Good morning, welcome to the PROCEPT BioRobotics 1st quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. We will be facilitating a question and answer session towards the end of the call today. As a reminder, this call is being recorded for replay purposes. I will now turn the call over to Matt Bacso, Vice President, investor relations, for a few introductory comments. Good morning, thank you for joining PROCEPT BioRobotics first quarter 2023 earnings conference call. Presenting on today's call are Reza Zadno, Chief Executive Officer, and Kevin Waters, Chief Financial Officer. Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events, or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to several risks, uncertainties, assumptions, and other factors that could cause results to differ materially from the expectations expressed on this conference call. These risks and uncertainties are disclosed in more detail in PROCEPT BioRobotics' filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned to not place undue reliance on these forward-looking statements, which speak only as of today's date, April 27th, 2023. Except as required by law, PROCEPT BioRobotics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances, or unanticipated events that may arise. With that, I will now turn the call over to Reza. Good morning. Thank you for joining us. For today's call, I will provide opening comments and a business update, followed by Kevin, who will provide additional details regarding our financial performance and 2023 guidance before opening the call to Q&A. Starting with our quarterly revenue results. We are pleased to report another strong quarter where our customers and patients continue to realize the significant clinical benefits of Aquablation therapy. Total revenue for the first quarter of 2023 was $24.4 million, representing growth of 72% compared to the first quarter of 2022. Growth in the quarter was driven primarily by increased utilization from our expanded install base and strong patient volume. We believe the combination of positive long-term clinical data, increased private payer coverage, outstanding real-world patient outcomes, and an expanded field-based commercial team continue to drive surgeon interest and adoption of our AquaBeam robotic system. As we move through 2023, we believe there are several positive factors which give us a high degree of confidence to achieve our increased full-year financial guidance, and Kevin will touch on later. Longer term, we believe these underlying fundamentals reflect a business that is laying the foundation to become the BPH surgical standard of care, starting with the recent payer coverage. In early April, we announced that UnitedHealthcare updated its policy for prostate surgery and interventions to include Aquablation as medically necessary. This updated policy will go into effect on June 1st, 2023. Being one of the largest commercial payers in the U.S., with approximately 45 million covered lives, United's positive coverage policy will greatly improve accessibility of Aquablation therapy for men suffering from BPH. In early March, we also obtained a positive coverage policy from Blue Cross Blue Shield of Michigan, which will be effective May 1st. Blue Cross Blue Shield of Michigan is the largest payer in the state of Michigan and covers approximately 5.7 million lives. With the additions of UnitedHealthcare and Blue Cross Blue Shield of Michigan, we now estimate roughly 95% of men in the U.S. have access to Aquablation therapy. There is both a long-term and a short-term benefit of increasing commercial payer coverage. The obvious long-term benefit is increased utilization, which will take time as we penetrate the surgical market. The short-term benefit is the increased value proposition of our technology and the lowering of barriers to sell capital equipment to hospitals. Turning to clinical updates. This weekend, at the American Urological Association Conference in Chicago, we will be releasing our 5-year WATER II study data. As a reminder, WATER II was a prospective FDA study with an Objective Performance Criterion for both efficacy and safety in large prostates ranging in size from 80-150 milliliters. The 5-year data were consistent with the previously reported primary endpoint, with no change to safety results. The efficacy results, as measured by change in IPSS and Qmax, also remain consistent at 5 years. Additionally, the 5-year WATER study abstract will be presented at AUA, comparing efficacy and safety of Aquablation therapy versus TURP for treatment of 50-80-milliliter prostates. As a reminder, our 5-year WATER data are the only prospective randomized double-blind multicenter FDA pivotal study comparing the safety and efficacy of Aquablation therapy to TURP for prostates ranging from 30 to 80 milliliters. This abstract proves Aquablation therapy's superior safety due to low irreversible complication and superior symptom relief. In this abstract, Aquablation therapy at 5 years exhibited durability that was 2 times better than compared to TURP. This is measured by patients going back to meds or requiring surgical retreatment, which is represented by an approximate 1 person annual retreatment rate. As a company, we have developed a significant and