PRCT - Earnings call transcript Q2 2022 | PROCEPT BioRobotics Corporation

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Operator

Good afternoon, and welcome to PROCEPT BioRobotics Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Matt Bacso from the Gilmartin Group for a few introductory comments.

Matt Bacso

Thanks, operator. you in thank call. and afternoon, for today's participating Good

quarter Zadno, BioRobotics Kevin released Joining available XXXX. on the release PROCEPT website. the Reza copy financial June CEO; of A for the PROCEPT me from is today, are and press XX, Earlier Waters, results company's ended CFO.

statements made call safe to federal the statements forward-looking within provisions meaning of Before like that events will operating expectations and expense current that include assumptions. remind we these begin, the upon make that management Accordingly, laws, pursuant which opportunity, of are securities you harbor I'd statements These to during this Private trends the and place Act performance, without actual estimates product events, including, and statements. Reform predictions you implied these should market growth, based various and materially undue for to or Litigation contained forward-looking forward-looking guidance, in of statements, and from future to statements financial management, Securities results commercial expectations limitation, revenue XXXX. those this by statements. statements. expansion our not and results of development future relate are forward-looking uncertainties those future cause our Any to or related performance call are could hiring that on differ All reliance involve or approvals material risks sales or

Exchange SEC. associated our by whether XX, of turn on reports and filed on XXXX. Factors list call August XX-K annual in Reza. that, time-sensitive periodically our future other a contains the Securities on section call except new forward-looking recent required statements conference events, For March most revise to XXXX, EDGAR uncertainties or projections with broadcast as please BioRobotics will filed the only with our report refer any with with on intention the available description because risks the otherwise. the and public of over the PROCEPT and or now to any and X, of This financial law, of update business, or And disclaims is and to accurate Risk and live as Commission or obligation, information information, Form I

Reza Zadno

afternoon, for joining us. Thanks, thank and Good Matt. you

was XXX%, For to approximately opening of XXXX AquaBeam today's call, prior to which has I Systems, year revenue quarter, our of driven XX%, to period. of who revenue sold representing hospitals. quarterly and $X.X AquaBeam quarter Total the of million, AquaBeam continues million, of the second high-volume was the quarter of will financial Kevin, of and second of an XXX%, of Robotic In generating details and and by growth from for business of updated the the second XX growth U.S. XXXX quarter U.S. be followed representing Starting the BPH provide growth the compared compared to at to second the Q&A. XXXX, we by compared the compared of to Systems quarter sales total in this primarily million, Robotic growth of $X.X compared before by Robotic representing XXXX. grown Systems, $XX.X revenue base XX% representing million, second was revenue sequential increase call XXXX regarding consumables installed the guidance comments and XXXX. XX% $XX.X a handpiece results. second quarter additional financial XXXX. provide quarter performance driven growth was quarter XX%, update, will growth for U.S. the to our first opening revenue with

to by continues approximately handpiece coverage, payer positive Utilization combination our of of patient the sold to and Additionally, Systems. base drive XXXX. adoption per we certain hospital long-term from and interest have clinical data, installed private seen believe increased outstanding increased releasing AquaBeam outcome We account. account quarter of real-world Robotic the an increase our utilization compared measured XX%, in second per as

a providing business briefly hospital address current let and me equipment Before specifically the update, capital spending. macro supply chain environment,

to constraints want demand, not in to have we to highlight been meet concerning customer material ability product experienced our inflation a date. I nor First, issue has

we supply for the navigate challenges to key successfully associated disruption been period components. While well, able inventory this continue seriously, with take have levels having we global this chain to increased

they we need we is and on ensuring way supply that customers with are progress year, focused we through high-quality timely. in the As can our a what

As of in believe our sales AquaBeam hospital it year, are around around early of back stage for momentum to capital of market spending, positive penetration. we to our due our pertains factors half the the continued Systems technology Robotic we uniquely multitude positioned and

