PRCT

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 4:30 p.m. ET Chief Executive Officer - Larry Wood Chief Financial Officer - Kevin Waters Investor Relations - Webb Campbell Operator: Good day, and thank you for standing by. Welcome to Q2 2026 PROCEPT BioRobotics Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Webb Campbell, Investor Relations. Webb Campbell: Good afternoon, and thank you for joining PROCEPT BioRobotics' Second Quarter 2026 Earnings Conference Call. Presenting on today's call are Larry Wood, Chief Executive Officer; and Kevin Waters, Chief Financial Officer. Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to several risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call. These risks and uncertainties are disclosed in more detail in PROCEPT BioRobotics filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date, August 4, 2026. Except as required by law, PROCEPT BioRobotics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances or unanticipated events that may arise. During this call, we will also reference certain financial measures that are not prepared in accordance with GAAP. More information about how we use these non-GAAP financial measures as well as reconciliations of these measures to their nearest GAAP equivalents are included in our earnings release. With that, I'd like to turn the call over to Larry. Larry Wood: Good afternoon, and thank you for joining us. This was an important quarter for PROCEPT as we continue to execute against the priorities we established at the beginning of the year. Coming into the year, we made several significant changes to our commercial organization, including realigning our regional structure and establishing a dedicated launch team to support the continued rollout of the HYDROS robotics system. We also initiated patient activation pilots designed to help patients better understand Aquablation as a treatment option and make it easier for those seeking care to connect with participating physicians. Today, we remain focused on execution across the organization including driving strong HYDRO system sales and procedure volume. I'm encouraged by the dedication and effort of our team and the progress we're making, and I remain confident in the significant growth opportunity ahead. In the second quarter, we delivered total revenue of $94.5 million, growing 19% year-over-year. We completed over 13,100 U.S. procedures growing 21%, a strong increase, but softer than our expectations. Importantly, the shortfall was not broad-based across our installed base. It was concentrated primarily in the legacy AQUABEAM accounts. Our newer HYDROS accounts continue to perform well with procedures per count significantly exceeding those of our legacy AQUABEAM accounts during the second quarter. We believe this performance demonstrates the value of the HYDROS platform. Its enhanced imaging, workflow and clinical capabilities are helping physicians adopt Aquablation more quickly and utilize the system more consistently. The contrast between the performance of HYDROS and AQUABEAM accounts has also made the opportunity in our existing installed base increasingly clear. We are, therefore, accelerating our efforts to upgrade legacy AQUABEAM systems to HYDROS. We sold 14 replacement systems during the quarter, and we expect replacement activity to remain an important part of our commercial strategy. These upgrades can create modest near-term disruption of accounts transition between platforms. However, based on the utilization we are seeing from HYDROS accounts, we believe upgrading our legacy installed base will improve count, productivity and support stronger, more durable procedure growth over time. AMP sales represented approximately 98% of procedures this quarter and we continue to expect an approximate 1:1 ratio of handpieces to procedures for the full year. Regarding system sales, we saw strong system demand in the quarter placing 65 HYDROS systems in total in the United States. This included 50 greenfield systems, 14 replacement systems and 1 HYDROS system placed under an operating lease. Approximately 40% of the HYDROS systems price during the quarter were launched through our dedicated launch team, up from approximately 20% in the first quarter. We expect another meaningful increase in the third quarter. By year-end, we expect to have the capability to support the launch of all new HYDROS systems while maintaining the flexibility to prioritize dedicated box resources where they can have the greatest impact. Further results remain encouraging with no new launch accounts demonstrating shorter time to first case and stronger early utilization than we've historically observed. In addition, our increased focus on the replacement program has also been well received by customers and will enable us to retire legacy AQUABEAM systems and relaunch them with HYDROS. Turning to pricing. As I mentioned, pricing discipline remains fundamental to our strategy, and our team executed with that discipline in this quarter. Our Q2 greenfield HYDROS ASP was the highest to date, reinforcing the value customers price on Aquablation therapy. Overall, our U.S. HYDROS system ASP was approximately $495,000, up from $485,000 we reported in the first quarter and $435,000 for the full year 2025. Hospital capital investment at that magnitude validates a commitment to building and expanding our long-term Aquablation program. Strong system sales this quarter give us continued confidence in the value of our platform and our customers as well as the outlook. Before I turn to guideline updates and our regulatory process, I would like to provide some additional context on our second quarter performance. While procedure growth did not accelerate to the degree we had expected, the shortfall was driven primarily by softer procedures across our legacy AQUABEAM accounts. Despite these challenges with our legacy AQUABEAM accounts, we made meaningful progress during the first half of the year. Most importantly, we demonstrated the durability of demand for the high dose platform through strong capital placements, accelerated system adoption with our replacement program and meaningful improvements in average selling prices for both systems and handpieces. Operationally, we have completed several important initiatives that position the business for long-term success. We substantially completed the U.S. sales force realignment and optimized account coverage across the organization. As part of that effort, at the beginning of the second quarter, we promoted our former Head of Capital sales, Kyle Kelch to lead our entire U.S. sales organization providing greater leadership ability and commercial purpose. Beginning in June, procedure case coverage transition to our clinical organization allowing our sales representatives to spend their time in physician processes, driving therapy adoption, referrals and expanding utilization. We have also launched several direct-to-patient pilots and we are now active across 18 markets in the United States with television, radio, digital and social media campaigns, and we are actively gathering data to assess which channels and messages are most effective in engaging patients and motivating them to seek care. We're encouraged by the leading indicators we're seeing, including increased website traffic, stronger digital engagement and greater interaction with our patient education resources. In summary, we believe that deliver changes we have made established the right foundation for durable, high-quality growth in the years ahead. It is also the right foundation for healthy gross margin expansion and our path to profitability. Today, we believe we are in a strong position to deliver our 2026 revenue and gross margin guidance, and we believe we are on track to deliver on our expectation for positive adjusted EBITDA in the fourth quarter. Now I'd like to highlight a few important clinical and regulatory milestones from the quarter. In May, the American Urology Association strengthened its recommendation for Aquablation therapy in its updated BPH treatment guidelines, further recognizing Aquablation as an important surgical treatment option for men with BPH. This follows the European Association of Neurology's upgrade of Aquablation to a strong recommendation earlier this year and reflects the continued strength and maturity of our clinical evidence. To date, Aquablation is supported by approximately 250 peer-reviewed publications, making it 1 of the most extensively studied technologies in BPH. Turning to our cancer initiative. We reached an important milestone in the second quarter by completing enrollment in WATER IV, our first randomized clinical trial evaluating Aquablation therapy versus radical prostatectomy with all 280 patients enrolled. WATER IV reflects our commitment to building the highest level of clinical evidence. With a prospective randomized trial, we remain on track to present the primary endpoint results at the AUA Annual Meeting in the spring of 2027. We also received FDA IDE approval for a second randomized protocol, WATER IV AF, which will evaluate Aquablation against active surveillance and then with Braid Group 1 and 2 disease and that will be up to 333 patients globally. Lastly, I'd like to highlight our international progress. We continue to take a disciplined approach to market expansion prioritizing geographies with attractive reimbursement and capital dynamics. The U.K. remains our largest international market, where we continue to see strong capital pipeline and encouraging adoption. We also remain focused on the opportunity in Japan. With that, I will turn it over to Kevin to walk through our financial results and guidance in more detail. Kevin Waters: Thanks, Larry. Total revenue for the second quarter of 2026 was $94.5 million, representing 19% year-over-year growth. U.S. revenue totaled $83.4 million, an increase of 20% compared to the second quarter of 2025. Turning to U.S. procedures, we completed more than 13,100 U.S. procedures during the second quarter of 2026, representing approximately 21% year-over-year growth. AMP sales remain closely aligned with procedure volumes with a handpiece to procedure ratio of approximately 98%, while handpiece average selling price increased to approximately $3,550. As a result, U.S. handpiece and other consumable revenue totaled $48.4 million, an increase of 12% compared to the second quarter of 2025. U.S. system revenue totaled $29.1 million in the second quarter, representing 32% year-over-year growth. During the quarter, we placed 65 HYDROS systems at an average selling price of approximately $495,000 for new U.S. system placements, reflecting continued strength in both demand and pricing. As Larry mentioned, the 65 systems included 14 replacement systems, demonstrating momentum in the early stages of what we expect to become a growing replacement cycle. International revenue in the second quarter of 2026 was $11.1 million, representing year-over-year growth of 15%. Moving down the income statement. Gross margin was 66% in the second quarter compared to 65% in the prior year period. Gross margin benefited from a $2.9 million tariff recovery recognized during the quarter. Total operating expenses for the second quarter of 2026 were $89.8 million compared to $73.9 million in the prior year period. The increase reflects continued investment in the business, including targeted initiatives to drive patient activation and market awareness, ongoing innovation across our BPH platform and increased funding for our WATER IV prostate cancer trial. We believe these investments position us to drive long-term growth while strengthening our clinical and technology leadership. Net loss for the second quarter of 2026 was $26.9 million compared to a net loss of $19.6 million in the second quarter of 2025. Adjusted EBITDA was a loss of $11.3 million compared to a loss of $8 million in the prior year period. Cash, cash equivalents and restricted cash totaled $231 million as of June 30, 2026, providing us with a strong balance sheet to support our strategic priorities. Looking ahead, we continue to expect improvements in both cash usage and adjusted EBITDA in the second half of the year driven by higher revenue, increased operating leverage and continued improvements in working capital. Moving to our 2026 financial outlook. We continue to expect full year 2026 total revenue to be in the range of approximately $390 million to $410 million, representing growth of approximately 27% to 33% compared to 2025. We also continue to expect international revenue of $50 million to $51 million. Turning to procedure guidance. We now expect 2026 U.S. procedures to be in the range of $54,000 to $56,000, representing growth of approximately 25% to 29% compared to the prior year. With respect to new U.S. system pricing, we expect average selling prices of approximately $480,000 to $490,000 during the second half of the year. In addition, reflecting the strength of our replacement cycle, we now expect to complete approximately 40 replacement sales at the midpoint of our full year revenue guidance with an average selling price of approximately $300,000 to $325,000. Turning to gross margins. We continue to expect full year 2026 gross margin of approximately 65%. We now expect full year 2026 operating expenses to be in the range of $355 million to $360 million, reflecting a disciplined increase in commercial investments aligned with our objective of accelerating procedure growth. We now expect adjusted EBITDA loss to be in the range of $35 million to $30 million, while continuing to expect positive adjusted EBITDA in the fourth quarter of 2026 across both the low and high end of our full year revenue guidance. With that, I will turn the call back to Larry for some closing remarks. Larry Wood: Thanks, Kevin. To close, we remain confident in the trajectory of the business. HYDROS continues to perform well with a sequential improvement in utilization and accounting for the majority of our procedure volume for the first time this quarter. With our commercial reorganization behind us, our launch team model continuing to scale and a replacement cycle gaining momentum, we believe the business has become stronger and more durable. Combined with record system pricing and a growing installed base, we are well positioned to drive sustainable long-term growth. We remain excited about where PROCEPT is headed, and I want to thank our team for their continued execution and our shareholders for their support. And with that, I'd like to open it up for questions. Operator: [Operator Instructions] Our first question is from Matthew O'Brien of Piper Sandler. Matthew O'Brien: Either Larry or Kevin, on the system side of things for starters, it looks like when you back out the replacements that you're about flat on the system side for '26 versus '25. Is that right? And then how quickly do you think you can get through this replacement cycle and get your legacy Aquablation systems converted over as many as possible over to HYDROS? And then I have a follow-up. Kevin Waters: Yes. Thanks, Matt. I'll start with your first question, and then I'll pass the replacement question, Larry. So our system expectations are somewhere in the $210 million to $220 million range is what our guidance implies, which for greenfield systems is really unchanged from our thought process going into the full year. So there's really been no change to our system guidance, except updating the average selling prices now that we have 2 quarters under our goal. Larry Wood: Yes. Thanks, Matt. As it relates to our replacement strategy, in Q1, we just launched our first pilot. And I think 1 of the things that we said was 2026, we really wanted to refine the playbook, and it is just going to be sort of a build. I think we've been really pleased with the demand we've seen from customers and the attractiveness of the upgrade system or the upgrade process that we're running, and literally doing 14 in Q2 was above what we would have modeled at the beginning of the year. So we think that's going to continue to remain attractive for customers. I think Kevin said at the midpoint of our guidance, that would imply about 40 systems for the full year. And so that's kind of where we're tracking. But I think this is going to be a big part of 2027 as well. And I think as we think about procedures, the more that we can upgrade our systems from AQUABEAM to HYDROS and at the same time, relaunched those under a launch team model, I think it's going to be something to flips utilization over time. Matthew O'Brien: Got it. Appreciate that. And then the follow-up on the guide for the year, and I'm fiddled with the model as quickly as possible, but I'm -- you're taking out what a $23 million, $24 million of handpiece revenue, offsetting it somewhat with replacement revenue. I'm having a hard time getting the model kind of to the mid or upper point of your range. So I don't know, not sure if there's something I'm missing there? Or I guess, why not just take the full year total revenue guidance down somewhat just given the procedure reduction that we've seen here? Kevin Waters: Yes. So if you look at pricing and the variables we've included, it will put total system revenue, Matt, somewhere in kind of the $115 million to $122 million range, if you assume the midpoint of the replacement range and updating for system average selling prices. We also said that on a full year basis, we expect handpieces sold to be at a 1:1 ratio to procedures, which would mean there is an expectation in the third and fourth quarter that handpieces sold will probably be anywhere from 1% to 3% of total procedures, which puts total handpiece revenue somewhere in the $200 million to $215 million range. And when you look at international of $50 million to $51 million, that essentially gets you to the range of $390 million to $410 million. Operator: Our next question comes from Brandon Vazquez of William Blair. Brandon Vazquez: Maybe first a little bit of a