growing body of clinical evidence, which now includes 2 5-year FDA durability studies, seven other clinical studies, and over 150 peer-reviewed publications, all supporting the benefits and clinical advantages of Aquablation therapy. We believe this backdrop will continue to be a significant differentiator for our customers when choosing to replace the historical BPH surgical modalities with Aquablation therapy across all prostate sizes and shapes. I want to touch on our commercial organization. In the first quarter, we sold 25 AquaBeam robotic system, generating total U.S. system revenue of $8.8 million, which was at the low end of our Q1 guidance range. During our Q4 earnings call in late February, we provided a range of capital fees in Q1 in order to give investors insight into our sales pipeline and the impact timing can play quarter-over-quarter. Our expectations and guidance around full year 2023 system sales has not changed in the last 2 months since we issued 2023 guidance. We still expect approximately 45% of our system sales to be in the first half of 2023. In terms of our pipeline, the number of robot placement opportunities continue to grow meaningfully, which has been driven by the addition of new capital reps in greenfield territories. Additionally, the more recent positive catalyst associated with the UnitedHealthcare announcement and full extension of the transitional pass-through payment for all of 2023 strengthen our confidence in our full year guidance. Speaking specifically about our capital sales personnel, we ended the first quarter of 2023 with approximately 30 capital sales reps, 10 of which were added in late Q4 2022. As a reminder, the productivity curve for capital reps is approximately six months as they will be responsible for building out their respective pipelines. We do not expect the capital reps added in the fourth quarter of 2022 to start meaningfully contributing to U.S. system sales until the second half of 2023. Our 2023 guidance continues to be informed by what we are seeing in our pipeline, how opportunities progress, what customers are telling us, the productivity ramp of new capital reps, and overall close rates. All of these indicators have maintained positive momentum as awareness around Aquablation therapy continues to grow, which gives us confidence in achieving our 2023 commercial objectives. I want to touch on our progress securing IDN contracts. We recently signed a national sales contract with the largest IDN that secures pricing for system placement and handpieces sold to its Nationwide hospital network. This is a significant milestone for us, as it will allow our sales team to operate in an expedited and more predictable manner as we partner with Aquablation surgeon champions at these contracted hospitals. As stated on our Q4 earnings call, we anticipate having the majority of large strategic IDNs in the U.S. under contract by the end of 2023. While there are many hospital networks in the United States, we categorize strategic IDNs as having greater than or equal 20 hospitals in-network. When analyzing the market, we estimate 17 strategic IDNs account for approximately 26% of the 860 high-volume BPH hospitals and 29% of the total of 2,700 BPH hospitals. The importance of this contract is meaningful to our ability to penetrate the U.S. market and provide increased visibility in our pipeline. Turning to utilization and surgeon activity. We are extremely pleased with Q1 utilization, where U.S. handpiece and consumable revenue increased approximately 165% compared to the first quarter of 2022. While the primary driver of monthly utilization continues to be active surgeon growth, there are two key trends that have emerged over the last 12 months that are extremely positive for us. The first is active surgeon retention. We define active surgeon retention as any surgeon who performs a case in both the current and previous quarter. In the first quarter of 2023, surgeon retention rates were greater than 90%. As a company, we benefit greatly from this high level of surgeon retention as our commercial team can focus on training new surgeons. We believe this demonstrates Aquablation therapy's ease of use and ability to treat all prostate size and shape safely and effectively. The second emerging trend is utilization among low-volume BPH hospital accounts. While we are primarily focused on the 860 high-volume BPH hospitals, we are also starting to see nice adoption from low-volume accounts, which accounts for roughly 30% of our current install base. Many of these hospitals are large surgery centers, however, have historically not performed many BPH surgeries. While likely too early to make definitive claims regarding market expansion, we do believe Aquablation Therapy has allowed low-volume accounts to treat patients they otherwise would have referred out. Given the expanded awareness of Aquablation Therapy, along with positive momentum in peer-to-peer interactions, we believe low-volume hospitals are very valuable targets for our commercial team. Lastly, with respect to international market development activities. In early February, Aquablation Therapy received a MedTech Innovation Briefing from the National Institute for Health and CARE Excellence, or NICE, for BPH in the United