PRCT - Earnings call transcript Q4 2024 | PROCEPT BioRobotics Corporation

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Operator

Good afternoon, and welcome to PROCEPT BioRobotics Fourth Quarter and Year-End 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, Investor Relations, for a few introductory comments.

Matthew Bacso

Good afternoon, and thank you for joining PROCEPT BioRobotics Fourth Quarter and Year-End 2024 Earnings Conference Call. Presenting on today's call are Reza Zadno, Chief Executive Officer; Kevin Waters, Chief Financial Officer; and Sham Shiblaq, Chief Commercial Officer.

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

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

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

Reza Zadno

you thank us. afternoon, for joining and Good

launch fourth an Robotic by opening update, overview quarter Sham, provide procedure comments will call, and and provide trends. commercial a followed For HYDROS today's of Systems the business I who will general

for provide financial Starting representing fourth initial details million, growth year quarter systems, representing the growth additional financial revenue quarter revenue a quarterly a performance will XXXX. We of guidance. and installed XXX year the results. XXXX to of $XX.X our base was XX%. our Total care. Kevin period. is was both Lastly, transform of the at the international exited increased compared XXXX and with our to prices U.S. XXXX sales basis, higher representing of sold treatment fourth On XXXX. procedures, a and standard record fourth $XXX.X with Growth by in average million, driven total At full systems become revenues. of quarter robotic revenue robot the compared and prior quarter XX% focus the growth was increased global selling total of to We of XX% of BPH PROCEPT, the regarding of of first XXX in

While approximately we have delivered robust we resective have years, growth few market BPH U.S. share. over the last XX% only

PROCEPT the a pursuit of us.Â In market, X for long was of we in a front in XXXX productive size BPH the year our areas. runway key of still vision, long-term Given have

enhance the setup and the process.Â The FDA fully the These between advanced the efficiency of and we PTH, advanced and The to digital platform development procedural the milestone with anatomical a mass for Robotic integrates plan PROCEPT. cystoscope to August, exceeded for for size the the further visualization ultrasound we key using to accuracy procedure landmarks, of clearance the brings be significant market care selling identifying we enhance urologists AI. which This resection shape price. FirstAssist to Handpiece.coms scope into anatomy, System, reprocessing of in ultrasound research, on or System the next-generation customer features with the receptivity and precise manifested prostate advanced regardless advanced individual tissue future.Â With and in the ability By HYDROS capital single-use for higher removal HYDROS System, results surgeon need of of enhance HYDROS area with suffering waterjet. are procedures. XXX(k) HYDROS pipeline AquaBeam providing the operating in believe feature the will and HYDROS introduction system for effective preassembled the a Robotic cystoscope improve Structurally, surgeon usability enhance can accuracy market has over HYDROS tailoring men to a We designed an imaging incorporating single-use First, FirstAssist years innovate our Robotic system, designed eliminates room features from itself HYDROS and deliver unveiled durable adoption a received the robust enabling experience. assist digital AI a outcomes. HYDROS aims and has feedback safe, of expectations, software experience. targeting and the team's combines to major advancement planning streamline

The second our cancer XXXX was milestone initiative. prostate related major achieved in we to

men lift First, journal, Aquablation have This persuade that Group therapy spread in also Grade with demonstrated we cancer X cells in enrollment of resection. published we does United a or peer-reviewed FDA-IDE patients an Aquablation study along cancer. procedures active the BPH X not the feasibility successfully an for supporting treating in in contraindication to with during PRCT-XXX, throughout cancer the study data, enabled diagnosis to body finished States.Â Second, prostate FDA us of other prostate

localized therapy will specific randomized the of trial multicenter up trial The cancer.Â Initiating and a The strongly clinical cancer global prostate Group in radical of against an is as prostatectomy of AUA randomized of assessing XX remains Grade randomized data, for We is Aquablation a in big PRCT-XXX approval at no which cancer. believe WATER treatment prostate FDA-IDE with FDA in the follow-up. men cancer indication, Building XXXX, cancer that safety improve late need prostate share feasibility become also millions efficacy pivotal to breakthrough centers men cancer treatment safety received patients study with that We therapy are April. today. to is have XXX for the enroll Aquablation the to in to excited at known needing an other pursuing study treatment to radical September could prospective life device to study our localized designation. surgical while initiate PCa we receiving clinical compared IV believe to XX-year data on X prostate significantly for up for first We a area first-line prostatectomy market-leading treatment quality a outcomes and prostate X underserved. step

that, Aquablation leading to Given standard a laying the PROCEPT this we launch our quarter is urology BPH positive turn I care, HYDROS momentum, emerging company. foundation therapy and procedures. will surgical call to believe and become fourth detail provide the over is to as more on the Sham global With of

Sham Shiblaq

Thanks, Reza.

XXXX exceptional from attitude execution the on an in comments part all-in performance First, and that I required want to team's reiterate Reza's every of the organization.

of quarter the into transitioned for very able Turning awareness Initial quarter around the we the launch which very price an sold launch. selling year feedback we our certainly In fourth the fiscal $XXX,XXX. quarter, through average as which of HYDROS we XXXX, from to approximately of our the with After to systems, of midway excitement FDA were third were fourth comprised quickly, encouraging. spreading clearance customers into receiving been strong. HYDROS finish and XX% favor HYDROS for XX played has

potential FirstAssist support patients.Â Other staff feedback surgeon sleep and for experience the from stage of continue procedure. new with experienced urologists, to AI received, how hospital surgeons to and urologists and the at to the Aside we particularly enable believe new has their Aquablation is design, feature, the all impressed improve which every improved we staff fromÂ HYDROSÂ fully-integrated be outcomes therapy is

a CFOs Specifically, Hospital workflow with a also reprocessing for are single and money. turnover. see the digital facilitates single-use integrated eliminates to footprint scope user-interface, setup, room time that streamlined tower operating setup, saves the new that the room and Handpiece further procedural and scope utilizes which improved efficient HYDROS operating and need happy

we underlying around trends, feel prices, selling demand the about very XXXX, good particularly sentiment. system andÂ HYDROSÂ user enter we average customer As

quarter. Aquablation details Next, the following macro I September. our We events in very impacted into quarter that heading want had seasonally to momentum strongest recent provide procedures strong a tremendous fourth on