First, the with men men hospitals. visit X at treatment seeking many the surgical durable BPH is reason No. option high-volume urologists,

to invest these many safety a are space. the With not in population, surgical ensure alternatives. increasing patients area our Additionally, growing offer patient AquaBeam of competitive of men current due hospitals System in other technology believe BPH to they to treatment lose the hospital We systems stay surgical to forgo technologies cutting-edge cutting-edge inferior profile educated Robotic motivated and and to allows hospitals. a

surgeries, high-volume risks exited systems. macro It we us. high-volume targets, the with still of reminder of of are the XXX associated very our that which adoption XXXX of with of is quarter which the target funded, in an base a U.S. With with mitigates approximately some front second total hospitals we liquidity, believe also uncertain in we an XXX curve X,XXX Next, an installed hospitals we BPH well important ample environment. early performing runway with long are are

of purchase equipment. routinely since complex CEO streamlines more can by other authorized approval and CFO, this at that and process higher-priced for be Additionally, the be level managed may hospital the capital of the typically local hospital is approval required System AquaBeam Robotic the

coverage, In our on pressure are associated macro Aquablation impact unique AquaBeam's with than more we would along be to its insurance makes the ever shortly We Kevin hospitals given our logical treat equipment their not aspects protocol. prostates, increased felt size and choice. shapes we will surgical of all on our standardization, and Lastly, details guidance, BPH environment the ability This increasing revenue standardizing capital a all provide if now environment. with monitor which business. to summary, continue of

turning organization. Now, our quarterly commercial with business to updates, starting

efficient to of hired We highly device experienced to a commercial sales XXXX medical put implemented our and have program team training position onboarding successfully professionals. growth attractive commercial us We in an plan. execute

the our commercial number doubled at of approximately relatively field-based reps we for of the six While unchanged end been has XXXX, team months.

with in Even fourth heading has to quarter hiring tight the momentum, to continue commercial our plan labor sales the strong and further confidence generate, market to of third real-world commercial clinical and and increase in been in excellent meaningfully the the U.S. penetrate objectives we interest updated increased us high-quality and able candidates, XXXX our from market, This our we field-based growth technology presence to team demand meeting Given outcome captured operating expense in expand see our additional into which our is the guidance. gives XXXX. expand

like I which have trends, the would to last XX procedure utilization comment and months. on Next, we in seen

performed the cases, the are is BPH. believe converted majority to which to continue Aquablation procedure procedure surgical for commonly of most volumes We

We On the simple increase to like the we clinical factors. attributable seeing annual resective are believe based in prostate. on utilization data, hospital meaningful utilization from the also and utilization, believe, our modalities are other procedures in increases laser our we prostatectomy taking We is procedures following customers. of from

Given an quarter curve we accounts. using the with predictability, seeing our associated reproducibility, the our surgeons System, each and AquaBeam number are low at learning Robotic of generally increasing system

therapy. of increasing are an a accounts protocol result, procedure effective their number of we Aquablation believe favor As to standardize beginning in

clinical since support broader independent data prostate surgeons prostate and Aquablation are size of sizes. of in a using that Additionally, our shape, are outcomes therapy range

we that fell XXXX most between XX prevalent data when June milliliters milliliters. to from Specifically, XX size treated found analyzing XXXX, to patient January range

are size Given the prostates the to months, beginning given of XX we last over to of their Aquablation the limitation alternatives. treated procedures surgeons standardize range surgical believe

clinical May, Orleans. Urological Conference Study II announced in to Association WATER updates. at Turning New American In we the Data X-year

in criterion data size change four-year prostate as with prospective results at to results. Qmax, XX efficacy efficacy reminder, consistent As also WATER large The II reported with consistent no change were performance in by and ranging endpoints, study previously a the IPSS a primary XXX an both from The was and for objective safety milliliters. FDA with in X-years. measured safety to milliliters

Lastly, at in more pandemic was in data the key attended and our time of retreatment durability in-person to surgical attended talking with February X,XXX key since well four. year surgeons was any patients and we the Conference point registrants. European published More X-year recently, WATER with among requiring XX% was remains opinion of strong A than leaders only up the Amsterdam. This Urology early July, European in Association XXXX. first event

efficacy is Aquablation X% compared for superior data surgeons retreatment, or This XX represented clinical risk approximate WATER recurrent strong TURP. is an only are retreatment comparing annual about multicenter prostate X-year lower Aquablation med was low BPH Xx durability measured to which back specifically, learn patients Aquablation data of about study, clinical our TURP. them superior by therapy to This to by X-years at safety safety due that As the milliliters driving surgical and due which exhibited rate. Europe a to more requiring reminder, randomized to ranging Aquablation's proves to In retreatment XX double-blind when from for the symptom complication relief and symptoms irreversible is going enthusiastic to prospective milliliters. FDA are study therapy.