high level. Larry, can you kind of reflect back a quarter ago on the prior guidance versus today, in the past 3 months, what has changed? What's been more difficult than you would have anticipated in terms of ramping utilization and getting to that full year procedure number, just to kind of understand a little bit more of the moving pieces of what's going on in the business? Larry Wood: Yes. Thanks for the question, Brandon. Yes, I think the biggest thing is that we've just seen more softness with our legacy AQUABEAM accounts than what we anticipated. HYDROS continues to perform well and perform in line with expectations. And so it's pretty much there. I think the -- we continue to drive the reorganization and realignment of our sales force. I think that is complete now, and that's largely overall behind us. And we were able to get reps into more of a selling mode starting in June, where they're not doing daily case coverage anymore, they only do that on an exception basis. So I think we've gotten those things completed. That might have taken a little bit longer than what we wanted, but we needed to make sure we had worked out the coverage model before we pulled our sales reps out of cases. So I think it's those 2 things, but the primary thing is we've just seen a softening in our legacy AQUABEAM accounts, and that's what drive driven most of the change. Brandon Vazquez: Okay. And maybe as my follow-up on that last piece, historically, when HYDROS first came out, this was, of course, a great upgrade and there were a lot of features for it. But it was never really portrayed as like HYDROS was meaningfully doing more procedures. I know we maybe heard some anecdotals that the improved efficiencies would help people do a couple of more procedures here or there. But it kind of sounds like that's changing now. And I'm kind of curious if you can spend a little bit of time on why that might be the case, why the legacy AQUABEAM system seems to be performing so much worse? Is it accounts? Or is it the systems? And do you guys have a good sense of what that is as you go forward? Larry Wood: Yes. I don't know that we fully understand what's driving all those dynamics. I think there's been some speculation and we've gotten some anecdotal feedback from the team. I think in some situations where we have doctors to practice at multiple hospitals. If they can move their patients over to HYDROS just because it's more efficient and the imaging is better and the AI is certainly better, they'll preferentially do that. But I don't think we fully unpack that yet. And with previously AQUABEAM has been pretty stable, and so the declines are fairly recent, so we're still digging into it. At the same time, HYDROS has been very resilient. It's been very robust, and we've been pleased with the utilization of HYDROS. And I think we probably have also spent probably more time from a marketing standpoint and from a sales standpoint, focusing on the features and benefits of HYDROS. And I think that's 1 of the reasons that, that system is doing well. And I think that's also reflected in the desire for people to upgrade their systems from our legacy systems to HYDROS, which a year ago, we weren't really seeing that sort of pull through to that sort of demand. I think it's a combination of our trading strategy, but also really focusing on the features and benefits and the improvements that the HYDROS system offers that's driving that. Operator: Our next question is from Nathan Treybeck of Wells Fargo. Nathan Treybeck: Larry, are you hearing anything from your commercial organization on any potential impact from the change in physician RVUs or the growth in competitive procedures like PAE? Larry Wood: Well, certainly, the RVU thing we did hear some feedback from our customers, but I think whatever RVUs change or whenever there's things like that, you're always going to hear some noise on that. But I don't think that, that's been a meaningful headwind for us. And again, if that was really the underlying issue, and I would expect to see that across both of our commercial platforms rather than just the AQUABEAM platform. So I don't really think that, that's it. As it relates to PAE, I know there's been a lot made about the closed CMS rules. But if you look at the hospital outpatient facility, all of us sort of went up by similar amounts. So that hasn't really changed a lot. We know that PAE has been growing, but I think a lot of that is pulling patients off the sidelines who aren't ready for a surgical procedure. And we know that the procedure is just simply not very durable. I spent time in the field that I talk to customers and for a lot of folks, a significant part of their practice now is doing a second procedure after a failed PAE, and we've also gotten that feedback from patients as well. So I don't think it's a lingering headwind, and I don't think it's the same basic patient population. Certainly, there's some overlap there. But I don't think it's really the issue. I think we need to continue to execute on the clinical superiority of our procedure, especially compared to other surgical approaches and continue to drive that. And that's where our biggest opportunity requires. Nathan Treybeck: Okay. Great. Can you say what percent of your installed base today is AQUABEAM? Larry Wood: I think it's fairly close to 50-50 right now. And so HYDROS is doing more cases, but I think it's fairly close to 50-50. Operator: [Operator Instructions] Our next question is from Vijay Kumar of Evercore. Vijay Kumar: Larry, 1 on the procedure utilization. I know it's been a key metric for you, procedure growth. The comment you made on legacy versus new account dynamics rate. How much of this is a function of sales force for your -- is there any comp metric changes that's driving this? And how do you rectify that rate? And I think, like related to that, is the bear to bear this look, utilization is coming down. But why are hospitals buying systems? I mean you guys seem really bullish on systems, right? I'm hard-pressed to see hospitals paying $0.5 million for new systems if they're not going to use these systems. So can you address this utilization bear to bear, please? Larry Wood: I don't think you need to be buying a $0.5 million system to put on the shelf and not use it. And I think hospitals understand the importance of beating Aquablation in their facilities. And I think the case that we make for high dose is a strong case. And I think we've seen that in both green field and replacements. Again, the performance we're seeing out of HYDROS is very much in line with our expectations. And so I think AQUABEAM, it's an older system now. It's -- it doesn't offer all the features and benefits of HYDROS. And I think, again, we don't fully understand why we've seen the decline there because they've been stable historically, but that doesn't distract at all from how well the HYDROS system is performing. And so I think it just really drives our strategy for encouraging replacements. But if we were seeing a softness in capital, I think it would be a different concern, but we're selling capital at levels that we're very, very pleased with, and we're doing it at our highest ever pricing. And we also see very good pricing on our handpieces, and I think that reflects the clinical value that we bring to the table. Vijay Kumar: That's helpful, Larry. Kevin, 1 for you. I know the procedure guidance has updated you reiterated gross margins. But when I look at the Analyst Day and the LRP, you laid out procedure was 25% to 30%. Given fiscal '26 is now 25% to 29%, is -- are the LRP targets still impact both for procedures and gross margins because with the gross margins came down ex tariff refunds and given the mix change, perhaps it's prudent for Street not to be modeling with your Analyst Day outlook? Kevin Waters: Yes. Let me take both of those, and I'll bucket on the same. On this call, we've obviously reiterated our '26 numbers. And we believe the ranges for 2027 revenue guidance -- they're still in the ballpark. But as we get closer to year-end, we'll formalize our 2017 guidance within our normal cadence. But as I said earlier, I think what we put forth at Investor Day is still in the ballpark. And then just regarding other areas, whether it be procedures, our profitability, we will update our 2027 guidance on our normal cadence. But with that said, we do feel good about the underlying trends that supported our LRP, and there's really nothing to update right now given the performance in the first 2 quarters here where we thought we needed to make an adjustment. Operator: Thank you. Our next question is Michael Sarcone of Jefferies. Michael, are you available? Please stand by while I compile the next question. The next question is from the line of Stephanie Algazi of Bank of America. Stephanie Piazzola: I just wanted to follow up on the procedure guidance for the year, which I think you're lowering by about 7,000 at the midpoint. So I was hoping if you could just explain a bit what the underlying assumptions are there in terms of what you're assuming for the AQUABEAM softness that you saw in Q2 as well as HYDROS and then also just from a commercial reorganization benefits ramping that you had expected as well as competition? Larry Wood: Yes. Thanks, Stephanie. I think the biggest thing is the guidance that we've laid out assumes no improvement in the AQUABEAM sites. And frankly, at the lower end of the range, it doesn't assume any real improvement in the HYDROS performance as well, and these things pretty consistent. As we think about how the year of the cadence of the quarters go, we still expect to see an incremental pickup from Q2 to Q3, but we always see some seasonality in Q3 with vacations in the summer months. But then we typically have our strongest quarter in Q4. And all of those things are the things that are baked into the model. So the lower end of our range is basically not seeing any improvement from kind of how we're performing today. I think the higher end of our range as some of our things start to take hold and we start seeing that improvement, and that's how we came up to that range. I don't know, Kevin, anything to add on that? Kevin Waters: No. I think Larry was spot on there, nothing to add. Stephanie Piazzola: And then just on the EBITDA guidance, you're expecting more spend now than you were previously. What are the main drivers of that? And what are the increased areas of commercial investments that you mentioned? Kevin Waters: Yes. So we had mentioned it's primarily around our commercial organization. We did mention that we have launched a pilot now in 18 markets on DTC and patient activation. But we're going to do this very thoughtfully. While we increased our OpEx guidance, we have looked at other areas in the organization where perhaps we don't need to spend as much. And we've made those decisions here internally such that our Q4 guidance still suggests even at the low end of revenue that we will be EBITDA positive exiting the year. Operator: Our next question is from Richard Newitter of Truist Securities. Richard Newitter: Maybe the first 1 on the procedure comment, Larry, that you just made. I guess you said that there's seasonality in the third quarter, but you expect a sequential uptick in procedures. I guess that puts a little less burden on the 4Q, but you're still -- there's still an implied step-up in utilization of some level in the back half. So one, just calibrate us on exactly kind of how we should model procedures between 3Q and 4Q? And then the second part of that question really is what's driving that improvement if legacy AQUABEAM doesn't improve, is it just that you're no longer seeing the disruption from the sales rep changes, and those are actually going to start yielding the hoped for utilization kind of performance improvement fruit? Or -- what's ultimately going to drive the improvement as we move through the year if you don't hit the low end of your guidance? Larry Wood: Well, a couple of things. I think, first of all, we continue to launch new systems. And in Q1, about 20% of our systems were launched under the launch team, and we got that up to about 40% in Q2, and we expect to see a solid step-up in Q3 as we scale the launch team. So I think as we launch those new systems and we do that in a late model, those things are certainly going to contribute to us. I think we've -- some of the leading indicators from our direct-to-patient programs, we're very encouraged by -- and I think that, that's going to help drive patients into the system, which I think is a positive as we replace legacy systems. I think that's something that can give us a boost as well. But again, at the low end of the range, it assumes very little improvement at the high end of the range, that's where some of these things start to play in, so as I think about the quarter, the step-up from Q2 to Q3, I think it's going to be pretty modest, just again to the seasonality, but I think we expect to see a significant step up in Q4, which is a historical pattern that we've seen before. Richard Newitter: Okay. And if I could just ask 1 more on the DTC step-up or the increased spending related to activation of patients. Are you reliant on that as you head into '27 to kind of drive the incremental adoption into the opportunity? Or is that something -- to get to the same place that you were thinking about when you laid out your LRP and the growth objectives there? Or do you still have enough runway as it is today with people in the channel? Larry Wood: Well, our #1 opportunity is converting competitive surgical cases. And that is our immediate near-term focus and that's where we have the team really fixated on. I think that there's -- as we laid out during our Investor Day in February, there's a lot of patients sitting on the sideline that it fails or unfair being in other things that are, frankly, looking for a better solution, I don't know what it is. And I think there's an opportunity to activate these patients. But that's a longer-term play. But from an expense standpoint, we're very focused on how do we make these investments in direct-to-patient things, but also still hit all of our bottom line financial goals. And I think as we look across the organization in most of our functions, I think we've reached a critical mass on those, and those are things that are going to drive leverage as we go forward as we make these incremental investments on the commercial side. I'll turn it over to Kevin to provide more detail on that. But I think we feel good overall about our long-term financial health. Kevin Waters: Yes. Rich, thanks for the question. We do believe that '27 and without getting in too far ahead of ourselves with guidance, it's a year though where we could demonstrate greater operating leverage than we did in '26, even with increased investments around patient activation. I'll just say that today. If you look at our R&D spend as a percent of sales, we've been very transparent that, that is going to come down over time. The big bolus of spend in R&D was primarily related to WATER IV over the last 18 months, and we'll start to see those expenses come down along with some other internal efficiencies in G&A that we're working on today. But we will be able to demonstrate greater operating leverage moving forward, such that, that pathway to profitability is maintained even with increased patient activation. This is a game of trade-offs. It's not incremental spend on the business. Operator: Our next question is from Mason Carrico of Stephens. Unknown Analyst: This is Ben on for Mason. I'll probably just keep it to one here. Could you characterize the mix of Q2 placements between single-site deals and any multisystem IDN orders? And then how should we think about IDN orders, those bulk orders relative to the full year guide? Is there a certain level of multisystem contribution baked into that number? Or would any incremental IDN activity represent upside from here? Kevin Waters: Yes. So Q2, I would suggest a characterization very similar to Q1, where we were not reliant on any large multisystem IDN deal. But at the same time, we did have multiple deals with hospitals affiliated with IDNs, but nothing that I would consider a bulk purchase. And our guide for the remainder of the year is not reliant on any type of bulk purchase. However, we did give a range for average selling prices that would reflect a downside if we were to get any large IDN orders. But in normal course of business, our guidance does not assume or reliant on any one large hospital network executing a large order. Operator: Our next question is from David Rescott of Baird. David Rescott: I appreciate the comments you provided so far around the HYDROS utilization. And I wanted to ask more about or if you could provide some more color on how you're proactively accelerating that change over there? Maybe what's contemplated in the guide with that for 2026 and how we should think about that as you exit the year? And then I think you touched on some gross margin commentary as well. But can you remind us, I guess, of the moving pieces around how the updated guide accounts for some of the moving pieces here? Larry Wood: Well, I think it's a few things. One, if you look at our HYDROS system, we're continually upgrading those systems with software and with capabilities and advancing the AI. And so I think that keeps the system very fresh and up to date in the eyes of the customer. And so I think that's part of it. I think also we continue to drive a replacement strategy. And as we do that, I think that, that's going to be a lift. And then the last thing is the launch teams. As our base grows to more and more systems that were launched under a launch team model, we think those systems are going to come with a durable increase in utilization. So the more of those we have in our installed base, the more that, that's going to improve our utilization. I'll turn it over to Kevin on the gross margin front. Kevin Waters: Yes. I just