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PROCEPT BioRobotics Corp (PRCT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue grew 55% YoY to $69.2M, with gross margin ~64% and strengthened unit economics; Street revenue/EPS were beaten as reported revenue exceeded consensus and EPS loss was smaller than expected . Q1 2025 consensus: revenue $65.40M*, EPS ($0.49)* vs actual $69.16M and ($0.45) .
  • Guidance raised: FY 2025 revenue increased to $323.0M from $320.0M; gross margin 64.5% maintained with potential 150 bps tariff headwind ($5M) weighted to 2H25; OpEx ~$300M and Adj. EBITDA loss ($35M) unchanged .
  • Commercial momentum: 43 U.S. systems sold, ~45% via corporate IDN multi-unit orders; 11,235 U.S. handpieces sold; U.S. installed base reached 547 systems; international revenue doubled YoY to $8.9M, led by the U.K. .
  • Key catalysts: IDN standardization trend, LCD updates by First Coast/Novitas expanding Medicare access, HYDROS launch traction, and positive WATER III RCT outcomes (0% transfusion; much lower ejaculatory dysfunction/incontinence vs laser enucleation) .

What Went Well and What Went Wrong

  • What Went Well
    • Strong beat/quality of revenue: total revenue up 55% YoY to $69.2M with gross margin ~64% (63.9% per call) driven by improved efficiencies and higher U.S. system ASPs .
    • Commercial execution and mix: 43 U.S. systems sold with ~45% from corporate IDN multi-unit orders; U.S. installed base climbed to 547; 11,235 U.S. handpieces sold with ~$3,200 ASP .
    • International acceleration and clinical/regulatory tailwinds: OUS revenue rose 104% YoY to $8.9M; WATER III showed 0% transfusion and meaningfully better continence/ejaculatory outcomes; LCD updates (First Coast/Novitas) remove age/retention/TRUS limitations, streamlining access .
    • Quote: “Procedural momentum remained robust... reinforcing our confidence that the saline disruption is behind us” — Reza Zadno, CEO .
  • What Went Wrong
    • Operating leverage not yet flowing through: OpEx rose to $71.6M vs $52.7M YoY, keeping net loss at ($24.7M); Adj. EBITDA loss ($15.8M) .
    • Tariff risk: potential ~$5M gross margin headwind (≈150 bps) in 2025 if China tariff rates persist, with impact weighted to 2H25 .
    • Residual Q4 saline disruption lingered into January/February, offsetting some deferred procedures; handpiece volumes normalized only by March .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$58.37 $68.24 $69.16
Gross Margin %63.2% 64% 64% (63.9% per call)
Operating Expenses ($USD Millions)$59.34 $63.38 $71.60
Net Loss ($USD Millions)($20.97) ($18.86) ($24.74)
Adjusted EBITDA ($USD Millions)($12.43) ($10.34) ($15.81)
YoY Revenue Growth %66% 57% 55%

Q1 2025 actual vs consensus and prior period:

  • Revenue and EPS vs consensus (S&P Global):
    • Actual revenue: $69.16M vs $65.40M*; Actual EPS: ($0.45) vs ($0.49)* .
  • YoY revenue growth: 55% (company reported) .
  • Sequential revenue: Q4 2024 $68.24M to Q1 2025 $69.16M .

Segment/geography breakdown (Q1 2025)

SegmentQ1 2025 ($USD Millions)
U.S. System Sales and Rentals$18.69
U.S. Handpieces & Other Consumables$38.01
U.S. Service$3.60
Outside U.S. System Sales and Rentals$3.85
Outside U.S. Handpieces & Other Consumables$4.48
Outside U.S. Service$0.54
Total Revenue$69.16

KPIs (Q1 2025)

KPIQ1 2025
U.S. Systems Sold (units)43
U.S. Installed Base (systems)547
U.S. Handpieces Sold (units)11,235
Handpiece ASP (U.S.)~$3,200
International Revenue$8.9M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025~$320.0M ~$323.0M Raised
Gross MarginFY 2025~64.5% ~64.5%; potential -150 bps from ~$5M tariff headwind (mostly 2H25) Maintained (with caveat)
Total Operating ExpenseFY 2025~$300.0M ~$300.0M Maintained
Adjusted EBITDAFY 2025(~$35.0M) (~$35.0M) Maintained
U.S. Systems SoldFY 2025Not disclosed~210 units; ASP $430–$440k New/affirmed detail
U.S. System RevenueFY 2025Not disclosed~ $95M New detail
U.S. Handpieces SoldFY 2025Not disclosed~52,100 units; ASP ~$3,200 New/affirmed detail
Other Consumables RevenueFY 2025Not disclosed~$9M New detail
U.S. Service RevenueFY 2025Not disclosed~ $16M New detail
International RevenueFY 2025Not disclosed~ $34.5M New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
HYDROS/TechnologyHYDROS FDA clearance (Aug’24); record GM 63.2% in Q3 HYDROS driving IDN interest; ~45% of U.S. system placements from corporate IDN multi-unit orders Improving
Supply Chain/SalineQ4 saline shortage delayed/cancelled 10–20% procedures in Nov’24 “Saline disruption is behind us”; March back to normal Improving
Tariffs/MacroNot highlighted in PRsPotential ~$5M GM headwind (~150 bps) if 145% China tariff persists; offsets identified to preserve EBITDA guide Headwind manageable
Product PerformanceQ3/Q4 strong handpieces and system ASPs 11,235 U.S. handpieces; $3.2k ASP; U.S. installed base 547 Improving
Regional Trends (OUS)OUS strength; Q4 OUS +137% YoY OUS $8.9M (+104% YoY), U.K. momentum; disciplined expansion (U.K., Japan next) Improving
Regulatory/Reimbursement–LCD updates (First Coast/Novitas) remove key restrictions; Category 1 process progressing; APC Level 6 hospital payment unchanged Improving
Clinical Evidence–WATER III RCT: 0% transfusion; markedly lower dysfunction/incontinence vs laser Strengthening

