PROCEPT BioRobotics (PRCT) - 2024 Q1 - Quarterly Results

Company Announcement & Highlights First Quarter 2024 Overview PROCEPT BioRobotics reported strong first-quarter 2024 financial results with significant revenue growth and an upward revision of its full-year 2024 revenue guidance First Quarter Revenue Performance | Metric | Q1 2024 | Q1 2023 | Year-over-Year Growth | | :--- | :--- | :--- | :--- | | Total Revenue | $44.5 million | $24.4 million | 83% | - Full-year 2024 revenue guidance raised to $213.5 million (previously $210.0 million)[9][10] CEO Commentary CEO Reza Zadno highlighted strong first-quarter revenue growth exceeding 80%, disciplined operating expense management, and improved gross margin, expressing confidence in achieving long-term growth targets with an expanded commercial team and increasing demand for Aquablation therapy - Strong start to 2024 with over 80% revenue growth and disciplined operating expense management in the first quarter[3] - Gross margin is expected to improve throughout the year by leveraging overhead[3] - The company is confident in achieving long-term growth targets with an expanded and more experienced commercial team and increasing demand for Aquablation therapy[3] First Quarter 2024 Financial Performance Revenue Analysis Total revenue for Q1 2024 increased by 83% year-over-year, driven primarily by strong performance in the U.S. market, particularly from handheld devices and consumables sales, and system sales to new hospital customers, with international revenue also showing significant growth Revenue Breakdown by Geography and Type | Metric | Q1 2024 (million USD) | Q1 2023 (million USD) | Year-over-Year Growth | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Total Revenue | 44.5 | 24.4 | 83% | | U.S. Revenue | 40.2 | 21.8 | 85% | | U.S. Handheld Devices and Consumables Revenue | 23.6 | 11.8 | 101% | | U.S. System and Lease Revenue | 14.2 | 8.8 | 62% | | International Revenue | 4.3 | 2.6 | 65% | - As of March 31, 2024, U.S. AquaBeam Robotic System installations reached 354 units[4] - Average monthly utilization per account increased by approximately 8% to 6.8 procedures in Q1 2024[4] - 38 robotic systems were sold in the U.S. during Q1 2024[9] Gross Margin Gross margin significantly improved to 56% in Q1 2024, up from 51% in the prior year and 49% in Q4 2023, driven by strong operational execution, improved overhead absorption, and better-than-expected revenue Gross Margin Performance | Metric | Q1 2024 | Q1 2023 | Q4 2023 | | :---------- | :------ | :------ | :------ | | Gross Margin | 56% | 51% | 49% | - Gross margin expansion is attributed to strong operational execution, improved overhead absorption, and better-than-expected revenue[5] Operating Expenses Operating expenses increased to $52.7 million in Q1 2024, up from $40.9 million in the prior year, primarily due to higher sales and marketing expenses for commercial organization expansion and variable compensation, alongside increased R&D and general administrative costs Operating Expenses Breakdown | Metric | Q1 2024 (million USD) | Q1 2023 (million USD) | Year-over-Year Change (million USD) | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------------- | | Total Operating Expenses | 52.7 | 40.9 | +11.8 | | Research and Development Expenses | 13.1 | 10.7 | +2.4 | | Sales, General, and Administrative Expenses | 39.6 | 30.1 | +9.5 | - The increase in expenses was primarily driven by sales and marketing costs for commercial organization expansion and variable compensation, as well as increased research and development and general administrative expenses[6] Net Loss and Adjusted EBITDA In Q1 2024, the company's net loss narrowed to $26.0 million, down from $28.5 million in the prior year, with adjusted EBITDA loss also improving year-over-year to $20.4 million from $23.9 million Net Loss and Adjusted EBITDA Performance | Metric | Q1 2024 (million USD) | Q1 2023 (million USD) | Year-over-Year Change (million USD) | | :----------------- | :-------------------- | :-------------------- | :-------------------------- | | Net Loss | (26.0) | (28.5) | +2.5 | | Adjusted EBITDA Loss | (20.4) | (23.9) | +3.5 | Net Loss Per Share | Metric | Q1 2024 | Q1 2023 | | :-------------------------- | :------ | :------ | | Net Loss Per Share (Basic and Diluted) | ($0.51) | ($0.63) | - The weighted-average common shares used to calculate net loss per share increased from 45,066 thousand shares in Q1 2023 to 51,011 thousand shares in Q1 2024[20] Balance Sheet Snapshot As of March 31, 2024, the company held $225.6 million in cash and short-term investments, with total long-term debt of $51.4 million, while both total assets and liabilities slightly decreased from December 31, 2023 Balance Sheet Summary | Metric (million USD) | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Assets: | | | | Cash and Cash Equivalents | 225.6 | 257.2 | | Accounts Receivable, Net | 56.1 | 48.4 | | Inventory | 41.6 | 39.8 | | Total Current Assets | 329.2 | 350.6 | | Total Assets | 382.9 | 404.7 | | Liabilities and Stockholders' Equity: | | | | Accounts Payable | 10.1 | 13.5 | | Accrued Compensation | 11.5 | 16.9 | | Total Current Liabilities | 38.7 | 45.9 | | Long-Term Debt | 51.4 | 51.3 | | Total Liabilities | 118.9 | 124.0 | | Total Stockholders' Equity | 264.0 | 280.8 | Full Year 2024 