remind you that the standard cost of both disposables and capital, it does vary quarter-to-quarter given the variability of cost, given the production levels of inventory but on the whole, for the full year, we feel very comfortable right now with our guide of 55%. And even with a lower ASP on these replacement sales, which is somewhat offsetting our normal standard margin, but we think that is made up over time by the increase in procedures that we expect those HYDROS systems to produce compared to AQUABEAM. So we remain confident in the guide on margins. And again, I think even with the increase in investments and with the increase in EBITDA, we're still committed to the fourth quarter EBITDA positive as we head into '27. Operator: Our next question is from Mike Kratky of Leerink Partners. Michael Kratky: So just maybe one follow-up on the nice comments on HYDROS utilization trends that you're seeing. In terms of that kind of factoring in, in a way that turns overall utilization growth positive in the U.S. Is that something that we should expect to see in the fourth quarter of this year at some point 2027? Or how do you think about the full year '27 at this point? Larry Wood: Yes. I think directionally, at the higher end of our guidance, we would model in some modest improvement in utilization. I think at the low end of the guidance, it stays largely the same. But it's a continued area of focus for us. And again, as we replace systems and upgrade people to HYDROS, we think that's lift as the installed base increases from systems launched under our launch team, I think that helps us. And then the longer-term things are direct-to-patient activation models, which brings more patients into the system and should increase treatment rates. So those are all sort of the factors that we're focused on. Michael Kratky: Understood. And maybe just a follow-up, in terms of the difference in utilization you're seeing for HYDROS systems placed under the sales team versus not, can you help kind of quantify what that difference looks like and what seems to be driving that success? Kevin Waters: When you say sales team, are you referring to HYDROS placed under the launch team? Is that the genesis of your question? Michael Kratky: Yes. Kevin Waters: We're not going to be specific. What we have said, though, is we definitely see more surgeons being trained on the system. We see a shorter time from systems sold to first PO, and we see a higher number of cases initially. And all of these metrics are why we've invested in this team such that when we get to the end of the year, if you go through Larry's prepared remarks, we expect to be able to launch 100% of our accounts under the launch team. And to contrast that, we were still somewhere in the 40% range exiting the second quarter. So we still have half of our systems that we want to get under the launch team by the end of the year, which we think will be a driver to overall procedure growth, not just in '26, but in '27. Larry Wood: Yes. I think that's the big thing. I think our installed base, if we look at where we're going to finish the rest of this year for things that are launched under the launch team and then all of next year, we expect virtually all of our systems to be launched under our launch team, and that includes greenfield along with replacements. And so we think those are things that, again, provide durable uptick in utilization over time. Operator: Our next question comes from Suraj Kalia of Oppenheimer. Suraj Kalia: Can you hear me all right? Larry Wood: Yes. Suraj Kalia: Perfect. So Larry, for either one of you, obviously, the procedures for this year have been lower. And as you look at your base, right, I'm just trying to look at it as a mathematical problem. You have the bell curve for procedures, right? So you have an area under the curve. Do you sense the curve is skewing a bit more or do you think it is flattening a bit more? Hopefully, you get the drift. Like I'm trying to understand what is going on within these centers? And how should we think about the emerging bell curve here? Larry Wood: Well, we've always, I think, tried to explain that there's a lot of variability between our sites, and that's true within AQUABEAM and our HYDROS sites. But the trends -- the procedure trends are very clear with what we're seeing between those 2 platforms when you look at it on a macro level. I think that we still have opportunity to accelerate procedures, and that's where we're investing in the program the way we are. But I think for us, increasing the percentage of the installed base to HYDROS over AQUABEAM, I think, is an important part of our strategy, which is why we focused on that. I think the launch team to play a role in that. So looking at the historical trends is interesting at some level, but our focus is how do we improve those historical levels of performance. Suraj Kalia: Got it. And Larry, I know utilization is in the past, you have said measure us on all the sales changes being done by utilization. And so far, I think so utilization seems to be trending a bit off. Is this still the metric you would advise us to gauge or measure all the initiatives, the changes that are being implemented? Or you would say, you know what, I'm going to be able to hybridize it to utilization and/or something else? Larry Wood: To be really frank about it, I'm focused on sequential growth quarter-over-quarter. I'm looking at how much we're growing procedures, how much we're driving utilization and how much we're penetrating the current existing surgical market. And then longer term, it's going to be about how many patients are we able to get off the sideline because we know that there's a large opportunity there. So I'm more focused on sequential growth than I am looking at instrument utilization because I think these are things that we can action more definitively than trying to get every system to do half a more procedure a quarter. Operator: Our next question is from Josh Jennings of TD Cowen. Joshua Jennings: I hope I'm not asking a repeat, but just on the direct-to-patient pilot programs you commented on, Larry, in the 18 markets, encouraged by leading indicators. I mean how should we be thinking about the assessment of the success of the DTC and our effort? I mean should we be seeing some benefits as we move into 2027? And any precedent scenarios or experience you can share in terms of the kind of return on these DTC investments and timing when we should expect to see not just leading indicators but translation into higher volumes? Larry Wood: Sure. Thanks, Josh. Yes, the first thing you get to see, these pilots are fairly recent for us. And the reason we're running these pilots is to find out which program is resonating the most and which gives us the biggest bang for our dollar as we look at these programs. What we can say is we're active now with television, we're active with radio, we're active with digital. And we do have patients calling in, asking for additional information. We have patients showing up at accounts. We have much more digital engagement with our website. People are staying on there longer. They're clicking through. They're engaging with our clinical resources. So we've already seen a lot of impact for those forward-looking indicators. Now to transition that to a meaningful increase in procedures, even if you activate a patient today, there's waiting list at all of these hospitals, and it might take somebody 2, 3, 4 months to be able to get on the schedule and be able to get their procedure just because of the natural constraints that exist within the system. So it's a no-regrets move to activate these patients, but now we have to get the centers once they see the steady flow of patients to figure out how they're going to treat these people. But we're very pleased with the leading indicators that we have. We feel good about the investments that we're making. But as Kevin said, this isn't just all incremental stuff. We are looking at things that we can trade off at the corporate level, at the G&A level so that we can create capacity for spending here because we're committed to our bottom line performance, not just by the end of this year, but certainly for 2027 as well. Joshua Jennings: And just one follow-up. It's a little bit associated with the prior. But just on just driving more awareness in the urology community. TURP just seems so vulnerable that seems to be hanging in there better than we would have thought, not just in terms of the competitive dynamics with the Aquablation procedure, but other resective options as well. Maybe just help us better understand any of the dynamics that are helping TURP volumes kind of not fall off more dramatically and just what PROCEPT can do on the physician side in terms of increasing awareness in the urology community and just getting more adopters flowing. Larry Wood: Yes. I think TURP volume has been resilient. It's been a resilient procedure in the space. And you can see a number of other technologies have actually been declining, but TURP has been pretty resilient. And I think it just reflects people have been doing it for a long time. They're very comfortable doing it. And they generally, I think, believe that they can deliver pretty good results with it. I think we offer significant advantages compared to TURP in terms of patient outcomes and in terms of efficiency for the system, especially as you get into larger-sized glands. And so I think we need to make our case with that. But I think it's also about educating the patients. I think as patients come in and they ask for Aquablation by name, I think those are things that are going to drive a change in physician behavior. Operator: And our last question will be from Ryan Zimmerman of BTIG. Ryan Zimmerman: U.S. Bancorp BTIG actually. So just a question on systems, Kevin and Larry. When I think about that system number, the 210 to 220, if you look at the first half new systems, and I could be incorrect in including maybe a replacement here or there, but it does imply, I think, a lower new system composition or proportion of new systems in the back half of the year. So Kevin, was there any -- when you think about those 51 units that were sold this quarter, was that -- was there any pull forward there? And because historically, I think we've thought about new systems being higher in the second half. I could be wrong in that assessment. Kevin Waters: Yes. I think what you're probably missing, Ryan, is you might be including 14 replacements, we sold 97 greenfield systems in the first half of the year, which the 210 to 220 does not include the 40 replacements. So you would still see the normal step-up in Q3 and Q4. And historically, what you see is a slight increase in Q3 from Q2. And then the fourth quarter tends to be our largest quarter given capital budgets and our guidance this year reflects that as well. But the second half greenfield sales to get to 210 are definitely higher in the back half than the first half, 97. Ryan Zimmerman: Go ahead, Larry. Larry Wood: Yes. Just to add that, we don't pull systems forward. I think the days of people buying multiple systems and then installing them over a longer period of time to get a discount. We want to make sure that every system we sell has a home and then it's going to launch within a reasonable period of time. So -- and I think that's what you see reflected in our system ASP is -- which has been a very healthy improvement year-over-year is that we're being very disciplined about the systems we sell. But we want to make sure that when we sell a system, it gets installed within a few months and it starts providing procedures for us. And we're much more disciplined about that process than we probably were historically. Ryan Zimmerman: So my follow-up to that is just when you think about the potential customers that are out there, historically, we've thought about kind of the high volume, medium volume, low-volume kind of customer sites. And so what's your sense, Larry, of kind of who you sold into this quarter on a greenfield basis? And what you think the runway ahead is in terms of that characterization? Because obviously, we're all trying to understand kind of the utilization dynamics that are occurring. And while I appreciate that HYDROS is ramping faster, the implied procedure per system guide based on the new procedures still implies a decline on a per procedure basis in 3Q and so on. So what I'm trying to understand is like if you're selling into lower volume sites, are they dragging down your utilization as a result of those dynamics as well? Larry Wood: No, I don't think that's the case. And I think actually, in some ways, a medium volume center might be a great target for us because maybe they don't have a super active group program or a super active BPH program, and this can be a new program for them that generates a lot of interest and a lot of focus. So I don't think that, that's a headwind for us. And I will say, I think the biggest change that we see in utilization is when we launch under our launch team, and we do that properly, and we do it with clinical excellence, and we have people stacking cases and doing multiple cases in a day at a much higher frequency than maybe one of our historical base. I think that's the biggest impact. And I think that's agnostic of center size. I don't think in our launch team, we're seeing a dramatic difference in a larger center versus a smaller center when launched under the launch team model. And I think that just reflects the potential of the therapy. We just need to do a good job launching them the proper way with the right amount of energy and creating the right footprint and cadence for cases from the very beginning. Operator: This now concludes our question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. PROCEPT BioRobotics (PRCT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Revenue: $94.5 million, a 19% increase year-over-year. U.S. Revenue: $83.4 million, up 20% from the second quarter of 2025. International Revenue: $11.1 million, representing 15% year-over-year growth. U.S. Procedures: Over 13,100 completed, growing approximately 21% year-over-year. U.S. Handpiece and Other Consumable Revenue: $48.4 million, an increase of 12% compared to the prior year period. U.S. System Revenue: $29.1 million, representing 32% year-over-year growth. HYDROS System Placements: 65 systems placed in the U.S., including 50 greenfield, 14 replacement, and one operating lease. U.S. HYDROS System ASP: Approximately $495,000, up from $485,000 in the first quarter. Handpiece ASP: Increased to approximately $3,550. Gross Margin: 66% in the second quarter, compared to 65% in the prior year period. Operating Expenses: $89.8 million, compared to $73.9 million in the prior year period. Net Loss: $26.9 million, compared to a net loss of $19.6 million in the second quarter of 2025. Adjusted EBITDA: Loss of $11.3 million, compared to a loss of $8 million in the prior year period. Cash Position: Cash, cash equivalents, and restricted cash totaled $231 million as of June 30, 2026. Warning! GuruFocus has detected 7 Warning Signs with ALIT. Is PRCT fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue grew 19% year-over-year to $94.5 million, with U.S. procedures up 21% to over 13,100. HYDROS system demand remained strong, with 65 systems placed in the U.S., including 50 greenfield and 14 replacements, and record-high ASPs of approximately $495,000. Newly launched HYDROS accounts under the dedicated launch team showed shorter time to first case and stronger early utilization, with launch team coverage expanding to 40% of placements in Q2. Clinical and regulatory momentum: AUA upgraded Aquablation recommendation, WATER IV trial completed enrollment (280 patients), and FDA IDE approval for WATER IV AS trial. Gross margin improved to 66% in Q2, benefiting from a $2.9 million tariff recovery, and the company reaffirmed full-year gross margin guidance of approximately 65%. U.S. procedure growth was softer than expected, primarily due to weaker performance in legacy AquaBeam accounts, leading to a reduction in full-year procedure guidance to 54,000-56,000. The company lowered its full-year adjusted EBITDA loss guidance to $35 million-$30 million, reflecting increased commercial investments, including direct-to-patient pilots. Legacy AquaBeam accounts continue to underperform, and the company does not assume any improvement in these sites in its guidance, creating uncertainty for future growth. Operating expenses increased significantly to $89.8 million in Q2, up from $73.9 million in the prior year, driven by investments in patient activation and clinical trials. The company faces potential competitive pressures from procedures like PAE and changes in physician RVUs, though management downplayed their impact. Q: Can you explain the primary driver behind the softer-than-expected U.S. procedure growth in Q2 2026, and what the updated procedure guidance assumes for the remainder of the year? A: Larry Wood (CEO) explained that the shortfall was not broad-based but concentrated in legacy AquaBeam accounts, while newer HYDROS accounts performed well with significantly higher procedures per account. The updated guidance of 54,000-56,000 U.S. procedures assumes no improvement in legacy AquaBeam sites at the low end, while the high end incorporates benefits from the launch team model, replacement upgrades, and patient activation initiatives. Kevin Waters (CFO) added that the guidance implies a modest sequential step-up in Q3 due to seasonality, with a significant step-up expected in Q4, consistent with historical patterns. Q: How is the company's replacement strategy for converting legacy AquaBeam systems to HYDROS progressing, and what is the expected impact on the business? A: Larry Wood (CEO) stated that the replacement program has gained significant momentum, with 14 replacement systems sold in Q2, exceeding initial expectations. The company now expects approximately 40 replacement sales at the