PROCEPT BioRobotics (PRCT) - 2024 Q1 - Quarterly Report

Part I. Financial Information Item 1. Condensed Consolidated Financial Statements (unaudited) Unaudited Q1 2024 financial statements show revenue growth to $44.5 million, a narrowed net loss of $26.0 million, and total assets of $382.9 million Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2024, shows a decrease in total assets to $382.9 million, driven by reduced cash, alongside lower liabilities and equity Balance Sheet Summary | Balance Sheet Item | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $225,576 | $257,222 | | Total current assets | $329,186 | $350,530 | | Total assets | $382,900 | $404,738 | | Total current liabilities | $38,650 | $45,922 | | Total liabilities | $118,853 | $123,986 | | Total stockholders' equity | $264,047 | $280,752 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q1 2024, revenue grew 83% to $44.5 million, gross profit doubled, and net loss narrowed to $26.0 million despite increased operating expenses Operations and Comprehensive Loss Summary | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $44,539 | $24,404 | +83% | | Gross Profit | $25,034 | $12,491 | +100% | | Loss from Operations | ($27,649) | ($28,377) | -3% | | Net Loss | ($25,957) | ($28,484) | -9% | | Net Loss Per Share | ($0.51) | ($0.63) | N/A | Condensed Consolidated Statements of Cash Flows Cash flow statements show $32.3 million used in operating activities for Q1 2024, an improvement from the prior year, resulting in a net cash decrease of $31.6 million Cash Flow Summary | Cash Flow Activity | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($32,286) | ($35,928) | | Net cash used in investing activities | ($1,946) | ($5,339) | | Net cash provided by financing activities | $2,586 | $380 | | Net decrease in cash | ($31,646) | ($40,887) | Notes to Condensed Consolidated Financial Statements Notes to financial statements detail the company's surgical robotics business, disaggregated revenue showing strong U.S. growth, and key financial arrangements including a $52.0 million term loan - The company develops, manufactures, and sells the AquaBeam Robotic System for use in minimally invasive urologic surgery, with an initial focus on treating benign prostatic hyperplasia (BPH)[23] Revenue by Type | Revenue by Type (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | System sales and rentals | $15,976 | $10,239 | | Handpieces and other consumables | $25,961 | $12,676 | | Service | $2,602 | $1,489 | | Total Revenue | $44,539 | $24,404 | - Revenue from the United States accounted for 90% of total revenue in Q1 2024, up from 89% in Q1 2023[51][53] - The company has a $52.0 million senior secured term loan facility with CIBC, which matures in October 2027[36][88] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion highlights 83% revenue growth driven by increased system sales and utilization, improved gross margin, and sufficient cash to fund operations for the next twelve months - As of March 31, 2024, the company had an installed base of 462 AquaBeam Robotic Systems globally, with 354 in the United States[60][65] - Revenue growth was primarily driven by an $18.4 million increase in revenue from the United States, due to higher sales volumes of systems, handpieces, and service contracts[76] - Gross margin increased to 56% from 51% in the prior year, mainly because fixed manufacturing overhead costs were spread over more production units, along with higher average selling prices[78][79] - The company believes its existing cash and cash equivalents of $225.6 million, along with anticipated revenue, will be sufficient to fund operations for at least the next twelve months[84][86] Item 3. Quantitative and Qualitative Disclosure About Market Risk The company's market risks include interest rate, credit, and foreign currency exposures, primarily from its variable-rate debt and Euro-denominated transactions, which management deems immaterial - The company is exposed to interest rate risk from its variable-rate loan facility, which bears interest based on the secured overnight financing rate (SOFR)[103] - Foreign currency risk is primarily from transactions denominated in Euros. The company does not currently hedge this exposure[106][107] - Management does not believe that a hypothetical 10% change in currency rates or a 100 basis point change in interest rates would have a material impact on its financial statements[103][106] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[109] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[111] Part II. Other Information Item 1. Legal Proceedings The company reports no material legal proceedings are currently underway - The company is not subject to any material legal proceedings[113] Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported during the quarter, directing investors to the latest Annual Report on Form 10-K - There were no material changes to the company's previously disclosed risk factors during the three months ended March 31, 2024[114] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds during the period - None reported for the period[116] Item 5. Other Information The Board Chair, Frederic Moll, M.D., terminated a pre-arranged Rule 10b5-1 stock sale plan on February 29, 2024 - On February 29, 2024, the Board Chair, Frederic Moll, M.D., terminated a pre-arranged Rule 10b5-1 stock sale plan[119] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including required Sarbanes-Oxley certifications - Lists exhibits filed with the report, including Sarbanes-Oxley certifications and Inline XBRL documents[121]