September, severity seasonality based quarter. disrupted. and over met winter by to of We the annual BPH Medicare other all being pay.Â However, is percentage our fiscal increases that XX% schedule late and BPH U.S. half in to who see Baxter's is private patients procedures have to of estimate reports, XX% storm large the Why flooded an Helene First, saline bolstered for insurance Due quarter volume Baxter after deductibles. strong elective of damage, once saline resective Hurricane the the typically with the capabilities This surgeries the procedure, this Given market Baxter's in for is fourth are were approximately important? industry fourth production. accounts season due summer on Carolina. North production utilize very surgery resulting elective typical they share of we in facility saline is

the other we we're not XX% the supply, of shortages stop arrangements XXX% to if use hospital's with of elective it in we they can as saline post-surgery.Â As BPH sailing procedures.Â From saline at increased. supplier an critical or Conversely, or of significantly drastic not recovery the of require were accounts pertains during Second, informed procedures starting the a that deliveries December saw those perspective, in and were their that it all unaffected prostate help impacted intra-quarter amounts, modest seasonal sailing of our primary to use XX% fourth material saw base, slowdowns month BPH Based quantify fourth either our volumes that deprioritizing accounts even roughly procedure impact BPH since accounts reduced in approximately resective procedures. quarter, due the XX% these and normal saline. demonstrated adequate thus, assessment receiving be is To procedures of the orders, elective unexpected typically and accounts in trends, more bladder were the We quarter. decline to performing was November requested strength of experienced Baxter as having a favor our our realized in installed supplier of and and deferred of on the given accounts in more November. irrigate

acute shipments to X,XXX expectations. our impacts proactively this accounts a cases the schedule line sailing lack With for first handpiece the for fourth XX% procedures not we XX% in efforts affected hospitals, to a in was our quarter realigned by of that time or recognizing order our patterns.Â In of mid-November, December, volumes of expected to to our anticipated saline team's to in would or challenge, which between the returned to first Given the saline ensure procedures we cancellation macro of resulted shortage ultimately an goal quarter, delay understanding be estimate procedure meeting the commercial in quarter. rescheduling up

of about in we procedure strategy, heading witnessed volumes result positive As February momentum in this proactive strong the and into a a feel recovery March.

to able saline recent the the first restricted were either many quarter As account all means the XXXX. number perform given quarter what our launch XXXX. push shortage of of high-dose launches, more a or on procedures it first the elaborate pertains of will for into of moment, launches account dynamic, new to In this the they Kevin

again proud team and being and once execute through of delay determination able of proud Lastly, the rescheduled. pivot ensure I'm I incredibly resolve focus and commercial procedures am to particularly and are to these the short-term challenges. their

and to and January also help to resources that but in is Aquablation the not demonstrated we our significant have it a we in to hospitals proposition February, hospitals, Specifically, covering This have a helps when operating procedures. because to optimizes it drive procedures is enhanced room team's value day it efficiency. stack impactful single PROCEPT multiple only how

With of a XXXX. increased forward, over I'll Moving procedure turn that, growth the this believe driver in we Kevin. call be to will

Kevin Waters

representing U.S. XX Total compared of was We sold revenue quarter, a quarter U.S. $XX.X compared quarter XXXX XXXX. of for the XX% of to $XX.X was fourth to of new systems fourth selling the fourth million, representing million, XX% to XXXX. Sham. revenue the system generated compared period. growth In revenue approximately of total at fourth robotic growth of revenue $XXX,XXX. the million, system year representing blended prior of average the XX% fourth growth quarter of price Thanks, quarter $XX.X we for the

fourth quarter, X over of trade-in of system were sold and during for anticipated, Systems.Â Additionally, the XXXX to of comprised U.S. fourth growth selling XXXX. X,XXX quarter of U.S. generating of the consumable representing XX% $XXX,XXX. in units at growth handpieces the in of quarter, $X,XXX U.S. the compared approximately average XX% fourth handpiece total of HYDROS revenue million, representing of As of XX% the quarter was unit fourth approximately shipped XXXX. our sales $XX.X the revenue compared We prices we quarter to