midpoint of full-year guidance, with an ASP of $300,000-$325,000. Kevin Waters (CFO) noted that while replacement sales carry a lower ASP, the increased procedure volume from HYDROS systems compared to AquaBeam will more than offset the margin impact over time. Larry Wood emphasized that upgrading the legacy installed base is a key strategic priority to improve account productivity and drive more durable procedure growth. Q: What is driving the performance difference between HYDROS and legacy AquaBeam accounts, and how is the company addressing the underperformance in the legacy base? A: Larry Wood (CEO) acknowledged that the company does not fully understand the dynamics, but noted anecdotal feedback suggests physicians with privileges at multiple hospitals preferentially move patients to HYDROS due to its superior imaging, AI capabilities, and workflow efficiency. The company is accelerating its replacement strategy to convert legacy systems, and the launch team model is being expanded to ensure all new systems, including replacements, are launched with dedicated resources. Kevin Waters (CFO) added that the company expects to have the capability to launch 100% of systems under the launch team model by year-end, up from approximately 40% in Q2. Q: Can you provide more detail on the company's direct-to-patient (DTC) activation pilots and their expected contribution to procedure growth? A: Larry Wood (CEO) detailed that the company is active in 18 U.S. markets with television, radio, digital, and social media campaigns. Leading indicators are encouraging, including increased website traffic, stronger digital engagement, and patients calling in and showing up at accounts. However, he cautioned that translating patient activation into procedures takes time due to hospital scheduling constraints, with patients potentially waiting two to four months for procedures. Kevin Waters (CFO) emphasized that the increased OpEx guidance reflects these investments, but the company is making trade-offs in other areas to maintain its path to profitability, with Q4 2026 adjusted EBITDA positivity still expected. Q: How should investors interpret the company's system sales guidance and the mix between greenfield and replacement systems for the remainder of 2026? A: Kevin Waters (CFO) clarified that the guidance implies 210-220 greenfield system sales for the full year, which is unchanged from initial expectations, with 97 greenfield systems sold in the first half. The second half is expected to be stronger, with Q4 typically the largest quarter due to hospital capital budget cycles. Larry Wood (CEO) added that the company is disciplined about system sales, ensuring each system has a home and launches within a few months, which is reflected in the record ASP of approximately $495,000 in Q2. The guidance does not rely on any large multi-system IDN orders, which would represent upside. Q: What is the company's outlook on gross margins, and how do replacement sales and the tariff recovery impact the full-year guidance? A: Kevin Waters (CFO) reiterated the full-year 2026 gross margin guidance of approximately 65%, noting that Q2 benefited from a $2.9 million tariff recovery. While replacement sales carry lower ASPs, the company expects the increased procedure volume from HYDROS systems to offset the margin impact over time. He also noted that standard costs for disposables and capital can vary quarter-to-quarter based on production levels, but the company remains confident in the 65% full-year target. Q: How is the company's launch team model performing, and what metrics are being used to measure its success? A: Larry Wood (CEO) stated that newly launched accounts under the dedicated launch team demonstrate shorter time to first case and stronger early utilization compared to historical launches. Kevin Waters (CFO) added that the launch team model results in more surgeons being trained, a shorter time from system sale to first procedure, and a higher initial case volume. The company expects to scale the launch team to support 100% of new system launches by year-end, which is expected to be a key driver of procedure growth in both 2026 and 2027. Q: What is the company's perspective on competitive threats, particularly from PAE (prostate artery embolization) and changes in physician RVUs? A: Larry Wood (CEO) dismissed RVU changes as a meaningful headwind, noting that if it were a significant issue, it would impact both HYDROS and AquaBeam platforms equally. Regarding PAE, he acknowledged its growth but argued that it is primarily pulling patients off the sidelines who are not ready for surgery, and the procedure lacks durability, with many patients requiring a second procedure after failed PAE. He emphasized that the company's focus remains on executing on the clinical superiority of Aquablation compared to other surgical approaches. Q: Can you provide an update on the company's clinical and regulatory milestones, including the WATER IV trial and guideline updates? A: Larry Wood (CEO) highlighted that the American Urological Association strengthened its recommendation for Aquablation in its updated BPH treatment guidelines, following the European Association of Urology's upgrade to a strong recommendation earlier in the year. The company completed enrollment in WATER IV, its first randomized trial comparing Aquablation to radical prostatectomy, with all 280 patients enrolled, and remains on track to present primary endpoint results at the AUA annual meeting in spring 2027. Additionally, the company received FDA IDE approval for WATER IV AS, a second randomized protocol For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in PROCEPT BioRobotics Corporation? Here are five stocks we like better. Second-quarter revenue rose 19% year over year to $94.5 million, but weaker utilization at legacy AquaBeam accounts led PROCEPT to lower its 2026 U.S. procedure outlook to 54,000–56,000. The company maintained full-year revenue guidance of $390 million–$410 million, supported by pricing and replacement-system sales. HYDROS systems continued to outperform legacy accounts, prompting an accelerated upgrade strategy. PROCEPT placed 65 HYDROS systems in the quarter and expanded its launch team, which now supports about 40% of new placements to improve time to first procedure and early utilization. Higher spending on commercial initiatives, platform innovation and clinical trials increased the full-year operating-expense outlook to $355 million–$360 million. Management still expects positive adjusted EBITDA in the fourth quarter, while WATER IV trial results are expected in spring 2027. 5 Robotics Stocks to Watch as Physical AI Builds Momentum PROCEPT BioRobotics (NASDAQ:PRCT) reported second-quarter revenue growth of 19% year over year while lowering its full-year U.S. procedure outlook, citing softer activity at legacy AquaBeam accounts. Management said newer HYDROS Robotic System accounts continued to show stronger utilization, supporting an accelerated replacement strategy for older systems. Total revenue for the second quarter of 2026 was $94.5 million, including U.S. revenue of $83.4 million, up 20% from a year earlier. International revenue rose 15% to $11.1 million. The company completed more than 13,100 U.S. procedures during the quarter, an increase of approximately 21%, though Chief Executive Officer Larry Wood said the result was below expectations. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control 3 Underrated Robotics Stocks Poised for Huge Gains Wood said the procedure shortfall was concentrated primarily among legacy AquaBeam accounts rather than across the company’s installed base. HYDROS accounts, by contrast, had procedures per account “significantly exceeding” those of legacy AquaBeam locations during the quarter, according to management. “HYDROS continues to perform well,” Wood said, adding that the platform’s imaging, workflow and clinical capabilities were helping physicians adopt Aquablation more quickly and use the system more consistently. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Is PROCEPT BioRobotics the Next Big Thing in Surgical Robotics? The company now expects 2026 U.S. procedures of 54,000 to 56,000, representing growth of approximately 25% to 29% from 2025. Wood said the low end of that outlook assumes no improvement in legacy AquaBeam account performance and little improvement in HYDROS utilization, while the high end incorporates benefits from commercial initiatives and system upgrades. Management said it does not fully understand the recent decline in legacy AquaBeam utilization. Wood noted that physicians practicing at multiple hospitals may preferentially shift patients to HYDROS-equipped locations because of the newer system’s efficiency, imaging and artificial-intelligence capabilities. → Why Rare Earth Processing Could Be the Real 2027 Opportunity PROCEPT placed 65 HYDROS systems in the U.S. during the quarter, including 50 greenfield placements, 14 replacement systems and one system under an operating lease. U.S. system revenue increased 32% year over year to $29.1 million. The company is accelerating upgrades of legacy AquaBeam systems to HYDROS. It expects approximately 40 replacement sales at the midpoint of its full-year revenue outlook, with replacement-system average selling prices expected to range from approximately $300,000 to $325,000. Wood said replacement activity should remain an important part of the commercial strategy in 2027 as well. While upgrades can create modest near-term disruption as facilities transition between platforms, management expects the program to improve account productivity over time. Wood said HYDROS represented about half of the installed base, but accounted for the majority of procedure volume for the first time in the second quarter. The company also continued to expand its dedicated launch team, which is intended to speed the time from installation to first procedure and improve early utilization. Approximately 40% of HYDROS systems placed in the second quarter were launched through the specialized team, up from about 20% in the first quarter. Management expects another meaningful increase in the third quarter and said it expects to have the capacity to support launches for all new HYDROS systems by year-end. Wood said launch-team accounts have shown shorter times to first cases, more surgeons trained on the system and higher initial case volumes, though the company did not quantify the utilization difference. Despite the reduced procedure outlook, PROCEPT maintained its full-year revenue guidance of $390 million to $410 million, which would represent growth of approximately 27% to 33% from 2025. The company also maintained its international revenue forecast of $50 million to $51 million. Management pointed to strong system pricing and replacement sales as support for the revenue outlook. New U.S. HYDROS system average selling price was approximately $495,000 in the second quarter, compared with $485,000 in the first quarter and $435,000 for full-year 2025. The company expects new U.S. system average selling prices of approximately $480,000 to $490,000 in the second half. U.S. handpiece and other consumable revenue was $48.4 million, up 12% year over year. Handpiece sales represented roughly 98% of procedures in the quarter, while handpiece average selling price increased to approximately $3,550. CFO Kevin Waters said the company still expects an approximately one-to-one relationship between handpieces sold and procedures for the full year. Management said its full-year system outlook implies 210 to 220 greenfield system placements, excluding replacement systems. Waters said the forecast does not depend on large bulk purchases from hospital networks. Second-quarter gross margin was 66%, compared with 65% a year earlier, benefiting from a $2.9 million tariff recovery. The company reiterated its expectation for approximately 65% gross margin for the full year. Operating expenses rose to $89.8 million from $73.9 million, reflecting investments in patient activation and market awareness, BPH platform innovation, and the WATER IV prostate cancer trial. PROCEPT reported a net loss of $26.9 million and an adjusted EBITDA loss of $11.3 million. Cash, cash equivalents and restricted cash totaled $231 million as of June 30. The company raised its full-year operating-expense outlook to $355 million to $360 million and expects an adjusted EBITDA loss of $35 million to $30 million. Waters said PROCEPT still expects positive adjusted EBITDA in the fourth quarter at both the low and high ends of its revenue outlook. On the commercial side, PROCEPT has launched direct-to-patient pilots in 18 U.S. markets using television, radio, digital and social-media campaigns. Wood said early indicators include increased website traffic, greater digital engagement and more patient interaction with educational resources, although he cautioned that translating outreach into procedures can take months because of hospital scheduling constraints. The company also highlighted clinical and regulatory developments, including a strengthened American Urological Association recommendation for Aquablation in updated BPH guidelines. PROCEPT completed enrollment of 280 patients in its WATER IV randomized trial comparing Aquablation therapy with radical prostatectomy, with primary-endpoint results expected at the American Urological Association’s spring 2027 meeting. The company also received FDA investigational device exemption approval for WATER IV AS, a randomized study evaluating Aquablation against active surveillance in certain prostate cancer patients. PROCEPT BioRobotics, Inc is a medical device company specializing in the development and commercialization of robotic systems for the treatment of benign prostatic hyperplasia (BPH). The company's technology leverages precision robotics and real-time imaging to perform minimally invasive procedures, aiming to reduce patient recovery time and improve clinical outcomes compared to traditional surgical approaches. The company's flagship product, the AquaBeam Robotic System, uses a high-velocity waterjet to selectively remove prostate tissue while preserving surrounding healthy structures. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "PROCEPT BioRobotics Q2 Earnings Call Highlights" was originally published by MarketBeat. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Total revenue grew 19% year-over-year to $94.5 million, driven by strong HYDROS system demand and record average selling prices (ASPs). U.S. procedure growth of 21% fell short of internal expectations due to concentrated softness in legacy AQUABEAM accounts rather than broad-based weakness. HYDROS accounts significantly outperformed legacy accounts in utilization, validating the platform's enhanced workflow, imaging, and AI capabilities. Management is accelerating the replacement cycle to upgrade legacy AQUABEAM systems to HYDROS, viewing this as critical for long-term productivity and durable growth. The commercial reorganization is now complete, with sales representatives transitioning away from daily case coverage to focus on physician referrals and therapy adoption. System ASPs reached a record $495,000 for greenfield HYDROS units, signaling strong hospital commitment to long-term Aquablation programs despite capital costs. The dedicated launch team model is scaling effectively, supporting 40% of new placements in Q2 with a goal of 100% coverage by year-end to ensure higher early utilization. Full-year 2026 revenue guidance is maintained at $390 million to $410 million, supported by higher system ASPs and the emerging replacement cycle. U.S. procedure guidance was lowered to 54,000–56,000 units, assuming no immediate recovery in legacy AQUABEAM account performance. Management expects to achieve positive adjusted EBITDA in Q4 2026, driven by operating leverage and reduced R&D spending as WATER IV enrollment concludes. Direct-to-patient (DTC) pilots are active in 18 markets; while leading indicators like website traffic are strong, management notes a 2-4 month lag before these translate to procedures. The replacement cycle is expected to be a significant driver through 2027, with approximately 40 replacement sales projected for the full year 2026. Completed enrollment for the WATER IV clinical trial (280 patients), with primary endpoint results expected in spring 2027 to support the prostate cancer initiative. Received FDA IDE approval for the WATER IV AF study, expanding the clinical pipeline to evaluate Aquablation against active surveillance. Gross margin of 66% included a $2.9 million tariff recovery; full-year margins are expected to normalize at approximately 65%. The transition between AQUABEAM and HYDROS platforms may cause modest near-term disruption at accounts during the upgrade process. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that physicians with access to both systems preferentially move patients to HYDROS due to superior imaging and AI efficiency. The decline in legacy accounts is a recent trend that management is still fully unpacking, but it reinforces the strategy to retire legacy hardware. Management dismissed RVU changes as a major headwind, noting that impact would be seen across both platforms if it were a primary driver. Prostate Artery Embolization (PAE) is viewed as pulling patients off the sidelines rather than competing for surgical candidates, due to its lack of long-term durability. Management stated that 2027 revenue targets remain 'in the ballpark' despite the 2026 procedure guidance reduction. Operating leverage is expected to improve in 2027 as R&D costs for the WATER IV trial subside, offsetting increased commercial investments in patient activation. Accounts launched under the dedicated team show more surgeons trained, shorter time to first purchase order, and higher initial case volumes. The company aims to have 100% of new systems launched under this model by year-end to drive more consistent utilization across the installed base.