will believe Given historical customers WATER when differentiator and for replace modalities this choosing data backdrop, Aquablation. be X-year to with WATER II their our significant BPH surgical X-year we a

coverage updated million Aetna quarter, BPH, In updates. as covered alternative the updates, noting Aquablation already list insurance a touching of their to coverage published the policy payer April, on members received for In U.S. second therapy. coverage surgical for Aquablation payer therapy Lastly, adding XX providing roughly commercial numerous recent its strong policy for in the we

existing second Association also Blue as XXX well million these the in policies, provide for plans coverage healthcare mutual. quarter, as members. approximately policies, issued aggregate, with Cross coverage, medical In numerous Shield along positive Blue coverage Additionally,

of important capital increased lowering value we of penetrate there our technology to the benefit obvious surgical BPH a on take as the long-term benefit high-volume and long-term to benefit. time market. is The is hospitals. targeted As it more short-term proposition short-term The and our relates which benefit the of will equipment coverage business, increased to both barriers the impact a utilization, is sell

Additionally, X code rates proposal system. for that payment over X.X% outpatient a in in-line XXXX increase $X,XXX hospital has approximate approximately which the XXXX hospital the with for provide its our Aquablation an proposed for procedure, prospective would Aquablation treating The by payment is published is execute mid-July, and and of CMS published year-to-date APC full Level growth expectations. of performance estimated final and high-volume our and with hospitals, pleased private increasing In in rule utilization plan payer shapes, continue are expanding to be strategic we coverage. the November. The to summary, our range sizes prostate each penetrating

highlighting our Given this positive turn data, Aquablation the revolutionize truly momentum of BPH. to of will long-term and will With believe over therapy I durability, we the that, call announcement Kevin. treatment the clinical

Kevin Waters

Reza. Thanks,

X% million, of generated system selling quarter. U.S. sales to the to price customers In average to price Robotic driven Reza quarter XXXX. of second AquaBeam our XXXX. of revenue Average second second XXXX of was quarter, revenue. sold of and second representing increased the increase approximately year the by compared of was approximately U.S. compared new million, $XXX,XXX. In U.S., the highlighted, revenue total prior an quarter revenues, system hospital we we the quarter the As and increased selling primarily $X.X to XX%, with handpiece XX%, compared for $XX.X XX growth both XX%, Systems of sequentially The growth representing including second

Systems. U.S. was Robotic quarter AquaBeam base installed second ending XXX Our

due second the benefited quarter Second to from average U.S. $X.X was growth in compared quarter procedures to XXX%, $X.X unit and million, to million, of We and deferral year handpieces of and prices the rescheduled was the COVID. which second were the growth in second from capital $X,XXX. flat of XXXX for representing prior U.S. sequentially. period roughly approximately approximately selling XXXX. International X,XXX XX% shipped revenues International in second increased the severely quarter the revenue the number quarter revenue approximately first in a impacted compared quarter, XXX%. XXXX, XXXX of representing meaningful quarter a annual was handpiece the consumable of quarter of Handpiece sales of

basis, costs million Difficulty]. in expenses for was compared [Technical XXXX. of same in compared XXXX, international quarter approximately in $XX.X strategy to number XXXX $XX.X On prior in development Net with increased $XX.X increase approximately year units production be the of gross in spread EBITDA continues second the for and in larger and produced. Total $XX.X Gross including brand period loss quarter to quarter Our and quarter compared higher activities. year is increase prices, our a average million across overhead was of selling market a of year-to-date variety has the to fixed second to margin the a million awareness in-line second in as expectations. the of portion million XX% The from was prior the Europe of a to second of was period we XXXX. first XXXX. of Adjusted higher million from the of were quarter $XX.X revenue margin of sales, increase the loss an and XX%, quarter the manufacturing driven increase U.S. volume $XX.X The by $XX.X year. factors, XXXX of million, the XX% increased a in loss operating second of million, prior