by during account XXXX. from other Sham, which was $XX.X by obtained and we further analysis Net loss growing as historical XXXX derived million of I the resulted in to in the XXXX fourth XXXX prices profitability, reinforce providing board. recorded International our not Furthermore, consumable of driven at quarter of mentioned of fourth quarter Gross will elaborate increased in path in lower significantly expenses is million previously to the trends is compared becoming in year in by was surveys.Â We X.X%. XXXX XX%, million shortage HYDROS an sales the quarter EBITDA of levels, the expenses, $X.X to an to growth, again primarily operating primarily expense expenses in was on System quarter the 'XX average overhead prior direct the increase in continues $XX.X across commercial overachievement. the This operating expenses October, we fourth fourth of same margin the issued $XX.X comparing cash and income expand saline our in reflected revenue increased approximately XXXX have primarily prices.Â Moving fourth the year previously as the profitability with a equivalents XXX% estimate $XX.X consistent This ability momentum customer the to compensation our with sequential XXXX.Â We were also late Gross in system raise recent most Growth faster are growth for expenses, increasingly a of year. to estimate million, and into $XX.X is our administrative period and guidance clear expenses As to million marketing in up all-time amounted compared cash, revenue of and development efficiencies being as higher million million development following statement. quarter to capital compared direct of was was prior second the performed. the once our This around The of result mostly million in revenue due period. representing strong million. quarter of X,XXX feedback selling track than same We the Kingdom. third which quantitative general higher operating expansion the record increased results. believe Total quarter XXXX. XXXX. supply of increased driven primarily operating high. internal revenues existing revenue of fourth gross procedures operational effort through as pace quarter by HYDROS to leverage significant interactions the pleased expenses very our operating in attributable of year-over-year prior sales for clarity XXXX United XX% well range, fourth representing of average XX% third the $XXX for margin $X.X revenue driven our expense to was of towards expense the on and quarter by $XX.X when quarter to the balances to trajectory compared offset exceeded fiscal loss the Adjusted by Fourth organization driven higher guidance. the fourth in HYDROS expansion was the growth. was in improved variance down and operating a leverage our our research margin growth our million quarter When cash is and period XX selling quarter at along to and restricted mid-XX% fourth $XX.X in the approximately variable demonstrated XXXX.Following year, loss December of recent by a

XXXX guidance. our financial Moving to

of growth first robotic sell XXXX U.S. are half XX% expect total XX% XXXX. in XXXX. our of to We previous that approximately the in years, such full with line occur approximately $XXX we will distributed new year systems, to XXX be sales be approximately million, with to compared approximately Beginning total of to estimated representing revenue expect XXXX.Â In robotic systems the

pleased of capital the $XXX,XXX. stress quarter-to-quarter. new to be be new pricing, that to guidance While HYDROS to direction pricing of range $XXX,XXX variable can Thus, the updated pricing in system want our system we with assumes

Our in accounts. in on substantial primary XXXX sell focus opportunity to remains greenfield the HYDROS

However, will customers current system, approximately incorporating their existing early the interest considering $X hospitals either who also which year.Â We United resective BPH our their replacement we though curve, of long-term are acquire HYDROS. we a to replacement half XXXX guidance, this are to the the would options in AquaBeam the seeing second be significant offering will currently to looking opportunity the a patients. States in still In be believe as that driver demand, although response replace system X,XXX adoption system are stages in the realized from second to million in or into revenue are predominantly for the business, of serve the we this continue

On we approximately Turning handpieces, XX,XXX handpieces. basis, XX%-unit compared representing to expect to U.S. growth a full XXXX. year to sell

We average also approximately to be selling expect handpiece prices $X,XXX.

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

service year.Â Lastly, U.S. in approximately to revenue for strong revenue Kingdom million, approximately full momentum pending annual international full of $XX.X United positive be growth the to Japan, expect $XX.X and launches XX%. international in given we the Additionally, be we million year expect representing revenue, on

Regarding an XX.X%, approximately basis margins which to be XXXX gross be expect XXXX. approximate year would point we full gross XXX improvement margins, over

to gross relatively XXXX to should margins quarter First operating fourth the expenses. quarter be consistent of XXXX.Â Turning

XXXX. expenses assumes operating million. We million, first our approximately of over In be guidance the $XX expect growth XXXX, full representing of approximately operating XXXX year $XXX expense to quarter XX% of spend

expense our will to down levels, additional to to want XXXX revenue operating XXXX forecasting I are be we compared While context. ratio provide

in us invest drive offers sheet areas with believe to strategically long-term flexibility growth. we strong the balance First, key our to

we the accelerate investments trial sooner to revenue is most as potentially begin enroll quicker occur expenses during Specifically, that generating from heavily patients, clinical we front-end prostate we expenses IV enrollment. it in to WATER enrollment targeted trial. cancer treatment.Â Additionally, can the The important note are making loaded are

We into expect time, XXXX. these costs will over particularly gradually decrease

Second, noncash reflects our Of aim remain compensation, with to revenue throughout expected On stock-based core ensures million of compensation, we operating their the with XXXX XX% apples-to-apples incremental year consistent amount with million. outperformance philosophy, total operating $XX.X which employees bottom is our interest provide our with approach our this, incremental expenses commitment thereby target approximately to could you an stable expense growth aligning equity, expense rewarding exclude compared to expanding to operating higher any an $XX guidance that to XXXX guidance those our to line. the shareholders. would is to if attributed levels.Â Finally, and initial basis, be the supports in the stock-based support contribute directly XXXX potential revenue levels. to workforce This

Given year net interest we forecasting first million. million.Â Regarding revenue, we to interest million, these U.S. EBITDA of million $XX.X When to XXXX. expect full all XXXX we the accounting generate $XX approximately current $XX.X income approximately States. be be to loss revenue quarter and variables, expect adjusted rates, are for selling first United quarter in we $XX.X system handpieces XX,XXX approximately expected revenue total anticipate is in of

In some residual experience did sales, January. terms the in from saline handpiece shortage we of impacts

trajectory in procedures. we returned expected are positive However, daily February seeing the levels, has to about and we are optimistic

saline the launch the our in and shortage ability fourth early new January. quarter Additionally, accounts affected to both

level quarter.Â As quarters in in a given communicated, on takes clear have new of launch our X we have of have to visibility normal in comments. we volume. a accounts and largest the we and procedure that ever strong be quarter experienced approximately volumes. procedural behind like I'd us, X this we to back reach appear fourth to largely track To are quarter At point, the the February, Reza exit we closing to as However, observed first visibility accounts monthly turn to challenges call into the it summarize, number for to March sustained and have

