Core Insights - PROCEPT BioRobotics Corporation will host an in-person investor event on April 25, 2025, at the Venetian Hotel in Las Vegas during the American Urological Association Annual Meeting [1] - The company will report its financial results for Q1 2025 on April 24, 2025, before market open, followed by a conference call at 8:00 a.m. Eastern Time [2][3] Company Overview - PROCEPT BioRobotics focuses on advancing patient care through surgical robotics, specifically in urology, with products like the AQUABEAM and HYDROS™ Robotic Systems [4] - The HYDROS Robotic System is noted as the only AI-powered robotic technology delivering Aquablation therapy, which is designed for effective treatment of lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH) [4] - BPH affects approximately 40 million men in the United States, highlighting a significant market opportunity for the company's solutions [4] - The company has established a robust clinical foundation with over 150 peer-reviewed publications supporting the efficacy of Aquablation therapy [4]

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Market Opportunity - The total addressable market opportunity for the company's products in the United States is estimated to exceed $20 billion, driven by approximately 8.2 million patients[23]. - The global incidence of BPH among men over 50 years old presents a significant incremental market opportunity outside of the United States[23]. - The total addressable market opportunity for BPH in the United States is estimated to exceed $20 billion, with approximately 8.2 million patients in the addressable population[35]. - Approximately 290,000 of the 400,000 annual BPH surgeries in the U.S. are resective procedures performed across about 2,700 hospitals[32]. - The aging demographics in the U.S. are expected to drive future growth, with the number of men over 65 projected to double by 2060[35]. Clinical Evidence and Efficacy - The company has developed a significant body of clinical evidence, including nine clinical studies and over 150 peer-reviewed publications, supporting the efficacy and safety of Aquablation therapy[27]. - In the U.S. pivotal trial, Aquablation therapy demonstrated surgical retreatment rates of only 5.2% and 3.0% at five years in the WATER and WATER II studies, respectively[26]. - Aquablation therapy has shown low rates of irreversible complications, maintaining a significantly higher level of sexual function compared to TURP[29]. - Aquablation therapy demonstrated a transfusion rate of only 0.8% in a study of 2,089 men, significantly lower than the 25% rate associated with traditional procedures[51]. - Clinical studies reported incontinence rates between 0%-2% and ejaculatory dysfunction rates between 6.9%-24.6% for Aquablation therapy[51]. - The WATER study, pivotal for FDA approval, showed superiority in safety and non-inferiority in efficacy compared to TURP, with results published in 2018[65]. - The WATER II study focused on patients with prostate sizes between 80 ml and 150 ml, demonstrating significant efficacy and safety outcomes[65]. - The OPEN WATER study included a diverse patient population with prostate sizes from 20 ml to 150 ml, providing robust data for Aquablation therapy[65]. Regulatory Environment - The company is subject to extensive government regulation and oversight, which could impact its ability to maintain necessary marketing authorizations for its robotic systems[19]. - The company is subject to extensive regulation by the FDA and other authorities, impacting the development and commercialization of its medical devices[99]. - The company's currently marketed robotic systems are classified as Class II devices, initially authorized through a de novo classification[106]. - The FDA requires a 510(k) premarket notification for most Class II devices, demonstrating substantial equivalence to a legally marketed predicate device[110]. - The PMA process for Class III devices is more demanding, requiring extensive data from preclinical studies and human clinical trials[112]. - The FDA has 180 days to complete its review of a PMA application, although the actual review often takes significantly longer[112]. - The European Union's Medical Device Regulation (MDR) requires all medical devices to be certified under the MDR, impacting the marketing of devices previously certified under older directives[128]. - Compliance with the General Safety and Performance Requirements (GSPRs) is mandatory for all medical devices marketed in the EU, which includes undergoing a conformity assessment procedure[130]. Financial Performance - Revenue for the year ended December 31, 2024, was $224.5 million, compared to $136.2 million for 2023, representing a year-over-year increase of 64.7%[31]. - The net loss for the year ended December 31, 2024, was $91.4 million, an improvement from a net loss of $105.9 million in 2023[31]. - For the years ended December 31, 2024 and 2023, the company reported net losses of $91.4 million and $105.9 million, respectively, with an accumulated deficit of $546.0 million as of December 31, 2024[164]. - As of December 31, 2024, the company had $333.7 million in cash and cash equivalents, which is expected to be sufficient to meet capital requirements for at least the next 12 months[174]. Business Strategy and Growth - The company aims to expand its market presence by educating urologists about the clinical benefits of Aquablation therapy and enhancing training