PROCEPT BioRobotics Corp Q1 FY2025 earnings call

• Business update: Total revenue grew 55% y/y, driven by increased US systems/handpieces sold and record international revenues. US installed base was 547 systems, up 55% y/y.
• Clinical updates: WATER III trial results showed aquablation therapy had similar symptom relief to laser enucleation, 0% transfusion rate, and lower ejaculatory dysfunction/incontinence rates.
• Medicare coverage: Effective 04/06/2025, First Coast and Novitas updated LCDs, streamlining pre-procedure workup and expanding access.
• Commercial performance: Sold 11,235 handpieces in US (65% unit growth y/y), Hydro's account launches increased, and international revenue grew 104% y/y with UK procedural volume growth.
• International expansion: Focus on UK, with growing procedural volumes and plans to expand to Japan.

Total revenue for the first quarter of 2025 was $69.2 million, representing growth of 55% compared to the first quarter of 2024. US revenue was $60.3 million (50% growth y/y), with US systems revenue at $18.7 million (32% growth y/y). US handpiece and consumable revenue was $38 million (61% growth y/y). International revenue was $8.9 million (104% growth y/y). Gross margin for the first quarter was 63.9%, consistent with Q4 2024 and up 750 basis points year over year.

• Full-year 2025 total revenue expected ~$323 million (+44% y/y).
• Expect to sell ~210 robotic systems in US at $430k-$440k each, with US system revenue ~$95 million.
• Handpieces: Expect ~52,500 units sold, maintaining $3,200 average selling price.
• International revenue: ~$34.5 million (+44% y/y).
• Tariff impact: Anticipate modest impact on 2025 gross margin, with potential $5 million headwind if tariffs remain at 145%, mitigated by operational efficiencies.

• Tariff escalations: Exposure to tariffs on ultrasound systems sourced from China; potential 150 basis point gross margin headwind if tariffs remain unchanged.
• Supply chain risks: Continued monitoring of supply chain disruptions that could affect gross margin and profitability.

Q: Can you talk about the CapEx environment and buyer interest in the Hydro system?

A: Haven't seen material shift in buyer interest; pipeline is at all-time high, with IDN relationships strengthening and patients/dentists demanding the technology.

Q: How many handpiece cases were pushed from Q4 to Q1?

A: Deferrals in Q4 were offset by saline impact in Jan/Feb, making Q1 procedures driven by business strength, not backlog.

Q: How is OUS resourcing balanced?

A: Focused on UK as next big market, building team there, with reproducible US formula applicable, and plans to expand to Japan; disciplined in market entry.

Q: Thoughts on PRCT001/002 results and filing?

A: Excited about AUA event, presenting prostate cancer results; WATER IV will generate level one evidence, potentially leading to tool claim for localized prostate cancer.

Q: Update on enrollment timeline for WATER IV?

A: Enrollment expected 18-24 months, with goal to shorten by 6 months.

Q: Impact of LCD changes on market opportunity?

A: Streamlines patient pre-workup, removes age/voided volume restrictions and transrectal ultrasound measurement requirement, expanding access.

Q: Shift in prostate size for aquablation use?

A: Distribution curve remains similar, with majority of prostates treated below 100 mL; aquablation effective for all prostate sizes.

Q: ASP differential for system replacements?

A: Replacement pricing varies by system age, incremental to greenfield sales in US system revenue guidance.

Q: Deferred procedures recapture?

A: Deferred procedures are elective and likely to filter evenly throughout 2025.

Q: Sales cycle duration and funnel visibility?

A: Sales cycle 6-9 months, no material change in conversion rates or funnel visibility.

Q: Competitive environment in BPH?

A: PAE has durability issues; aquablation competes well on resective side with no new competitors in sight.

Q: Clarification on system revenue guidance?

A: $95 million US system revenue guidance includes greenfield sales and replacements, with 210 systems at ~$435k ASP contributing to that total.

Q: Deferred procedures recapture in Q1?

A: Deferrals not assumed to be fully recaptured in Q1, expected to filter throughout the year.