Our $XXX and our borrowings current and June our We of XX resources while needed and balance strong capital support provide our equivalents million, believe $XX business. to will totaled cash as million. cash the balance liquidity grow was sheet long-term

to our Moving guidance. financial

guidance and start of we business, momentum revenue million Given the continued in to the $XX are increasing to XXXX full-year range our to million. strong the our $XX be year in underlying total

and trends guidance handpieces in levels, per relative the fourth in sequential third are assumes growth our be updated utilization expected to sold to Although half first quarter down revenue quarter.

throughout utilization installed as natural provide this new the are our as rates will a accounts average previously, explained to increases headwind added. As base year,

Regarding is handpiece pricing XXXX, range the for which expect the prices, actuals. in remainder year-to-date $X,XXX selling we be average with of to in-line

sales. Robotic Turning to AquaBeam Systems

of of year second for of with We in systems range expected continue to expect throughout prices modest sold sequential half selling the now to $XXX,XXX number average increases the the to XXXX. be the

to XX%, on international compared approximately revenue expect revenues, XXXX XXXX. we Lastly, growth of

is We Moving our of of XX% the to down previously XX%. from statement. which income the gross range range margins to issued XX%, to expect now be in increase an XX%

approximately We operating $XXX be million. expenses. to Turning now to expenses forecast

a on As the in us and majority commercial plan. team will towards XXXX long-term the Reza put back half growth in be favorable incremental to mentioned previously, allocated initiatives expanding position of execute spend our our of the to

$XX Lastly, back range. At I'd we more to million, closing full-year in of expect the turn we of to are trending to million adjusted to although the range be toward comments. Reza EBITDA point, continue like $XX call high-end for the negative to the this

Reza Zadno

all Thanks, journey BPH. standard employees, our thank Kevin. In to their closing, I along for want of to support us our becoming the customers and to care shareholders for help

we We will strategy. execute long-term a to meeting at questions. upcoming forward investments conferences. on great commercial this Operator? continue clinical our to I leverage you day, investor of look to At and take our and point, will Have many

Operator

[Operator Instructions] from Joshua Our first question Jennings with comes Cowen.

open. Your line is

Joshua Jennings

revenue strong about the of quarter. range, sales the spending the guidance budgets Thanks suggests hospital you PROCEPT questions, funnel tightening just budgets. afternoon. and raise on another with can hoping against pipeline to to start backdrop good asking Hi, environment? for capital taking how it capital congratulations that I the of continues and my was AquaBeam U.S. sales soft the in talk fill But about navigating is for through a and

Reza Zadno

are number macro Thanks, and prostate for seeing position environment, shapes. with now using outcomes are outcomes full to with some also in very factors standardization Yes, about our in our coverage, payers there procedure procedure. fact, All here? are physicians curve. with in commercial sequentially and And and are adoption in we procedure. adoption discussion and and to guidance are driving sizes Yeah. the there that seeing the helping clinical real-world surgeons in early and And more effective we you are utilization sales that with all a utilization, hospitals coverage. now Hospitals starts sense Many think, and QX Medicare anything but these are our increase we of are that have in good are broad do And our is procedures. the a want adoption unique on feel utilization. of seeking factors Kevin, some And Josh. add and expect covering, importantly, about updated more and durable, safe and we competitive QX. I for better We unit patients the

Kevin Waters

Yeah. on the to background high-end Great. capital, of million raise on raise, lot a the $X essentially frame gave million Josh, pipeline, guidance just is but a the our about guidance Reza on capital of raise handpiece. $X

the that's increase revenue and both range. So, penetration the utilization driving in it's

Joshua Jennings

X the Level Thanks that. then that's, cited, X.X% procedures to code you in for maintaining rule tick-up and about And that follow-up. wanted at reimbursement. I APC a just think, I ask Aquablation proposed

everyone level profitability touch pass-through that other but Aquablation away next receiving have premiums And of been resective guys just private payment think issued. relative guys. CMS taking this just the reimbursement understand that procedures to for you year, procedures is the proposed maybe could transitional you – from then us the clear also questions, Thanks I payers? that are on help going the

Reza Zadno

Thanks, Yes. Josh.