Reza Zadno

the an XXXX. I AUA In results of for event brief anatomical closing, The we present with capabilities be provide PRCT-XXX. XXXX and Kevin. for we our with of respect will and first a erectile will functional cancer to control oncologic data exciting to function this be measured to Thanks, PRCT-XXX and present ad plan preview population PROCEPT AUA will safety trials, as year both include from biopsy. outcomes and procedural incontinence want

of during we Given our how glimpse the will cancer trial early-stage believe safety future reproducible view company BPH, to IDE treatment are FDA specific indication, We seen pursuing XXXX the ever a and prostate for its treatment prostatectomy against which a profile first treatment we has treated.Â Furthermore, procedure be for to in the big into prostate will cancer the other as nature approval the receive prostate from AUA first of to no as randomized a the enroll this cancer. step today. radical provide

Given and position we summary, finally, prepared conclude few features. be trend great Level-X our thrilled we will massively HYDROS years, plan.Â In the evidence my remarks, rapid continue drive advantageous strategic with we are in positively, an market. will to seeing is amount long-term of in execute to multiple next believe change start over clinical to be improved a off quality a And underserved to are to us we launch gathering the the allowing customers factors the U.S.

previous grow Our are to nicely higher sales that than HYDROS our pipeline for system. funnel and at average AquaBeam price selling trending continued

momentum the in continues Our international build U.K. Japan. and to business

and productivity. to which believe we is organization tenured increased most largest commercial company's the Our will in history, the lead

shareholders company. In start a the strong standard to the company cancer. for specific a care in acute business a cancer big BPH. randomized as positive receive our becoming customers the saline We BPH are become we ever urology underlying be will fourth lastly, the all view IDE of global to enroll help foundation quarter care and journey growth. very these us confident supply prostate first of in quarter, off leading laying the of treatment in step for technology are following along And believe an approval employees, We in standard their indication. to the trial fundamentals a first surgical feel disruption to to I and We a radical pursuing for to FDA of this against first the closing, from prostate to want reflect our support thank and is year that the that delivering another procedure the prostatectomy

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

Operator

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

Craig Bijou

I will but in couple lump the a here, from shortage. around the are they saline impact

or to the what the of guess, 'XX that month And I have about frame a utilization thinking weren't there way that So, I to understand is maybe how got follow-up impact. the hospitals your and first, can Kevin then procedures that I the would cancellation to X,XXX XX% estimate and -- love of was Sham, is beyond quick kind how kind XX% or impacted that And the in will or a procedures. where with you you delay reconcile impacted, of there in weren't that, estimate you either period? on

Kevin Waters

Thanks, Great. take I that. will Craig. Kevin. is This

want significant different up X,XXX point analyzed I gross to reiterate, our go saline significant next-generation our did get we noted question, market And we Before expansion, in share We had Particularly, valid overall to are from those to did 'XX. of the here. to see system. procedures really launch we QX I specifically, of many here your the get is is as multifactorial. gains. HYDROS estimate of variables. And question prepared I in lastly, margin procedure a remarks, pathway today. our this into hope But the on through which with we do few impact to proof your we profitability to am going shortage. in performance pleased We a a saw really

amount our attribute to That procedures. done lost to who, ways. in January, then analysis was they the we we directly and where knowledge customer as had reps not in currently or lost survey We actually just to customer And direct Frankly, So, went did performed. first, they two as we we also, performed you had we be know scheduled were of know, different impact. direct every an scheduled out were inquiries and case. were a assess are

that high We visibility factor. into of degree have a

Second, off feedback. we a we analysis. our growth, Internally, rep I internal We performed And this an for a coming did the qualitative QX expectations understand regarding would normal there say, through supported very quantitative more surveys ordering analysis of strong analysis September. particularly patterns. and is

reminder, factor number is new that did what And I two. due start shortage. quantify we lastly, saline that Aquablation important, procedures did that's to by accounts lost then And this and not the So their mean from it's programs procedures in a typically And to normal this it new utilization. perform system that not is as is, once sold, circumstances, does a that lag we've sold. quarter about under given natural talked dynamic, always

-- were limited pushed reality so the procedures. very the range, which to saline in they the is from first the we a However, were up is or into standpoint. quarter a because quarter, accounts provided but I was to think that And why quarter, procedure majority widespread fourth impact was is the good not of it feel it's X,XXX this materially somewhat we exact, sold in third the we

question. your first So of that's part the

back seeing to March. QX part procedures then accounts. degree coming is more a November. January, some from widespread October Sure, your when in We not a us. for you are recovery in we some anticipate But a was we half. going to we call, accounts we we see how being a And lingering were in back become you and saw get very intra-quarter hear saw to October what trends. drop normal started this of precipitous into high second importantly, really the a definitely in on start was strong impacts. did and in impact of December, The But when February saw issue our and launched question, QX we

your the of So, I length questions. for but both I apologies answered there, hope

Sham Shiblaq

we on saline because were procedures, is in time. that take of impact fourth expected quarter, will in at look for hospitals because fourth an didn't in quarter, with the all period I you that are about single hospitals And we growth our very closely. when of shortage every strong the quarter. it, in quarter the performed Yes. we exactly XX% which second And elective I'm utilization encouraged that these that normalized Craig, had the strong they glad impacted. the a very fourth the track sequential seasonally as that especially And weren't metrics trends of very a have We have of mean, we I case. they delivered did in part the hospitals noticed we procedures.

trends And with about if so, customers, we that just as it look our of performed you continue on to going are be that procedures. expected. very the and excited And at bullish segment

Craig Bijou

color. If I squeeze just the for in could a Thanks follow-up.

