 9. The number that would change the verdict is service gross margin: back near 69% once da Vinci 5 matures would mean the 2025 fall was a launch cost; stuck near 65% would mean the new platform is permanently dearer to maintain.

Moat trajectory: Holding steady

Service gross margin recovered to 67.2% in the June 2026 quarter after falling to 64.6% in 2025.

The number that tests this moat
Reported
Service gross margin, latest quarter
67.2% in Q2 2026, from 65.3%; 64.6% for 2025

Back near 69% would mean da Vinci 5's service cost was a launch cost; stuck near 65% would mean it is permanent.

Source: Intuitive Surgical Form 10-Q, Q2 2026 ↗
References
  1. ReportedThe line had revenue of $1,572.1 million in 2025, from $1,307.1 million in 2024 and $1,167.8 million in 2023 , 16% of the company .
    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 calcThe line had revenue of $1,572.1 million in 2025, from $1,307.1 million in 2024 and $1,167.8 million in 2023 , 16% 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. ReportedIt grew 20% in 2025, which the filing attributes to a larger installed base producing service revenue and a favourable product mix, particularly from da Vinci 5 placements .
    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. ReportedThe da Vinci installed base was about 11,106 systems at the end of 2025, up 12% from about 9,902 , and service revenue grew faster than that because the newer systems carry larger contracts.
    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. ReportedService gross margin was 69.8% in 2023, 69.0% in 2024 and 64.6% in 2025 .
    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. ReportedThe filing attributes the fall to higher costs associated with da Vinci 5, an unfavourable repair mix, incremental fixed costs including depreciation, and new tariffs .
    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 ↗
  7. ReportedService revenue was $472.4 million in the June 2026 quarter against $391.2 million, up 21% , and service gross margin was 67.2% against 65.3% .
    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 ↗
  8. ReportedService revenue was $472.4 million in the June 2026 quarter against $391.2 million, up 21% , and service gross margin was 67.2% against 65.3% .
    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 ↗
  9. ReportedThe outlook follows the installed base, which was 11,710 da Vinci systems at June 2026 .
    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 ↗
Sources
Generated September 23, 2026