So, related Level Level the with our was are expected the and we will X, And APC to we obtained X. believe APC satisfied Level X. customers, APC confident this be they we

not an were if this information is aware based many that payer the transitional to issue. of additions communicating sense the private year, customers this is a And in as and have that the going is compared far believe we concern a year a been we not hospitals, is coverage last the this it's was material ago, that where we we quite outweighs conversation we private As that compare payers today, and the have not Medicare. covering the frankly, you and with on that pass-through not of transitional they surprise, pass-through compare look new, transitional, pass-through with and have this a we all top believe we on transitional concerned, again, And addition, away. are

Joshua Jennings

Great. Thanks again.

Operator

Craig of with America. Bank comes question next from Our Bijou

line open. is Your

Craig Bijou

Great. guys you're strong on seeing to see you're new But urologists from for on quarter. and little Thanks and what taking system. – comments individual congrats about trends, adopt? bit bring maybe maybe little now, ask a adopters, a maybe have market I are the starting talk to maybe number their another hospitals on urologist decides the the of within their first you in so utilization doctors? your that trends I hospitals if a wanted the once questions, grow about quarters, bit to the Reza, the You appreciate to more is on been continue you can touch individual can where a utilization now for utilization where to does practice? it own early

Reza Zadno

by utilization Yes. Thanks for I driven this multiple question. increase is mean factors.

As starts broad hospitals of And clinical and prostate. on range physicians with I a are using outcomes. mentioned,

and – have converted have you resective don't their do most And all know, … many add done, of I In growth prostate for fact, those the standardizing are accounts fact, utilization. accounts factors when prostate in on the majority the on in some us it's at shapes. they the And are last on procedures, prostate and XX And Kevin with all can to the and sequential resective want where look definitely, quarters, procedures accounts for these to XX the utilization see many accounts we our, of are milliliter which range. And months, again, to are been driving of in cases Aquablation. XX they to sizes we these using, Kevin,

Kevin Waters

Yeah. No.

that close XX% year. largest So, still to have get we're And longest. over to the growing that our of roughly utilization of the to end installed we grew important that customers XXX% on. a It the we we're of utilized time is base in that is By year, group first the the been are it's end the one to dynamic the And with XXXX. eye installed the remember the highest base half significantly. still an mean, is up the going Reza's I recognize us keeping point, that have or

seeing, oldest for get additional to each utilization around have on And then accounts we'll to fair we have as quarters, been new also that, top our specificity today physicians in the they're So, able we of adding be metrics. utilization. customers to customers Craig, are even But that those say utilization still rate. helping now, highest for with multiple cohort more which those that it's our quarter, provide is us

Craig Bijou

you whether the it. half, reps, expect that if say the you guys. second or I I'm on it capital they sure both? into not reps, helpful, Got in detail sales missed could bit were not, maybe strategy a to the for or That's then And if did And adds adding of be you reps. the going little on those Aquablation maybe go but

guys obviously extremely thus doing You well have far. been

the there, in strategy just feet need certain the maybe geographies? or So, whether geographies street targeting they're current you on more

Kevin Waters

this Yeah, is Kevin.

start with we clinical clear team. comfortable been of commercial jeopardize we won't performance Let now expect. would the And that we're we increase field at of the our the that the size feel outcomes that very with we it increase our commercial felt will where size when data strategy. this me we and sales real-world on We've that force excellent the point

So, strategy. that's the

U.S. time reps. penetrated territory to In continue every terms going near Aquablation to equal where we're both in bifurcation, be. add this at We're need capital we and probably of nowhere of sales number the to

commercial We that to But look take point continue my long the some want reps headcount do being we have capital we'll us front we in business. large right terms have territories now of a to is, that. in adding runway And fairly a of at. to in

however, world given interest. But strategy, physician they back the protocol they could enter we time such the again, patient is be point I doesn't we get now though to board, trained, XXXX. on our sure guidance the both reps felt of as really our they we and imply to these meaningful real we in that make to in the do from learn What right contribution back them any want new other The half on get folks. the productive make XXXX do, want is we're what to outcome is seeing

Craig Bijou

taking Thanks guys. Great. the questions, for

Kevin Waters

Thanks, Craig.