QX, probably there, like about in that some did takes delayed maybe seeing were on or procedures QX. and done you then residual talk seems and back cancelled effect, they it Just puts there's but some come still

comment how maybe just if think about going So on we mind and that, utilization you should growth forward? wouldn't overall

Kevin Waters

take Thanks, your all Craig. of questions. will I

I procedures First, would back. QX guidance we suggest lost QX assume our doesn't all that in fully X,XXX come

this there's you all of the where to here XX,XXX of at QX get from our said, And did handpieces, in they But back come relatively the look majority I quarter. see not QX just those we of back, as utilization this overall January. we a reality practical impacts think when flat but previously I guide 'XX. lingering does in will apply first into

is philosophical and is accounts. an expanding lastly, And us, behind the we're apples-to-apples more February we are and basis, March, So, saline when just this I'd comment. then looking impact those utilization at where suggest in a on of seeing

procedure experienced the We about very fourth some off the good are feel the in our while And just procedure first a we first expectations that is want we here the quarter of on we coming continue where we sense headwinds of to communicate. in the which seeing we cautious quarter to quarter, have trends are optimism maintain side to business. a guidance ensure we significant outperform

Operator

from Our next of Piper Sandler. question O'Brien comes Matthew

Matthew O'Brien

two have as questions well. I

side them are ASP start in for on in just US. here of the terms you One with handpiece to number the assuming what the is of

company. about What's handpiece I X.X% precipitating are what seen is we've that it's here. Kevin, on the biggest of the drop, kind down think, drop That's year-over-year think assuming the side? from I we

Kevin Waters

Yes.

ASP. specifically Let's handpiece talk about

ASP is relatively our for slightly handpieces, XXXX, implies from full the $X,XXX guidance So, for up which actually our year consistent.

into Does and other but guiding you're coming lower on, directly consumables that in up are is number is not is another million, consumables, getting sell. steady Other But to off drapes, include handpiece ASPs. why your that's And what accessories goes help? handpiece our in I fact $X think think handpiece our you're which that number at business we it's part Matt, we model correlated million a ASP. picking of of revenue, $X I that's XXXX. to about there $X,XXX. ASP is The a a that

Matthew O'Brien

It does. go that, I keep but ahead forgetting HYDROS. on about

Kevin Waters

HYDROS me ASP. talk about And Yes. let just

we guided I'd head base installed procedures a on XX% to ASP it's remember handpiece get we've than on the of do off, to still into always is system. important higher So always of first expect for 'XX as AquaBeam 'XX. HYDROS say our We relatively are the conservatively price. But AquaBeam majority AquaBeam.

should it's relatively assume So, you which year-over-year, lower consistent. at But the procedures, the are we're ASP. of analogy, majority by

Matthew O'Brien

appreciate I that.

total of -- on the maybe than investments especially the have with how to making. really it spend the make And WATER Or loading Can you Street. the then the hear full for year, that's going I makes right faster think enrollment? can little expecting AUA much there, extra wait we is do IV think, talk we here that's now, Just and spend you these to that bit mean, extra I about with on it? that about sense been being the number, the and higher have more some a I you're OpEx what upfront

Kevin Waters

Yes.

I million start as down. So, we head into $XX slightly expectations OpEx out than call that higher With this appreciate did of million. that is in said, public I year-over-year company X comparable that's in come should $XX heading up $XX in call. remarks, that about incremental do is prepared that noncash-based into year totality XXXX, of stock a million compensation my about to

exclude comp, our you and is not OpEx stock-based XX%. if growth actually So, XX%

the so And that's year-over-year.

making about out. come absolute can million mean start on in front WATER Think improvement I about but terms that 'XX. dollars. an in accelerate as to will R&D is just in targeted characterize that It XXXX do total front-loaded, it, XX% $XX does of as this that investments, revenue feel in down a investments, be IV will That over 'XX, XX% somewhat In of R&D spend, by we to the of we end. is That's time. called from

think I rate here. revenue business this a future to talked getting on R&D near we've about kind of a percent of in run mid-teens the as

Operator

from Stanley. Morgan Patrick comes of question Wood next Our

Patrick Wood

little on And or a have love of should to say, side? follow-up. customers how accounts. Like you're more quick versus from the just lower that your one seeing, bit high-volume it conversations HYDROS I then the to compares feedback, going the I how accounts feedback unpack I'd volume that kind with on low-volume,

Reza Zadno

Yes. Thanks.

of our in mentioned are about that launch in the our we features workflow. excited I'm let little offering. have more re-sterilize remarks, put or the robot, expectation. course, AI. more the course, be the using are the XX% the are very practice the CFOs they is to need and prepared the the Sham to efficient, Customers And And other about the fact computer don't to about the what FirstAssist we AI, the excited very making procedures And HYDROS scope. make going exceeds features help of of to are this in fact, to As they adjustment streamline ultrasound -- the that. talk that hospital no staff

Sham Shiblaq

on the take I'll question Sham. is this mix. Patrick, Yes. the

X,XXX hospitals. we've on hospitals, the to was we about the BPH what done But recent of strategy. Keep hospitals. over surging hospitals. momentum lot with very a and we've are the large the a BPH by BPH initial many them low-volume high-volume So the of historically commercialization, hospitals in hospitals, They years hyper low-volume frame number talked U.S. BPH. just being of the these conversation the perform of early medium on is in BPH. focused and years XXX, mind, have about that and of demand and seen up mix in Keep there's In that not medium kind mind,

surge like those seeing to demand, of with begin Aquablation However, acquire many with Aquablation, I said, of systems. we're the hospitals

So in those and as sum low-volume been hospitals centers. more mix begin has medium years moving the surgeons do the really, Aquablation more in to BPH here, significantly to over

Patrick Wood

on And want a something don't follow-up. patients the is? the risk saline? Obviously, then thought Any helpful. on sense had maybe get those I that of risk a Super that or prostate away a the ended X,XXX. of quick some procedures but as whether backlog up on pulled PAE hung up But very any to going being lower of they what that it slightly a lower requirement, size, else. went for saline depends for

Kevin Waters

mean, weren't is modalities. is Kevin. an other And We don't used This for procedures. we resective where saline not less the at performing accounts reality like you lost is other I No. than to look Aquablation, they saw when feel any the performing procedures resective any Aquablation, comparative technologies. we resective it

the No modalities. any short no. feel procedures other to we So, We is don't lost answer.

