Good morning, everyone. Welcome back to the 41st annual J.P. Morgan Healthcare Conference. Great to see everyone's faces in the flesh this year. My name is Lisa Cohen. I am an Associate out in San Francisco with our healthcare investment banking team. I'm very excited to introduce today PROCEPT BioRobotics. We have three wonderful speakers here with us. Reza Zadno, the CEO, Kevin Waters, the CFO, and Matt Bacso, the VP of Investor Relations. With that, I will pass it off to Reza to share their story. Thanks, Lisa. Good morning, everyone. Reza Zadno, CEO at PROCEPT. Very excited to be here to present our company. We are a surgical robotic company, and our vision is to become the standard of care in treatment of BPH, which is the number one reason patients, men, see a urologist. Massive market. Please review our safe harbor statement. Today with me, our Chief Financial Officer. We have an experienced management team from high growth companies and multiple public companies. BPH, as I mentioned, is the number one reason men see a urologist. More than 50% of men at the age of 50 years old and above have BPH, and this has a huge impact on their quality of life, and 99% complain about this impact on their quality of life. In the United States, there are 40 million men with BPH. This number is expected to increase in the next 10 years because of the increasing population of age in the U.S. When we dig down in that 40 million, 12 million of them are seeing physicians, 4.3 million of them are sitting on the sideline, watchful waiters. 6.7 million are taking medication, 1.1 million have failed to medication. In 2019, there were about 400,000 men who had some intervention. 300,000 of them were resective procedures, 100,000 of them were non-resective. The market numbers that I put on the right-hand side is roughly the price of our handpiece, just the disposable part. I'm not putting the price of our robot here, times that market. You can see this is a massive market. If you look at the prostate's size and shape of men, this roughly represents from very small, let's call it 30 ml or or gram, all the way to above 150. It's not just a uniform shape. The shape could be different. Because of this size and shape of the prostate, physicians offer different procedures. They have multiple algorithm when they select the procedure for a patient. Generally, the treatments are either in the resective, in which they remove tissue from prostate to allow the patient to empty bladder. Again, these patients, they wake up multiple times at night or during the day to empty their bladder. Resective, the advantage is by removing tissue, there is good efficacy and symptom relief. The current techniques, the side effects of resective procedures are what give pause to patients to choose those options. On the other hand, you have non-resective procedures in which side effects are good, but the symptom relief and durability is not there. What we have offered and we show is a very good combination of the efficacy and durability along with the side effect for safety profile of this procedure. That is due to features that we have implemented in our technology. Starts with image guidance. I'm gonna show in the next slide how the procedure is performed. Contour planning. Once the physician actually sees the prostate, they decide which parts of the prostate they wanna cut and which parts they wanna spare. Then the cutting and the resection is done by the robot. It's the same whether it's the first case of a young doctor or case number 100 of an experienced doctor, the outcomes are the same. It takes the surgeon skill out of the picture. During cutting, it uses water, so it doesn't generate heat. The safety and efficacy of our technology is supported by compelling clinical data that I will show shortly. We have favorable reimbursement. We'll talk about it in a reimbursement. We have a very efficient sales force because we have a targeted customer. Initially, we are targeting hospitals where most resective procedures are performed. That allows us to have a very efficient sales force. This slide outlines the procedure. We give the prostate image you see to the right. That's with ultrasound. That no other technology... Generally, what you see on the left side, the cystoscopic view of the view, that's generally what procedures like TURP and other provide. We provide that image and the image to the right, which is the side view of the prostate. In the diagram in the middle, you see our handpiece that basically water jet comes out of it, pushed going from right to left at the tip is inside the bladder. As you see, it's inside the prostate. Once the physician now sees the prostate, they put the those yellow dots where they want to cut. They do the contour, let's call the contour planning. Once the contour planning is performed, then the robot cuts exactly where the physician has decided to perform the procedure. As I mentioned, the safety and efficacy have been supported by compelling clinical data with the WATER study, which was the only randomized study against TURP in the United States. In the WATER study, that was done in the prostate between 30 ml and 80 ml, and then between 80 ml and 150 ml, that's a prospective single-arm study. The OPEN WATER is, after FDA approval, is in the real-world data. We have shown good efficacy, durability, but more importantly, the consistency. In this, during this study, we have selected some of the top TURP