Procept Biorobotics (PRCT) Q3 2025: U.S. Handpiece Volume Jumps 51% as Utilization Initiatives Intensify

November 4, 2025 | By EarningsIQ Research

Procept Biorobotics delivered robust U.S. handpiece growth and capital system placements, but flagged near-term utilization friction as organizational changes and inventory optimization take hold. The new CEO is prioritizing faster account ramp-up and patient activation to unlock broader adoption, while maintaining a measured approach to profitability in the face of heavy investment. Early 2026 guidance signals confidence in sustained momentum, with a focus on converting underpenetrated BPH demand and expanding internationally.

Summary

• Handpiece Growth Outpaces System Installs: U.S. consumable sales surged, but utilization rates are now a central execution focus.
• Commercial Overhaul Targets Ramp Speed: Leadership is restructuring go-to-market and launch protocols to reduce time-to-first-procedure.
• 2026 Outlook Anchored in Market Expansion: Management eyes patient education and international growth as next major levers.

Performance Analysis

Procept Biorobotics posted a standout quarter in consumable-driven growth, with U.S. handpiece and consumable revenue up 50% and handpiece volumes up 51% year-over-year. This outpaced U.S. system revenue growth of 26%, reflecting a business model where recurring procedural sales, or “razor blade” revenue, is increasingly central. The U.S. installed base grew 47% to 653 systems, driven by 57 new Hydros system placements, but management highlighted that capital sales alone are insufficient—utilization per system remains the key unlock for durable growth.

International revenue accelerated 53% off a smaller base, underscoring the company’s intent to prioritize select global markets. Gross margin expanded 160 basis points to 64.8%, aided by operational effectiveness, though Q4 margin is expected to dip temporarily due to $2 million in tariff expense. Operating expenses rose 30% as the company invests in commercial infrastructure and marketing. The adjusted EBITDA loss narrowed substantially, reflecting operating leverage even as the company reinvests for scale.

• Handpiece Utilization Now in Spotlight: Despite system placements, low-single-digit utilization growth signals a need for faster ramp and deeper account penetration.
• Field Inventory Optimization Affects Q4 Outlook: Destocking and tighter account management will temporarily weigh on consumable sales, but are expected to normalize by 2026.
• International Outperformance: Overseas markets contributed $9.4 million, with momentum expected to accelerate as focus and resources shift globally.

Overall, the quarter revealed a company transitioning from early adopter momentum to the operational rigor needed for mainstream adoption. The leadership narrative and resource allocation are shifting toward patient activation, commercial discipline, and global expansion.

Executive Commentary

Strategic Positioning

1. Utilization-Focused Commercial Execution

Procept is pivoting from a capital-sales-first mindset to a utilization-driven model, recognizing that system placements alone do not guarantee recurring revenue growth. New initiatives target reducing the lag between system sale and procedural ramp, with metrics now tied to time-to-utilization and cadence of early cases. The company is also reengineering the handoff between capital and clinical teams to ensure faster, more robust account launches.

2. Patient Activation and Therapy Awareness

Leadership sees patient education and activation as the next major unlock, drawing from CEO Larry Wood's prior success at Edwards with TAVR (transcatheter aortic valve replacement). The strategy includes investments in direct-to-patient outreach, digital channels, and evidence generation to shift both clinician and patient mindsets, aiming to convert the large pool of underdiagnosed and undertreated BPH (benign prostatic hyperplasia) patients.

3. International Expansion and Segment Diversification

With international revenue up 53% and now guided to $45–50 million for 2026, Procept is sharpening its focus on non-U.S. markets that value innovative therapies and can support premium pricing. The elevation of international leadership and resource allocation reflects a deliberate move to diversify growth engines beyond the U.S. hospital channel.

4. Platform Expansion and Clinical Adjacent Opportunities

The Water4 clinical trial for prostate cancer represents a potential adjacent market, though management is careful to keep focus on BPH as the core growth engine. Evidence generation and clinical differentiation remain central to the platform strategy, with future expansion contingent on robust trial results and regulatory progress.