Operator

next question Vazquez William Blair. Our from of comes Brandon

Brandon Vazquez

I'll just ask X upfront here.

we're rescheduling seem but utilization side, procedure opening very record would the flattish year-over-year, kind have expected that's near-term But a and higher. on that to bit new excited what maybe little accounts, I frankly focus QX, on also to seeing in be about about First, we're myopically I terms trends. hate of talking accounts. we're in of

bit have The do maybe higher as numbers of in What follow-through maybe bit as little follow-up little look we you that placements system from the being is see through anymore -- greater system the So we Aquablation why have for QX? systems that we here? since go changing. just they're than we later, system XX% you're about don't and as perfect see mean an little accounts this high-volume at for for don't through question a to placements maybe penetration of does But What a 'XX. optimism, is probably a where forward? we regardless, placed bit looking mix talk this durability at Sham us in on that mean come that does go

Kevin Waters

take Thanks, as the the I'll your Brandon. And first lingering heavily January. absolute is by question. utilization QX the part metric impacts an in impacted of

I about reading it March. in And then in our would we're it because comments seeing tremendous is of my company. and guidance us us remember much, ensure that but being January, just to So, hit without impacts coming really seeing and too in somewhat expectations out flat we the of into put momentum we off just February cautious as year-over-year both there we're our continue a QX to just

can at second the utilization of we're year, with be But would for XX%. I in third to XQ not utilization. see time to And say, going guidance that and our start guidance and year-over-year improved should we're the quarterly what this quarter exiting You QX year-over-year is imply issuing what growth X.

we're second Now new about on it with do only not we're driving of business the maybe to part expansion, utilization that's but turn I not with comparable talk Sham in, And this accounts, your appreciate that, question. that's off those to the but driving apples-to-apples, a ensuring more hyper-focused is procedures. to utilization that over current accounts surgeons I'll

Sham Shiblaq

factors you available high-volume years it's that just have over left we our hospitals. pipeline which for other low- Without mix, future, in Sham. opportunity a medium-volume numbers tell hospitals, doesn't rate, for It the It sales. giving the Brandon, of let would doesn't systems. BPH the and potential run X I Yes. specific in data with trade could second doesn't BPH This you account business for opportunities. on significant for suggests alone account account drive current at our

So, this is sales. just strictly greenfield

Operator

from of next Securities. comes Our Truist question Richard Newitter

Richard Newitter

talk XQ that can that that's Could then you assume behind it, maybe the impact kind the you missed to like And really I just at that's sales you XQ? Just of had I through quarter? think into fourth what, any, or to was HYDROS but about I in didn't first if the distraction rearview. launching in first or you quarter, I'm follow-up. kind And sounds have didn't moving force. discuss maybe you had were we I all. It the there us handpiece the it one, -- a mentioned lingering hear of as initially, guys -- consumables

Sham Shiblaq

turn There's have training the we in to behind silver Year the to year and large the a impact Richard, field take in we quarter. the a turn We we in have I'll I'll training sailing team here, did impact. as This accelerated be about on that. take need the lining HYDROS. that on one first that as And the is as -- us. fourth QX Sham. QX New we rep talk completely

so, the HYDROS we no impact on utilization. fully to and longer as see rep in that's system, And January, trained is an every something

Richard Newitter

helpful. about maybe be Any recent kind the true-up And Great. than $X than Okay. little to those the to last that years upgrading. you talk of installed we who or a then thinking I there's that, $XXX,XXX have just X purchasers was bit there the the new that's $XX,XXX older mean, obviously replacement something average? we we that I million the anticipated think then are said older Should more X -- help of there I assume your less imagine for an for ASP and Should the on some $XXX,XXX? would revenue, purchased that's is should portions customers you -- assume range system base. of within XXXX. a and But for on can have system that's would be ASP in maybe

Kevin Waters

Yes.

turn and comments replacement. about ASPs in over then of and our and to Sham opportunity I'll on both kind focus and it your Let greenfield replacements me address

X available for that those as when AquaBeam. an opposed They're And those $XXX,XXX ongoing to QX we low. I the is by XXXX AquaBeam suggest like replacement talked exchanges correct what range, therefore, the look not replacements $XX,XXX and in in to executed bought as the that average selling So, prices. almost are for And replacements that previous that customers of HYDROS I in given really was that had purchased what would more are were are on cycle that and the we've months. about reflective in they ASPs should fairly mean not replacements QX you're

seeing opportunity a five me, excuse -- the HYDROS but As is the discount $XXX,XXX to we buy. greenfield you X years, in some you've much bought you're discount, at the if $XXX,XXX into think to an a I normal to in where replacement get $XXX,XXX, get that ASP have ago, AquaBeam HYDROS range, you last But buy AquaBeam move X have would bought you the is forward, not X years if you that we last reality months. that will you going more if which in been same more the a

you of I'll address on Sham replacement and kind in there customer appreciate cycle. strategy the about which to an And turn ASPs, hope talk a just and kind the concerns the here. between I ongoing over then near-term why and it launch, the difference So that's replacements initial normal to of

