The manufacturer of robotic surgery, Intuitive Surgical, will continue to reinvest profits
The manufacturer of the Da Vinci robot surgeon and its consumables, Intuitive Surgical Inc. (ISRG), has enough funds to invest in research and development. The company is constantly releasing new accessories and tools that expand the capabilities of its robots.
Management probably intends to continue this strategy at least until 2030. Intuitive Surgical receives a steady income through the sale of consumables for operations and maintenance. The company does not distribute the accumulated funds among shareholders; it accumulates them in its accounts in order to continue investing.
Keep earnings explain why Intuitive Surgical’s business is booming. The company reinvests its earnings in growth as production capital or acquisitions on an ever-larger scale. In 2020, Intuitive Surgical launched a $100 million venture fund designed to invest in minimally invasive care companies.
It will take some time for these investments to bring results, but, if successful, the result can be significant. Over the past five years, Intuitive Surgical’s net profit has grown by over 154%, reaching $1.7 billion in 2021. Revenue has also increased by almost 82%, reaching more than $5.7 billion. Intuitive Surgical’s ability to keep and reinvest its earnings means that new entrants to the robotic surgery market will not have such a capital accumulation base.
This reduces the chances of successful competition, and can also simplify their acquisition. In addition, Intuitive Surgical is one of the largest medical companies in the world, but it is still in the initial stage of development.