SAN JOSE, Calif., Aug. 04, 2026 (GLOBE NEWSWIRE) -- PROCEPT BioRobotics® Corporation (Nasdaq: PRCT) (the “Company”), a surgical robotics company focused on advancing patient care by developing transformative solutions in urology, today reported unaudited financial results for the quarter ended June 30, 2026. "This was an important quarter for PROCEPT as we continued to strengthen the foundation of our business for long-term growth," said Larry Wood, Chief Executive Officer. "We delivered 19% revenue growth, achieved record HYDROS placements, demonstrated continued pricing discipline, executed a more robust replacement strategy and completed the commercial realignment that positions us to execute more effectively going forward. Importantly, HYDROS accounts continue to perform well - procedures in the second quarter of 2026 were significantly higher per HYDROS account as compared to our legacy AquaBeam systems.” Wood continued, "We also reached several important strategic milestones during the quarter, including completing enrollment in our WATER IV prostate cancer study and receiving a strengthened recommendation for Aquablation therapy in the updated American Urological Association guidelines. As we enter the second half of the year, we remain focused on execution and confident in our long-term opportunity to advance the standard of care in prostate disease." Second Quarter 2026 Financial Results Total revenue of $94.5 million for the second quarter of 2026, an increase of 19% compared to the prior year period in 2025 U.S. procedures over 13,100 for the second quarter of 2026, an increase of approximately 21% compared to the prior year period Delivered 65 U.S. HYDROS® systems, which included 14 replacement systems. U.S. average selling prices were approximately $495,000 for new HYDROS systems U.S. handpieces sold as percent of U.S. procedures in the second quarter of 2026 was approximately 98% Second quarter of 2026 handpiece average selling price of approximately $3,550 increased 11% compared to the second quarter of 2025 International revenue of $11.1 million for the second quarter of 2026, an increase of 15% compared to the prior year period Gross margin of 66% for the second quarter of 2026, compared to 65% in the prior year period and 65% in the first quarter of 2026 Total revenue for the second quarter of 2026 was $94.5 million, an increase of 19% compared to the prior year period. The increase was driven by increased U.S. handpiece and system revenue and international revenue. U.S. revenue was $83.4 million, representing growth of 20% compared to the prior year period. U.S. handpiece and consumable revenue for the second quarter of 2026 was $48.4 million, an increase of 12% compared to the prior year period. U.S. system revenue for the second quarter of 2026 was $29.1 million, an increase of 32% compared to the prior year period. International revenue was $11.1 million for the quarter, an increase of 15% compared to the prior year period. Gross margin for the second quarter of 2026 was 66% compared to 65% in the prior year period. Gross margin increase in the second quarter was primarily driven by increased U.S. system and consumable pricing and a $2.9 million tariff refund. Operating expenses in the second quarter of 2026 were $89.8 million, compared with $73.9 million in the prior year period. The increase in operating expenses reflects continued investment in our commercial organization, innovation across our BPH platform, as well as costs associated with completing enrollment and advancing follow-up in our WATER IV Prostate Cancer trial. Net loss was $26.9 million for the second quarter of 2026, compared to a loss of $19.6 million in the prior year period. Adjusted EBITDA* was a loss of $11.3 million for the second quarter of 2026, compared to a loss of $8.0 million in the prior year period. Cash, cash equivalents and restricted cash balances as of June 30, 2026, totaled approximately $231 million. The Company remains committed to advancing the standard of care in urology through continued innovation, combining AI, robotics, and real-time imaging to enable personalized, precise, and durable treatment for the millions of men affected by benign prostatic hyperplasia (BPH). Full Year 2026 Financial Guidance The Company reiterates revenue for the full year 2026 to be in the range of $390 million to $410 million, which represents growth of 27% to 33% compared to the prior year period The Company now expects full year 2026 U.S. procedure volume to be 54,000-56,000 with growth to be in the range of 25% to 29% compared to the prior year period The Company reiterates full year 2026 gross margin to be approximately 65% The Company now expects full year 2026 adjusted EBITDA* loss to be in the range of $35 million to $30 million *Adjusted EBITDA is a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States (GAAP). For more information about the Company’s use of non-GAAP financial measures, please see the section below titled “Use of Non-GAAP Financial Measures (Unaudited). Webcast and Conference Call Information PROCEPT BioRobotics will host a conference call to discuss the second quarter 2026 financial results on Tuesday, August 4, 2026, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call may do so by following one of the links below: Webcast link for interested listeners: Dial-in registration for sell-side research analysts: About PROCEPT BioRobotics CorporationPROCEPT BioRobotics is a surgical robotics company focused on advancing patient care by developing transformative solutions in urology. PROCEPT BioRobotics manufactures the AQUABEAM® and HYDROS Robotic Systems. The HYDROS Robotic System is the only AI-powered, robotic technology that delivers Aquablation therapy. PROCEPT BioRobotics designed Aquablation therapy to deliver effective, safe, and durable outcomes for males suffering from lower urinary tract symptoms or LUTS, due to BPH that are independent of prostate size and shape or surgeon experience. BPH is the most common prostate disease and impacts approximately 40 million men in the United States. The Company has developed a significant and growing body of clinical evidence with approximately 250 peer-reviewed publications, supporting the benefits and clinical advantages of Aquablation therapy. Use of Non-GAAP Financial Measures (Unaudited)This press release references Adjusted EBITDA, a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization and stock-based compensation. Non-GAAP financial measures are not a substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to any other performance measures derived in accordance with GAAP. The Company believes that presenting Adjusted EBITDA provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies. Forward Looking StatementsThis release contains forward‐looking statements within the meaning of federal securities laws, including with respect to the Company’s projected financial performance for full year 2026, statements regarding the potential utilities, values, benefits and advantages of Aquablation therapy performed using PROCEPT BioRobotics’ products, including AquaBeam or Hydros Robotic Systems, which involve risks and uncertainties that could cause the actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are only predictions based on the Company’s current expectations, estimates, and assumptions, valid only as of the date they are made, and subject to risks and uncertainties, some of which the Company is not currently aware.   Forward-looking statements may include statements regarding financial guidance, market opportunity and penetration, procedure growth, the Company’s possible or assumed future results of operations, including descriptions of the Company’s revenues, gross margins, profitability, operating expenses, installed base growth, commercial momentum and overall business strategy. Forward‐looking statements should not be read as a guarantee of future performance or results and may not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. These forward‐looking statements are based on the Company’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward‐looking statements as a result of these risks and uncertainties. These risks and uncertainties are described more fully in the section titled “Risk Factors” in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s annual report on Form 10-K filed with the SEC on February 26, 2026, and subsequent quarterly reports on Form 10-Q. PROCEPT BioRobotics does not undertake any obligation to update forward‐looking statements and expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward‐looking statements contained herein. These forward-looking statements should not be relied upon as representing PROCEPT BioRobotics’ views as of any date subsequent to the date of this press release. Important Safety InformationAll surgical treatments have inherent and associated side effects. For a list of potential side effects visit https://aquablation.com/safety-information/ Investor Contact:Marissa BychManaging DirectorGilmartin Group [email protected]

Image source: The Motley Fool. Wednesday, April 29, 2026 at 4:30 p.m. ET Chief Executive Officer — Larry Wood Chief Financial Officer — Kevin Waters Larry Wood: Good afternoon, and thank you for joining us. Over the past 6 months, we have taken decisive actions to reset the organization. We have sharpened our focus on operational excellence, accountability and commercial discipline. Our first quarter performance reflects the early impact of these efforts. We are encouraged by our Q1 results and the momentum we are building, having reported total revenue of $83.1 million, representing an annual growth of 20%. Starting with procedures. We completed approximately 12,200 U.S. procedures in the first quarter of 2026. While our commercial realignment initiatives modestly affected Q1 procedure growth, performance was largely in line with expectations. The team is adapting well, and we expect the full benefit of these changes to materialize in the second half of 2026. Regarding handpieces, we believe field inventory levels and customer purchasing behavior have normalized with handpieces sold representing approximately 95% of procedures in the first quarter. On a weighted average basis, we continue to expect approximately a 1:1 ratio of handpieces to procedures for the full year. Turning to U.S. systems. We sold 49 Hydros systems, which included 2 replacement systems. We remain confident in our full year system plan and are encouraged by the early positive customer response to the AQUABEAM replacement program. With regards to pricing, as we emphasized in our last earnings call, establishing price discipline remains fundamental to long-term value creation. In the first quarter of 2026, U.S. Hydros system average selling prices of approximately $485,000. This represents an all-time high and a 14% increase compared to the fourth quarter of 2025 despite what is typically a seasonally challenging quarter for capital. Given our increased pricing discipline across the organization and strong first quarter pricing, we now expect full year 2026 system pricing to be modestly above our initial guidance range. Additionally, U.S. handpiece average selling prices were approximately $3,500, representing a 5% increase compared to the fourth quarter of 2025 and a 10% increase year-over-year. Now I'll provide an update on our commercial organization. We previously described 2 key changes that we believe are strategically important for long-term performance. First, we realigned our commercial team into an integrated regional structure where our clinical and sales functions now report to a common regional leader. The new structure creates a single point of accountability at the regional level to ensure clinical and commercial activities are coordinated around customer success and procedure growth. Second, we are continuing to advance our dedicated launch team to drive more consistent launches, reduce variability in activation and accelerate procedure volume ramp for customers. We view launches as a key lever for improving downstream utilization and overall performance. The realignment of the commercial organization and implementation of the launch team was finalized in early Q1 and as expected, resulted in some short-term disruption in the first quarter. We view this as a normal transition period as teams ramp, establish account relationships and standardize new operating processes. Most important, we believe these changes, along with our marketing programs, better position us for sustained high growth. We will continue to manage through the transition thoughtfully, and we expect the benefits to build as the organization settles into the new model. Now let's look at gross margins and how we are progressing towards profitability. In the fourth quarter of 2025, we reported gross margins of 61% and indicated this level was temporary. We guided to full year 2026 gross margins of approximately 65%, reflecting expected improvement. Driven by increased price discipline and better leverage of our cost structure, we delivered first quarter gross margins of 65%. With this strong start, we expect gross margins to increase modestly on a sequential basis throughout the year. We will also continue to manage operating expenses as we work toward achieving positive adjusted EBITDA in the fourth quarter of 2026. Turning to regulatory and clinical updates. In March, at the 41st Annual European Association of Urology Congress in London, the EAU updated clinical guidelines to give Aquablation therapy a strong recommendation as a surgical treatment for men with BPH and moderate to severe LUTS, reflecting the high quality of evidence and favorable patient outcomes. The therapy is now recommended as an alternative to TURP, especially for patients seeking to preserve ejaculatory function. This upgrade for prostates 30 to 80 milliliters and the additional notes for treating prostates greater than 80 milliliters is supported by multiple clinical trials, including WATER and WATER 2, all of which demonstrated durable improvements in urinary symptoms, preservation of ejaculatory and urinary function and effectiveness across a wide range of prostate anatomies. A strong recommendation from one of the most respected global guideline bodies reflects the strength of the clinical evidence supporting Aquablation therapy and reinforces its role as a modern surgical option for physicians seeking to deliver durable symptom relief while preserving quality of life outcomes that matter most to patients. At EAU, we also announced the first international launch of Hydros in the U.K. This milestone marks the beginning of a broader global expansion. Specifically, in the first quarter, we sold 7 new Hydros systems in the United Kingdom at an average selling price of over USD 400,000. Building on the recent approval and strong clinical momentum, including the rapid adoption at high-volume NHS hospitals, our U.K. capital pipeline continues to grow nicely. We have also received FDA clearance on our second-generation FirstAssist AI software, an advancement in personalized image-guided planning for Aquablation therapy. This milestone further strengthens the capability of the Hydros robotic system and enables more precise identification of prostate anatomy and more complete treatment planning to help surgeons plan with greater confidence and consistency. We remain deeply committed to advancing the standard of care in urology through our continued innovation for the millions of men affected by BPH. Lastly, we are approaching the completion of patient enrollment in the WATER IV study and based on current trends, expect to be fully enrolled by the end of May. We have been very pleased with the pace of enrollment, which is on track to be completed in less than 18 months. For a clinical trial of WATER IV size and complexity, the speed of enrollment highlights strong surgical interest and a patient willingness to participate, factors we believe will ultimately translate into broader market adoption post approval. Based on current time lines, we expect to present the WATER IV primary endpoint at AUA in the spring of 2027. With that, I will turn the call over to Kevin. Kevin Waters: Thanks, Larry. Total revenue for the first quarter of 2026 was $83.1 million, representing 20% year-over-year growth. U.S. revenue for the quarter was $72 million, reflecting 19% growth compared to the prior year period. Turning to U.S. procedures. We completed approximately 12,200 U.S. procedures in the first quarter of 2026, representing approximately 30% year-over-year growth. The