Sham Shiblaq

Richard. you, Thank

that we sales that, trade dynamic to team In compelling standard second and for at do on expeditious interesting are have continue are need system focus we of an in don't excited, trying and trades The an customers do to can we is focus opportunities. care it's think disciplined inbound And to getting on. greenfield I or hospitals order lose what going customers. then HYDROS very believe effort focus. on The interest in fashion. BPH. to do is our value the our we become into ensure with our to where looking we're we on We stay opportunities we that

lot takes a and hospital of So, it to the outside energy seem though purchasing may work on selling a trade, like a even it's faster, through time on process trade. a

And away takes greenfield so time. selling that from

a be we've to and When team larger for be trades take in continues sense of will as sales. the So, sales doesn't than advantage from it sales. greenfield XXXX long and for focus those in XXXX, our distract greenfield capital makes opportunities come as those will we seen they sales

Richard Newitter

Is I to overall is that $XXX,XXX the downward revenue? on $X there separate relative on million replacement from If company a that ASP Or $XXX,XXX? just the pressure that. follow-up one could, from

Kevin Waters

That is separate.

million revenue be to $X XX million systems Those to $X somewhere guided Rich, we that here, can that, an $XXX separate in to just number. get incremental of to $XXX. specific replacements, XXXX than range of completely to in that to at the XXX ascribe ASP about are that think So in you

Operator

of Pasquale Research. Our next from Chris comes Nephron question

Christopher Pasquale

'XX by particular, a in Maybe just but OUS overshadowed know of quarter momentum step to strong. next expansion? fourth saw International half terms Guidance and you're gets the I been back you seeing have the seems continued and seems it for seems we strength the 'XX. really where have a big for up imply inflected the utilization business, guys there. to number, in minute are spend on the the dominoes in to quite of in there what U.S.

Kevin Waters

nice some quarter the new start really that demand some I'll both just I'll it the think pointed revenue quarters, we're and with a XXXX of on fourth same to from upside UK, started you growth was reflects UK some significant runway that turn we is guidance the the the have our amount other we're primarily utilization. as a Maybe but driven but in I about left out, the previous time, some And of with inroads, regions lot Sham the And of to on procedure perhaps providing here. what help Yes. international. really fact getting initial talk not do consistent just systems, comprised making and in of over in at have 'XX.

Sham Shiblaq

Yes.

I'll and I then the bit think on UK. a touch color the talk little about more outside UK just

now executive also in hospitals I've U.S. would the that's business the spending the to the in say adopt been happening is time momentum seeing thing UK government first but to over the our just akin technology, We're some the was Very the large of I experience a the due throughout there. So, in nice a team IDN fashion the with and the to are to expand there strategy and largest -- with Recently, the in private very in I Aquablation sector that started country. looking adopt for they over UK. met a the

for the the established UK, primary in really We a really, team will we've is exciting like a opportunity in those large obviously we'll installed we we building. is build start move business can network now much Japan. on on countries, And care in our focused just focus the reimbursement. believe So be focus greenfield have to of U.S., as standard the KOL the become UK, well. there Outside procedure a to as procedure XXXX expanding have the we're And business we where market and countries X opportunity, is to in base we'll -- come. the Japan. the focus sales. on start years direct beyond very The of UK in years the build that BPH direct to over heavy

development those markets. market activities building in So, building and KOLs

Christopher Pasquale

And in then but and you size Did it's IV it one. before fall? contemplated one WATER the just had trial the what this now I is detailed XXX from thought XXX, misheard. change was the maybe back of I

Reza Zadno

No, no. at We patients would had States. the IV United said be study WATER XXX in randomized

Operator

Fargo. Wells next Treybeck Our Nathan comes from question of

Nathan Treybeck

you back Just you any should for Is can kind cadence then gross just And margin impact through do how generally in to the XXXX, you where year? circling help could the us the margin think replacements replacement QX? think about way understand of from we opportunity. and gross there exit

Kevin Waters

Yes.

Greenfields We're U.S. this guide. XX replacements the replacement $XXX,XXX assuming asked gross U.S. just about $XXX,XXX. question. in at a $XXX,XXX Richard in XXX The our So, assuming factored ASP the is margin opportunity We're to into at

So, margin takes replacement any our impacts expansion have dilutive we would opportunities. that from into account

part second question. I you your can can answer so margins, gross of your exactly The just question I on repeat make sure just

Nathan Treybeck

and margin Basically, how through you Yes. exit gross the do rate the to year QX? trend expect in

Kevin Waters

Yes.

to just margins of QX XX%. we So, full and of this exited year, -- XX% with remind everybody, margins year XXXX

that, had the business. And kind new range surprise on It's in XXXX. we're is our from of margin. impact saw of meaningful reality a think basis in we growth, And given This guided leveraging in of on for capital on year velocity exit fourth want Now selling significantly 'XX facility right a a to particularly a in our that fully That and have that.Â And we was somewhere suggest with improvement in XX% of we're was disappointed 'XX took but from full side would an the the don't XX% year XX% The 'XX how us year we that of then was robust overhead. advantage gross the a average transformational I to quarter. the pleased prices, top here meaningful moved to with of anybody the always to was. we nice mid-XX.X%.

be on clear today proof where in 'XX. to we're mid-XXs, we believe, the given the pathway same point expect the year to of we're XX%, again, at another profitability. very to exiting move in which So importantly, will don't going a But we magnitude close be

