PROCEPT BioRobotics Corporation (PRCT) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates strong financial performance with optimistic guidance, including projected revenue growth of 27%-33% for 2026. Despite some challenges like flat procedures in Q1 and a prudent Q2 guidance, the company expects significant growth in the latter half of 2026. The strategic focus on international expansion and new initiatives, coupled with a positive outlook on gross margin and EBITDA, supports a positive sentiment. Given the company's market cap, the stock price is likely to see a moderate positive movement of 2% to 8% over the next two weeks.
Key Financial Performance
Total Revenue $83.1 million, representing 20% year-over-year growth. The growth was attributed to increased pricing discipline, better leverage of cost structure, and favorable product mix.
U.S. Revenue $72 million, reflecting 19% growth compared to the prior year period. This growth was driven by increased procedure volumes and pricing improvements.
U.S. Procedures Approximately 12,200 procedures, representing approximately 30% year-over-year growth. Growth was attributed to the commercial realignment initiatives and increased adoption of the technology.
U.S. Handpiece Revenue $43 million, representing 13% growth compared to the first quarter of 2025. Growth was driven by increased procedure volumes and normalized customer purchasing behavior.
U.S. System Revenue $23.4 million, representing 25% year-over-year growth. This was driven by the sale of 49 Hydros systems at an average selling price of approximately $485,000, which is a 14% increase compared to the fourth quarter of 2025.
International Revenue $11.1 million, representing year-over-year growth of 25%. Growth was supported by the first international launch of Hydros in the U.K. and strong clinical momentum.
Gross Margin 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 discipline, cost discipline, and favorable product mix.
Operating Expenses $86.6 million, compared to $71.6 million in the prior year period. The increase reflects continued investment in commercial expansion, innovation, and funding for the WATER IV prostate cancer trial.
Net Loss $31.6 million, compared to a net loss of $24.7 million in the first quarter of 2025. The increase in net loss was due to higher operating expenses.
Adjusted EBITDA Loss of $18.1 million, compared to a loss of $15.8 million in the prior year period. The increase in loss was attributed to higher operating expenses.
Cash, Cash Equivalents, and Restricted Cash $249 million as of March 31, 2026. This provides a strong balance sheet to support strategic priorities.
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Operating Highlights
Hydros systems: Sold 49 Hydros systems in the U.S., including 2 replacement systems, with an average selling price of $485,000, marking a 14% increase compared to Q4 2025. Internationally, sold 7 systems in the U.K. at an average price of over $400,000.
FirstAssist AI software: Received FDA clearance for the second-generation FirstAssist AI software, enhancing personalized image-guided planning for Aquablation therapy.
U.K. market expansion: Launched Hydros systems in the U.K., selling 7 systems in Q1 2026. Strong adoption in NHS hospitals and growing capital pipeline.
Commercial realignment: Reorganized the commercial team into an integrated regional structure to improve accountability and coordination. Introduced a dedicated launch team to enhance customer activation and procedure growth.
Gross margin improvement: Achieved 65% gross margin in Q1 2026, up from 61% in Q4 2025, driven by pricing discipline and cost structure leverage.
Pricing discipline: Implemented pricing discipline, leading to higher average selling prices for Hydros systems and handpieces.
Clinical guideline upgrade: Aquablation therapy received a strong recommendation from the European Association of Urology as a surgical treatment for BPH, enhancing its market positioning.
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Risk or Challenges
Commercial Realignment Disruption: The realignment of the commercial team into an integrated regional structure caused short-term disruptions in Q1, including challenges in team ramp-up, establishing account relationships, and standardizing new operating processes.
Net Loss and Adjusted EBITDA: The company reported a net loss of $31.6 million in Q1 2026, an increase from $24.7 million in Q1 2025. Adjusted EBITDA loss also widened to $18.1 million from $15.8 million in the prior year period, reflecting ongoing financial challenges.
Tariff Expenses: The company expects $5 million to $6 million in tariff expenses for 2026, significantly higher than the $1.3 million incurred in 2025, which could impact gross margins.
