PROCEPT BioRobotics Corporation Q3 FY2025 earnings call

• Strong execution in Q3 2025 with total revenue of $83.3 million, driven by 58 U.S. capital systems shipped. - Focus on improving procedure utilization, implementing initiatives to speed new account launches. - Pooja Sharma joined as Chief Marketing and Strategy Officer; Stephen McGill promoted to SVP, GM International. - Emphasize BPH market opportunity, need to increase therapy awareness and patient activation. - Plan to expand internationally with increased investment and support. - Organizational changes made to support core initiatives, including new leadership roles.

Total revenue for the third quarter of 2025 was $83.3 million. U.S. revenue was $73.9 million (contributing ~88.7% of total revenue), international revenue was $9.4 million (contributing ~11.3% of total revenue). Handpiece and other consumable revenue in Q3 2025 was $44.4 million + $2.4 million = $46.8 million. U.S. system revenue was $24.7 million. Gross margin for the third quarter was 64.8%, operating expenses were $77.2 million, net loss was $21.4 million, and adjusted EBITDA was a loss of $7.4 million. Cash, cash equivalents, and restricted cash balances as of September 30 were approximately $297 million.

• Full-year 2025 total revenue expected ~$325.5 million (+45% y/y). Expect to sell ~213 new robotic systems in U.S. in 2025, ~65 in Q4. - Full-year handpiece sales expected ~52,000 units (61% increase), but Q4 guidance reduced due to inventory optimization. - International revenue expected ~$37.5 million (+56% y/y). - 2026 revenue guidance range $410M-$430M, with strategic investments and organizational changes in H1 2026 impacting procedures.

• Macro conditions causing large hospital systems to scrutinize capital spending, delaying some purchases. - Organizational changes may cause short-term disruption. - Variability in timing from system sale to first procedure affecting utilization. - Tariffs impacting gross margin in Q4.

Q: Matthew O'Brien from Piper Sandler asked about the capital environment and HYDROS placement.

A: Kevin Waters said the capital team performed well in Q3, with some variability in timing due to customer capital allocation, but felt good about momentum heading into Q4.

Q: Brandon Vazquez from William Blair inquired about HYDROS placement impact on utilization.

A: Larry Wood and Kevin Waters discussed focus on improving utilization, organizational changes to speed new account launches, and early initiatives showing promise.

Q: Richard Newitter from Truist Securities asked about 2026 outlook components and procedure headwinds.

A: Kevin Waters said they plan to provide more color in February, and Larry Wood mentioned organizational changes may cause headwinds in H1 2026 but remained confident in long-term success.

Q: Patrick Wood from Morgan Stanley asked about commercial activities and utilization changes.

A: Larry Wood talked about improving handoff between capital sales and utilization teams, reevaluating field resource utilization, and moving to the next phase of market building.

Q: Christopher Pasquale from Nephron Research asked about DTC advertising and hospital capital scrutiny.

A: Larry Wood discussed DTC channels and responsible investments, and said capital purchases are taking longer due to additional steps in the process.

Q: Suraj Kalia from Oppenheimer & Company asked about BPH market opportunity and price elasticity.

A: Larry Wood emphasized growing the market by getting patients off the sidelines, and said price increases may not be a major strategy.

Q: Nathan Treybeck from Wells Fargo asked about operating leases and utilization outlook.

A: Kevin Waters said the operating lease was a one-off, and focus on launching accounts timely and driving utilization in existing accounts will help utilization in 2026.

Q: Mason Carrico from Stephens Inc. asked about variability in timing from system sales to first surgery.

A: Larry Wood talked about renewed focus on post-sale actions to drive utilization, and getting systems to ramp up cases quickly.

Q: Joshua Jennings from TD Cowen asked about concomitant BPH and prostate cancer.

A: Larry Wood said focus is on BPH first, with prostate cancer as a natural adjacency but not the primary focus.

Q: Brett Gasaway on behalf of Mike Kratky asked about ASP for consumables.

A: Kevin Waters said HYDROS has higher ASP than AquaBeam, and guide is conservative on price with low single-digit increases as mix shifts to HYDROS.

Q: Michael Sarcone from Jefferies asked about 4Q gross margin.

A: Kevin Waters said ~$2M tariff expense in Q4, with margins continuing to trend upwards and path to profitability clear.

Q: Stephanie Piazzola on behalf of Travis Steed asked about Q4 implied guidance.

A: Kevin Waters said Q4 guide lowered due to inventory optimization and destocking, with focus on procedure growth in Q4 and update in February 2026.