Nathan Treybeck

in every I point, eventually, talked rep about this move this that want so, is at every to understanding procedure. where but a And at are past, how in terms in at procedure. there's you transitioning field? don't my And believe timing reps the need you beyond procedure many a you done, I the you rep you how thinking guess, of the need is what about

Sham Shiblaq

Nate, Sham. Hey, it's

So, here make factors couple surgeons. are that to high-volume there's BPH I of hospitals, considering we're is in be decision widespread. we think that's there a before Number more something that XX one

an be those technology cross-selling And in other becomes sales to room. and aren't we're opportunity other sell team to It's our when in not surgeons the cases so, surgeons. and more our the opportunity field that our challenging more to operating unbelievable to those using for

we're that surgeons. the more lot staff more HYDROS, that room.Â With staff procedures, of procedure when of allow day there's the get members be HYDROS that reasons and to change piece a equation procedure. is can When one lot to reps our have efficient the through covers of helping more different the in we're this The in there and a able different and excited about efficiencies of why in ability a to staff our our for could other simply is That's we're we're for cases a more are us.

how to an to pilot in will opportunity more to and definitely some over hospitals see it as So, independent we we and we'll more And see bring XXXX, on the that goes. of your surgeons, and question for when technology. we these see more in time, is surgeons plan we're short but accounts more now, answer those HYDROS

Operator

comes Our Partners. Mike Kratky Leerink next of from question

Michael Kratky

to go back Kevin, talked one maybe about. just you to

profitability. path you've margins to the which get gross historically pretty start think to I range being at could XX% in about clear you a talked

it if good XXXX not then think you And I is follow-up. at confidence give to but of year that pretty So, fair ourselves, is one year the that, get I this have that then could mean, XX, to you're happen? does exiting that ahead

Kevin Waters

focused with on 'XX, anyhow. EBITDA help particular. they'll think commentary And about keep I Yes. to talk I'm your going going I'm question to my but in

EBITDA did provide quarterly and to going we guidance, about So, fourth I'm talk quarter. the

show 'XX, very EBITDA believe, going a do we we the to clear pathway to profitability. sustained improvements we're However, sequential to throughout year. exiting expect And see do in

with on should However, exiting question top-line we're expanding about very comment leveraged implied 'XX, significant be get OpEx, guidance, get be to not this is that's moving or again, place where our forward. going XXXX generate you actually a today what to that quarter on to to to to and a our it profits no clear ability specific business comment growth, margins, either. going But

Michael Kratky

is And coming just one Earlier, up still think mentioned that your then from follow-up. your AquaBeam. handpiece you implies maybe is most I guidance ASP, slightly, but of

on is an is your revenue versus ASP So, your or quantify AquaBeam how HYDROS help basis? Handpiece sorry, apples-to-apples much can -- higher you

Kevin Waters

comment to lot early HYDROS reality too It's we're still working Yes. a The negotiations. on is the specificity. of through

is of Our systems installed than still we've sold. that base HYDROS less XXX

we're increased delta we what looks that on ASP, good negotiations. fair? multiple So, too that probably like early Is as that working but to it's feel comment getting we're through customer

Michael Kratky

Yeah. Understood.

Operator

Jennings Our TD Cowen. next question of comes Josh from

Joshua Jennings

I'd after I on? are as the even to you guys or PROCEPT hard getting hoping counter Aquablation answer, you Are the any on tougher what and that enhancements competitive about competitors you a you're confident more are landscape if past how standard hear been there marketing thinking could love significant in technology you driving but your run got field? maybe it's the just you've is care. are of towards multiyear radar? seeing guess share Are doing one the if to just that treatment was I

Reza Zadno

Josh, this see on the area. couple years, in are non-resective is generally front Reza. of the we Definitely technologies the competitive last in

the is focal therapy. the technologies in ID are for resective, the we as we not And And States. -- running also companies see we FDA an running as company On only so some FDA prostate for study this BPH yes, especially, far trial. still And see do treatment. the an United even randomized cancer,

can add this. more Sham we technology. to color I'm our So, are very he going to confident let -- with

Sham Shiblaq

Josh, Sham. it's

our TURP? think for roughly to at We'll I the the competition care. XXXX on XXX become of resective the been the who resective market. gold TURP. journey front, XX% a made exit you significant market, There's in TURP. has And at products of sells sell years when of And to resective we've progress standard look the different in standard lot

comes really So, we for a massive direct for a it don't Aquablation TURP, and competitor have when which to PROCEPT. is advantage

non-resective on of we've to which But feel standard an the touched like rather in be technologies, other the really our market, to The journey tend companies continue becoming opportunity got unbelievable care we office-based. of hospital

Joshua Jennings

on in in. know cancer and check to at we're I see early to guidance baked wanted AUA just data prostate going assumptions as system some your And my understanding.

I you XXXX prepared in system prostate mean, system that Sorry, in? missed are any cancer not earlier. I the is may sales guidance? baked indication-driven baking part remarks in Or of session have But

Kevin Waters

or systems attributable our to -- not guidance procedures revenue any assume that's No, prostate or cancer. does

Reza Zadno

an second will be enrollment. As update your We'll presented far on WATER data very definitely, as give PRCT-XXX, of PRCT-XXX. question, the excited. There IV we on part are

will AUA. of presented are so, some that information at the be And these

Operator

Zadno, turn We for time. like have back CEO, closing I'd it this no to Reza remarks. further to questions at

Reza Zadno

conferences to have you earnings upcoming to We a see everyone day. nice at our call. want hope and I attending thank the for

Operator

today's for concludes conference and call. disconnect. now This you participating, Thank you may

PROCEPT BioRobotics (PRCT) 25 Feb 252024 Q4 Earnings call transcript