Total Revenue (Q4 2024): $68.2 million, growth of 57% compared to Q4 2023. Full Year Revenue (2024): $224.5 million, growth of 65%. US Revenue (Q4 2024): $60.4 million, growth of 50% compared to Q4 2023. International Revenue (Q4 2024): $7.8 million, growth of 137% compared to Q4 2023. Gross Margin (Q4 2024): 64%, an all-time high. Operating Expenses (Q4 2024): $63.4 million, compared to $50.8 million in Q4 2023. Net Loss (Q4 2024): $18.9 million, compared to $27.5 million in Q4 2023. Adjusted EBITDA Loss (Q4 2024): $10.3 million, compared to a loss of $23.3 million in Q4 2023. Cash Equivalents and Restricted Cash (End of 2024): $337 million. Robotic Systems Sold (Q4 2024): 60 systems, with 95% being Hydros. Average Selling Price of Systems (Q4 2024): Approximately $460,000. Handpieces Shipped (Q4 2024): Approximately 8,750, with an average selling price of $3,200. 2025 Revenue Guidance: Approximately $320 million, growth of 43% compared to 2024. 2025 Gross Margin Guidance: Approximately 64.5%. 2025 Operating Expenses Guidance: Approximately $300 million, growth of 28% over 2024. 2025 Adjusted EBITDA Loss Guidance: Approximately $35 million.

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Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

PROCEPT BioRobotics Corp (NASDAQ:PRCT) reported a 57% increase in total revenue for Q4 2024 compared to Q4 2023, driven by increased robot sales and procedures. The company achieved a 60% growth in the US installed base, with 505 systems by the end of 2024. The introduction of the Hydro robotic system, featuring advanced AI and ultrasound integration, has been well-received, leading to a robust capital pipeline. International revenue grew by 137% in Q4 2024, with strong sales momentum in the United Kingdom. Gross margin for Q4 2024 reached an all-time high of 64%, attributed to improved operational efficiencies and higher average selling prices.

Negative Points

A saline shortage due to Hurricane Helene impacted Q4 2024 procedures, resulting in a delay or cancellation of up to 2000 expected procedures. Operating expenses for Q4 2024 exceeded guidance by approximately 3.5%, primarily due to higher variable compensation expenses. The company experienced a net loss of $18.9 million for Q4 2024, although this was an improvement from the previous year. The transition to the new Hydro system required significant training efforts, which initially impacted sales force productivity. Despite strong growth, PROCEPT BioRobotics Corp (NASDAQ:PRCT) still holds only about 10% of the US BPH receptive market share, indicating a long runway for further market penetration.

Story Continues

Q & A Highlights

Q: Can you explain the impact of the saline shortage on your procedures and how you estimated the 2000 delayed or canceled procedures? A: Kevin Waters, CFO, explained that the impact was multifactorial. They conducted customer surveys and received direct feedback from reps who are present in every case. They also performed an internal quantitative analysis of Q4 ordering patterns. The shortage affected new accounts that couldn't start their aqua ablation programs, pushing many into Q1. October was normal, but November saw a significant drop, with some recovery in December. They expect a strong recovery in Q1, particularly in February and March.

Q: How are handpiece ASPs expected to trend in 2025, and what factors are influencing these trends? A: Kevin Waters, CFO, stated that the guidance for 2025 implies a $3200 ASP for handpieces, consistent with 2024. The apparent drop in ASP is due to other consumables, not the handpieces themselves. The majority of 2025 procedures will still use the Aquabeam system, which influences the ASP.

Q: What is the strategy for the Hydros launch, and how are different hospital volumes responding? A: Shamsha Black, CMO, noted that the Hydros launch exceeded expectations, with 95% of procedures using the new AI feature. Initially, they focused on high-volume BPH hospitals, but there's now surging demand from medium and low-volume hospitals. These hospitals are starting to acquire aqua ablation systems, indicating a shift in the market.

Q: How is the international market performing, and what are the next steps for expansion? A: Kevin Waters, CFO, highlighted strong demand in the UK, both in new systems and procedure growth. The focus for 2025 will be on expanding the install base in Japan, where they have established reimbursement. They are also building market development activities and KOL networks in other countries.

Q: What are the expectations for gross margin trends in 2025, and how do replacements impact this? A: Kevin Waters, CFO, explained that the gross margin guidance for 2025 is around 64.5%, with an exit velocity of 65-66% in Q4. The replacement opportunities are factored into this guidance, assuming about 10 replacements at a $300,000 ASP. The focus remains on leveraging overhead and maintaining high ASPs to drive profitability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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