PRCT - Earnings call transcript Q2 2024 | PROCEPT BioRobotics Corporation

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Operator

Good afternoon and welcome to PROCEPT BioRobotics Second Quarter 2024 Earnings Conference Call. [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, Vice President of Investor Relations, for a few introductory comments.

Matthew Basco

Good afternoon, and thank you for joining PROCEPT BioRobotics Second Quarter 2024 Earnings Conference Call. Presenting on today's call are Reza Zadno, Chief Executive Officer; and Kevin Waters, Chief Financial Officer. Also present is Sham Shiblaq, Chief Commercial Officer, who will participate in the Q&A session.

as like call listeners plans, XXXX. that performance forward-looking I'd on statements events, begin, Securities are conference Private this relate statements we to Act that remind made or Litigation Before Reform under of defined to future

only these other available to on current events call. factors materially under obligation cause date, to beliefs, are August that as all are online expectations statements of with required several place www.sec.gov. risks, from X, XXXX. not based reliance subject Except uncertainties and Listeners which reflect law, are information, that detail no or forward-looking and the more BioRobotics' may differ expressed risks are conference undertakes statements could new any These are as to PROCEPT statements these on BioRobotics the uncertainties, revise forward-looking and forward-looking to Commission, speak of While cautioned in on management's Securities unanticipated these assumptions, this by to Exchange PROCEPT circumstances expectations today's and results at disclosed which arise. in or update filings statements,

nearest turn we that, accordance equivalent we financial release. With that financial reference over also not prepared GAAP are well as about earnings are as measures included call our I'll measures in During certain their use these to call, with the to information will More non-GAAP in GAAP. measures how the these Reza. of reconciliations

Reza Zadno

you and thank afternoon, for joining us. Good

our our results. XXXX then provide update, revenue comments financial a regarding business will by will followed Kevin opening provide For detail updated quarterly who guidance. Starting performance and I and today's call, with additional general

to the revenue second by strong quarter second of with revenues. We of are the continue XX% the was strong the both quarter increased of move another execution U.S. U.S. our base compared second compared install consistent driven and prior utilization quarter demonstrates us and against international installed accounts demand up growth customer positively, representing with XXXX from increase growth report a U.S. XX% active base to of execute XXXX systems, objectives. year allowing of system patient We of XXXX. U.S. of XX curve utilization our in and year to our XXX factors for faster XX% to in U.S. compared record exited commercial representing increased Growth monthly utilization the to total prior $XX.X Despite to ability the million, base sales, quarter to install quarter in for less pleased expanded approximately months, growing period. The for conjunction Aquablation team's the than trend revenue accounts period. of XXXX therapy. Multiple with our new significant being XX%

expense gross urology margins a We laying foundation underlying progress, expanding the company. to believe continue and we that maintaining care to good that a Additionally, is reflect be fundamentals these make BPH control. the operating standard will and of surgical the leading business global become technology

market the PROCEPT's Regarding team, to previous months. we improving the the capital XX environment believe to stable is hospital rep and CapEx to continue compared

are a pursuing hospitals having macro lose motivated ensure in area robotic in we general caution our CapEx with a we given patients they system Specifically, along exercising were CFOs, investment patient and other who seeing more with lingering few quarters educated conversations to population, urologists, to headwinds. With hospitals. just competitive and ago, more prioritizing investment stay proactive increasingly not hospital growing are

Aquablation now not to patients BPH that resection refer our technology of therapy believe out practice build robust BPH have nature of and every outcomes are we and disruptive with the achieving skill or Given can specialists. surgeon independent consistent experience, hospital a to

placement of X BPH reps very excited added grow to of quarter recent meaningfully XXXX. long approximately we XX in X opportunities capital about ramp runway turn driven with reps. in capital sales of we we With with with nicely, selling U.S. our our XXXX Even the half has by enter of XXXX added front of the capital which we remain reps, expect the in capital of adoption robot continued are addition We of the a months, the in us a to quarter second opportunity. hospitals. new fourth XXXX. to to productivity number of system to contributing fourth sales curve to success, start still our pipeline, As which the in been were The XX early

Next, growth handpiece to with the trend. XXXX. consumables of touching pleased U.S. account, XXXX. In When remain overall quarter we utilization second of quarter compared U.S. and new our ramp base surgeon to our grown on and XX% revenues other second months, activity. past accounts. the utilization levels mature XX increased XXX% the analyzing These install has time compared take the to accounts of to

account-specific within what on and have hospital. encouraged is multiple seeing Aquablation given points receptive the a utilization we of by are standard believe are care We as proof we therapy where we viewed

to be exceeding active procedure a growth, continues retention surgeon new addition is growth adding new surgeon active performing to which and XX%. In of accounts, rates primary of procedures surgeons a driver combination

we retention can a high surgeon focus surgeons. our As on level company, team training new as of this from commercial benefit greatly

was XXXX the May, Conference, early in held American Association in AUA, or Urological Antonio. interest, San surgeon Regarding

