Consumables pull-through and recurring revenue
Instruments per procedure, service, leases, margins.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: consumables pull-through and recurring revenue.Updated 2 October 2026
Part of healthcare financial models, with the models, labs and guides around it.
What it does
What every installed system earns after it is placed. Instruments and accessories are procedures times revenue per procedure; service is a contract on each sold system; lease payments come from each leased one. Together they are the recurring revenue a medtech investor pays for, and their share of revenue rises as the base grows. Each line carries its own margin: consumables are the richest, system sales the thinnest, and leases are burdened with the depreciation of the systems behind them.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 16–25: System selling price, FY1 ($m), System price change a year, Cost to build a system ($m), Instruments and accessories revenue per procedure, FY1 ($)…
- Revenue, rows 6–7: System selling price ($m), System sales: systems sold x price
- Revenue, rows 10–14: Instruments and accessories revenue per procedure ($), Instruments and accessories: procedures x revenue per procedure, Service on sold systems: average sold base x contract, Lease payments: average leased base x payment…
- Revenue, rows 17–20: Revenue, Revenue growth, Recurring share of revenue, Recurring revenue per average installed system ($m)
- P&L, rows 6–11: Cost of systems sold, Cost of instruments and accessories, Cost of service, Cost of servicing leased systems…
- P&L, rows 14–18: Systems, Instruments and accessories, Leases, after depreciation, Gross profit…
- P&L, rows 21–24: Research and development, Selling, general and administrative, Operating profit, Operating margin
What a reviewer looks for
- A price increase in revenue per procedure read as procedure growth.
- Lease revenue without the depreciation of the leased fleet in its cost.
- One blended gross margin hiding a mix shift.
Learn it, then build it
Vocabulary: Pull-Through, Razor-and-Blade Model, Gross Margin.