programs[30]. - The company plans to expand its install base of robotic systems by increasing its direct sales team and establishing relationships with key surgeons and decision-makers[32]. - The company aims to increase awareness of Aquablation therapy among primary care physicians, targeting approximately 3.9 million men under their care[36]. - The company is committed to broadening private payor coverage and improving patient access to Aquablation therapy in key international markets[32]. - The company plans to expand its direct sales organization to enhance adoption and utilization of Aquablation therapy among urologists[64]. - Marketing initiatives will target primary care physicians to increase awareness and referrals for BPH patients to urologists[65]. - The company plans to significantly expand its commercial infrastructure to increase customer base and awareness, which requires substantial time and resources[185]. Competition and Market Challenges - The company faces intense competition from both resective surgical treatments and non-surgical treatments for BPH, with competitors having greater resources and established market presence[83]. - The company faces competition from larger companies and alternative treatments, which may impact its market penetration and operating results[195]. - The company faces significant hurdles in product adoption due to established treatment patterns, requiring education and supportive clinical data[197]. - The company may face pricing pressure from group purchasing organizations and integrated delivery networks seeking discounts on its robotic systems[187]. - The company must continuously innovate and deliver new product enhancements to maintain its competitive edge in the market[196]. Operational Risks - The company currently operates a sole manufacturing facility in San Jose, California, which poses risks to growth if damaged or affected by unforeseen events[199]. - Manufacturing capabilities are limited by the company's experience and reliance on single-source suppliers, which could lead to supply shortages and impact production capacity[202]. - The company has not qualified alternative suppliers for critical components, which could result in manufacturing delays and increased expenses if current suppliers fail to meet demand[203]. - Warranty claims and service requirements could significantly increase operating expenses, adversely affecting financial results and market reputation[206]. - The company must accurately forecast customer demand to manage inventory effectively; failure to do so could lead to excess inventory or inability to meet customer needs[210]. - The company is vulnerable to cyberattacks and security breaches, which could disrupt operations and result in significant liabilities and reputational damage[212]. Employee and Governance - The company aims to foster a diverse workplace and has a growing employee base of 756 as of December 31, 2024, which is crucial for its success[151]. - The company has published its Environmental, Social, and Governance (ESG) Report annually since 2022, detailing its human capital programs and initiatives[153]. - The company emphasizes employee engagement and retention through comprehensive compensation and benefits programs, including annual bonuses and flexible work arrangements[157]. Funding and Capital Requirements - The company may need additional funding to finance planned operations, and changing circumstances could lead to a faster consumption of capital than currently anticipated[174]. - The company anticipates requiring additional capital in the future to expand its sales and marketing organization, invest in clinical trials, and support research and development efforts[175]. - Future funding requirements will depend on various factors, including market acceptance of products, investment scope in the sales force, and costs associated with clinical trials and regulatory approvals[176]. - The company may seek to raise additional capital through equity offerings or debt financings, which could result in dilution to existing stockholders[177].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $68.2 million, representing a growth of 57% compared to Q4 2023 [7] - Full year total revenue was $224.5 million, indicating a growth of 65% [8] - Gross margin for Q4 2024 reached 64%, marking an all-time high [36] - Net loss for Q4 2024 was $18.9 million, an improvement from $27.5 million in the same period of the prior year [40] - Adjusted EBITDA loss was $10.3 million compared to a loss of $23.3 million in Q4 2023 [40] Business Line Data and Key Metrics Changes - The company sold 60 new robotic systems in Q4 2024, with over 95% being HYDROS systems at an average selling price of approximately $460,000 [20][33] - US handpiece and consumable revenue for Q4 2024 was $29.3 million, representing a growth of 36% compared to Q4 2023 [34] - International revenue in Q4 2024 was $7.8 million, showing a growth of 137% compared to the prior year period [35] Market Data and Key Metrics Changes - The US installed base of robotic systems grew to 505, a 60% increase year-over-year [8] - Approximately 50% of all BPH resective surgeries are Medicare, with the other half being private pay [23] Company Strategy and Development Direction - The company aims to transform the global treatment of BPH and become the standard of care, currently holding about 10% US BPH resective market share [9] - The introduction of the HYDROS Robotic