Kingdom. NICE has recognized that Aquablation Therapy is effective for the removal of prostate tissue for BPH patients. Clinical experts said the technologies was innovative compared to the standard of care and offered additional benefits, such as increased ability to preserve quality of life. Clinical experts associated with the review also stated that the technology had the potential to replace TURP and would challenge Holmium laser in the creation of the prostate for larger prostates. While our presence in the U.K. is currently small, given this updated guidance from NICE and established reimbursement for Aquablation Therapy at similar levels to that of the U.S., we believe the U.K. could be an attractive market for our company in the future. In March, we also attended the European Association of Urology in Milan. At the conference, we received positive feedback from surgeon customers and met with hundreds of European and other international urologists who were enthusiastic about our strong clinical data, driving them to learn more about Aquablation Therapy. In summary, I feel better about our business today than at any point and have a higher degree of confidence in our ability to achieve our long-term growth plan. Every metric we track is moving in the right direction. To summarize these catalysts, our pipeline and sales funnel continue to grow nicely. We just signed a national contract with the largest IDN and expect to continue to finalize contracts with other large strategic IDNs throughout the year. We received a positive coverage policy from UnitedHealthcare, providing approximately 95% patient access to Aquablation Therapy in the U.S. and have full transitional pass-through payment through 2023. Utilization continues to exceed our expectations, and we have increased our full year guidance around this metric. Lastly, our recent sales rep hires are progressing very nicely as they build our respective green field territories. Given this positive momentum, we believe Aquablation Therapy will truly revolutionize the treatment of BPH. With that, I will turn the call over to Kevin. Thanks, Reza. Total revenue for the first quarter of 2023 was $24.4 million, representing growth of 73% compared to the first quarter of 2022. U.S. revenue for the quarter was $21.8 million, representing growth of 74% compared to the prior year period. In the first quarter, we sold 25 AquaBeam robotic systems, generating total U.S. system revenue of $8.8 million, representing growth of 13% compared to the first quarter of 2022. First quarter system average selling prices were $350,000, which was approximately 5% below our expectations. However, we still expect full year system average selling prices based on the deals in our pipeline to be in the $370,000-$375,000 range. U.S. handpiece and consumable revenue for Q1 was $11.8 million, representing growth of approximately 165% compared to the first quarter of 2022. Handpiece revenue growth was driven by an increase in the install base of AquaBeam robotic systems, which has grown 106% from the first quarter of 2022. We have seen an increase in utilization from our install base. Monthly utilization per account of 6.3 increased approximately 14% compared to the first quarter of 2022. Utilization outperformance in the first quarter was a reflection of strong commercial execution and surgeons taking the next step to adopt Aquablation therapy as their treatment of choice for all resective procedures. We view the utilization as the true leading indicator of overall market adoption long term. We shipped approximately 3,400 handpieces in the U.S. in the first quarter, representing unit growth of 139% compared to the first quarter of 2022, with average selling prices of approximately $3,140. International revenue for the first quarter was $2.6 million, representing growth of approximately 60%. International revenue in the quarter was driven by both increased system sales and improved utilization. Gross margin for the first quarter of 2023 was 51%. Sequential gross margin expansion in Q1 was due to strong execution from our operations team and our ability to absorb overhead expenses. Given our favorable standard margin profile of both our robot and handpiece, we have increased confidence to further absorb overhead expenses and expect to show sequential gross margin expansion throughout 2023. Lastly, on margins, we continue to make nice progress with regards to our move to San Jose, California, which will increase our footprint by 4 times to 160,000 sq ft. As stated previously, we expect to move into our new San Jose location by the end of the 3rd quarter of 2023. Moving down the income statement. Total operating expenses in the 1st quarter of 2023 were $40.9 million compared to $23.4 million in the same period of the prior year, and $35.7 million in the 4th quarter of 2022. The increase was driven by increased sales and marketing expenses, primarily to expand the commercial organization, increased variable compensation expenses, and increased research and development and general and administrative expenses. Total interest and other expense was $107,000 as quarterly interest expense from our $52 million term loan was offset by favorable interest income. Net loss was $28.5 million for the first