Growth in the company’s surgical robotics procedures remained impressive, supporting recurring revenue.
Adoption of Intuitive Surgical’s Da Vinci 5 is growing rapidly.
Ion sales are growing faster than its parent Da Vinci platform.
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Actions of Intuitive surgical(NASDAQ: ISRG) after-hours trading rose Thursday after the surgical robotics specialist reported fourth-quarter results that showed procedure growth was holding up and the installed base was still expanding.
In the fourth quarter of 2025, Intuitive Surgical’s revenue rose 19% year-over-year to $2.9 billion. And the company’s net income rose, rising from $686 million in the year-ago quarter to $795 million.
By almost every measure, the quarter was great. But can the business continue to create fast enough to justify what investors are paying for the growth stock today?
Image source: Getty Images.
The lifeblood of Intuitive’s business is the volume of procedures performed with its minimally invasive robots. Not only do procedure trends highlight the appeal of its products to surgeons and hospitals, but procedure growth also helps drive demand for the company’s lucrative recurring revenue lines: service revenue and sales of instruments and accessories.
In Q4, Intuitive Surgical’s worldwide procedures grew 18% year-over-year.
And the growth of the procedure was not limited to a single platform.
Fourth-quarter procedures using its flagship Da Vinci platform were up 17% in the quarter, and Ion procedures were up 44%.
This increase in procedure translated into ample revenue gains. Tools and accessories revenue rose 17% to $1.7 billion, and services revenue rose 19% to $422 million.
System sales were also impressive. Intuitive placed 532 Da Vinci systems in the quarter, and 303 of those were the latest Da Vinci 5 systems. For the full year, Intuitive’s installed base of Da Vinci surgical systems grew 12% year-over-year to 11,106.
Ion — Intuitive Surgical’s robot-assisted bronchoscopy system — is still a much smaller business than da Vinci, but its recent rapid growth in procedures suggests it is becoming increasingly important to the company. Additionally, the company ended 2025 with an active installed base of 995 ion systems, up 24% year over year. Such growth from a system beyond its flagship da Vinci system shows how the company can expand its platform over time.
But it’s worth noting that Intuitive placed 42 Ion systems in Q4 — down from 69. So investors will want to watch for that trend to reverse at some point. However, it’s still good news to see usage increase (procedure growth is up, even though ion system placements are down). This suggests that the system is a hit with its customers.
The company’s financial profile also helps explain the bull case for the stock. In 2025, its total revenue grew to $10.1 billion, up about 21% from $8.4 billion in 2024. And instruments and accessories plus services revenue totaled $7.6 billion, or about 75% of total revenue — an important factor to keep in mind because that mix helps keep the business model anchored to procedure volume rather than a more predictable one. Additionally, this helps explain why a year-over-year decline in Ion system placements in the fourth quarter of 2025 compared to the fourth quarter of 2024 is not worth worrying about.
Intuitive also has significant balance sheet flexibility. The company reported approximately $9 billion in cash, cash equivalents and investments at the end of 2025.
Debt? Intuitive Surgical does not.
But are the stocks really worth their sky-high valuation? At the time of writing, the stock is trading at around 70 times earnings.
Additionally, management’s outlook for 2026 implies a slower growth rate than the company provided to investors in 2025. Management guided for worldwide procedure growth of 13% to 15% in 2026 — down from 18% growth last year. Of course, the company is notorious for offering conservative guidance. However, a significant slowdown (if it materializes) could be a concern given the stock’s high valuation. With such a rating, stocks could take a big hit if the proceedings’ growth cools more than expected.
Ultimately, though, Intuitive Surgical’s fourth-quarter results strengthen the case for the stock as a good long-term investment, and arguably make the stock look like a buy today — even at this lofty valuation. The company’s core platform is still expanding, and Ion is contributing nicely to the overall business.
Of course, the stock’s very high valuation makes it a high-risk investment, so investors should keep their positions in small stocks as part of their overall portfolios.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool has a disclosure policy.
This often overlooked growth stock just reported an amazing quarter. Time to buy stocks? was originally published by The Motley Fool
