PROCEPT BioRobotics (PRCT) stock experienced a dramatic surge on Monday, climbing over 28%, after the company delivered better-than-expected third-quarter earnings results. The impressive performance stemmed from strong revenue growth, which was fueled by increased system sales and a significant rise in utilization of the company’s innovative Aquablation technology.
The company reported a third-quarter EPS loss of $(0.40), a narrower loss than the $(0.51) reported in the same period a year ago, and exceeding the consensus loss of $(0.49). This positive trend was further amplified by third-quarter sales reaching $58.4 million, a substantial 66.3% year-over-year increase, outpacing the consensus estimate of $53.18 million.
Driving this remarkable growth was a combination of factors. Notably, increased system sales, higher average selling prices, and a surge in handpiece and other consumable revenue contributed significantly to the impressive performance. Notably, U.S. handpiece and consumable revenue for the third quarter of 2024 reached $29.6 million, marking a 74% year-over-year increase. This strong performance is particularly noteworthy considering the potential for procedural disruptions due to the sales team’s temporary removal from the field for training on the new Hydros system, as noted by William Blair.
In the U.S., system revenue for the third quarter of 2024 reached $19.6 million, demonstrating a 46% increase year-over-year. As of September 30, the install base of robotic systems in the U.S. stood at an impressive 445 systems. The company’s gross margin for the third quarter was 63.2%, a significant improvement compared to 53.8% in the same period last year. This positive development was primarily driven by improved overhead absorption and increased U.S. robotic system average selling prices.
Looking ahead, PROCEPT BioRobotics projects 2024 revenue to be between $222.5 million and $223 million, a notable increase from the previous guidance of $217 million and exceeding the consensus estimate of $217.06 million. The company also projects a 2024 gross margin of approximately 61%, an improvement from the previous guidance of approximately 59%. In terms of adjusted EBITDA, PROCEPT projects a full-year 2024 figure of $(60.0) million, a positive shift from the previous guidance of ($67.5) million.
Analysts at William Blair remain optimistic about the company’s future prospects, highlighting the strong underlying demand for Aquablation technology. They emphasize that the U.S. market penetration is projected to reach only 10% by the end of 2024, leaving ample room for continued growth.
Furthermore, the robust utilization growth estimated at 7%, the launch of the new Hydros system, improving profitability, and potential catalysts in prostate cancer treatment add to the bullish outlook. In light of these positive factors, William Blair maintains its Outperform rating on PRCT stock.
The remarkable performance of PROCEPT BioRobotics in the third quarter, coupled with the strong outlook for the future, has solidified its position as a leader in the surgical robotics space. The company’s innovative approach and dedication to delivering value to patients and healthcare providers continue to drive its success.