quarter of 2023, compared to $17.2 million in the same period of the prior year. Adjusted EBITDA was a loss of $23.9 million, compared to a loss of $13.5 million in the first quarter of 2022. Our cash and cash equivalents balance as of March 31st was $181 million. The decrease in cash in the first quarter compared to historical cash burn was impacted by two factors that will not impact future quarters in 2023. First, we had our annual company bonus incentive payment, which used roughly $9 million of cash. Second, due to both our increased revenue ramp coupled with the move to San Jose in Q3, we have substantially built up our inventory balances in Q1 to meet second half 2023 demand and provide safety stock during this transition. Inventory increased by $10.4 million in the first quarter of 2023 and should not increase at these levels in subsequent quarters. Moving to our 2023 financial outlook. We are increasing our full year 2023 total revenue guidance to $128 million, representing growth of approximately 71% compared to 2022. First are the strong underlying utilization trends in the business. We now expect full year monthly utilization to be approximately 6.5 across our average install base for 2023. Given the strong ramp we are seeing within our accounts, our updated guidance assumes slight sequential improvements in utilization throughout 2023. We have increased confidence and visibility to achieve our implied system sales of 140 units for the full year. We continue to expect approximately 45% of capital sales to occur in the first half of 2023. We expect our new capital reps, who were hired in Q4 2022, to become fully productive in the second half of 2023. We also expect U.S. average selling prices to be approximately $370,000 for the full year. Given the strong first quarter and positive momentum, we now expect full year international revenue to be approximately $9.6 million, representing growth of approximately 33% compared to 2022. Additionally, we expect handpiece average selling price to be approximately $3,100. For other consumable revenue to be approximately $5.4 million. Moving down the income statement, we now expect full year 2023 growth margins to be approximately 54%, which is a slight increase over our initial guidance of 53%. Based on my previous comments and given the current rate of overhead absorption, we expect to exit 2023 with Q4 growth margins in the mid-50% range and should see sequential margin improvement throughout the year. Additionally, we forecast full year 2023 operating expenses to be approximately $167 million. This increase in operating expense is associated with strategic investments in R&D, commercial team expansion, non-cash stock-based compensation, and underlying general and administrative costs to support the business and put us in a favorable position to execute on our long-term growth plan. Given the increase in revenue and improved margin profile, we continue to expect full year 2023 adjusted EBITDA to be approximately negative $70.5 million. At this point, I'd like to turn the call back to Reza for closing comments. Thanks, Kevin. In closing, I want to thank our employees, customers, and shareholders for all their support to help us along our journey to becoming the standard of care for BPH. We will continue to leverage our commercial and clinical investments to execute on our long-term strategy. Have a great day, and I look forward to seeing many of you at our AUA investor event tomorrow at 8:00 A.M. Central Time. At this point, we will take questions. Operator? Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your telephone. Again, to ask a question, please press star one one. One moment for our first question. Our first question comes from the line of Craig Bijou of Bank of America. Your line is open. Good morning, guys. Thanks, thanks for taking the questions. Want to start with the system placements in Q1. Kevin, you obviously said you guys still feel comfortable getting to that 140. Maybe, I guess, you know, talk about why the 25 or why the system placements came in at the lower end of the range. I guess maybe a little bit more color on your confidence, one in, you know, the strong Q2 sequential uptick in systems implied by your guidance and then, you know, your confidence in getting to that 140 for this whole year. Yeah. Thanks, Craig, and good morning. Our thoughts really around the full year capital and even the first half of 2023, that cadence hasn't changed since our call in February. In fact, you know, we do have a greater degree of confidence today to achieve our full year system numbers than we did even two months ago. I mean, that's primarily based on the pipeline we're seeing and just the numerous catalysts that Reza mentioned in his prepared remarks. Just specific to Q1, we did have deals that we expected to close in March that we now see a high probability of closing in the second quarter. There is that timing dynamic, which we've been talking about now over the last few quarters, and that is why we gave a range of system sales in the first quarter. Perhaps a point of specificity in the first quarter around system sales and that dynamic around IDNs is we did see IDNs in the first quarter take a very cautious approach to capital purchases, and therefore, we