surgeon. TURP still is the gold standard for the treatment of the prostate in the resective market. The graph on top shows, again, these are surgeons who have done thousands of TURP procedures. You can see the variation for the time it takes to do a procedure for a doctor, whether it's a 50g prostate or 70g prostate. The graph at the bottom, some of our procedure shows the resection time. This is not the total procedure time. The resection time, whether it's a 30g all the way to 150g, it's pretty tight. Some of these, they were their first procedure that they were doing, and this is how tight. As we see in the subsequent slide, this is one of the reasons we are seeing accounts are standardizing the procedure. Whether it's a 30g prostate or a 150g prostate, whether it's their experienced surgeon or a younger surgeon, they are using this because they can predict exactly how long the procedure is gonna take and what the outcomes are. This is the graph on durability of the procedure. I have to give some background on this. The Aquablation, of course, is our technology. The TURP is the data from the TURP in the WATER study. The other ones are the published data on Rezūm and UroLift. It's very important to see the presence of obstructive median lobe. As I mentioned, there is the size, there is the shape and the anatomy. In our study, many of the patients had obstructive median lobe. The presence of obstructive median lobe has impact on durability of the procedure. We see at 6% surgical and medical retreatment. This is the WATER, which was 30-80g. In a separate, on the right-hand side, we are showing WATER II. We see that durability is still there even when we are treating patients all the way to 150g. Very good safety and efficacy and durability of the technology. Where this technology is used, definitely for the large prostates. This is a very obvious solution for patients. When we looked at patients that have been treated in the last 18 months or more, is a histogram. This histogram pretty mimics the prostate shape and size of patients. Physicians are using this technology for all prostates, whether it is 30g all the way. You can see the tail end goes very far, above 300g. The majority of the cases are done in the 60 to 80 gram, with the top of the bell curve at 70g. We are very happy to see that we are on our path to become standard of care, and they are using this technology on all prostate size and shapes. On the reimbursement side, I'm happy to say that we have full coverage from Medicare, which represents about 50% of the all men with BPH. Those are patients, of course, above 65. On the commercial side, we have many of the commercial payers covering the procedure. We have a code dedicated to our technology at Category III code. On the payment, this is mapped at APC Level 6, which is about $8,500 paying to the hospital. The physician is paid roughly about the same as a TURP. On the commercial side, majority of the resective procedures are done in a hospitals, hospital setting. In the U.S., there are 2,700 hospitals. 860 of them are considered high-volume hospitals, average high-vol hospital does about 200 cases per year. Our initial target are those 860 hospital. This allows us to have a very efficient sales force to target those high-volume hospitals. I'm very happy to show our revenue, which roughly about $7 million in 2020, about just about $34 million in 2022, and we just yesterday announced our preliminary results for 2022 in the $74.8 million-$75 million. Those are preliminary results. We consolidated our financials. You can review them. Thank you very much. Thank you, Reza. I want to start off with, you know, you had a pre-read of Q4 2022 earlier this week, and you placed 28 AQUABEAM Systems. I'd love to just hear a little bit more about, you know, your expectations and kind of how you're thinking about the CapEx in the hospital setting. Yeah, I'm very happy with the performance, our strong commercial performance and results in 2022. There are multiple factors helping with that result, starting with the clinical data. Again, as I mentioned, this is the massive market. First of all, on the patient side, there are 12 million patients, and then you saw the numbers. On the provider side, there are 2,700 hospitals. We're just scratching the surface. We have a high, long runway ahead of us. Patients are now asking for this procedure because they want both efficacy, safety and durability. Also hospitals are standardizing the procedure because they don't need to have this multiple algorithm to see if the prostate is small or is the experienced doctor is today here. The combination of these factors and our sales force, becoming more experienced and their increased productivity allowed us to deliver what we delivered in 2022. Also in 2022, we were able to sign multiple contracts with IDNs, and we have national contracts with those. Those are. Although it was a tough environment, we are very happy to have signed many of those IDNs. Basically we delivered on utilization that consistently increased it throughout the year. The capital placement was above the consensus and what we were expecting. More importantly, our plan has always been to deliver on clinical outcomes, utilization and robot placement. We have always, because our ultimate goal is to become standard of care. Utilization has always been one of our area of focus, and we are very happy to deliver on all those. As far as CapEx is