Surgical Robotics Provider PROCEPT BioRobotics' Q3 Earnings Beats Street View, Analyst Optimistic About Upside Potential

Core Insights - PROCEPT BioRobotics reported better-than-expected third-quarter earnings with an EPS loss of $(0.40), improving from $(0.51) a year ago and beating the consensus loss of $(0.49) [1] - The company achieved third-quarter sales of $58.4 million, representing a 66.3% year-over-year increase, surpassing the consensus estimate of $53.18 million [1][2] Revenue Drivers - The sales increase was primarily driven by higher system sales, increased average selling prices, and a rise in handpiece and consumable revenue [2] - U.S. handpiece and consumable revenue for Q3 2024 reached $29.6 million, a 74% increase year-over-year [2] - U.S. system revenue for Q3 2024 was $19.6 million, reflecting a 46% increase [3] Operational Metrics - As of September 30, the U.S. install base of robotic systems stood at 445 systems [3] - Gross margin for Q3 was 63.2%, up from 53.8% a year ago, attributed to improved overhead absorption and higher average selling prices [3] Future Guidance - PROCEPT BioRobotics projects 2024 revenue between $222.5 million and $223 million, an increase from prior guidance of $217 million and consensus of $217.06 million [3][4] - The company anticipates a 2024 gross margin of approximately 61%, up from previous guidance of 59% [4] - Adjusted EBITDA for the full year 2024 is projected at $(60.0) million, an improvement from the previous guidance of $(67.5) million [4] Market Outlook - Analysts express optimism regarding the strong underlying demand for Aquablation, with the U.S. market expected to reach only 10% penetration by the end of 2024 [4] - Utilization growth is estimated at 7%, alongside the launch of the new Hydros system and potential catalysts in prostate cancer treatment [4] - William Blair maintains an Outperform rating on the stock, which saw a price increase of 28.50% to $88.36 [5]