It's bound to happen to every high-growth company eventually. Sustaining growth is increasingly difficult as the base a company is working from continues to increase. At some point, saturation kicks in.

For Intuitive Surgical (Nasdaq: ISRG), that time may be coming.

The most important metric for the robotic surgery company has always been the number of procedures performed on its machines. The procedures directly drive sales of instruments used during the surgical procedures.

Unlike a typical medical-device maker like Medtronic (NYSE: MDT), Boston Scientific (NYSE: BSX), or St. Jude Medical (NYSE: STJ) that make money off the procedure and it's done, Intuitive Surgical also derives revenue from its $1.4 million da Vinci Surgical Systems that perform the surgery.

Procedures indirectly drive sales of new machines because there's only so much time one instrument can be used. As the time on the machine gets filled up, surgeons start demanding a new machine from hospital management; 19 of the 88 new machines installed in the first quarter went to returning customers. And many of the new hospitals are likely buying one because they see their patients heading to their cross-town rival that are increasing their procedure count.


Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Year-over-year procedure growth






Source: Company releases.

Procedure growth slipped in the first quarter. An anomaly you ask? Not according to management, which kept 2011 guidance in procedure growth at 25% to 28%. Since the first quarter was higher than that, the last three quarters have to average lower.

Let's keep this in perspective, though. If Intuitive Surgical hits its target, 25% to 28% is still pretty solid growth. And the company is in the process of developing new instruments that could increase the average revenue per procedure and/or allow da Vinci to be used in new types of procedures.

The low hanging fruit may be gone, but I wouldn't write off Intuitive Surgical just yet.

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Intuitive Surgical is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Motley Fool has a disclosure policy.