Intuitive Surgical Inc. (NASDAQ:ISRG)

An examination of the long-term activity ratios reveals consistent trends over the observed period, spanning from March 31, 2022, to December 31, 2025. Generally, a pattern of declining efficiency in asset utilization is apparent, though with some stabilization in the most recent periods.

Net Fixed Asset Turnover

The net fixed asset turnover ratio demonstrates a clear downward trend from 3.00 in March 2022 to 1.88 in December 2025. This indicates a decreasing ability to generate sales revenue from its fixed assets. The rate of decline was more pronounced in the earlier part of the period, slowing considerably after September 2024. The ratio shows a slight increase from 1.80 in December 2024 to 1.88 in December 2025, potentially signaling a stabilization of fixed asset utilization.

Total Asset Turnover

The total asset turnover ratio exhibits a similar, though less dramatic, declining trend. Starting at 0.43 in March 2022, the ratio decreased to 0.49 in March 2023, then fluctuated between 0.44 and 0.49 through December 2024. A slight increase to 0.50 is observed in September 2025, followed by a decrease to 0.49 in December 2025. This suggests a gradual reduction in the efficiency with which all assets are used to generate sales, with some recent variability.

Equity Turnover

The equity turnover ratio also shows a declining trend, though less consistent than the other two ratios. It moved from 0.49 in March 2022 to 0.51 in December 2024, then increased to 0.57 in September 2025 before decreasing slightly to 0.56 in December 2025. This indicates a changing relationship between sales and shareholder equity, with a recent increase in sales generated per dollar of equity, followed by a minor pullback.

Collectively, these ratios suggest a gradual decrease in the overall efficiency of asset utilization. While the declines appear to be moderating towards the end of the period, continued monitoring is warranted to determine if these trends represent a fundamental shift in operational efficiency or are temporary fluctuations.

The net fixed asset turnover ratio demonstrates a consistent downward trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio stood at 3.00, but it progressively declined to 1.88 by the end of the analyzed timeframe. This indicates a decreasing efficiency in generating revenue from the company’s net fixed assets.

Overall Trend

A clear and sustained decline in the net fixed asset turnover ratio is evident. The ratio decreased from 3.00 in March 2022 to 1.88 in December 2025, representing a roughly 37.3% reduction over the period. This suggests the company is becoming less effective at utilizing its fixed assets to generate sales.

Phases of Decline

The rate of decline was more pronounced in the earlier part of the period. Between March 2022 and December 2022, the ratio fell from 3.00 to 2.62, a decrease of approximately 12.7%. The decline moderated somewhat between December 2022 and September 2024, decreasing from 2.01 to 1.77, representing a 13.4% decrease. The final phase, from September 2024 to December 2025, saw a smaller decrease, moving from 1.77 to 1.88, a 6.2% increase.

Revenue and Asset Relationship

While revenue generally increased over the period, the growth in revenue did not keep pace with the growth in net fixed assets. Revenue increased from US$1,487,700 thousand to US$2,866,200 thousand, a roughly 92.8% increase. However, net fixed assets increased from US$1,968,200 thousand to US$5,342,400 thousand, a roughly 171.3% increase. This disparity explains the declining turnover ratio.

Recent Stabilization

The ratio experienced a slight increase from 1.77 in September 2024 to 1.80 in December 2024, and continued to 1.88 in December 2025. This suggests a potential stabilization, although further monitoring is needed to confirm whether this represents a genuine shift in trend or a temporary fluctuation.

In conclusion, the observed trend suggests the company is investing more heavily in fixed assets relative to the revenue generated from those assets. This could be due to strategic investments in capacity expansion, new technologies, or other long-term initiatives. However, it is important to assess whether these investments are ultimately translating into sufficient revenue growth to justify the increased asset base.

The total asset turnover ratio for the analyzed period demonstrates a generally stable trend with some fluctuation. Initially, the ratio exhibits an increasing pattern, followed by a period of relative stability, and then a slight increase towards the end of the observed timeframe.

Initial Trend (Mar 31, 2022 – Dec 31, 2022)

From March 31, 2022, to December 31, 2022, the total asset turnover ratio increased from 0.43 to 0.48. This indicates a growing efficiency in utilizing assets to generate revenue during this period. The company was becoming more effective at converting its investments in assets into sales.

Period of Stability (Mar 31, 2023 – Dec 31, 2023)

Between March 31, 2023, and December 31, 2023, the ratio fluctuated between 0.45 and 0.49, remaining relatively stable. This suggests a consistent level of asset utilization, without significant improvements or declines in efficiency. The ratio experienced a slight dip to 0.46 in September 2023 before recovering.

Recent Trend (Mar 31, 2024 – Dec 31, 2025)

From March 31, 2024, to December 31, 2025, the ratio showed a slight increase, reaching 0.49 by the end of the period. There was a peak of 0.50 in September 2025. This suggests a renewed improvement in asset utilization, potentially due to increased sales or more efficient asset management practices. The ratio remained above 0.45 throughout this period.

Overall Observations

The total asset turnover ratio remained within a narrow range of 0.43 to 0.50 throughout the analyzed period. While fluctuations occurred, the ratio generally indicates a moderate level of asset efficiency. The slight upward trend observed in the latter part of the period suggests potential improvements in how effectively assets are employed to generate revenue.

The equity turnover ratio for the analyzed period demonstrates a generally increasing trend from March 31, 2022, to December 31, 2022, followed by a period of relative stability and a subsequent increase towards the end of the observed timeframe. This indicates a changing relationship between revenue generated and the amount of equity employed to generate that revenue.

Overall Trend

The equity turnover ratio began at 0.49 in March 2022 and increased to 0.56 by December 2022. It then fluctuated between 0.52 and 0.57 over the subsequent quarters, concluding at 0.56 in December 2025. This suggests an initial improvement in the efficiency with which equity is used to generate revenue, followed by a period of consolidation, and a final slight increase.

Initial Increase (March 2022 - December 2022)

The consistent increase in the equity turnover ratio during this period suggests that revenue was growing at a faster rate than stockholders’ equity. This could be due to increased operational efficiency, effective asset utilization, or a strategic decision to fund growth through retained earnings rather than additional equity issuance. The ratio increased from 0.49 to 0.56, representing a 14.3% increase over the nine-month period.

Period of Stability (March 2023 - September 2024)

From March 2023 through September 2024, the equity turnover ratio remained relatively stable, fluctuating between 0.50 and 0.57. This indicates a balanced growth pattern where revenue and equity grew at similar rates. The slight variations within this period are likely attributable to normal business fluctuations.

Recent Increase (September 2025 - December 2025)

The ratio experienced a slight increase from 0.57 in September 2025 to 0.56 in December 2025. While modest, this suggests a renewed trend of revenue growth outpacing equity growth at the end of the analyzed period.

In summary, the equity turnover ratio indicates a generally efficient use of equity in generating revenue. The initial increase suggests improved efficiency, the period of stability indicates balanced growth, and the recent slight increase suggests a potential return to a more rapid revenue growth phase relative to equity.