What happened

Shares of Intuitive Surgical (ISRG 1.16%), the granddaddy of robotic surgery, surged 73% in 2017, according to data from S&P Global Market Intelligence. Better-than-expected procedure growth and an important regulatory win were the primary driving force behind the bullish move.

So what

Here's an overview of the most important announcements from the year:

  • In January, Intuitive projected that procedure volume growth -- which is a key driver of revenue and profits -- would land within a range of 9% to 12%. The growth was expected to be driven by increasing use of the da Vinci in general surgery procedures in the U.S. and from international expansion. 
  • Also in January, the company repurchased $2 billion worth of its stock, a move I criticized at the time. Given the share-price action for the remainder of 2017, that looks to have been money well spent. 
  • In April, management raised its procedure growth guidance range to 12% to 14% based on positive trends that they were seeing in the marketplace.
  • In May, Intuitive won Food and Drug Administration approval for the da Vinci X. This new robot offers a lot of the functionality of its other models but at a much lower price point. It believes that the da Vinci X will be an attractive option for cost-conscious hospitals. 
  • In July, the procedure volume growth guidance was raised yet again, this time to a new range of 14% to 15%.
  • In October, management bumped up its procedure growth guidance for the fourth time, to a  range of 15% to 16%.
  • Also in October, Intuitive executed a 3-for-1 stock split.

Given the string of guidance raises, well-timed stock buyback, and approval of the da Vinci X, it isn't hard to figure out why shareholders had another great year.

Da Vinci system in use by surgeons

Image source: Getty Images.

Now what

There's no doubt that Intuitive had a wonderful year and is in the best financial shape of its life, but that doesn't mean investors should be at ease. After all, a tiny robotic surgery upstart called TransEnterix (ASXC -1.78%) won FDA approval for its Senhance Surgical Robotic System in late 2017. Since Senhance holds several advantages over da Vinci -- the most important of which is the ability to reuse instruments -- it isn't entirely clear how the market dynamics might change.

Still, the robotic surgery market is projected to grow so fast that it's possible that both companies will be able to coexist peacefully. That's one reason I plan to remain a happy shareholder for years to come.