Operational Costs: Operating expenses increased to $86.6 million in Q1 2026 from $71.6 million in Q1 2025, driven by investments in commercial expansion, innovation, and clinical trials, potentially straining financial resources.
Seasonal Challenges in Capital Sales: Despite achieving record average selling prices for U.S. Hydros systems, the company acknowledged that Q1 is typically a seasonally challenging quarter for capital sales, which could affect revenue consistency.
Regulatory and Clinical Risks: While the company has made progress in clinical trials and regulatory approvals, the success of initiatives like the WATER IV study and international expansion depends on future outcomes and adoption rates, posing potential risks.
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Guidance & Outlook
Revenue Guidance: Full year 2026 total revenue is expected to be in the range of $390 million to $410 million, representing growth of approximately 27% to 33% compared to 2025. Second quarter 2026 total revenue is expected to be in the range of $91 million to $95 million, representing growth of 15% to 20%.
Gross Margin: Full year 2026 gross margin is expected to be approximately 65%. Sequential modest increases in gross margin are anticipated throughout the year.
U.S. Procedures: Total U.S. procedures for 2026 are expected to be in the range of 60,000 to 64,000, representing growth of approximately 39% to 48%.
System Pricing: New U.S. system pricing for 2026 is expected to range between $450,000 and $460,000 for the remainder of the year, depending on customer mix.
Adjusted EBITDA: Full year 2026 adjusted EBITDA loss is expected to be in the range of $30 million to $17 million, with positive EBITDA anticipated in the fourth quarter of 2026.
International Revenue: International revenue for 2026 is expected to be in the range of $50 million to $51 million.
Clinical Trials: Enrollment for the WATER IV study is expected to be completed by May 2026, with primary endpoint results anticipated to be presented in spring 2027.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What were the key factors contributing to the strength on the capital side in Q1?
A:The capital quarter was broad-based without large IDN orders, contributing to ASP upside. Pricing discipline was implemented on capital, similar to handpieces, as part of the journey toward profitability.
Q:What is the status of the sales force realignment and its impact on handpiece sales?
A:The sales force realignment is complete, and the company is in a transition phase, reestablishing account relationships and backfilling key positions. Momentum on procedures is expected to build throughout the year, and the company remains on track with its guidance.
Q:What is the confidence level in achieving the Q2 guidance midpoint of $93 million and the full-year guidance?
A:The company has increased confidence in executing within the guidance range due to Q1 performance. However, they are maintaining current expectations as they emerge from the recent commercial realignment.
Q:What caused procedures to be flat quarter-over-quarter in Q1?
A:The flat procedures were attributed to normal seasonality and the sales force transition. The company expects procedures to grow throughout the year with strong system placements and contributions from launch teams.
Q:Why were handpiece sales below the target of 1:1 procedures in Q1, and what is the outlook?
A:Handpiece sales were impacted by inventory rightsizing, which is now completed. The company remains confident in achieving a 1:1 ratio for the full year, acknowledging minor fluctuations based on system launches.
Q:What is the guidance for system ASPs for the remainder of the year?
A:The guidance for system ASPs is $450,000 to $460,000 for the remainder of the year, with the full-year average expected to be around $460,000.
Q:What are the expected benefits of the new initiatives and sales organization changes?
A:The company has confidence in the launch teams and patient awareness activities. Benefits are expected to show up more meaningfully in the back half of the year due to the natural lag between initiatives and patient procedures.
Q:What is the impact of physician fee payment changes on procedures?
A:The company had factored in the changes during February and does not see any significant impact. The focus remains on driving clinical benefits and therapy adoption.
Q:What is the potential for Aquablation procedures to move up in the APC level?
A:The company has not built this into their modeling and focuses on making the procedure economically solid for hospitals under current reimbursement levels. Any changes in APC levels would be an upside.
Q:What is the outlook for replacement systems and their contribution?
A:The company is encouraged by the early start of the replacement program and expects it to be a bigger part of the story in 2027.