particularly and XXXX feel year marked clearly first our Given and could was recent see it of Aquablation acceptance the exciting market we growth, PROCEPT therapy. growing awareness for as AUA

was a highlighted the with presenters of there was papers more Throughout The work also that confidence in session therapy by sessions BPA therapy Specifically, presented. were outcomes were publications continues training of adopters where the real for clinical consistent number real-world PROCEPT we that company's provide presentation and Aquablation XXX trials. a to not sponsored significant rapid Aquablation surgeons educational This held where participated. weekend, increase new technology. over future of the industry

how attention treat could Since AUA slow-moving disease prostate low mortality noticeable very the more urologists at cancer with Aquablation a garnered information therapy of number cancer. is into prostate a prostate rate, is Additionally, our a it growing expansion cancer with on legacy many demand intermediate and These a the treatments unnecessary cancer in request cases, of in lead at risk the low patients that significant decisions harm body. decrease their the can quality patient's secret no from life. be to who removed of cause requesting

into in with Given is PRCTXXX, very April, knowing BPH more cancer. localized this profile backdrop, cancer, many surgeons we attractive. Furthering demonstrated potential at the therapy's in initiated our prostate AUA interested learning enrollment efficacy in safety men PROCEPT's IDE study in the were Aquablation the about first expansion of prostate so that

We patients information and II excited to prostate progressing Group study I a that forward in tracking available. cancer. becomes in As expect third it to additional to coming patients we with grade announce enrollment an reminder, when I'm single-arm enrollment these the PRCTXXX to XX is is FDA-approved months provide and look quarter. and complete of nicely plan

and Cross Blue reimbursement covered roughly positive Louisiana. late Shield to March and Shield Blue Combined, updates. of we June, Arkansas recent Turning both coverage received from Blue Blue million lives. and X.X plans payor for Between of Cross coverage policies account

impact coverage, in XX% these plans our have the While positive Shield considering on systems relatively incremental utilization Cross those addition numerous Blue we in believe have do will locally we Blue states. given of a payor existing [indiscernible]

System. second quarter primarily generated I mid-June, of current the published representing international reminder, a of hospital would BPH. for procedure the X% Prospective code proposed in in Category strong ASC X% again to second rule will momentum Aquablation Level January respectively The for in III November. Also, for XX% mid-July, a $X,XXX the sales APC by each the the replace procedural and to rule the code Medical driven to international for final $X,XXX provide Aquablation has CMS a X, the published Category market in Additionally, over the X XXXX. With Aquablation proposed activities, terminology the that payment XXXX I or rates. CPT be which its development in compared XXXX, The million code as is was period. growth Hospital $X.X new that setting Association American Category Payment CPT prior and United is CPT we revenue year a code once quarter to respect starting therapy increase The treat XXXX Growth established in we existing expected announced Outpatient of Kingdom. the

X to Additionally, Japanese we in our hospitals first sold the systems second quarter.

Following pipeline we the future penetration technology arrangement was surgeons the at generated new U.K. presence the the increased confidence British AUA Japanese conference earlier Japanese the Positive sizable our our a the in the ASPs in our has to XXXX. Similarly This interest this of granted the our the its market the NICE to ability year, recommendation from study completion confidence we in and of standard of market excitement in for post-market nicely. conference the States, accelerate Association also investments and Birmingham, in historical acceptance since had the gives United and at of penetrating Aquablation therapy first Urological Surgeons in reinforce market. England. us

to Larry PROCEPT our most of joins business. Lastly, Group where years welcomed Wood and Directors. experience, with of mid-April, at comment of notably to to President Lifesciences want Surgical our is he XX Edwards Directors. Structural on changes In we currently Board new of I medical TAVR Larry made Board its over Heart device

from most President in medical welcomed XXXX. to XXXX Board. and of Tom the as of new Align Tom decades of joins CEO as our Chairman Technology Additionally, Prescott with mid-July, we experience, PROCEPT device notably

under $X help orthodontic Larry PROCEPT when regulatory market, affairs in Tom's areas million dental transformed believe billion and coming experience operations, efficiently in the commercialization, to the he scale near leadership Specifically revenue growing $XX leadership, Tom's related Align years. will clinical retired. We to from and and strategic

account the to as Directors are what funnel is average, conclude the to pleased serve key performs. pipeline to well. To In more an believe macro who continue to our stable the remarks, also our active, served nicely continued XXXX, Dr. grow on and every Moll, improving prepared Board metric Fred currently procedures environment. On Chairman longer we our continues sales has track a we of been will move that since in it right my direction. summary, in We as has

with sustaining launching surgeons while more are We excellent rates. retention new accounts

exceed business expectations. international continues Our to

is commercial guidance believe our we largest to around and company's XXXX. continued most Our history, exceed organization profitability margins which to primarily we the in the the have throughout with lead gross metrics productivity. And of increased pioneer expansion lastly, will

therapy company. And Aquablation to believe turn Given we will BPH over with laying as a this of the to leading global is that, PROCEPT and is momentum, care emerging the standard the become call surgical positive I Kevin. foundation urology