percentage of handpieces sold to procedure volume was approximately 95% with handpiece average selling price of approximately $3,500. As a result, total U.S. handpiece and other consumable revenue was $43 million in the first quarter of 2026, representing 13% growth compared to the first quarter of 2025. Turning to U.S. systems. Total U.S. system revenue was $23.4 million in the first quarter, representing 25% year-over-year growth. We sold 49 Hydros systems at an average selling price of approximately $485,000 for new U.S. systems. Additionally, the 49 systems include 2 replacement systems, representing the early stages of what we expect to become a growing replacement cycle. We exited the first quarter of 2026 with a U.S. installed base of 765 systems. International revenue in the first quarter of 2026 was $11.1 million, representing year-over-year growth of 25%. Moving down the income statement. Gross margin for the first quarter of 2026 was 65% compared to 64% in the first quarter of 2025 and 61% in the fourth quarter of 2025. The improvement was driven by increased pricing, cost discipline and favorable product mix. Total operating expenses for the first quarter of 2026 were $86.6 million compared to $71.6 million in the prior year period. The increase reflects continued investment to support commercial expansion, ongoing innovation across our BPH platform technology and increased funding for our WATER IV prostate cancer trial, positioning us to drive long-term growth and expand our clinical and technology leadership. Net loss for the first quarter of 2026 was $31.6 million compared to a net loss of $24.7 million in the first quarter of 2025. Adjusted EBITDA was a loss of $18.1 million in the first quarter of 2026 compared to a loss of $15.8 million in the prior year period. Cash, cash equivalents and restricted cash totaled $249 million as of March 31, 2026, providing a strong balance sheet to support our strategic priorities. We expect cash usage to improve throughout the year, driven by greater operating leverage and improvements in working capital. Moving to our 2026 financial guidance. We continue to expect full year 2026 total revenue to be in the range of approximately $390 million to $410 million, representing growth of approximately 27% to 33% compared to 2025. This guidance range continues to assume international revenue to be in the range of $50 million to $51 million. Additionally, we continue to expect 2026 total U.S. procedures to be in the range of 60,000 to 64,000, representing growth of approximately 39% to 48%. With respect to new U.S. system pricing, we now expect pricing to range between $450,000 and $460,000 for the remainder of the year, depending on customer mix between individual accounts and large IDNs. While first quarter U.S. system revenue and pricing exceeded expectations, and we remain encouraged by both pricing and sales momentum, our focus is on ensuring this performance is sustainable. Based on current trends, we have strong confidence in our full year total revenue guidance. We will provide further detail on these metrics as the year progresses. Turning to gross margins. We continue to expect full year 2026 gross margin to be approximately 65%. This includes $5 million to $6 million of tariff expense compared to $1.3 million in fiscal 2025. Our gross margin guidance does not reflect any potential benefit from previously paid tariff refunds, which could provide upside to 2026 gross margins. We continue to expect full year 2026 adjusted EBITDA loss to be in the range of $30 million to $17 million. This guidance reflects positive EBITDA in the fourth quarter of 2026 at both the low and high end of the revenue range. In the second quarter of 2026, we expect total revenue to be in the range of $91 million to $95 million, representing growth of 15% to 20%. I would now like to pass it back to Larry for closing comments. Larry Wood: Thanks, Kevin. In closing, while we have undergone significant change over the past 6 months, we believe these steps are essential to driving sustainable, high growth and to establishing a clear path to profitability. In summary, while we are mostly complete with our U.S. commercial realignment initiatives and expect more consistent commercial execution over the course of the second quarter as reflected in our total revenue guidance. We have established pricing discipline across the organization, which we believe is critical to our long-term success. The U.S. capital pipeline continues to build, increasing our confidence in the sustainability of higher average selling pricing and the conversion of this pipeline into sales. Lastly, WATER IV enrollment is ahead of schedule, and we expect to complete enrollment in May. In closing, I want to thank our employees, customers and shareholders for all their support to help us along our journey to becoming the standard of care for BPH. At this point, we will be happy to take questions. Operator? Operator: [Operator Instructions] And our first question comes from Matthew O'Brien of Piper Sandler. Matthew O'Brien: The first one is just a broader question kind of on the puts and takes that we saw here in Q1, the strength on the capital side. I'd love just to hear about where that originated plus the ASP benefit that you're getting. And then on the handpiece side, I don't know, Larry, if there's a way to kind of frame up some of the disruption that you saw this quarter and then kind of how long it should linger and when we should be past that? And then I do have a follow-up. Larry Wood: Yes. Thanks, Matt. I think the capital quarter was pretty broad-based. We didn't really have a lot of large IDN orders or anything like that. So it was pretty broad-based. And I think that also contributed to the ASP upside. But we did certainly implement pricing discipline, much like what we did with handpieces, we implemented that on capital as well. And so that's just an important part of our journey toward profitability. On the handpieces, the realignment of the sales force has been complete. And I think we're just in a very just natural transition phase where we're reestablishing account relationships and backfilling some of the key positions for people that have moved over to the launch teams. But we expect the momentum on procedures to build throughout the quarter -- sorry, throughout the year. And we remain, I believe, on track related to our guidance, and those are certainly our goals. So we're not where we want to be yet, but I think we've made the changes we need to make and we're building. And I think the team is going to continue to grow into these roles, and I'm excited about what the future looks like. Matthew O'Brien: Okay. I appreciate that. That's very helpful. And then on the second question on the guide side. Just if I'm looking at the roughly -- I think it was $93 million midpoint of the range for Q2. Just talk about plus all the -- again, the ASP benefit you're going to get on the system side. Just talk about the confidence in the -- especially the back half, it seems like it's a little bit more loaded than normal to get to the midpoint of that range and just the confidence there getting to the midpoint or even higher just again, given the ASP benefit that you're talking about on the system side? Kevin Waters: Yes, Matt, I'll take that. So regarding Q2, in our prepared remarks, we did say that we are guiding to new systems in the $450,000 to $460,000 range even with the strength that we saw in the first quarter. And I would definitely suggest our confidence in executing within our guidance range this year has increased with our Q1 performance. But we did just feel it's prudent to maintain current expectations as we continue to emerge from the recent commercial realignment. But look, we feel good about the full year across all metrics. And as I said in my prepared remarks, it will probably be the end of Q2 where we start to formally update some metrics around pricing and volume given what we've seen in the first 6 months here. Operator: And our next question comes from Nathan Treybeck of Wells Fargo. Nathan Treybeck: So procedures were flat quarter-over-quarter. Is there any way to quantify how much of this is driven by disruption from the commercial or changes in the inventory destocking? And I guess, have you seen any underlying softening in demand or referral funnels? Larry Wood: No. I think what we saw in Q1 was just sort of some normal seasonality that we see when we start the year, and that's not uncommon for us. And so I think that was all pretty normal. It's hard to quantify the sales force part of it in terms of people growing into their new roles and just sort of the normal seasonality we see in Q1. But we're going to continue to drive procedures throughout the course of the year. And we had strong system placements and the combination of strong system placements along with our launch teams. We think [indiscernible] is going to be a contributor to procedures as we get deeper in the year, and we have more launch team systems in the field, and we think that's going to help us. Nathan Treybeck: Great. And for my follow-up, so handpiece sales were below your target of 1: 1 procedures. You mentioned inventory rightsizing is completed, but can you help us understand how much residual destocking impact there was in Q1? And could handpieces fall below procedures in upcoming quarters? Larry Wood: Yes. No, we tried to guide that for the full year, we're going to be 1:1 on handpieces, and we still remain very confident that's going to be the case. And I think the bottom line is we have -- if we're 95%, I'm not going to really apologize for it. And if we're 105%, we're not going to brag about it. I think handpiece sales are always going to fluctuate a little bit based on the number of systems we launch and all these other sorts of things. So I think that it's normalized. The number that we're focused on are procedures because eventually, procedures and handpiece sales have to equalize out over time. It's not going to be about how much inventory people carry. It's going to be how many procedures we drive. So we feel like that is largely normalized now, but we remain confident in the 1:1 full year ratio that we provided at our investor conference. Operator: And our next question comes from Mike Kratky of Leerink Partners. Michael Kratky: Maybe just one quick one. You mentioned the $450,000 to $460,000. Was that the full year average? Or was that for the remainder of the year? Kevin Waters: I would classify that as for the remainder of the year. You could put in -- that puts the full year average more towards the upper end, probably around $460,000 when you average that out, Mike. Larry Wood: Yes. And just to add to that, part of our thinking on this is we didn't have a lot of big IDN orders in Q1. And when we get larger IDN orders, that can sometimes have a little bit more effect on price. But I think even broader than that, we don't want to get out over our skis on ASP commitments because there are certain places where we want to maintain some flexibility. But we are driving price discipline across the organization, and we're going to continue to do that. Michael Kratky: Understood. And maybe just as a quick follow-up. But Kevin, totally appreciate your comments on the prudence and maybe some conservatism for now given it's early in the year, but you're reiterating your U.S. systems revenue guidance in the backdrop of the higher ASPs. Is there anything fundamental from a number of units sold perspective that is maybe changing? Or is this really just as usual? Kevin Waters: Look, I don't think it's changing, but I definitely believe the Q1 performance gives us greater conviction and confidence around achieving our full year guide. That should be implied with our performance. But at the same time, we're just coming off a Q4 shortfall. We're coming off a commercial realignment. And we just want to make sure that we maintain current expectations and not get out over our skis, as Larry mentioned, but our confidence in executing the full year on systems, particularly with the Q1 performance is higher today than it was when we gave guidance in February. Operator: And our next question comes from Richard Newitter of Truist. Richard Newitter: Maybe just to start, I'm trying to get a sense for -- of the new initiatives or the kind of the way you're approaching the market and the selling organization that you outlined. Can you highlight where you're seeing or where we should expect to see the proof points or the benefits show up fastest? Like are there -- I think there were 3 main ones that you had. Like where are you seeing the improvements show up most meaningfully and soonest? And I get that you're pointing more to the back half, but I'm just curious where it's most evident that the progress is going the way you want it to be going in the first half? Larry Wood: Well, I think we have a lot of confidence in our launch teams. I think we moved some of our more senior people over there with a lot of experience. And I think the key thing there is the more systems we put in the field that we do under the launch team model, which is going to build throughout the year that we will continue to see benefit of that. And I think that's one that we have great confidence in. The patient awareness activities, we're running multiple pilots on that. And when those pilots read out, it will help us really prioritize what things are most effective and what things we should be driving. And I think that's just a prudent way to approach some of these new marketing programs. But I think it's also really important for people to understand that there's always just going to be a lag between driving patient awareness and a patient getting a procedure. It's not that patient gets new information, they get an e-mail, they see something on social media or maybe they hear a radio ad and they show up at a doctor and they get treated the next day. They have to come in, they have to schedule their appointment, they have to go to work up. I think most systems in the country probably schedule people a month out or so. So there's always going to be a natural lag between some of these initiatives and actually seeing the patients get treated. But we're encouraged by all of the things. I think we spend a lot of time with the sales team, and I think people have good conviction about the changes we've made and the new roles that we have for people. But it still just takes time for people to reestablish account relationships and to get some of the new people trained to backfill some of the launch teams. But I think these are all very natural things. They're not like -- they're not things that we think are going to be a struggle, but that's why we've always modeled, and we tried to be really clear about this at the investor conference. These things are going to contribute more in the back half of the year than they are in the early part of the year. Richard Newitter: Got it. That's really helpful. And then just -- this is now the first quarter or the first few months that you've been able to really see how physicians would react to kind of the physician fee payment changes that happen to all respective procedures going down, including yours. I guess what are you hearing and seeing out there? Do you feel better or worse unchanged versus kind of the way you were talking to us before we obviously have these changes in place. Larry Wood: I think we had pretty much factored those things in, in February when we spoke before. And I don't think anything has remarkably changed from what we talked about in February. I think the economics for all these procedures are what they are. It is really about driving the clinical benefit and making sure patients understand how differentiated our procedure is versus competitive procedures. And I think when physicians understand that as well and patients understand it, I think that's what drives therapy adoption and taking share from competitive procedures. But I don't think anything has meaningfully changed on that. Operator: And our next question comes from Josh Jennings of TD Cowen. Joshua Jennings: Nice to see the solid start to the year. I wanted to start off and just follow up on the reimbursement question. And just is there any way you could help us frame up the potential for Aquablation procedure to kind of move up in the APC level as we go through these proposed rules and then final rules over the next couple of months? Larry Wood: Yes. We haven't built that into our modeling. And I think one of the important things to remember, Josh, is that even