Key Considerations

This quarter marks a strategic inflection as Procept transitions from early capital-driven adoption to operational scale and mainstream market development. Investors should weigh the following:

Key Considerations:

• Utilization Ramp Remains Critical: The speed and consistency with which new systems reach target procedure volumes will determine recurring revenue growth and margin leverage.
• Commercial Realignment Underway: Organizational changes, new leadership hires, and revised field protocols are intended to reduce variability in account launches and improve handpiece throughput.
• Inventory Normalization Temporarily Impacts Q4: Efforts to optimize customer inventory and destock excess handpieces may mask underlying procedure growth in the near term.
• International Opportunity Accelerates: Outperformance in ex-U.S. markets could provide a hedge against U.S. hospital capital spending volatility.
• Strategic Investments Prioritized Over Short-Term Profit: Management is willing to trade near-term margin for long-term growth, but remains disciplined on the path to profitability.

Risks

Execution risk is elevated as the company restructures its commercial organization and adapts to a more mature, utilization-centric model. Hospital capital scrutiny may elongate sales cycles, while field inventory optimization could obscure true underlying procedure growth. Tariff-related cost pressure could impact margins, though management views these as transitory. The company’s ability to educate both clinicians and patients, and to convert latent demand into active procedures, will be critical to sustaining momentum.

Forward Outlook

For Q4 2025, Procept expects:

• System sales of approximately 65 in the U.S.
• Handpiece sales to reflect inventory normalization, not underlying demand weakness

For full-year 2025, management maintained guidance:

• Total revenue of $325.5 million (45% YoY growth)
• Gross margin 64–64.5%, with Q4 margin temporarily dipping to 63% due to tariffs
• Adjusted EBITDA loss of $35 million

For 2026, early guidance calls for $410–430 million in revenue, with modest procedural headwinds in H1 as commercial changes are implemented. Leadership expects investments in marketing, patient activation, and international to drive acceleration in the back half and beyond.

• Organizational changes and new leadership will be fully in place by early 2026
• Formal analyst day in February 2026 to provide multi-year guidance and strategic update

Takeaways

Procept’s Q3 signals a shift from capital-driven growth to a utilization-anchored model, with commercial discipline and patient activation now at the forefront.

• Utilization Is the Next Battleground: System placements must be matched by faster and deeper procedural ramp to sustain revenue and margin expansion.
• Commercial and Organizational Overhaul: New leadership, revised account launch protocols, and sharper field incentives are designed to reduce variability and accelerate recurring revenue growth.
• Watch for International and Patient Activation Impact: Success in non-U.S. markets and direct-to-patient strategies could unlock new growth vectors and de-risk the U.S. hospital channel concentration.

Conclusion

Procept Biorobotics is entering a new phase, pivoting from hardware-led growth to a model where utilization, patient activation, and global reach drive value. While near-term friction from organizational changes and inventory normalization may obscure the underlying trajectory, the company’s long-term thesis now rests on its ability to scale procedures per system and convert a large pool of underpenetrated BPH patients. Execution on these fronts will determine whether Procept can sustain its impressive growth and move toward durable profitability.

Industry Read-Through

The transition from capital sales to utilization-driven growth at Procept echoes a broader medtech industry trend, where recurring revenue and procedural ramp are increasingly valued over initial hardware placements. Hospital capital spending scrutiny and inventory optimization are becoming common themes, suggesting that companies with robust patient activation strategies and efficient commercial organizations will outpace those reliant solely on early adopter momentum. International diversification is also rising in importance as U.S. hospital budgets tighten. Competitors and adjacent device makers should take note: the next phase of growth will be won by those who can activate latent demand and accelerate account maturity, not just place more systems.

PRCT Healthcare Medical Devices Recurring Revenue Commercial Execution Patient Activation International Expansion