Kevin Waters

million, growth second $XX.X we of period. In in representing was Also, second $XX.X handpiece Thanks, growth growth XXXX. $XXX,XXX, the place revenue compared quarter. U.S. was quarter, was of XXXX XX% the second compared at quarter generating for XXXX. of U.S. with XX million, $XX.X XXX% the did XX% Systems. in was $XX.X second compared representing AquaBeam prices to revenue the U.S. the driven of compared Reza. units of revenue for Robotic selling XXXX XX% of the the install U.S. million, we ASC million, of Robotic to quarter second to Total representing second growth consumable system in the for by growth of quarter Handpiece sold and quarter quarter of to quarter AquaBeam prior the Systems revenue second of base system the XXXX. any total an the increase representing of approximately an year average revenue not of

a exceeded Additionally, our second quarter. Overall, quarter continue increased across account Utilization XXXX. handpieces see approximately sequential increased to compared XX% to the quarter represents the which is the monthly in of of XXXX. commercial approximately direct shipped X.X manner. increase training expectations reflection utilization timely from and of retention cohorts, which first U.S. we high per unit second and surgeon X% a a in surgeons, X,XXX second execution, XXX% new includes opening compared quarter quarter, the in of second handpieces representing growth the of in We to accounts new strong the utilization

Second were approximately average prices quarter handpiece selling $X,XXX.

and and second in again team we XX%, margin second approximately with million, Gross May. expansion representing to provided overhead We also an of XX%. basis the the $X.X points in margin the all-time our revenue consumable guidance XXXX along XXX quarter of was representing to operations in of absorb high million quarter above quarter ability execution due other second Gross of quarter recorded strong overachievement. XXXX. International second revenue second was $X.X from was quarter expenses once for growth for the our revenue our

marketing $XX.X primarily development expenses. expenses, were The and research income $XX.X down mostly driven in the million and Total of sales the Moving million XXXX of commercial second same expenses XXXX. the operating was the year the by increased the and statement. prior period of and million organization to compared $XX.X to increase first quarter in increased quarter in expand

offset from a cash million for expense the operating was quarter of quarterly loss the compared of foreign growth. Total of XXXX. with first a expense Adjusted interest our We in expense was pleased of to year. $XX XX% operating are million very revenues balances. When XXXX. favorable the $XXX,XXX of XXXX period $XX.X compared currency interest loan X losses $XX million the the growth, first million same in of leverage of revenue the was half income EBITDA on demonstrated Net $XX.X million loss growth in of $XX.X second to income by other second operating as prior loss comparing quarter have expense in increased to interest million we our was plus from and term months XX% XXXX $X.X the

June and resources of which Most usage to quarter strong our cash business. improvements will $XX.X and cash the improvement balance in XXXX. the this We million. sheet $XX.X was believe capital significant reported support liquidity equivalents XX of is Our needed provide first million, progress of grow We was and from million $XXX in as working quarter the balance usage of our the capital. a current driven in cash by

Moving year approximately $XXX be million, to U.S. full Starting guidance. XXXX XXXX revenue to now of systems. financial total growth approximately XX% representing XXXX. expect to compared with our We

continue in sell systems expect approximately to XXX We XXXX. to

sales with strongest be quarter of being quarter quarter In system to year. XXs the cadence, low terms our we the system of fourth expect third sales in

of We anticipate system the to selling be XXXX approximately average prices half also second $XXX,XXX. in

handpieces. U.S. to Turning

sell average approximately full We expect year selling the to XX,XXX for $X,XXX. handpieces with of prices approximately

other million to $X.X consumables expect full revenue approximately the also for be year. We

with strength the in expect be Regarding cadence given to quarterly quarter, an quarter third due we quarter aging to to base. install we sequentially compared saw quarter, utilization utilization the slightly and seasonal increasing fourth the second strength down in second normal

revenue Additionally, million. we service U.S. $XX.X now be approximately to expect

we revenue, Lastly, year international approximately momentum be now $XX.X expect on in given million, strong positive growth annual Kingdom, XX%. United representing and of quarter another full revenue to the approximately international

income be our gross approximately guidance Moving from year to full an statement. expect We down to XXXX issued margins XX%, of now previously XX%. the XX% increase

the second expect sequentially Regarding half cadence, margins to continue quarterly we of gross the year. to increase modestly in

expenses. operating to Turning

of approximately full expenses XXXX continue We million, XX%. to $XXX.X year operating expect be to representing growth

operating In cadence, expense expect we $XX million. of quarterly third be to quarter terms the approximately

in Given current income rates, interest net XXXX. generate we expect interest to of approximately $X.X million

continued in Given our we the revenue expenses, view EBITDA operating now $XX.X improvement increase year along and from approximately full to an be on million, margin, expect a loss adjusted gross the with comments. I'd our previous to from loss turn million $XX February. At up $X for our like to initial and from provided guidance million guidance of this point, XXXX almost call in closing back Reza

Reza Zadno

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

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

Operator

[Operator from our America Craig Bank from first Instructions] And comes Securities. question Bijou of