System and FirstAssist AI is expected to enhance procedural accuracy and outcomes [11][12] - The company is pursuing a pivotal randomized clinical study for prostate cancer, which could position Aquablation therapy as a first-line surgical treatment [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in procedure volumes following a saline supply shortage that impacted Q4 2024 [28][30] - The company anticipates full year 2025 total revenue to be approximately $320 million, representing growth of about 43% compared to 2024 [41] - Management highlighted the importance of strategic investments to drive long-term growth, particularly in clinical trials [48] Other Important Information - The company experienced a saline supply shortage due to Hurricane Helene, which resulted in a delay or cancellation of 10% to 20% of expected procedures in Q4 [26][28] - The company has a strong cash position with $337 million in cash, cash equivalents, and restricted cash as of December 31 [40] Q&A Session Summary Question: Impact of saline shortage on procedures - Management estimated that the saline shortage resulted in a delay or cancellation of up to 2,000 procedures in Q4, based on customer surveys and internal analysis [67][70] - Accounts not impacted by the saline shortage performed as expected, showing strong sequential growth [76] Question: Q1 utilization growth - Q1 guidance does not fully assume that all lost procedures from Q4 will return, but there is optimism for recovery in February and March [80][81] Question: HYDROS feedback and account mix - Customers are excited about the HYDROS features, with 95% of procedures utilizing the FirstAssist AI [102] - There is a growing demand from medium and low-volume BPH hospitals for Aquablation systems [106] Question: Replacement revenue and ASP - Replacement ASPs for AquaBeam customers are expected to be lower, around $50,000 to $100,000, while future replacements will align more closely with greenfield sales [128][129] - The $3 million in anticipated replacement revenue is separate from the guidance for new systems [135]

BPH Market and Aquablation Therapy - The U S BPH surgical market represents a $20 billion+ opportunity[12,19] - Approximately 40 million men in the U S currently have BPH[15] - Aquablation therapy is uniquely positioned to become the BPH standard of choice for all prostate sizes and shapes[10] - Around 95% of patients have access to Aquablation therapy[11,59] Clinical and Technological Advantages - The HYDROS Robotic System elevates the Aquablation Therapy experience with AI-powered treatment planning and advanced image guidance[31] - Aquablation offers similar symptom relief to TURP across all prostates in both clinical & commercial studies[50] - WATER study showed that 14 out of 17 participating surgeons had no previous experience with Aquablation therapy, highlighting its ease of adoption[57] Financial Performance and Guidance - Worldwide revenue for Q4 2024 reached $68 2 million, a 57% year-over-year increase[88] - New U S systems sold in Q4 2024 increased by 36% year-over-year[88] - International revenue for Q4 2024 was $7 8 million, a 137% year-over-year increase[88] - The company provides revenue guidance for 2025 of $320 million, representing 43% year-over-year growth[92,93]

Group 1: Financial Performance - PROCEPT BioRobotics reported a quarterly loss of $0.35 per share, which aligns with the Zacks Consensus Estimate, an improvement from a loss of $0.54 per share a year ago [1] - The company posted revenues of $68.24 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.40%, compared to $43.58 million in the same quarter last year [2] - Over the last four quarters, PROCEPT BioRobotics has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2][3] Group 2: Stock Performance and Outlook - PROCEPT BioRobotics shares have declined approximately 19.1% since the beginning of the year, contrasting with the S&P 500's gain of 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.32 on revenues of $66.34 million, and for the current fiscal year, it is -$1.27 on revenues of $315.64 million [7] - The estimate revisions trend for PROCEPT BioRobotics is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Medical - Instruments industry, to which PROCEPT BioRobotics belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Total revenue for Q4 2024 was $68.2 million, a 57% increase compared to the prior year period[4] - Full year 2024 total revenue reached $224.5 million, a 65% increase from $136.2 million in 2023[11] - Total revenue for the twelve months ended December 31, 2024, was $224.498 million, a 65% increase compared to $136.191 million in 2023[33] - U.S. total revenue for the three months ended December 31, 2024, was $60.389 million, up 50% from $40.269 million in the same period of 2023[33] - U.S. handpiece and consumables revenue for Q4 2024 was $29.3 million, a 36% increase compared to the prior year[10] - Handpieces and other consumables revenue in the U.S. for the twelve months ended December 31, 2024, reached $110.542 million, a significant increase of 73% from $64.051 million in 2023[33] Profitability and Loss - Net loss for Q4 2024 was $18.9 million, an improvement from a loss of $27.5 million in the prior year[7] - PROCEPT BioRobotics Corporation reported a net loss of $80 million for 2025, with an adjusted EBITDA of $(35) million[29] Operating Expenses - Operating expenses for Q4 2024 were $63.4 million, compared to $50.8 million