Operator

Goldman Our Sachs. with Amit comes Hazan from next question

open. Your line is

Amit Hazan

Hello, all the thanks. hospital macro that and other guys. shortages staffing Hey, earnings in take with it get impact out Is it good from couple maybe out? and calls it. a into to installations? the making impactful questions you observations, One you is I wanted of all that you on hard whether on would case been afternoon, just training an that to on to start that call that's are at just seeing get Anything your like that call would have sector you? done,

Reza Zadno

Thanks, Amit, for the question.

So, it has not impacted us.

We to but been we are forecast. that, hearing have able achieve our

has material us. So, a event been for it not

Amit Hazan

Okay. during fast, small percent will, growing do a market as recovering? overall if at And kind trend at exiting of I if overall during we quarter have quarter, whether of we for the in kind of the and and you're you inside underlying get high improvement know, in do BPH in But growing. of terms of level, for you all change you're saw saw very of same, because a that sense in the but are were market, where conditions the a kind just how you your maybe where that the XXXX, health you, know question, customers we market BPH it's BPH of, procedures And of any to that a segment? and improve you sense level a into hear, procedures, XQ just the I they love high lot

Kevin Waters

macro in I look were normal suggest numbers XX in I that doing when much were around we XXXX surgical customers per to not the that those even the you would We the can last, look, those month. believe X.X procedures Yeah. definitely impacted we're paying XXXX we're we're at in a XXXX attention And that environment. low operating current on utilization targeting, as say, mentioned, procedures resective at years. by And Good average, consider customers relatively we question, you is would XXXX, Therefore, and is unique of that if And a is macro COVID. we're This approximately frankly, procedures and month. bit look that, year account a the Kevin. a environment, I think mean our position average per about at still volumes. Amit.

XXXX penetrated, very our still utilization shields So, we the us some from term of we're focused not in And frankly, factors. accounts the impacted, the which really terribly decreasing on would relevant ability the is to a near I with level, with XX% our to macro been, but bit growth agree it's on and that definitely the growing increasing have grow. that macro hasn't market impacted if you XXXX or but XX%,

Amit Hazan

Great.

side. versus evals Just one quick accounts there last many one share you were on were in is for you sold systems the new if me system retirements how that the Can and any quarter?

Kevin Waters

Yeah.

So, no pool. and through demo we're retirements. now the And eval

to program. out sale. not every So, a forward, periodically new rental offer a we're with a may greenfield right model moving and customer, sale is going we a sell demo And put but now, our is much pretty

Amit Hazan

Thanks very much. Okay.

Operator

with question Mishan KeyBanc. from Matthew comes next Our

Your open. line is

Matthew Mishan

you questions. Hey, the good thank taking afternoon, and for

half maintaining like second Why of decline as Just half first, guidance? versus seem does around inflation it the in systems. the would gross price you're margin first especially [indiscernible] goes, the the

Kevin Waters

good it's Yes, a question.

with Glad us. you're the – call first it's guidance by on board. Matt, Our your welcome, way,

Matthew Mishan

Thank you.

Kevin Waters

a our And look the margin second in where back you if of recorded high-end we guidance, out does half XX%. the range few XX% you're off point gross of So, the just margins the at came I'd quarter approximately things. recognizing the we imply year. that

volume. that relatively they pretty first dollar are going And revenue to margin fairly gross modest significantly on low level. fluctuate, and can we fluctuate The being still percentages, they're at

full $XXX,XXX in equates points that cost on margins. a percentage context, Just to to put a X

the This are production. gross in one. would modest in increasing metrics will levels trending but right anticipation margin in staffing that operations be create revenue in relatively to point and areas fixed supply here with that in So be tends expense. growth. a like is, high degree costs variable the near-term, direction. of chain That of our future does Point additional These are some we two group have

this However, the at nothing create does second and our guidance. implied nothing point our expense. in infrequent there's production, that's out, margins I least supply half There's in additional And unusual. some would chain

unusual. long-term. do would point this there's that's margin for going multitude There's margins scale, infrequent a There's still again the our just half. over unusual does significant our term. a business It's half nothing we nothing in factors. second I at But guidance. in to nothing implied potential of However, there's the variability second that in in expansion have And be the some out, believe near