concerned, we are very happy because, as I mentioned, we are still very early in our journey. You know, if you have 160+ accounts, there are 2,700. The fact that the price of the robot, the reimbursement in place, and hospitals do not wanna lose patients because they don't wanna refer these difficult cases to other hospitals. All these parameters have helped us, not only for our results, but also on the CapEx. Awesome. Well, congratulations. Thank you. It was clearly a great quarter. I know you didn't provide 2023 revenue guidance, but can you tell us how we can think about capital placements this year? Yeah, I'll take that question. Our CapEx, we didn't provide guidance for 2023. At the same time, a lot of the points Reza just mentioned, you can assume that the growth that we experienced in 2022, we think we have the ability to continue at kind of above market growth rates really for the foreseeable future. It's one of the nice aspects of the market that we're currently in. There's 2,700 hospitals in the U.S. Currently, even with all the success we had this year, we're still very low penetration. We're in 167 hospitals. We're aware of the numbers that are out there for us next year, and we feel very comfortable in our ability to continue to grow and to meet and exceed kind of expectations that have been set for the company. We've made a lot of investments internally, particularly around the commercial team. We do think at this stage in our development, there's really no diminishing returns with adding new capital sales reps. We had mentioned on our Q3 call that we had some meaningful additions to that team heading into 2023, and we're really happy with the team we brought on board, with the enthusiasm we're seeing with that new team, and really the enthusiasm we see around our physician customers and patients to continue the adoption curve we're on. Awesome. Turning back to Q4, I know you delivered, you know, material upside in terms of handpieces sold. I think it was 3,000, which equated to about a utilization of 6.5. Can you tell us a little bit more about the quarterly trends and what was really driving that beat? We've spent the beginning just talking about capital, but really the star of the show for us as a company is really seeing the physician customer utilization in 2022. When we go back to our original guidance that we gave at the beginning of the year, we were forecasting on average a hospital to do about four procedures per month. What we saw exiting the year is right around 6.5. We're almost a full year ahead of where we expected to be with the utilization. That's attributable to all the clinical benefits that Reza went through. Just what we are seeing in our, in our accounts, it's our older aged accounts that have been with us a longer period of time are definitely doing more than average, and we attribute that to physician standardizing their treatment algorithm. At the same time, even accounts that have been with us now, even over two years, we're still seeing new surgeons start adopting Aquablation within that account, which is driving utilization. That's point one. Point two is our new customers now today, we're seeing a higher number of surgeons initiating Aquablation in their practice than we did 1 year ago. We're seeing higher utilization, not just from older accounts, but also from new accounts, that's driving that increase in utilization. Just really pleased on a full year basis with where our utilization is. I know Systems today, they have a high contribution to our revenue, but at the end of the day, the most important metric to monitor the success of our business is the underlying utilization. We're more than pleased with how that's performing. How are you affected by, you know, were you affected by COVID and the flu and RSV and...? You know, for us given the relative number of procedures we perform 6.5 per month on average, given kind of the treatment times and our ability to have predictable scheduling, we really haven't been impacted to the extent some other elective procedures have been impacted. Regarding the flu, COVID, you know, also regarding Q4 seasonality, I think given how early we are in our commercializations, it's really hard to pin down if that did have an impact. I mean, like most procedures, you would expect an uptick in Q4, but it's hard to parse that out for us given where we're at. I wanna pivot a little bit. In your investor presentation, You show how the prostate sizes have evolved since January 2021. Can you tell us a little bit about that data set and, you know, how the surgeon's algorithm has evolved with that? Yes. The immediate prostate size that some physicians target are larger prostate because there are no good viable solutions over there. That's why we were monitoring. We have been monitoring all the prostate size and shapes they are treating for various reasons. As they see the clinical outcomes, whether they use on a large prostate or a small prostate, they start using it on all the way to 30g. They have treated above 150g. Because it really simplifies the algorithm. They don't need to think. Because during the procedure, they actually see the prostate, they see how big it is, and right there they can plan. That histogram I showed represents very similar to actually prostate size of a few years ago in one of our accounts. We gathered that information for prostate size of patients, whether they were planning to get the surgery or they were