Management Commentary

  • “Procedural momentum remained robust... reinforcing our confidence that the saline disruption is behind us and that we are well-positioned for another year of strong procedure growth.” — Reza Zadno, CEO .
  • “Approximately 45% of U.S. system placements came from corporate IDN multi-unit orders” — Reza Zadno .
  • “Gross margin for the first quarter of 2025 was 63.9%... year-over-year margin expansion was driven primarily by improved operational efficiencies and higher average selling prices” — Kevin Waters, CFO .
  • “We sold 11,235 handpieces... sailing [saline] issue is behind us” — Sham Shiblaq .
  • “LCD changes... removed age-based restrictions... voided volume thresholds... and TRUS requirement... [which] should expand access” — Reza Zadno .
  • “Should current [tariff] rates remain elevated at 145%, we estimate a potential gross margin headwind of approximately $5 million... ~150 bps... weighted to 2H25” — Kevin Waters .

Q&A Highlights

  • Capital environment and pipeline: No material change in sentiment or conversion/fallout; sales cycle ~6–9 months; pipeline at all-time high; IDN dialogues increasingly strategic .
  • Handpiece dynamics and utilization: Q4 deferrals net neutral in Q1 due to January/February saline effects; utilization normalized in March; FY25 framework assumes ~10% utilization growth with natural headwind from many new account launches .
  • IDN strategy and standardization: Shift from one-hospital-at-a-time to corporate partnerships; potential for nurse/patient navigation programs to drive utilization; standardization across networks a focus .
  • OUS focus and pacing: Prioritizing U.K. near-term with reproducible U.S. playbook; Japan next; deferring broader country launches to ensure depth and support .
  • Tariffs/EBITDA: ~$5M GM risk could be offset by OpEx to preserve ($35M) Adj. EBITDA guide; path to profitability not materially impacted .
  • Competitive landscape: PAE viewed as less durable (retreatment ~20% at 1 year cited); Aquablation taking share from GreenLight/TURP; few receptive competitors in development .

Estimates Context

MetricPeriodActualConsensus*Outcome
Revenue ($USD)Q1 2025$69,162,000 $65,404,950*Beat
EPS (Primary)Q1 2025($0.45) ($0.49125)*Beat
Revenue ($USD)Q4 2024$68,236,000 $66,787,510*Beat
EPS (Primary)Q4 2024($0.35) ($0.34625)*Slight miss
Revenue ($USD)Q3 2024$58,370,000 $53,186,890*Beat
EPS (Primary)Q3 2024($0.40) ($0.48833)*Beat
FY Revenue ($USD)FY 2025 (guide vs Street)$323,000,000 (Guide) $326,466,900*Guide below Street

Note: Consensus values marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue quality and consistency: Q1 2025 beat on revenue and EPS with GM ~64%, indicating resilience post-saline disruption and favorable pricing/mix .
  • IDN-driven acceleration: Nearly half of system placements via corporate IDNs suggests rising standardization and multi-system adoption — a flywheel for procedures and durable consumables .
  • Unit growth visibility: FY25 plan for ~210 U.S. systems and ~52.1k handpieces (ASP ~$3.2k) underpins strong top-line and scale benefits; U.S. system revenue guided to ~$95M .
  • International optionality: U.K. scaling and disciplined global expansion (Japan next) provide a second growth vector beyond U.S. greenfields .
  • Tariffs are a managed risk: ~$5M (≈150 bps) potential GM headwind largely offsettable via OpEx without changing EBITDA target; majority impact in 2H25 .
  • Clinical and reimbursement catalysts: WATER III RCT results strengthen differentiated outcomes; LCD changes expand Medicare access; ongoing Category 1 and AUA program provide incremental demand drivers .
  • Near-term trading setup: Raised revenue guide and beats vs consensus are positive; watch for updates on tariffs, IDN multi-system momentum, U.K. trajectory, and any upgrade to FY25 Street estimates post-print .