Craig Bijou

Congrats on quarter. strong another

I out. you things. the start want on Obviously, or really stood ask But side. to So firstly, I expense X want about to

was you coming gross impressive be was guys clearly lower margin getting Your to burn it better last going than in quarter. what cash and said the had

ahead you to how business your maybe can think Kevin, and gross ability And margin line and to just So not moving go line. burn leverage OpEx where talk margins kind the how picture, forward big on of cash kind of we can just then if but the your the kind just about and looking the think those should of this to? about year, cadence about

Kevin Waters

of margin contributor To that our the question. the what in and margins gross helped and related the we've this fruition has to that top second on around warranty. ability about quarter. of We've the into expand guidance. And of did consistent to and saw really that, our for is continue XXXX. new going costs our talk built of that in quarter you Craig, operational put a those the lot That to a increased in to future for second occurred on first Thanks, X kind biggest we like in months XXXX and gross this in the moving saying gross at what the end business implied we Yes. is saw revenues. us of few we around our address things the what's yield in to things fixed margins, absorb come XX% leverage That's really first, focus XXXX pass facility, scrap for areas been first the expansion quarter overhead

the the of I north full somewhere to year, of Regarding XX%. exiting to get year in XX%, this number we guide expand range expect third at achievement rest to cadence quarter, then year which continue throughout to when XX% of think, the think, full in the and is, tremendous the year XX.X% the to ending the were last from we a year XX% I

term just margin kind improvement good of potential of your longer leads into last business. the question, there. That So of kind

on could good margins, do it on ratio, here expense business. just come the XXs, XXXX that X first a call the this with I given our gives 'XX. months fruition profile really with see profitable And process longer of to growth, increased term the be and to in confidence us highly particularly talk this margin year to -- in on about think we're leverage prepared operating call, While with this exiting trajectory given our low not the we're that's

Craig Bijou

enough opportunities guys on international and that do record about on talk And expansion the had, the international that you we think you do quarter guys just I business following comments up have. the don't the maybe

talk something So in ramping maybe what far seen just soon. is And the really that's to going obviously to Japan look about thus start U.K. you've to forward then

talk relative about how opportunity. those to those maybe So -- size the opportunities current your of U.S.

Reza Zadno

we second with driven quarter Craig. are U.K. strong Thanks, the very international happy with primarily Yes,

we and to a that previously are data. investors nice have the similar said, utilization. predictable now was good And team more [indiscernible] we X for robots install I'm have U.K. always endorsement conservative U.S. said we XX As in in the a great a was so clinical happy starting can to And international we the we -- driver this base and the about that, Japan. Having cadence stay we that to put ago. our that placed say going also expect to should in months about are international have

XXXX on So only we full add was ask the efficient the But international. the are have the first practices the wants on that to comments. going same more to enthusiasm if Sham clinical anything to year on international. I'm making it's my

Sham Shiblaq

that Sure. I to similar very add the commercialize is would Yes, using we're Japan Craig, we've would process process that I the to -- add the used in U.K. U.S. the in just and that

about think So building you of team, onboarding, structure think when think about the you the about funnel. the you

the data Japan had about really in provide now the we're and forecast. same business we've lot to nice great our be there. And And a that predictability the excited way our as we've to as U.K. mentioned, we build well. you to the about a business have over start U.S. use that of then feel to We years to business able been able

going XXXX be look to our first for a in and ramped to we the This Japan. our up. our great been starting full get so U.K. at And with year is business has teams year

and years into then the as out And so future the provide year to we're U.K. finish visibility in great well. some excited

Operator

from Matthew question And O'Brien comes Piper Sandler. our from next

Matthew O'Brien

look guide, XX% you're time, couple starting you the in what's of last to of like And just back XX% generated Maybe years, the back-half the anyway. I the half and sales If implied of more year. at with guiding XX%. this

bit So all not sure especially. reps on and it And just side, that given with disconnect. a on the what of I'm handpiece those we've why kind commercial little side, then slowdown of the implies there's seen a

might there in versus the anything in what just So terms you've a mindful why here back half of in slight be done first of be acceleration we should the half.

Kevin Waters

Thanks. is Kevin. This

did, stronger increasing really was of we As out, second have on QX what expected a you pointed with you even utilization, had handpieces if I'll internally very strong utilization XX% actually a We start -- sequentially. utilization. than of -- down. look kind And did at quarter 'XX

the guide, would to to half, half. I stronger much given almost and saying than our back put of for year, our time, an argue, the total quarter-to-quarter. And accounts launching can the in that historical feel months I kind quicker and monthly our XXX than I ramp same we've So half utilization it's just account takes able sensitive surgeons launch been we to prudent it consistent say base. been very half And first new multiple anything accounts still will wouldn't growing to XX% into with be install our in X utilization back at plan the is with how back trends we've X that perspective, read up. it's of we versus But in manage did do implied that expectations to we of which overcome first in half historically. to But almost

in 'XX there's I than expectation of high quarter, quarter look productivity the flip the XXs, have a 'XX. then XX half. at the which actually little of the guidance capital, our per in on slowdown if same somewhere I anything in wouldn't a capital, in that you XXs think the sales the puts rep somewhere force, just low number that quarter range. a basis to third fourth in we in fourth does quarter thinking back the XX there productivity a And assumes in fourth our of with the in the read is that assume So at the bit all. And into management the of I'll utilization

with no So how at no all. we're in what funnel real and seeing there change progress deals the slowdown to