on drugs, were very similar to that graph. We are very happy to see, although majority of them are below 100g, but If you look at the histogram, the top of the bell curve is between 60 and 80. They are using it on all. We see some accounts have converted almost all their resective procedures to us. Yeah, we are happy to see that they are using it on all prostate size and shapes. Just to add on to that. I mean, with the standardization that we're seeing, it really allows hospitals that typically would have had to refer out some of those other procedures. So if you take a prostatectomy or enucleation for larger prostates, there's many BPH hospitals that don't have a surgeon that specializes in that modality. And with Aquablation now, it allows a hospital to retain patients they would otherwise lose if they didn't offer Aquablation. And going back to kind of a CapEx environment, our ability to continue to meet capital numbers, allowing hospitals to retain patients in this type of environment really is a nice selling point for our field team when they're out there talking to hospital administrators and CFOs and CEOs. That's great. I know over the last few quarters, you know, there's been some noise around U.S. urology visits in general. Can you tell us about, you know, do you have a sense that we're back to pre-COVID levels? How are you thinking about that? We ask that question every time we are in front of a surgeon. Fortunately, our surgeons, when we ask that question, their answer is, in fact, if they see more patients and their number of surgeries and patient visit, they say it's back to, in fact, higher than 2019. That has not affected us. We ask this question, it has not. Great. You know, on your international revenue, I think it was an 18% sequential growth. Anything to point out there? Any additional color? Yeah. We had a nice quarter international and, you know, I made some comments about COVID and RSV not impacting the U.S. business. That's true for the U.S., but where we did see an impact in 2022, primarily with COVID and hospital staffing, was our international business. The fourth quarter, I'll say we started to see green shoots, particularly around procedures and also selling systems internationally that contributed to that growth. With that said, in the near term, our primary focus in Western Europe is really on securing a higher reimbursement for Aquablation in countries like Germany, France, Spain, Italy, and U.K. We're working more on market development activities, and that international contribution will continue to be kind of in that 10% range. We are working on some exciting things. We have approval now in Japan, where we're working on a post-market study in 2023, and we should see revenue contribution more likely not until 2024. Definitely market development international is a huge opportunity. I'd say an underappreciated opportunity for our business longer term. We're laying a lot of the proper groundwork such that physicians and hospitals can get reimbursed a fair amount in these countries. That's helpful color. Thanks, Kevin. you know, as we switch to thinking about 2023, I'd love to just hear a little bit more about how you're thinking about, you know, your investments. I know you touched on commercial expansion, and maybe talk a little about how we can expect that to affect OpEx trends in general. We made commentary at the end of our third quarter around kind of how we expect operating growth to be. You know, we didn't guide to 2023, but I will say, you know, the current models that are out there I think are more reasonable today than they were three to six months ago. If you look at the investments we're making, they're primarily around our commercial team. We're at a point now where we feel we can hit the gas a little faster than we were, given some of the early success we're having. We are going to be adding both capital reps, which are responsible for selling our system. Importantly as well, we also offer robust case coverage in the U.S. We think it's very important with our growth rates to maintain the excellent clinical outcomes that have allowed for the robust adoption we've seen. We're gonna add meaningfully to our Aquablation case coverage team. Those are clinical reps to support cases and to support our install base. Just always focusing on kind of the surgeon and patient experience. I think our management team, one of the advantages, we've all been part of high-growth medical technologies. When you grow as fast as a company like PROCEPT is growing, excuse me, you can't lose sight of that physician and patient experience. Making sure that we maintain the outcomes that, you know, our patients and customers expect is kind of paramount to us, and that creates an investment need, and we're gonna continue to make that need in 2023. The other thing we're doing investment-wise is we are gonna have, I'd say, a more consistent cadence of sales hiring throughout the year. It takes a rep about three to six months to get up the learning curve, and we've done a good job in the past 24 months of hiring ahead of the fiscal year. We're ready to kinda meet the growth expectations. Again, we're at a point now where we feel we can start to have a more constant cadence of sales reps add. Then just lastly, we're a robotic company. We're an innovative company, and while we're not going into details about that innovation, I think that's at our core, and we're gonna continue to make