in the prior year, marking a significant increase[6] Gross Margin - Gross margin for Q4 2024 improved to 64%, up from 49% in the prior year period[5] Assets and Liabilities - Total assets increased to $534.017 million in 2024, up from $404.717 million in 2023, representing a growth of approximately 32%[31] - Current assets rose to $481.842 million in 2024, compared to $350.567 million in 2023, marking a 37% increase[31] - Total liabilities increased slightly to $131.797 million in 2024 from $123.965 million in 2023[31] - The company's accumulated deficit increased to $(545.985) million in 2024 from $(454.572) million in 2023[31] - Cash and cash equivalents grew to $333.725 million in 2024, up from $257.222 million in 2023, indicating a 30% increase[31] Future Projections - The company projects total revenue for 2025 to be approximately $320 million, representing a 42% growth over 2024[10] - The company anticipates a depreciation and amortization expense of $6.8 million for 2025[29] Technological Advancements - The company received FDA 510(k) clearance for the HYDROS™ Robotic System in August 2024, marking a significant technological advancement[3] Install Base - The install base of AquaBeam and Hydros Robotic Systems in the U.S. was 505 systems as of December 31, 2024[4]

Core Insights - PROCEPT BioRobotics Corporation reported a total revenue of $68.2 million for Q4 2024, marking a 57% increase year-over-year, driven by higher system and handpiece sales, increased average selling prices, and international revenue growth [4][9] - The company received FDA 510(k) clearance for its HYDROS™ Robotic System and FDA-IDE approval for a pivotal clinical study for prostate cancer, indicating significant advancements in its product offerings and clinical research [3] - For the full year 2024, total revenue reached $224.5 million, a 65% increase from 2023, with a projected revenue of approximately $320 million for 2025, representing a 42% growth [10][9] Financial Performance - Q4 2024 gross margin improved to 64% from 49% in the prior year, attributed to better overhead absorption and increased revenues [5] - Operating expenses for Q4 2024 were $63.4 million, up from $50.8 million in the previous year, primarily due to expansion of the commercial organization and increased compensation expenses [6] - The net loss for Q4 2024 was $18.9 million, an improvement from a loss of $27.5 million in the same period last year, with adjusted EBITDA loss narrowing to $10.3 million from $23.3 million [7][12] Revenue Breakdown - U.S. system revenue for Q4 2024 was $27.6 million, a 67% increase year-over-year, with 60 new robotic systems sold at an average price of approximately $460,000 [4][9] - U.S. handpiece and consumable revenue for the quarter was $29.3 million, reflecting a 36% increase compared to the prior year [4] - International revenue for Q4 2024 was $7.8 million, a significant increase of approximately 137% compared to the previous year [4] Guidance and Projections - The company projects Q1 2025 total revenue to be approximately $65.5 million, with U.S. system revenue expected to be around $18.7 million [16] - For the full year 2025, the company anticipates a gross margin of approximately 64.5% and total operating expenses of about $300 million [16] - The projected adjusted EBITDA loss for 2025 is approximately $35 million [16]

Financial Results Announcement - PROCEPT BioRobotics will report financial results for the fourth quarter of 2024 after market close on February 25, 2025 [1] - A conference call will be hosted by the Company's management at 4:30 p.m. Eastern Time on the same day [1] Conference Presentations - Management will present at the TD Cowen 45th Annual Healthcare Conference on March 4 at 1:10 p.m. Eastern Time [3] - Additionally, management will present at the 2025 Leerink Partners Healthcare Conference on March 11 at 3:00 p.m. Eastern Time [3] Company Overview - PROCEPT BioRobotics focuses on advancing patient care through surgical robotics, specifically in urology [5] - The Company manufactures the AQUABEAM and HYDROS™ Robotic Systems, with the HYDROS system being the only AI-powered technology delivering Aquablation therapy [5] - Aquablation therapy is designed for effective treatment of lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH), affecting approximately 40 million men in the U.S. [5] - The Company has over 150 peer-reviewed publications supporting the clinical advantages of Aquablation therapy [5]

Core Viewpoint - PROCEPT BioRobotics Corporation (PRCT) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4][6]. Earnings Estimates and Revisions - The Zacks rating system is centered around the changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts for the current and following years [2]. - Rising earnings estimates for PROCEPT BioRobotics indicate an improvement in the company's underlying business, which is expected to drive stock price appreciation [6][9]. - The company is projected to earn -$1.75 per share for the fiscal year ending December 2024, reflecting a year-over-year change of 21.9% [9]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [10][11]. Market Implications - The upgrade of PROCEPT BioRobotics to a Zacks Rank 1 positions it among the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [11]. - The correlation between earnings estimate revisions and near-term stock movements highlights the importance of tracking these revisions for investment decisions [7].