when these codes change, they always collect actual costs. Medicare doesn't pay for value, they pay for resource consumption. And so that's just not -- I think if you make our economics the primary part of the story here, you're always going to be sort of chasing those ghost. So what we're focused on is at the current levels of reimbursement exists, how is this an economically solid procedure for hospitals and then how do we drive patients in. And I think the other part about it is how do we help hospitals be efficient with the procedure? How do we help them be efficient with procedure time? How do we help them be efficient with discharge, be efficient in avoiding complications. And when we do that, I think the economics for this procedure work well. But we haven't factored anything into our guidance about changing APC levels. If that happened, it would be certainly an upside to reimbursement. Joshua Jennings: And then just a follow-up. Sorry if I missed this in the earlier remarks, but sounds like there was more positive reception than anticipated for replacement systems, Hydros replacements. Any new outlook just in terms of how replacements kind of factor into -- through the rest of 2026? And maybe just remind us why you expect replacements to pick up next year. Larry Wood: Yes. Thanks, Josh. Yes, I think just in simplest terms, given a typical capital cycle, and we just really launched our replacement program kind of at the beginning of the year, the fact that we got 2 replacements already in, I think we were very encouraged by. And I think we've had a lot of customers now that they realize they can get a trade-in value for their legacy system, which helps them with a replacement strategy. I think we just probably feel confident that replacements are going to be something that we're going to really hone the program in this year. And I think it's going to be a much bigger part of our story in 2027. But we're encouraged with our early start, and we just got to continue to drive execution on that. Operator: And our next question comes from Chris Pasquale of Nephron Research. Christopher Pasquale: Besides all the moving pieces you guys had going on, there was also quite a bit of severe weather during the quarter. These cases are reschedulable if the need arises. Did you see procedures getting pushed from 1Q into 2Q because of that? Or was all of that disruption sort of contained within February and March? Larry Wood: Yes. Thanks. Chris, I mean certainly, there were some severe weather in the year, and we know that there are some case cancellations and whatnot. How many of those cases came back on the schedule and how many of those patients got something else. I think it would be really difficult for us to say. I think most of that's probably out of the system at this point because most of that happened early in the quarter. I don't think it materially impacted our quarter. And I'm sort of just not really inclined to attribute anything to weather or weather-related issues. Our numbers are our numbers. They have to stand alone. If there's severe weather and cases get canceled, it's our team job to make sure that they get rescheduled and they get done. So we just don't really make any allowances for that here and just keep people focused on the execution that we control. Christopher Pasquale: Yes. Fair enough. I'd love to hear a little bit more about the U.K. opportunity and what that looks like. International, small part of the business today has been a consistent outperformer. Can you talk a little bit about sort of what you think the denominator is for that particular market? And are there other areas that you're excited about in terms of next steps internationally? Larry Wood: Yes. When I stepped into the role, I really felt there's opportunities in international. But international isn't a very homogeneous place. There's a lot of variation, obviously. And so some countries have really solid reimbursement and the capital opportunities there are solid. And so we focus on those places and the U.K. is certainly our biggest place in Europe. We were excited to launch Hydros. I think we had a great showing at the AUA and combined with the latest guidelines, I think it was an overall very positive meeting for us. We continue to evaluate what other markets in Europe that we should be looking at as opportunities, but it's not going to be everywhere. But I think over time, it's Europe and international is going to become a bigger and bigger part of our story, but that's going to just take time to develop. Operator: And our next question comes from Stephanie Elghazi of Bank of America Securities. Stephanie Piazzola: I wanted to ask on Q1 procedures were a little light of the Street and grew 31%, and you're still expecting a ramp in procedures to 50% growth in the second half. So can you remind us what's driving that acceleration and your confidence in that? Larry Wood: Yes. Thanks for the question. I think we always expected the first half of the year to be slower than the second half of the year. And we always expect to see a little bit of seasonality in Q1, and we certainly did see that, but it was pretty much at expected levels. We implemented all of our organization changes in the sales force early in the year. And so people are growing into those roles and they're reestablishing account management. The launch teams are starting to launch systems under the launch team model. They started in the quarter. But it takes time for those to build and for those to contribute. So I think it is a combination of people maturing the roles, reestablishing these account relationships. I think in the back half of the year, we start seeing more benefit from some of our patient activation activities. And I think we get the full benefit of all of our newly launched systems this year and those contributing at a higher level than what we've seen historically. But the more systems you place under that model and the better they do, the more that builds for the back half of the year. So that's what's driving that. Stephanie Piazzola: Got it. And then on the Q2 guidance, the midpoint of $93 million is a little below the Street at $95 million. So maybe could you help us understand that? I'm just curious what's changed on your view of Q2, maybe it's some of what you had just talked about, but is there more lingering disruption from the commercial organization changes than you thought or anything else? Kevin Waters: No, this is Kevin. Nothing has really changed in our thinking. If anything, as I said earlier, I think we feel more positive in our initial guide today than we did when we provided that a few months ago. And we have never provided Q2 guidance as part of Investor Day. So this is really the first time and really just sticking with the philosophy right now that we think it's prudent to keep expectations reasonable and give us a chance to outperform as opposed to getting out ahead of ourselves. But there's nothing unique or different in Q2, and we continue to feel good about the trajectory on both systems, procedures and our international business. Operator: And our next question comes from Suraj Kalia of Oppenheimer. Suraj Kalia: Larry, Kevin, congrats on a good start to the year. So Larry, a lot of commentary on handpieces and procedures. Maybe if I could ask one question slightly differently. So of the 47 (sic) [ 49 ] Hydros systems, right, you've given your site numbers in the U.S. Our rough math, Larry, is suggesting it's around the 17-ish number of procedures per site per quarter, roughly in that ballpark. Maybe if you could talk to what are you seeing in utilization in your sites? Where do you think your share capture is within those sites? And is this the bogey that we should be thinking about as we map out the year and new store same-store sales? Larry Wood: Yes. Thanks for the question. We talked about this a little bit at the investor conference. Our sites are highly variable. And so trying to create averages and trying to create average utilization, especially when we have a mix of AQUABEAM and a mix of Hydros. And going forward, we're going to have a mix of kind of our launch team launch systems and some of our legacy systems. I just think it's hard to be able to create an average. And I appreciate why everybody wants to do that because it's easy to just plug into a formula. But I think what people should be focused on is just our pure procedure growth. We put our procedure numbers that we expect to do this year. We put our ASP numbers, we put our system numbers on the board, and that's what we just have to go drive to. So the key for us is showing growth quarter-over-quarter on our procedure growth. And that's what we're going to be driving to. And I think I'm certainly not focusing the team on -- go to our lowest utilization places and trying to bring into the mean. We map out literally every system in the country and say, where are the biggest opportunities, where are their under-usage, where are there share shifts, where are there motivated people. And so that's just our focus. But I would just continue to focus on procedure growth quarter-over-quarter. Suraj Kalia: Fair enough. And Larry, one follow-up question on WATER IV. So you'll have a readout in spring '27. Let's assume it's positive, right? Logic tells you there would be a collateral pull-through both on the BPH side and on the prostate cancer side, right? But Larry, should we think about, is it going to be a symmetric payoff? Or do you envision there could be some level of asymmetricity? In other words, let's say, superiority, there is some kink somewhere. Does it impact BPH? So how are you all thinking about that? Larry Wood: Yes. That question may be about my education level. I'll say like I don't know the WATER IV data. Nobody knows the WATER IV data at this point. And I don't want to speculate about data. But I think just broadly speaking, the more positive that data is, the more disruptive it has the potential for being -- for patients with prostate cancer. And obviously, anybody that already has a system that's already trained would be able to adapt quickly to treating those patients, and we would certainly do everything we could to facilitate that. But I think it's just going to matter most of the strength of the data and how doctors interpret that as it relates to where this fits in treating patients with prostate cancer. All of those things being said, we think it's a perfect adjacency for us. It's rare that you can get this kind of leverage out of the same exact system, the same exact handpiece and largely the same users, and that gives us leverage all of our sales force as well. So we're just focused on running a great trial and then presenting that data when it comes out at AUA next year. And we're all cautiously optimistic it's going to be positive. But we'll have a lot more view once the data is public and we can talk about it and be more granular. Operator: And our next question comes from David Rescott of R.W. Baird. David Rescott: I wanted to ask on procedure utilization. I think at the -- I recall at the Analyst Day, you had called out different levels of procedure contribution from that class of systems sold pre-'25, those sold in '25 and those expected to be sold in 2026. And so just curious on the progress you've seen so far in Q1, maybe how that level of contribution from the different groups have stacked up relative to your initial expectations? And then what your expectations are through the rest of the year from that segmentation perspective to get to the lower end, the midpoint or upper end of the procedure guide for the year? Larry Wood: Yes. I'll just say that we're still early in the launch model and the ability of those systems to contribute significantly to our overall total number is just very limited at this point. I will say we remain extremely confident in the launch team model. And I think when we saw the readout from our pilot that we shared at the investor conference, and I think we -- for all the same reasons, we continue to believe that, that's going to be a very important part of our story. And it really just comes down to making sure as many systems we sell as possible start off great because our view is when they start off great, they tend to stay great. And they tend to get established and they become a huge part of how BPH gets treated in those accounts. But we don't want to get too far ahead of ourselves, and I think it's too early to declare victory on any of our programs yet. We just remain laser-focused on all of them and making sure we're tracking the metrics. We're tracking the progress that we're making, and we're driving our procedure numbers and doing that to the very best of our ability. So that's our focus now. We're just sort of head down and trying to drive the organizational excellence that we need to get where we need to go. David Rescott: Okay. And then maybe on this system ASP in the U.S. that you delivered in the quarter and then the subsequent guide through the remainder of the year. You called out this pricing discipline maybe as being a factor for the higher ASPs you saw in the first quarter, but obviously also shows that there clearly is an appetite maybe at least from the centers' perspective of paying a higher price for some of these systems. So maybe can you help reconcile why the guide for the second half of the year -- or sorry, for the remainder of the year would assume an ASP below what you delivered in the first quarter? And is there a potential for what you saw in Q1 to maybe be a more realistic number as you go through the year from a system ASP perspective? Larry Wood: Yes. I think as Kevin said earlier, a little bit of it comes down to customer mix. We talked about it a little bit in our Q4 number. We had probably more IDN sales in Q4. And so that took our ASP down a little bit from what we've seen earlier in the year last year, and we had less IDNs in Q1. We are going to continue to drive price discipline, and we're going to continue to try to get the highest ASP that we can, and we think our value proposition is very strong. But we don't want to react to one quarter and get out over our skis for what the whole year ASP is going to be. So what we're just trying to do is be measured about that. And that's why Kevin covered that we're now thinking that you can model at $450,000 to $460,000 for the remainder of the year, and we think that's a good modeling number. We'll certainly update that quarter or next quarter where we land. And depending on how that quarter lands, I think it will give us a lot more confidence in how durable the pricing ASP is going to be. But I'm very pleased overall with the operational discipline that we're showing. We guided -- if you go back and look at handpieces, we guided handpieces this year that you should model in $3,500. We were able to achieve that in Q1. And so I think that bodes well for us for the rest of the year. We're going to continue to drive that same sort of transition on systems. But as Kevin and I both said, we just don't want to get out ahead of ourselves. Operator: And our next question comes from Mason Carrico of Stephens. Mason Carrico: I'll keep it to one. Could you characterize, I guess, what percentage of the sales funnel today is being driven more by bottoms-up surgeon champion versus top-down admin of these larger systems? Are you seeing the new launch team attract more surgeon champions to deals that are sourced top down today versus, I guess, where you guys were 6 months ago? Larry Wood: Well, yes, I'll start and then maybe I'll ask Kevin to add a little bit of color because he's very deep on our capital cycle and for some of those things. One of the things that is core to what we're doing on the capital side, though, is we don't want to sell a system to anybody, frankly, if there's not a surgeon champion who's established. We want people to always be standing on the dock waiting for the system. We want to have our launch team ready to go. We want to have patients prescreened and we want to drive that system very, very quickly. And I think historically, we just were much looser on that process. If somebody wanted to buy a robot and we haven't identified a champion yet, it showed up on the dock, then the team would start working on that process. And now we just have a much more integrated approach on that, of making sure like when we sell a system that there's a home for it and there's a champion who's ready to go, and then we bring the launch team in and we try to drive case excellence from the very first cases we do with that system and try to establish