investments in R&D to make, again, make sure that customer and patient experience can, you know, be even better than it is today. One more area is the manufacturing. We were fortunate to manage the supply chain issues that some other companies had challenges in 2022. We were able by increasing personnel in our supply chain and manufacturing, also we announced that we are moving to a larger facility next year in San Jose. We are investing in manufacturing to meet the demands. And, and- That's another area of the investment. How should we think about that impacting our margins in 2023? Again, if you go back to our Q3 commentary, we had made some comments that, you know, margin expansion, we think is gonna be fairly limited. I'd say in the next three to six months. Next one to two quarters. That's due to these investments. We do have dual facilities that we're gonna be carrying in the near term. We've been fortunate, and we've been able to say that supply chain issues haven't impacted our company, but that's not free, right? We've brought in some very experienced personnel on in the operations team to help navigate through that. Frankly, we're growing that expense base into the revenue that we expect exiting the year. Again, I think this is another area where the Street picked up on our commentary in the third quarter, and it's very reasonable. They have us exiting the year at, you know, slightly north of 55%, I believe, in Q4 of next year, which we feel comfortable with. We feel really good about this business ability to generate, you know, 70%+ gross margins at scale. We already have the cost structure in both our handpiece and system that allows us to get there. Now it's really just growing into the infrastructure that we've built to spread those fixed costs over a larger number of units. That's super helpful. You know, anything else that I didn't cover that you'd like to add that I might have missed? I think, going back to we are very excited about the ability of this technology to treat all prostate size, shape, and be independent of surgeon experience and expand the market. Although the resective and, I mean, in 2019, 400,000, what we believe is this technology will be able to expand this market to those 1.1 million patients who have failed to medication, the 6.7 million who are on medication. That is what we are excited about. We are seeing increase in utilization per quarter. That increase, we are on that path, and we are very excited about this. That's very exciting. Just to comment again, we didn't guide the fiscal 2023, and I'd say the majority of investor questions that we've taken have focused on 2023. Without getting into the numbers, just to kind of reiterate where we are today versus where we were a year ago, I mean, we're a much stronger, I would say, more confident company today than at this time last year. Just going through a few points, I do wanna mention them. I mean, Reza mentioned the IDN contracts that we have. I mean, that's very important. That's a license to hunt for our sales team. It's standardized pricing. It makes our capital process much more predictable. While we haven't publicly announced what specific IDNs we're working with, we do feel that, you know, having these IDN contracts in place is going to allow us to have predictable system sales. Our pipeline. Again, we didn't give guidance around 2023, but our pipeline today is larger than it was a year ago. Our sales team on the capital side is larger today than it was a year ago, and we feel very good about our capital pipeline. Just the surgeon interest. I can't quantify this for folks, but being part of previous high-growth med tech companies, there's a point, a tipping point, so to speak, when you start to see that physician buzz in the community, whether that's on social media or peer-to-peer sharing. You know, we really are starting to see that where awareness of Aquablation, it's just very high. Now we're kind of through the early innovators, and we're getting into more mainstream adopters, and that's really driving our growth, which is important. Just reimbursement and ASPs. We've been very fortunate where we have great reimbursement for our product. We've been able, even in this environment, if you go back to our system, we were selling our system for $300,000 in Q1 of 2021. We're exiting Q4 at $375,000. Even in this, I would say, tougher environment, we're able to increase our ASPs. Our handpiece ASP as well is now north of $3,100. Just feel really good about the momentum of the business heading into 2023. I just don't want investors to think not giving guidance for 2023 is any reflection of how we feel about the business. Personally, it's just a tenet that I feel this, you know, isn't the proper forum to give guidance, and we wanna be able to talk about it in a more detailed level when we have a greater degree of visibility into Q1. We'll do that at the end of February. I just wanna make sure we mention that. I appreciate that. Well, Reza, Kevin- I also wanna. Yes. I hope to see everyone in the... There is a EAU, European Association of Urology in Milan in March. We're gonna have a surgeon panel, and then followed by American Urological Association in April. There will be surgeons. Hopefully, we can see many of you and look forward to see many of the investors on one-on-ones. Thank you. Awesome. Thank you for the time. We appreciate it. Thank you very much. Thank you. Thanks for having us. Thank you.