PROCEPT BioRobotics (PRCT) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $83.3 million, representing a growth of 43% compared to Q3 2024 [10] - U.S. revenue for Q3 was $73.9 million, reflecting a growth of 42% year-over-year [10] - Gross margin for Q3 2025 was 64.8%, an increase of 160 basis points year-over-year [11] - Net loss for Q3 2025 was $21.4 million, compared to a loss of $21 million in the same period last year [11] - Adjusted EBITDA loss was $7.4 million, an improvement from a loss of $12.4 million in Q3 2024 [11] - Cash, cash equivalents, and restricted cash balances as of September 30 were approximately $297 million [12] Business Line Data and Key Metrics Changes - U.S. handpiece and other consumable revenue for Q3 2025 was $44.4 million, representing a growth of 50% compared to Q3 2024 [10] - Approximately 13,225 handpieces were sold in Q3, reflecting a 51% year-over-year unit growth [11] - U.S. system revenue was $24.7 million, with system revenue growth of 26% compared to Q3 2024 [11] - 57 new hydro systems were sold in Q3, with an average selling price of approximately $435,000 [11] Market Data and Key Metrics Changes - International revenue in Q3 2025 was $9.4 million, representing growth of 53% compared to the prior year period [11] - The company expects full-year international revenue to be approximately $37.5 million, representing annual growth of 56% [14] Company Strategy and Development Direction - The company aims to improve procedure utilization as a key to unlocking long-term value [5] - There is a focus on increasing therapy awareness and driving patient activation, which will be a core part of the near and midterm commercial strategy [7] - The company plans to invest in international markets that value transformational therapies [7] - Organizational changes have been made to enhance marketing and strategy capabilities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to finish 2025 strongly despite some scrutiny in capital spending by large hospital systems [4] - The company anticipates total revenue for fiscal 2026 to be in the range of $410-$430 million, reflecting current momentum in capital sales [16] - Management acknowledged potential procedural headwinds in the first half of 2026 but remains optimistic about long-term growth [16][40] Other Important Information - The company is committed to building a world-class marketing organization to activate patients and accelerate utilization [10] - Management plans to host a formal analyst day in late February 2026 to outline multi-year revenue guidance and provide updates on various initiatives [17] Q&A Session Summary Question: Can you discuss the capital environment and the strength seen in the quarter? - Management noted strong performance in capital sales despite some variability in timing and capital allocation with customers [18][19] Question: What insights have you gained in your early tenure as CEO? - The CEO emphasized the need to better tell the company's story to clinicians and patients, highlighting the opportunity to transform medicine [21][23] Question: Can you elaborate on the utilization dynamics and expected improvements? - Management confirmed low single-digit growth in utilization but expects it to improve in Q4 due to initiatives aimed at enhancing the speed of new account launches [27][30] Question: How does the company plan to approach profitability and reinvestment? - The CEO indicated that strategic investments will be made to drive long-term growth without disrupting the path to profitability [43][44] Question: Will direct-to-consumer advertising be considered to educate patients? - Management acknowledged the need for patient education and indicated that cost-effective channels will be explored for outreach [60][63] Question: What are the expectations regarding system placements under operating leases? - Management clarified that the operating lease was a one-off situation and does not indicate a shift in business practice [74]