didn't see many IDN purchases come through in the first quarter. We're already seeing here, being through the month of April, those same IDNs releasing funds being released in Q2 that now will make up Q2 purchases. When you take all those dynamics together, you know, it still gives us confidence around the first half being about 45% of total system sales, which is consistent with the guidance in February, albeit some of that timing shifted to Q2. Got it. Thanks. Maybe I'll stick with systems. Just, I guess two pieces here. One, on the ASP, you know, it came in lower in Q1 than what it traditionally has been and what you expect for the year. Just wanted to understand if there was any. You know, what was driving that pressure. Then on the IDNs, how much of that is kind of baked into that 140 systems? Or how are you guys thinking about the opportunity that the IDNs present, whether it's the contract that was just signed or future contracts you expect to sign? How much of that factors into that 140? Yeah. I'll start with the capital ASPs. You are pointing out the fact Q1 system ASPs were about $350,000. That's about 5% below kind of the guidance that we put forth in February. As mentioned in my prepared remarks, we still do expect full year ASPs in the $370,000-$375,000 range based on all the deals we see in the pipeline. Without getting into specifics of each sale in the deal, the lower ASP in Q1 is not reflective of... First, it's not any large IDN pricing. It's not any other factors that we believe will impact future ASPs. It's really just timing and the high degree of variability that we have around some of our capital sales. We have two levers in the business, right? One being systems and one being utilization. We are willing, as a business, to be variable and flexible on capital pricing to ensure that we get that system sold and then to ensure that we get that utilization. If you look at AMP's average selling prices, those have actually been remarkably consistent quarter-to-quarter and increasing. At the end of the day, we're willing to be slightly flexible on capital. Again, given the visibility we have into the pipeline, we feel very confident the full year ASP being in the $370-$375 range. The second part of your question, this is Reza. Related to IDNs, want to remind that we are already have a few robots at the IDNs. Having said that, we have not factored in multi-systems or commitment for 2023 from these IDNs. We already have robots in those, some of these IDNs. That's great. Thanks for taking the questions, guys. Thanks, Craig. Thank you. One moment, please. Our next question comes from the line of Joshua Jennings of Cowen. Your line is open. Hi. Good morning. Thanks for taking the questions. Want to just ask on two topics. The first is just on the low volume accounts, you know, representing about 30% of, I believe, the install base you said, Reza. Wanted maybe just help us understand the opportunity there and how this channel could expand the TAM. Are these mostly robotic prostatectomy surgeons that are familiar with robotic platforms and have been compelled to adopt the AquaBeam system and the Aquablation treatment? Then how do you see low volume accounts contributing to system placements in 2023? I just have one follow-up. Yes. Thanks. Yeah, we are very pleased with the progress we have seen with these with these accounts. Again, just as a reminder, low volume does not necessarily mean a low volume surgery. These are high volume surgery, but historically they have been doing lower number of BPH surgeries. The reason they are growing is they see better patient outcomes. They are standardizing the procedure. They can build their robot BPH practice. Also allows them to recruit talented urologists. Yes, these are accounts that they have robots there, but they have not been using it for they were not using many BPH, but they are high-volume surgery center. As we mentioned, 2,700 hospitals in the, in the U.S., 860 of them were high-volume centers. These other 2,000 is a great opportunity for the future and growth of our business. Great. Thanks for that. Just a follow-up question. Wanted to better understand how your team is thinking about the replacement cycle as we get into 2024 and 2025. I guess maybe the right way to phrase the question would be, you know, when should we be thinking about AquaBeam 2.0 being commercialized? Anything you can share about what AquaBeam 2.0 or just the next iteration of AquaBeam or the enhancements that will be incorporated. What do you think the replacement cycle period will look like as we move into the out years? Thanks for taking the questions. Yeah. Thanks, Josh. This is Kevin. The replacement cycle is many, many years ahead. I, you know, north of 2, 3 years. It's not an immediate impact to the business in the near term. With that said, I think you are picking up that we are spending a lot of money in our R&D group, and we continue to be, you know, focused on our current system. We feel our current system is more than sufficient to penetrate the majority of the high-volume hospitals in the near term. At the same time, being a robotic company, being an innovator, we're always gonna be working on kind of next-generational type of stuff. At this point in time, it's not