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01/11 03:37
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with 55% revenue growth, improved gross margins, and reduced net loss. The launch of the HYDROS Robotic System and FDA-IDE approval for prostate cancer study are significant positives. Despite tariff and operational challenges, the company maintains strong demand and positive market sentiment, especially in international markets. The Q&A reveals confidence in continued growth and strategic expansion. With a market cap of $3 billion, the positive factors are likely to lead to a stock price increase of 2% to 8% over the next two weeks.
Total Revenue $69.2 million, representing growth of 55% compared to Q1 2024, driven by increased US system and handpieces sold, as well as record international revenues.
US Revenue $60.3 million, representing growth of 50% compared to Q1 2024.
US System Revenue $18.7 million, representing system revenue growth of 32% compared to Q1 2024.
Handpiece Revenue $38 million, representing growth of 61% compared to Q1 2024.
Handpieces Sold 11,235 handpieces, representing year-over-year unit growth of 65%.
International Revenue $8.9 million, representing growth of 104% compared to Q1 2024, driven primarily by strong sales momentum in the United Kingdom.
Gross Margin 63.9%, up 750 basis points year-over-year, driven by improved operational efficiencies and higher average selling prices.
Total Operating Expenses $71.6 million, compared to $52.7 million in Q1 2024.
Net Loss $24.7 million, compared to $26 million in Q1 2024.
Adjusted EBITDA Loss of $15.8 million, compared to a loss of $20.4 million in Q1 2024.
Cash and Cash Equivalents Approximately $319 million as of March 31, 2025.
Robotic Systems Sold: 43 robotic systems sold in Q1 2025 at an average price of approximately $435,000.
Handpieces Sold: 11,235 handpieces sold in Q1 2025, representing a 65% year-over-year growth.
Hydros Launch: Hydros is gaining traction with increased engagement from large strategic Integrated Delivery Networks (IDNs).
International Revenue Growth: International revenue reached $8.9 million in Q1 2025, a 104% increase year-over-year, driven by strong sales in the UK.
Medicare Coverage Update: Key local coverage determinations updated by First Coast and Novitas, removing age-based restrictions and other limitations, expanding access to Aquablation therapy.
Gross Margin: Gross margin for Q1 2025 was 63.9%, up 750 basis points year-over-year due to improved operational efficiencies.
Inventory Management: Proactive inventory management mitigated supply chain risks and tariff exposure, with over 95% of direct material costs sourced in the US.
Long-term Profitability Outlook: Despite potential tariff impacts, the company remains confident in achieving long-term profitability objectives.
Clinical Trial Approval: Received FDA approval to enroll a randomized trial comparing surgical therapy against radical prostatectomy for prostate cancer.
Supply Chain Risks: The company has proactively de-risked its supply chain by sourcing the majority of strategic components in the US, maintaining significant inventory levels to mitigate risks of supply disruption and potential tariff escalations.
Tariff Exposure: The company has exposure to tariffs primarily affecting its ultrasound system sourced from China, with a potential gross margin headwind of approximately $5 million in 2025 if current tariff rates remain elevated at 145%.
Regulatory Risks: Changes in Medicare coverage could impact the company's market access and revenue potential, although recent updates have been favorable.
Economic Factors: Market uncertainties present challenges, but the company believes hospitals are less likely to cut investments in robotic surgery, viewing it as a long-term strategic priority.
Operational Challenges: The company anticipates a significant increase in operating expenses, projected at approximately $300 million for 2025, which could impact profitability.
Future Guidance Risks: The company has taken a conservative approach to its 2025 gross margin outlook, closely monitoring potential headwinds that could affect fiscal 2026.
US Installed Base Growth: Exited Q1 2025 with a US installed base of 547 systems, representing growth of 55% compared to the prior year.
Hydros Launch: Hydros is gaining traction with large strategic Integrated Delivery Networks (IDNs), with 45% of systems sold in Q1 associated with IDN bulk buys.
Clinical Updates: Presented positive results from the WATER III trial, supporting Aquablation therapy's efficacy and safety.
Medicare Coverage Expansion: Updated local coverage determinations by First Coast and Novitas, removing key limitations and expanding access to Aquablation therapy.
2025 Total Revenue Guidance: Expecting full year 2025 total revenue of approximately $323 million, representing growth of approximately 44% compared to 2024.
US System Revenue Guidance: Guiding total full year US system revenue of approximately $95 million.
Handpiece Sales Guidance: Expecting sales of approximately 52,500 handpieces, representing a 63% increase in unit volume compared to 2024.
International Revenue Guidance: Expecting full year international revenue of approximately $34.5 million, representing annual growth of 44%.
Adjusted EBITDA Loss Guidance: Anticipating a full year 2025 adjusted EBITDA loss of approximately $35 million.
Gross Margin Outlook: Current gross margin guidance of 64.5%, with potential headwinds from tariffs estimated at $5 million.
Operating Expenses Guidance: Expecting full year 2025 operating expenses to be approximately $300 million, representing growth of 28% over 2024.
Share Repurchase Program: None
The earnings call revealed mixed signals: strong revenue guidance and strategic focus on growth, but concerns about profitability delays, tariff impacts, and vague responses on future plans. The Q&A highlighted management's confidence in long-term growth but also noted uncertainties in capital sales timelines and utilization improvements. The market cap suggests moderate stock movement, balancing positive growth prospects with operational challenges.
The earnings call summary and Q&A reveal strong financial performance with a 55% growth in US installed base and optimistic guidance, despite an adjusted EBITDA loss. The Hydros launch and international growth, particularly in the UK, Japan, and Korea, are positive indicators. Tariff impacts are being mitigated, and the Medicare coverage expansion is promising. The Q&A section highlights management's confidence in overcoming potential risks, with positive analyst sentiment. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
The earnings call reveals strong financial performance with record revenue growth, particularly internationally. Despite increased operating expenses, the company is improving its margins and reducing net losses. The Q&A section indicates robust buyer interest and strategic market expansion plans. Although there are some regulatory and tariff challenges, management is optimistic about maintaining EBITDA guidance. The stock's market cap suggests it may not react as strongly as small-cap stocks, but overall positive financials and guidance should lead to a positive stock price movement.
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