Financial Guidance Revenue Guidance The company raised its full-year 2024 revenue guidance to $213.5 million, representing a 57% increase from last year's revenue, exceeding the previous guidance of $210.0 million Full-Year 2024 Revenue Guidance | Metric | New FY 2024 Guidance (million USD) | Previous FY 2024 Guidance (million USD) | Year-over-Year Growth | | :----------- | :--------------------------- | :-------------------------------- | :-------------------- | | Total Revenue | 213.5 | 210.0 | 57% | Gross Margin Guidance Full-year 2024 gross margin guidance has been updated to approximately 58% to 59%, compared to the previous guidance of approximately 57% to 59% Full-Year 2024 Gross Margin Guidance | Metric | New FY 2024 Guidance | Previous FY 2024 Guidance | | :----------- | :------------------- | :------------------------ | | Gross Margin | 58% to 59% | 57% to 59% | Operating Expense Guidance The company anticipates total operating expenses for the full fiscal year 2024 to be approximately $231.5 million, remaining consistent with previously issued guidance Full-Year 2024 Operating Expense Guidance | Metric | FY 2024 Guidance (million USD) | Previous FY 2024 Guidance (million USD) | | :-------------------- | :--------------------------- | :-------------------------------- | | Total Operating Expenses | 231.5 | 231.5 | Adjusted EBITDA Guidance Full-year 2024 adjusted EBITDA loss is projected to improve to ($70.0) million, compared to the previous guidance of ($73.0) million Full-Year 2024 Adjusted EBITDA Guidance | Metric | New FY 2024 Guidance (million USD) | Previous FY 2024 Guidance (million USD) | | :----------------- | :--------------------------- | :-------------------------------- | | Adjusted EBITDA Loss | (70.0) | (73.0) | Company Information About PROCEPT BioRobotics Corporation PROCEPT BioRobotics is a robotic surgical company focused on urology, developing, manufacturing, and selling the AquaBeam Robotic System for minimally invasive urological procedures, primarily treating benign prostatic hyperplasia (BPH), emphasizing the therapy's effective, safe, and durable outcomes supported by extensive clinical evidence - PROCEPT BioRobotics is a surgical robotics company dedicated to advancing patient care by developing transformative solutions in urology[12] - The company develops, manufactures, and sells the AquaBeam Robotic System, an advanced, image-guided robotic surgical system for minimally invasive urological procedures, initially focused on treating benign prostatic hyperplasia (BPH)[12] - Aquablation therapy aims to provide effective, safe, and durable treatment outcomes for men suffering from lower urinary tract symptoms due to BPH, regardless of prostate size, shape, or surgeon experience[12] - The company has accumulated extensive and growing clinical evidence, including nine clinical studies and over 150 peer-reviewed publications, supporting the benefits and clinical advantages of Aquablation therapy[12] Investor Relations & Webcast Information PROCEPT BioRobotics will host a conference call on May 1, 2024, to discuss its first-quarter 2024 financial results, with registration details for the webcast and conference call, along with investor contact information, provided - PROCEPT BioRobotics will host a conference call on Thursday, May 1, 2024, at 8:00 a.m. Eastern Time to discuss its first-quarter 2024 financial results[11] - Webcast and conference call registration links are provided for investors and sell-side research analysts[17] - Investor contact: Matt Bacso, Vice President of Investor Relations and Business Operations[19] Non-GAAP Financial Measures Use of Non-GAAP Financial Measures (Unaudited) This press release refers to Adjusted EBITDA, a non-GAAP financial measure defined as earnings before interest expense, taxes, depreciation and amortization, and stock-based compensation expense, used by the company to provide supplemental information for understanding operating performance and enhancing transparency, while acknowledging its limitations compared to GAAP measures - Adjusted EBITDA is a financial measure not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP)[11][13] - The company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, and stock-based compensation expense[13] - The company believes that providing Adjusted EBITDA offers investors useful supplemental information to understand and evaluate its operating performance, enhance overall understanding of its past performance and future prospects, and increase transparency regarding key financial measures used by management in financial and operational decision-making[14] - Non-GAAP financial measures are not a substitute for, or superior to, GAAP financial performance measures, should not be considered an alternative to any other performance measure derived in accordance with GAAP, and may not be directly comparable to similarly titled measures of other companies[13][14] Legal & Safety Disclosures Forward-Looking Statements This section contains forward-looking statements regarding anticipated financial results, product efficacy, and business strategies, which are subject to risks and uncertainties that could cause actual results to differ materially from expectations, cautioning readers not to place undue reliance on these statements as they are based on current