Matthew O'Brien

the really question commercial for leave to Reza, I did you It's sorry -- on team. have then Sham. a out, And but

especially as when smaller is expand you the it. much it's Just I because know capital XX%, productive that you little curious want can not on team, force, maybe as and the how numbers, still a unwieldy sales trending get commercial side, but as the

So how I'm the just IDNs trending things and the how as expectations. updates are And trending curious there team with any group. far your that's as then on and that

Sham Shiblaq

one on would team do some say not continue is expand. different numbers, when we drastically in at The the I than Matt. capital years. to you But they're look thing Thanks, prior the

the so be to And processes are bigger, well has through gotten employees, productive. place going team new now onboard in the to training and more going

about talked At we're of managers we've level, really we thrilled in in level the many As rep talent the environment, the that will management of managers helps capital in that with before, mentioned, them And we be are half of team and bring at up the we Kevin experienced accounts. get expect from capital onboard level. very back helps this speed to quickly. year, bringing to as robotic fully productive strategic to the some large

to deals to the they different we them. When that to accounts technology the systems to able hospital account local multiple the possible accounts regional that you to phase, these it fruition. only and versus purchase for for So you and important ensure way acquire funding. very, team XXXX difference bring the build the best the added with a team the a because numbers as do stand-alone corporate to get capital accounts smaller, to team. with a the team or a national in is in slightly bubble not rep were strategic help will start wasn't us The us. than It start we our the becomes have important IDNs larger, see to big have also XXXX hired very work pipeline What numbers strategic up been be specifically when intent junior to

just the So time this we're I year. goes And very as far they'll so think on. be better happy progress with

Operator

question from Securities. from our And Truist next comes Newitter Richard

Richard Newitter

the on strong quarter. Congrats

the capital follow-up. do $XXX,XXX, and have been just question, I trend, trying broadly. on what for just what that the system above year. and in you've you're First that's and the Maybe just to where rest a And we the of comment funnel the ASP, definitely on outlook modeled

Kevin Waters

a see that Kevin. in And of on the This today. the And the raising of that the Yes. we line the we $XXX,XXX ASP for this, funnel. very pipeline have to are good Thanks, given Rich. the what comfortable sight is coming ASP second back in is based year $XXX,XXX quarter. And felt of of of deals in guide we kind half our off

We continue to refer ability to have CFOs all had treatment ROI of creep which systems, otherwise on of the with system, is they to have higher would very administrators out, them productive our leading about those standardize that on for hospital algorithm. patients ability things And good and retain the to may conversations the to it kind ASPs are see. the to

Richard Newitter

deal there at like with pre-authorization get to I'm there's and to been by that Medicare surgery. steps needing out just looking just prostate the respect things pre-authorization kind Maybe one just last numbers to RAC that's else the other just backdrop, one. get I all, the to the worth with hasn't on anything of at just obviously, year, it audits curious impacted your all. out. at over it that -- curious extra know you size there's insurance and how in or your field if seen out you've But utilization calling if I'm

Kevin Waters

turn to could Sham will better. answer probably that Sham over it one and I

Sham Shiblaq

question. take to the Yes, Sure. happy

Medicare through assisting very do have long we're process. and we're go XX how healthcare. started audits. about around they customers as background RAC PROCEPT years aware RAC common time. doing slight our across talk a small for of RAC the a audits been So and about audits then and that them Maybe very I'll They're ago.

of 'XX. see started this summer late customers, to our Regarding we

utilization mentioned, that execute we've To Now months, not currently mentioned. as been as XX Medicare-specific the started you grams, X prostate of limitation nicely. doing despite and was do you size able context, years. again this also to during last Medicare the provide increase shouldn't is year. And audits more Medicare some you a have to XXX and does be COVID able to them to for know last They years,

labeling our FDA doesn't So match that.

limitation. to not Just labeling have size clear, FDA a does be

So we've removing have X also Medicare to would we contractors age begun Medicare been in recently the restriction. I the removed. X with out of in restriction point this our successful with that surgeons working have

So received been restriction X we and there first -- of when XX we of a removed that's X years out our coverage, first at was contractors. now Medicare

well. So be to able we restriction as over size get we'll the feel confident time removed

Regarding Medicare of comprised the that impact audits focused our important think and are we business, numbers, on RAC are traditional Advantage. Medicare. also so to half this of in you traditional about note how Medicare does the patients But estimate can BPH only it's

that a think of you traditional XX% BPH will over size, XXX about about than less Medicare. And then the are So procedures market the means of our quarter grams. be

limitation, on to targets. achieve utilization ability So a does impact it expand this our and minimal our have

to appreciative So proactive That's out. helping to closely we worked compliant the they're well ensure accounts more recent and them of been with our out we've even accounts continue work are in and our quarters partnership.