necessary for us to meet our near-term targets, and therefore we're not providing a lot of color around future platforms. Understood. Thanks a lot. Thanks, Josh. Thank you. One moment, please. Our next question comes from the line of Ryan Zimmerman of BTIG. Your line is open. Good morning, guys. Thanks for taking the questions. Just wanna follow up. I thought it was, you know, helpful in terms of the stat you gave on the percentage of low volume hospitals. I just wanna follow up on kind of Josh's line of questioning there. Are we doing for, just from the math that you're at about 16% penetration in high-volume accounts, if you just back out the low volume in the U.S. install base? You know, kind of help us understand what the expectation is in terms of the rate of penetration you think for that high volume 860 hospitals. I think, you know, as we look at kind of consensus estimates, you know, a few years out, I think there's, you know, some lofty numbers in terms of high volume penetration. It'd be helpful to understand kind of your expectations on cadence for that high volume segment. Yeah. Thanks, Ryan. You pointed out a few stats that Reza mentioned in his prepared remarks. The first, the current install base is about 30% in low volume centers, low volume BPH centers. To your comment, that would assume that for the high volume, we're about 15% penetrated in the 860 high volume hospitals in the U.S. Over the next few years, I mean, we think we're a great option for the majority, if not all of those high volume 860 BPH centers. We don't feel that there's anything with our technology or outcomes that would limit us from being fully penetrated in the 860. I appreciate you're never gonna get to 100%, but, you know, we don't see a reason why every high volume BPH hospital over time wouldn't wanna have an AquaBeam system. We feel there's a long ramp there. To Reza's comments around the low volume hospitals, it's great to see so early in our commercialization that we're seeing these low volume centers that previously had to refer out patients and perhaps were losing physicians to other hospitals to do BPH, start to adopt the technology and have good utilization of those accounts as well. Got it. Okay. That's very helpful, Kevin. Then the second question, well, I guess two questions for me. One, what is the percentage of the IDNs, I think you called out 17 strategic IDNs, that have more than one system today, or you expect to have more than one system right now? I think that'd be helpful to understand. The last question I'll hop back in queue is just, Craig asked this, but I'm not clear why does pricing come back in the second quarter and through the remainder of the year if it were at $350? Why not, you know, can you spur more demand maybe at that lower price point than what you had previously? Yeah. The first question on the 17 strategic IDNs, I mean, those represent over 200 hospitals in the U.S.. You should assume that as these IDNs that we sign with, we will have systems at their various hospital network. If your question is around multi-systems within the same hospital, that's currently not part of our near-term growth plan. We don't believe, given the current volumes today, that most hospitals will not necessitate having a second system. Did I answer your question on IDNs? I wanna make sure I covered that. Yeah. Maybe I'll take that offline. We can take that offline just 'cause I think I was just trying to understand kind of the potential for the 17 strategic IDNs. I'll follow up. Yeah. We have very low penetration in those 17 strategic IDNs, so there's a lot of room for us to sell systems in the future there. On pricing, you know, again, one of the nice aspects of our business is we have a high degree of visibility into the funnel, so we can actually see the deals in the pipeline in the next three to nine months. That is why we feel comfortable talking about full-year average selling prices in that $370,000-$375,000 range, based on deals we see in the pipeline. Really, we view Q1 as just an anomaly in terms of the variability around pricing and settling at $350,000. We don't think this is reflective of any future ASP decreases on the capital side of the business. Okay. Thanks for taking my questions. Thanks, Ryan. Thank you. One moment, please. Our next question comes from the line of Chris Pasquale of Nephron Research. Your line is open. Thanks. Kevin, I want to circle back to that last point. I was hoping you could spell out a little bit more clearly what the typical sales cycle for AquaBeam looks like in terms of the time it takes for contracts to be finalized. When you talk about visibility into the pipeline, you know, what pieces need to be in place for you to consider a system placement likely within a certain timeframe? Yeah. When we talk about pipeline, we are identifying for our investors. That means the surgeon champion has been identified and supports the technology. We have a funnel that's much larger than our pipeline. When a deal gets into our pipeline, we have a high degree of certainty of that deal to close. We don't have a lot of deals fall out once a surgeon champion has been identified and wants to go to administration to purchase a system. And given that dynamic, we can look forward to six to nine