it as a core therapy within their urology program. And I just think we're just so much tighter about that now organizationally, and we're still building that muscle that's going to be what I think really differentiates the organizational performance as we move through time. I'll ask if Kevin wants to add anything on customer mix or some of these other things. Kevin Waters: Yes. I'll just add a follow-up point that I think it is a common misconception where we have said and we are seeing great relationships now with the top down with large IDNs. But at the same time, that does not mean we don't have the bottoms-up surgeon support within that IDN network. But historically, we only had the surgeon support, whereas now we're definitely being viewed as a viable technology across a much broader hospital network. And that is what we're seeing. But to remind you, our Q1 results did not have any of those large IDN sales. So that's just another factor as well that gives us confidence in the full year system guidance. Larry Wood: Yes. I guess just to finish the thought, it's really both. If you have top-level administrative support, you don't have a surgeon champion, you can get the capital sale, but you're not going to get the pull-through on procedures that you want. If you have a surgeon champion that you don't have the administration that's supporting, bringing a new therapy in, then you're going to struggle with the capital sale and that cycle is going to go a lot longer. And I think what we're just really trying to do is just be super integrated about that and drive to where we have both pieces of those puzzles because when those 2 things come together really strongly, I think that's where we really drive utilization to where we want it to be. Operator: And our next question comes from Brandon Vazquez of William Blair. Max Kruszeski: It's Max on for Brandon. I'll just do one quick one as well. First quarter gross margin was 65%. You guys reiterated the full year expectation of about 65%. Can you just walk us through some of the puts and takes given some of the revenue mix and ASP dynamics on the year and how that relates to gross margin and how we should be thinking about cadence for the rest of the year? Kevin Waters: Yes, I can walk you through the year. Good question. So you pointed out in Q1, we did deliver 65% gross margin. That was driven sequentially by higher handpiece and system pricing and just our overall ability to leverage our overhead expenses. And as we move throughout the year, Q2 and Q3, you should think of very modest expansion in the next 2 quarters, somewhere in the 10 to 20 basis point range over the next 2 quarters. But when you get to the fourth quarter, you have a multitude of factors. You have favorable revenue mix towards higher-margin handpieces. We have improved overhead absorption. And then just in general, we have total revenues, and we should be exiting the year in the 66-plus percent range, but that will still translate to a full year margin at 65%. And definitely coming off of Q1, landing at our full year guide in Q1 at 65% gives us a greater degree of comfort with our full year margin guidance. Operator: Thank you. This concludes our question-and-answer session and also today's conference call. Thank you for participating, and you may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Procept (PRCT) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Q1 revenue was $83.1 million (+20% YoY) with ~12,200 U.S. procedures (+30% YoY), and management reiterated full‑year guidance of $390–$410M revenue and 60,000–64,000 U.S. procedures. Pricing discipline lifted U.S. HYDROS average selling price to about $485,000 (a 14% QoQ increase); the company sold 49 U.S. HYDROS systems (including two replacements) and expects new system pricing of $450–$460k for the rest of 2026 while pushing the AquaBeam replacement program. Gross margin improved to 65% and management targets positive Adjusted EBITDA in Q4 2026 with cash of $249M; the company also secured key clinical/regulatory milestones including an EAU "strong recommendation" for Aquablation, FDA clearance for FirstAssist AI Gen‑2, and near‑complete WATER IV enrollment. Interested in PROCEPT BioRobotics Corporation? Here are five stocks we like better. 3 Underrated Robotics Stocks Poised for Huge Gains PROCEPT BioRobotics (NASDAQ:PRCT) reported first-quarter 2026 revenue of $83.1 million, up 20% year over year, as management pointed to early progress from organizational changes aimed at improving execution, pricing discipline, and profitability. Chief Executive Officer Larry Wood said the company has taken “decisive actions to reset the organization” over the last six months, sharpening its focus on “operational excellence, accountability and commercial discipline.” He added that first-quarter results reflected “the early impact of these efforts,” while noting some short-term disruption tied to a commercial realignment that was finalized in early Q1. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Is PROCEPT BioRobotics the Next Big Thing in Surgical Robotics? Chief Financial Officer Kevin Waters said U.S. revenue was $72.0 million, up 19% from the prior-year period, while international revenue was $11.1 million, up 25%. On procedure volume, both Wood and Waters reported approximately 12,200 U.S. procedures in the quarter, representing about 30% year-over-year growth. Wood said the company’s commercial realignment “modestly affected Q1 procedure growth,” but that performance was “largely in line with expectations,” with the “full benefit” expected to materialize in the second half of 2026. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Why Intuitive Surgical Stock is Dominating the Medical Sector Asked about quarter-over-quarter flat procedure trends, Wood attributed the pattern primarily to “normal seasonality” that the company typically sees at the start of the year and said it was “hard to quantify” the impact of sales force changes versus seasonality. He also said stronger system placements and the launch team model should contribute more as the year progresses. The company sold 49 HYDROS systems in the U.S., including two replacement systems, and ended the quarter with a U.S. install base of 765 systems, according to Waters. U.S. system revenue was $23.4 million, up 25% year over year. → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report Wood emphasized pricing discipline as a cornerstone of the company’s long-term strategy. He said first-quarter U.S. HYDROS system average selling prices were approximately $485,000, calling it “an all-time high” and a 14% increase compared with the fourth quarter of 2025, despite Q1 being “typically a seasonally challenging quarter for capital.” He added that the strength was broad-based, with no meaningful contribution from large IDN orders, which he said also supported the ASP outcome. Management tempered expectations for the rest of the year, citing customer mix and a desire not to “get out over our skis,” as Wood put it. Waters said the company expects new U.S. system pricing to range between $450,000 and $460,000 for the remainder of 2026, depending on the mix between individual accounts and large IDNs. In response to an analyst question, Waters indicated this would put the full-year average “more towards the upper end, probably around $460,000.” Wood also highlighted early traction in the AquaBeam replacement program. While only two replacement systems were included in the quarter’s 49 U.S. system sales, he said the company was “very encouraged” by the early start and expects replacements to be an area it “really hone[s]” in 2026 and “a much bigger part of our story in 2027.” Handpiece sales represented about 95% of procedures in the quarter, with an average selling price of approximately $3,500, according to both Wood and Waters. Total U.S. handpiece and other consumable revenue was $43.0 million, up 13% year over year. Wood said field inventory levels and customer purchasing behavior have “normalized,” and management maintained its expectation of roughly a 1-to-1 ratio of handpieces to procedures for the full year. Responding to questions about whether handpieces could remain below procedures, Wood said handpiece sales can fluctuate based on the number of systems launched, but that “eventually procedures and handpiece sales have to equalize out over time.” Gross margin in the first quarter was 65%, compared with 64% in the first quarter of 2025 and 61% in the fourth quarter of 2025. Waters said the improvement reflected increased pricing, cost discipline, and favorable product mix. Operating expenses rose to $86.6 million from $71.6 million a year earlier, which Waters attributed to continued investment in commercial expansion, ongoing innovation in the BPH platform, and increased funding for the WATER IV prostate cancer trial. The company posted a net loss of $31.6 million, compared with a net loss of $24.7 million in the prior-year quarter. Adjusted EBITDA was a loss of $18.1 million, compared with a loss of $15.8 million a year earlier. Waters said the company is working toward positive Adjusted EBITDA in the fourth quarter of 2026, and also noted that cash, cash equivalents and restricted cash totaled $249 million as of March 31, 2026. He said cash usage is expected to improve through the year as operating leverage and working capital improve. On gross margin cadence, Waters said margins should expand modestly in Q2 and Q3 (by roughly 10 to 20 basis points in each of the next two quarters), and that the company expects to exit the year “in the 66%+ range,” while maintaining a full-year gross margin expectation of about 65%. Wood highlighted several clinical and regulatory developments discussed on the call: EAU guideline update: Wood said the European Association of Urology updated clinical guidelines in March to give Aquablation therapy a “strong recommendation” for men with BPH and moderate to severe LUTS, including as an alternative to TURP, particularly for those seeking to preserve ejaculatory function. U.K. HYDROS launch: Wood said the company completed the first international launch of HYDROS in the U.K., selling seven new systems in the quarter at an average selling price of over $400,000. He cited “rapid adoption at high volume NHS hospitals” and said the U.K. capital pipeline “continues to grow nicely.” FDA clearance for software: Wood said PROCEPT received FDA clearance for its second-generation FirstAssist AI software, describing it as advancing personalized image-guided planning for Aquablation therapy. WATER IV enrollment timing: Wood said the company is approaching completion of patient enrollment in WATER IV and expects full enrollment by the end of May. He said the company expects to present the WATER IV primary endpoint at AUA in spring 2027. During Q&A, Wood also addressed reimbursement-related questions, saying the company has not built potential APC level changes into its modeling and is focused on clinical differentiation and operational efficiency for hospitals rather than trying to “chase” reimbursement changes. He added that any improvement in APC levels would be “an upside to reimbursement.” Looking ahead, Waters reiterated full-year 2026 revenue guidance of $390 million to $410 million, which implies 27% to 33% growth versus 2025, and reiterated expectations for international revenue of $50 million to $51 million. The company also maintained its expectation of 60,000 to 64,000 total U.S. procedures for the year, representing 39% to 48% growth. For the second quarter, management guided total revenue to a range of $91 million to $95 million. Wood said that while the company has undergone significant change, management believes the steps are “essential” to drive sustainable growth and establish a “clear path to profitability,” pointing to pricing discipline, a building U.S. capital pipeline, and ahead-of-schedule WATER IV enrollment as key factors discussed on the call. PROCEPT BioRobotics, Inc is a medical device company specializing in the development and commercialization of robotic systems for the treatment of benign prostatic hyperplasia (BPH). The company's technology leverages precision robotics and real-time imaging to perform minimally invasive procedures, aiming to reduce patient recovery time and improve clinical outcomes compared to traditional surgical approaches. The company's flagship product, the AquaBeam Robotic System, uses a high-velocity waterjet to selectively remove prostate tissue while preserving surrounding healthy structures. The article "PROCEPT BioRobotics Q1 Earnings Call Highlights" was originally published by MarketBeat.

Management implemented a decisive organizational reset over the last six months, prioritizing operational excellence, accountability, and commercial discipline to drive long-term value. The commercial team was realigned into an integrated regional structure to create a single point of accountability for clinical and sales functions, aiming to better coordinate customer success and procedure growth. A dedicated launch team was established to standardize new account activations and accelerate the procedure volume ramp, which management views as a key lever for improving downstream utilization. U.S. Hydros system average selling prices reached an all-time high of approximately $485,000, driven by a deliberate shift toward pricing discipline and a favorable mix of individual accounts over large IDNs. Procedure growth of 30% was largely in line with expectations despite modest short-term disruption caused by the commercial realignment and typical Q1 seasonality. The company achieved 65% gross margin in Q1, a significant recovery from 61% in Q4 2025, attributed to increased price discipline and better leverage of the cost structure. Management expects the full benefits of the commercial realignment and launch team initiatives to materialize in the second half of 2026, driving a projected acceleration in procedure growth. Full year 2026 system pricing guidance was raised to a range of $450,000 to $460,000, reflecting strong Q1 performance while maintaining flexibility for potential large IDN orders later in the year. The company remains on track to achieve positive adjusted EBITDA in the fourth quarter of 2026, supported by sequential gross margin expansion and disciplined operating expense management. Completion of patient enrollment for the WATER IV study is expected by the end of May 2026, with primary endpoint data presentation targeted for the AUA meeting in spring 2027. The Hydros replacement cycle is expected to be a modest contributor in 2026 as the program is refined, with management anticipating it will become a more significant growth driver in 2027. The European Association of Urology (EAU) upgraded Aquablation therapy to a 'strong recommendation,' which management believes validates the clinical evidence and will support international adoption. FDA clearance was received for second-generation FirstAssist AI software, enhancing the Hydros system's planning capabilities and surgeon confidence. Full year gross margin guidance of 65% includes an estimated $5 million to $6 million in tariff expenses, though potential refunds could provide future upside not currently in the guide. Management noted a natural lag between new patient awareness marketing initiatives and actual procedure volume due to typical clinical work-up and scheduling timelines. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterized the Q1 procedure performance as a 'normal transition period' where teams are reestablishing account relationships and backfilling roles. They expect momentum to build throughout the year as the new integrated regional structure matures and launch teams stabilize. The $485,000 ASP in Q1 benefited from a lack of large IDN orders, which typically carry higher discounts. While raising the floor of guidance, management is maintaining a range of $450,000 to $460,000 for the remainder of the year to preserve flexibility for strategic large-scale deals. Handpiece sales represented 95% of procedures in Q1, which management views as a normalization of field inventory levels. They reiterated confidence in a 1:1 ratio for the full year, noting that fluctuations are expected based on the timing of new system launches. Management highlighted the rapid enrollment (less than 18 months) as a sign of strong surgical and patient interest in the technology. The trial represents a 'perfect adjacency' because it utilizes the same robotic system, handpiece, and sales force as the BPH business. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.