Operator

And comes question our from next from Blair. William Vazquez Brandon

Brandon Vazquez

seeing? talk in is that that are can maybe utilization those utilization made a Despite of Or about XX commentary So there? a average you little to come? base Reza, accounts around U.S. accretive that you obviously than then those than you are your XX that nice guys XX Can quarter. Anything us, any point. of months on less in XX total months than those you the a at that, XX% about them, is months utilization to like under you less and had call from the the difference active XX% are, still install had longer are comment bit this guys months? tell

Reza Zadno

Yes. Yes. Thanks.

to to said X quarters accounts account X above past, month. in X that have we the per for it takes about get As to

So the is utilization. their stay the higher accounts the with longer us,

our reasons we standardizing attracting And accounts. in about that allows anything want continue we don't the half Kevin, do the to you to So I seeing year? mentioned, add the hospital. And of know, the for procedure back that that surgeons

Kevin Waters

get just I'll how little cohort some to Yes. the I over I maybe in your specificity we to could building provide guess numbers a question. be -- time that heart of to see the

a think robot, when quarter. in the the the remember majority of accounts We of aren't until may But even that those average I occurring we I first handful a doing think quarter. procedures following quarter, sell X. are it's to not a handpieces, given on sell general, in procedures important

less therefore, quarter second to then utilization was X. X. than the they up performed you less than quarter, this our the low corporate but first average. So And start they in in ramp have average very quarter, the in corporate And

shine, given So north as of X. And positive typically been cohorts newer the speak, third they that corporate see a so corporate and you nuance doing is X, with average. in And they're time where and the that they're appears X, the quarter, to mentioned, thing, then cases average consistent. by doing roughly that seen, with faster them and which doing is to trend get to start one moving ramp launching very multiple on our really we have focus multiple they're to X has less quarters The be surgeons. accounts Reza than the then

Brandon Vazquez

the in already surgeons comment a prostate Aquablation. also coming asking was with cancer how to there guys are prepared you then remarks about And about treat to and how

are you but some treated of interest are just into kind seeing creep seeing information, the prostate really of patients that patients already inquiring curious of kind kind yet? cancer if of they early you're treatment Or not today? guys Just of

Reza Zadno

Thanks.

So, around the you of some discussion on at definitely expecting surgeon enthusiasm at I the cancer -- saw And the study at as and growing mean both progressional same. potential That's prepared on of the that They the remarks, remember in has we again, panel awareness the question the AUA some our the halo acceptance we market mentioned Cancer saw of first to clearly the I and cancer. asking was Aquablation. were our same time, AUA. technology study. day, had are quarter in for we at the future But AUA, surgeons of as we study. effect BPH about PRCTXXX where enthusiasm finish this

Operator

question And TD Cowen. our Jennings next comes from from Josh

Joshua Jennings

being cycle to year. the I to I about It's there your the an in ask, half wanted talked a great the just thoughts update and on such first and past, know of I just when but divulging hear see strong just anything, we today. if for developed asked just replacement this and we've next-generation last can't but the this may AquaBeam have any the are about I not that could on system enhancements the call, remember, plans even

Kevin Waters

to crept be the not if projects at and is we We're but has spend that are we all things, of things workflow, I the the suggest recently, of artificial prepared transformative have. look we're on. that Kevin. time believe to hopefully, future timing. that would to market. And in the accelerating on to R&D around talk good those today be feel about And maintain to in for I, it's talked we've and we about And our Thanks, specificity data up been significant planning, think you We exciting intelligence, some internally. technological given things our talk continue And the establish PROCEPT Sham, more are assisted timing, to do Reza ease not-too-distant there Josh. use, be sequentially, say able look, advantage about fair continue we This we'll that working able we some spend that internally us very to clinical work which progress. all will to allow will

Joshua Jennings

trend sorry, prostate sorry told if We've well. some X-tiered currently don't that's who treat AquaBeam for a for strong. of want some there's question. specifically being hearing that Brandon's Vinci there's since more is any Da repeat to and And question. surgeons just acquiring to there. I are one. to BPH been with as a way about physicians ask two if to -- us that, utilization to talked then know indication. this also we've I'm I common willing quantify you patients localized they know cancer AUA rate sure And But contribution

Reza Zadno

that cancer the increase know, of significant removed not contraindication you And as So a BPH. market. we the it's treatment for in the

remark, are millions on We the United safety are the presented and men the profile It All avoiding where the the not that's excited. sidelines. dysfunction cancer the surgeons at specifically the we presented outside having treatment that of where our and from are were we cancer we is States which effects incontinence, of our on what move preliminary the as are us said -- state. have and side because that's patients not United promoting product patients these product are there or promoting today treatments have cancer data States, sidelines. in our AUA want in to They the in without we are But who of treatment. that erectile strong was for prepared of the for their very

running are these studies. We

Sham Shiblaq

Josh, -- Sham. Regarding it's

treated are being active or are watchful BPH also cancer BPH Aquablation that patients system. with of have a our form that's disease patients that of the for for treated Regarding surveillance lower those under or intermediate prostate Many with currently waiting.