Matthew Mishan

And force, rep which system comfortable at get which placement going the almost you're seem you're with sales placing pace from a outcome the that a with the then expanding just doctor Excellent. controlling or that new or does sales pace these expect? like just, to your Okay. you you it installing that you're what you're at this systems, makes

Reza Zadno

Yeah.

So, in targeting this we are accounts. disciplined Reza. Definitely, is our very

we disciplined reason to approach, be those extra we our capital we even champion. – the hospital, the administrators successful. that XXX that are in than has And procedures disciplined are we are equipment have year, we because you're resective high-volume an allowed the in placing doing this targeting average And that in that success per And not more this those. we make is before to hospitals aware physician And sure approach seen had have rate are have high have We we on U.S., a talking pushback the talking. robots. and of us and

Matthew Mishan

Thank much. you very

Operator

next B. question with Chatterji Neil Our comes from Riley.

Your line open. is

Neil Chatterji

Hey, questions. the guys, for taking thanks

adds second circling maybe the back for commercial the on half. just team Just

impact start if quarter just kind could some that just maybe like kind there? third be just that, six towards the us you more ramp. expected remind you to wondering before productivity to then expected And Is fourth you quarterly could add could expect or weighted quarter. cadence if of meaningful to if three color of Just that or you you if months the that about, maybe of of see talk on,

Kevin Waters

the as having appreciate By Yeah. Neil, covering way, now. well, welcome I you the company

In terms million. of I'll OpEx spend talk about of cadence, just our $XXX

million sales million that about about quarter. going And the in where we're the QX from third spend is to QX. imply be should $XX be half of sequentially, team $X $X relevant cadence back does quarter than that million expense larger fourth up So the year. should to a how the to the And build

suggest the on was does does OpEx. will that mind your [ph] and second folks That Do time itself we on to primarily [ads] QX expense the question? So was OpEx repeating? mid board manifest late by in What have that that you guidance. be

Neil Chatterji

much… was pretty think I mean, I that

Kevin Waters

asked doing be to month three it's larger rep we reps also sorry. six have for be Generally, may into will to But You as or grow. a going to some average, we again, to which perhaps six depends to the do a become three you're at these productive. months territories, will of looking fully that productivity, And it's territories, which about new ramp. if on continue splitting

Neil Chatterji

if add And Got just I question it. could a follow-up here.

kind the for it of international with on Pacific Just approvals about Asia front, and regulatory last quarter circling the you back talked Korea Japan.

and any market the of could in reimbursement if kind any if there's you there China there? in terms pathway then adoption talk updates Japan? maybe curious kind Just your expectations in of for the strategy about Korea of and secondly, And for

Kevin Waters

Yeah.

separately. those to you take I'll – of terms in just So,

We XXXX, expected in as in quarter. call, the no another we $X so on phrased sell last So, there. very quarter, robot Korea, modest in I the did is than in million number mentioned greater how the second Korea contribution that in really that's last

moving on anticipate started fairly meaningful lengthy reimbursement that modest but work Japan Japan, revenue penetration, probably contributions next regulatory pathway flipping to continued the would but introduce when again, in update then The the be there. XXXX. continuing relatively process. We through a we be do Japan time we'll guidance. we So, China, process And give there, we're any XXXX to have forward. not could a revenue

We meaningful in short-term. in China not any contribution expecting the are

Neil Chatterji

all That's Thanks. me. Great. for

Operator

call There's I'd the to turn over Reza. questions this back time. no at to like further

Reza Zadno

meetings. our everyone, seeing earnings look attending future the in call. We Thanks, you for a to investment forward day. Have Yes. nice

Operator

This the concludes program.

You may now Good-bye. disconnect.

PROCEPT BioRobotics (PRCT) 7 Aug 222022 Q2 Earnings call transcript