expectations and are not guarantees of future performance - This press release contains forward-looking statements within the meaning of federal securities laws, including the company's projected full-year 2024 financial results and statements regarding the potential efficacy, value, benefits, and advantages of Aquablation® therapy performed using PROCEPT BioRobotics products, including the AquaBeam Robotic System[15] - These statements involve risks and uncertainties that could cause actual results to differ materially from the results and expectations expressed or implied by these forward-looking statements[15] - Forward-looking statements are merely predictions based on the company's current expectations, estimates, and assumptions, are valid only as of the date of this release, and are subject to risks and uncertainties[15] - These risks and uncertainties are described in more detail in the company's filings with the U.S. Securities and Exchange Commission ("SEC"), including in the "Risk Factors" section of the company's Annual Report on Form 10-K filed with the SEC on February 28, 2024[18] Important Safety Information All surgical treatments carry inherent associated side effects; for a list of potential side effects, please visit the company's provided safety information website - All surgical treatments have inherent associated side effects[19] - For a list of potential side effects, please visit https://aquablation.com/safety-information/[19](index=19&type=chunk) Unaudited Financial Statements Condensed Consolidated Statements of Operations Presents the unaudited condensed consolidated statements of operations for the three months ended March 31, 2024, and March 31, 2023, detailing revenue, cost of sales, gross profit, operating expenses, and net loss Condensed Consolidated Statements of Operations | Metric (thousand USD) | Q1 2024 | Q1 2023 | | :-------------------------------- | :------ | :------ | | Revenue | 44,539 | 24,404 | | Cost of Sales | 19,505 | 11,913 | | Gross Profit | 25,034 | 12,491 | | Research and Development Expenses | 13,084 | 10,737 | | Sales, General, and Administrative Expenses | 39,599 | 30,131 | | Total Operating Expenses | 52,683 | 40,868 | | Operating Loss | (27,649) | (28,377) | | Net Loss | (25,957) | (28,484) | | Net Loss Per Share (Basic and Diluted) | (0.51) | (0.63) | Reconciliation of GAAP Net Loss to Adjusted EBITDA (Q1 2024) Provides a reconciliation of GAAP net loss to Adjusted EBITDA for the three months ended March 31, 2024, and March 31, 2023, showing adjustments for depreciation and amortization, stock-based compensation expense, and net interest Reconciliation of GAAP Net Loss to Adjusted EBITDA (Q1 2024) | Metric (thousand USD) | Q1 2024 | Q1 2023 | | :-------------------------------- | :------ | :------ | | Net Loss | (25,957) | (28,484) | | Depreciation and Amortization Expense | 1,184 | 793 | | Stock-Based Compensation Expense | 6,256 | 3,724 | | Interest (Income) and Interest Expense, Net | (1,838) | 49 | | Adjusted EBITDA | (20,355) | (23,918) | Reconciliation of GAAP Net Loss to Adjusted 2024 EBITDA Guidance Presents the reconciliation of projected full-year 2024 GAAP net loss to Adjusted EBITDA guidance, including adjustments for depreciation and amortization, stock-based compensation expense, and net interest Reconciliation of GAAP Net Loss to Adjusted FY 2024 EBITDA Guidance | Metric (thousand USD) | FY 2024 Guidance | | :-------------------------------- | :--------------- | | Net Loss | (100,000) | | Depreciation and Amortization Expense | 5,645 | | Stock-Based Compensation Expense | 31,500 | | Interest (Income) and Interest Expense, Net | (7,145) | | Adjusted EBITDA | (70,000) | Condensed Consolidated Balance Sheets Provides the unaudited condensed consolidated balance sheets as of March 31, 2024, and December 31, 2023, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | Metric (thousand USD) | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Assets: | | | | Cash and Cash Equivalents | 225,576 | 257,222 | | Accounts Receivable, Net | 56,081 | 48,376 | | Inventory | 41,622 | 39,756 | | Total Current Assets | 329,186 | 350,567 | | Total Assets | 382,900 | 404,717 | | Liabilities and Stockholders' Equity: | | | | Accounts Payable | 10,084 | 13,499 | | Accrued Compensation | 11,469 | 16,885 | | Total Current Liabilities | 38,650 | 45,927 | | Long-Term Debt | 51,371 | 51,339 | | Total Liabilities | 118,853 | 123,965 | | Total Stockholders' Equity | 264,047 | 280,752 | Revenue by Type and Geography Details the company's revenue breakdown by type (system sales and leases, handheld devices and other consumables, services) and geographic region (U.S. and outside U.S.) for the three months ended March 31, 2024, and March 31, 2023 Revenue by Type and Geography | Revenue Category (thousand USD) | Q1 2024 | Q1 2023 | | :-------------------------------- | :------ | :------ | | U.S. Revenue: | | | | System Sales and Leases | 14,236 | 8,770 | | Handheld Devices and Other Consumables | 23,618 | 11,770 | | Services | 2,347 | 1,235 | | Total U.S. Revenue | 40,201 | 21,775 | | Outside U.S. Revenue: | | | | System Sales and Leases | 1,740 | 1,469 | | Handheld Devices and Other Consumables | 2,343 | 906 | | Services | 255 | 254 | | Total Outside U.S. Revenue | 4,338 | 2,629 | | Total Revenue | 44,539 | 24,404 |