And some the presented AUA. were even at of that datas

pretty results and the other we and You future. the in an think to saw in treat us. excited long to report watch excited keen -- be urologists data as some opportunity those us, BPH very of on that we're well. And data having patients that's ways continue to term that are to we're I about also opportunity very great And that

But them cancer. an on going that's BPH at obviously and of have this many we're focused we think opportunity. to So be point, patients

treating We'll does of BPH with it So indication. in because the be go cancer kind hand. of patients hand

Joshua Jennings

Or you a the include just you BPH as follow-up your If do I build number indication? Is expanding this in of historically? of in. sneak surgeries guys TAM quick could a terms TAM this

Sham Shiblaq

Yes.

those So cancer. I have mean currently, the current market patients that includes

just TAM expansion, treatment that be we when about so cancer And think itself. would

expansion this So BPH as indication. I don't the an for see

Operator

next Wells our Treybeck from Fargo. question comes And from Nathan

Dino Weinstock

for install Weinstock strong Could out QX, placements. about looks install base? XX Treybeck. total is like quarter. on you On replacements Nathan out talk the of the why on Congratulations it the of the system alongside one for the system came base This Dino came

Kevin Waters

out install did that not actually. Yes. It's a great base observation and of come a system

placed quarter, sell break And quarter operating 'XX actually was in a in is, operating first average went second XXXX. converted under system This back lease you to. QX think, this we the executed. did of This systems very at XX, to So recall, this install the base selling but a what And alluding to that you're up down, the XX if we which system the this lease. company an goes price. sale quarter of to had a the I reasonable

of sale but sell, how than account convert put done not number, was So we in to it ASP included system a this see At lease QX, obviously, was rest And lease was we've was base. different we it operating first it that thinking it an the install commit when was this this point, good our going mechanism not we occur. and but And purchase. we're a in under changing, of our said to that sales materially at good we to in sales. had our already sale to the our to see

see. to good really So

Dino Weinstock

IDNs And of necessary also at purchases can they expectations level talk XXXX? you XXX about your corporate in And multisystem your guidance above the for to by reach are placements?

Kevin Waters

we're And that forward. executed but direct, few last the we large the our on funds. IDN do level, black get With funnel on multisystem meet the that that is corporate that we've provided planning Yes. at now as we not are over as used happen, I quarters the from orders already are order reliant To be appear a by surface. may multisystem XXXX. being not were in to would relying guidance we Look, put local and in seen we the suggest it's unexpected guidance question that IDN for at orders but not the to continue the corporate multisystem we are to white that to our to said, be systems on what expect executed that an meet level

Operator

Zimmerman comes BTIG. next from from Ryan And question our

Ryan Zimmerman

a for this Just couple me evening.

maybe And you're that curious NHS of was trickle have some of down a or that were the in OUS And to we We just how you Sham, U.K. one, sales this I might there level. impact. over had a the U.K. on attack. month been So few follow-up The there margins. have a over I the had said cyber a is if And question your big at much seeing any then urologists just ago. were us to who total talked to related your procedure point. remind

Sham Shiblaq

Sure.

to in attack They specific We cyber the surgeries allow It and around been large have that go them safety that that that of hospital actually one created aware it. happened. to wasn't And down. they procedure fully many no wasn't created had yes, hospital with in to a actually, actually the we're doing impacted. So processes There's of due dealt cybersecurity. the Aquablation NHS. protocols needed. protocol continue hospital, London, a in additional shut to Aquablation widespread

to now. able to So companies that we other with are be good right felt ability about issue work our dealing pretty that around

do want part Kevin, to last Regarding -- of you take the that?

Kevin Waters

Yes.

our has a rough So haven't but just XX% not approximately I Ryan, -- I will derived say provide that the the us in the to the last U.K. numbers, we raising to specificity, now of we're are U.K. for from it X of guidance sales calls we're ballpark And you, primary been driver momentum of international on international in our question, mean, level going your seeing

as to U.S., say And as momentum. to margins. And comparable back So improved is you ASPs I'll the impacted our to anyway. well you. didn't we're We actually very by but weren't endorsement the with the it we're seeing which NICE referenced. over ask, attack that great I'm seeing The cyber Sham in turn are going U.K. the contributing it

I margins said you question on had you -- think another

Ryan Zimmerman

kind consumable, as the 'XX Yes. of capital the And No, you leverage give as guide to of the margin capital higher. the -- handpieces from you But to continue a I'm to on of quarter that what drive sales margin -- talk expense today think had move about versus just hear, kind first, what just you us and mean, more, line. margin Because If I On to margin more going capital. if you on with I margins the a this more your Kevin, know leverage, remind you're you do good trajectory this are that's you're to on comfortable gross step-up do on curious proportion away margins, going what beyond your But is but year, certainly sales of ability terms I particularly your XX% trajectory? guys. around so I'm get margins. can the and operating talked about again, your nice side, this utilization. think from you're just good wondering you in not