Q:Did severe weather in Q1 impact procedures?
A:Severe weather caused some case cancellations, but the company does not attribute material impact to weather and focuses on rescheduling and execution.
Q:What is the opportunity in the U.K. and other international markets?
A:The U.K. is the biggest market in Europe for the company, with solid reimbursement and capital opportunities. The company is evaluating other European markets for expansion.
Q:What is driving the expected acceleration in procedure growth in the second half of the year?
A:The acceleration is driven by maturing sales roles, reestablished account relationships, patient activation activities, and contributions from newly launched systems.
Q:Why is the Q2 guidance midpoint of $93 million below the Street estimate of $95 million?
A:The company maintains a prudent approach to guidance, focusing on reasonable expectations and not overcommitting.
Q:What is the focus for driving procedure growth?
A:The focus is on quarter-over-quarter procedure growth, identifying opportunities, and driving utilization in underused systems.
Q:What is the potential impact of WATER IV trial results on BPH and prostate cancer procedures?
A:The impact depends on the strength of the data. Positive results could disrupt prostate cancer treatment and leverage existing systems and users.
Q:How are procedure contributions from different system groups performing?
A:The launch team model is still early, but the company remains confident in its potential to drive procedure growth.
Q:Why is the system ASP guidance for the remainder of the year lower than Q1 ASP?
A:The guidance accounts for customer mix and IDN sales, maintaining a measured approach to ASP expectations.
Q:What is the approach to sales funnel development and surgeon champion involvement?
A:The company ensures systems are sold with established surgeon champions and integrates top-down administrative support with bottom-up surgeon support.
Q:What is the gross margin outlook for the year?
A:The full-year gross margin is expected to be 65%, with modest expansion in Q2 and Q3 and exiting the year at 66%+ due to favorable revenue mix and improved overhead absorption.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific quantification of sales force disruption on procedures and the exact impact of severe weather on Q1 results. Additionally, they did not provide detailed metrics on procedure contributions from different system groups or the exact potential for Aquablation procedures to move up in the APC level.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aquablation therapy
EAU
Hydros system
UK
WATER IV
accountability
adoption
afternoon PROCEPT
approval
average selling
cost
customer
end
enrollment
function
guideline
handpieces procedure
improvement
leverage
men BPH
milestone
mix
momentum
planning
price discipline
prostate anatomy
prostate milliliter
quality
realignment
recommendation
replacement system
structure
symptom
system Hydros
system replacement
treatment
trial WATER
PRCT Transcript
PROCEPT BioRobotics Corporation (PRCT) Q1 2026 Earnings Call Transcript
Positive4-30
The earnings call indicates strong financial performance with optimistic guidance, including projected revenue growth of 27%-33% for 2026. Despite some challenges like flat procedures in Q1 and a prudent Q2 guidance, the company expects significant growth in the latter half of 2026. The strategic focus on international expansion and new initiatives, coupled with a positive outlook on gross margin and EBITDA, supports a positive sentiment. Given the company's market cap, the stock price is likely to see a moderate positive movement of 2% to 8% over the next two weeks.
PROCEPT BioRobotics Corporation (PRCT) Presents at TD Cowen 46th Annual Health Care Conference Transcript
Neutral3-6
PROCEPT BioRobotics Corporation (PRCT) Q4 2025 Earnings Call Transcript
Unknown2-26
The earnings call reveals a mixed performance with strong revenue growth and improved gross margins, but significant concerns arise from increased losses, higher operating expenses, and weak Q4 handpiece sales. While guidance for 2026 shows potential, the immediate impact of discontinuing bulk discounts, increased ASP, and the sales force realignment creates uncertainty. The Q&A session highlights management's confidence in future growth but lacks concrete evidence for some claims. Given the market cap and these factors, a negative stock price reaction is expected.
PROCEPT BioRobotics Corporation (PRCT) Q3 2025 Earnings Call Transcript
Unknown11-4
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.
PRCT Report
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