Kevin Waters

driver of that opposed absorption XXXX, Ryan. And and more actual some XXXX, overhead this, a would is mix Longer consumables revenue to becomes I'll guidance term, our is single hopefully the our questions. a at expansion amongst level, answer for is question, This to I'm The again, but your between but going the important, biggest not to now, our mix can disposables. suggest that's biggest and provide that's single and Right total margin suggest I both capital. even as equally beyond and I great Ryan. driver capital allocated XX,XXX-foot

margin So That our the itself with a longer manifest overhead more and talk term. And statement of or to doesn't on efficiencies into business that of that more now improvement reduction we've things that just probably do products total mix talked comparative to initiatives management that really will the income we're then a term, XX% term, longer particularly we cost longer can some throughout by being few improvements -- of team, cost at next excuse have projects, about reflective me, 'XX. to really alone. But the later looking we and we really nature, seeing structure pleased around expansion this seeing we years. disposable, volume is we that but until XXXX. help as in XXXX, opposed allows And of as margin And move about the we're other the continue. start look, we're excited 'XX our absorbing And operational consumables. as business to feel about seen expansion in just

Ryan Zimmerman

just Kevin, follow relative comfortable consumable, margin you to of sharing And to up, are profile capital that? the

Kevin Waters

be What extent say the a margins not for our is drag capital to I on would may is overall [indiscernible]. the it some

Operator

our Kratky next Mike Leerink Partners. from question comes from And

Unknown Analyst

on Congrats another quarter. is This Mike. Brett for great on

guide want million, about $X.X by I couple guide the revenue Obviously, $X.X on again. raised you margins hit million, So EBITDA the do of by and a to million.

shown incremental a versus historically. implying pretty that's you've margin, obviously, what pretty decent high So

some that down can a get that going up of durability can get that we see flex of going forward? to forward. and what the are wanted Just a toggles confidence margin sense the or incremental key And head for your

Kevin Waters

question, a not with if think telling that detrimental to offshoring overhead highly start a impact to I answering that expand really to but hurtful improvement we fruition. we've And Again, early leverage, see is here. come has we're a the like moving a size revenues. speed public leverage our felt as of we feel a year us. gives in confidence But We we're reliant I business us that business high out here were fully margin now today given really was attributable in since those point improved at just have reductions when create single $XXX team forward that's or margin of starting hit expansion if us It's apologize significant as our certain again, or I bumps durable that of And record would years, a things in we to good facility. operations with broken had to facilities fixed in cost support have we confident. margins. I we're to about our on that fully driver ability of grow now I structure last in here previously to I being it's into that, warranty. cost high million-plus that biggest near-term. we're the it's just We first very that was feel are that behind in. lot manufacturing also now a transition lastly around margins pass that yield, facility Xx product that we increased a that get because the the think our Ryan's we think the we around is few new And this to where went moved to XXXX. that structure leverageable very revenue. investors building been we business. And is level you And beyond And

Unknown Analyst

anything XX% you But is retention very received just commercial strategy going Is have, there it impacts the -- fall feedback that kind that go-to-market? And to any in that then there just that as -- on your anything the of off, there? follow-up, back of out strong. would you there obviously that's existing surgeons rate could you a that that do that XX% call helps

Kevin Waters

I'm I what Reza. to on actually going it -- metric want Sham the to turn that clear to to want and be and over I means.

when quarter not it procedure in do that second surgeons and that QX. QX. came the did we a -- of QX the also procedure back did procedure retention, that in a say in a XX% XX% means in QX, that are did What perhaps for are did So procedure in doesn't for a then QX dabblers account surgeons

retention all. to actual turn the maybe have higher discuss it why to So actually over fallout any XX%. And much I'll Sham than just is would at you

Sham Shiblaq

least do a I back if remember procedures. Over treated year. procedure BPH would urologists I just a and step that a BPH that take commonly very add is XX,XXX that at one

BPH and works volume low to because low do surgeons So it have predictably. very with Aquablation mind, love we a that has learning number are our we in very, It going curve. technology

you of standardize sizes to so the And ability shapes. across different have treatment and prostate

do low-volume So who you a maybe our surgery. of lot BPH but will surgeons BPH technology, don't have use

great doesn't necessarily have but somebody those who's in So about that the we experience. operating quarter. then does it's do surgeons, room to we're think somebody a when surgeon rarely out, And lose case you support every surgeon, fallen They consistently. not cases every surgeons. just a who And

Operator

back I remarks. to I'm no you. Reza now showing thank turn and questions. And closing Zadno, further Okay over would call to like the CEO, for

Reza Zadno

in for conferences. everyone, quarter call. second We have attending see earnings day. to future Thank the you you, our a nice And hope

Operator

Thank concludes This conference for participating. today's call. you

disconnect. now may You

PROCEPT BioRobotics (PRCT) 1 Aug 242024 Q2 Earnings call transcript