months is the timing for that process from identifying a surgeon champion to selling the system. That's the funnel and pipeline that we talk about that has been growing, and we feel has a high certainty to close. Okay. Can you talk about the competitive landscape within BPH, you know, new da Vinci SP approval for the procedure? How do you expect that to impact demand for Aquablation? Just anything else you guys are highlighting at the meeting this week with surgeons. Yeah, thanks. Definitely, we see that as an endorsement and confirmation of this large BPH market. We remain very excited about what we do and do not see that, competitor as an obstacle to our growth. As a reminder, you know, robotic prostatectomy is considered acceptable for large prostates, and for, medium or small prostate, it's not used due to its invasive nature. I wanna mention that we have already placed more than 90% of our systems at centers where there's already a da Vinci system. I think, the best is I highly recommend that you speak with surgeons. We are at AUA or come to our investor meeting tomorrow and where you will see the benefits of our technology is the shorter surgery time, shorter recovery time, and of course, the price of the robot. As far as the utilization and competition is concerned in our utilization, as we have said, majority of the cases that are done between 60 and 80 gram, although more than 70% are below 100, are the TURP and various laser conversion. We are very happy our progress. I hope this answers your question. Appreciate it. Thank you. One moment, please. Our next question comes from the line of Neil Chatterji of B. Riley. Your line is open. Hey, guys. Good morning. Thanks for taking our questions. Maybe just on the international growth, you know, pretty strong in the quarter. Just curious, you know, you know, if you could just talk about, you know, what key markets are driving that and just kind of your expectations for international over time, you know, including both, you know, potential in China, and then also, you know, with the NICE MIB in the U.K., you know, what that U.K. opportunity could look like? We're really pleased with the international performance this quarter. It exceeded our expectations. You know, I feel international historically, there was much more of an impact, whether it was around staffing levels or COVID than we saw in the U.S. It feels like we've really turned the corner in our key markets in Western Europe. The outperformance really starts with the U.K. You know, the recent decision around reimbursement from NICE has been a nice tailwind to the business there. We're already seeing robot purchases in that country at, frankly, pricing levels that are higher than they've been historically, which is really good to see. We're also in Germany, Italy, and Spain, although that's a much less of a contributor, we believe, moving in the near term than the U.K. In longer term, you mentioned a few territories. We are excited about the Asia Pacific opportunity. You know, we submitted for regulatory approval in China. We have regulatory approval now in Japan. We're actively selling in Korea. While this revenue impact in 2023 is not terribly material, I do think looking in the outer years, 2024, 2025, we could see some nice contributions from international that we'll provide more color on as we get closer to those timelines. Great. Just one follow-up. I noticed that, you know, you had a Midwest site, you know, with U.S. Urology Partners with a press release. Just curious, you know, what kind of impact that could have across that network or, you know, on influencing kind of the affiliated hospitals with those groups and his, you know, thoughts on impact from, you know, potentially, you know, large urology groups. Yeah. You know, Midwest Urology in the quarter did purchase various robots. I'm not getting into specifics of the amount and how many, it is good to see a group like that make a commitment to Aquablation. You know, when we start looking at these large IDN networks, we had an account in Atlanta last year that we talked about. We've obviously talked about signing the largest strategic IDN now in the U.S., we do think this could be a nice driver of the business. I think it's just reflective of everything we talked about, that Aquablation offers these centers the ability to retain patients they otherwise would've had to refer out. They make their procedure load much more predictable, they're having great clinic outcomes. It was a nice vote of support for the business that we saw in the first quarter. Great. Thanks. I'll hop back in the queue. Thank you. One moment, please. Our next question comes from the line of Richard Newitter of Truist. Your line is open. Hi. Thanks for taking the questions. A couple for me. Maybe just starting off on, you know, you sound very confident in kind of the step up in 2Q placements implied by your first half guidance. I appreciate the capital can be lumpy, but, you know, can you just maybe characterize where or what you see as the risk of potentially having some of whatever you anticipate coming in 2Q spilling into the back half, like it kind of did in 1Q as you came in, you know, at the low end of your range and it spilled into 2Q? Just to get a sense for, you know, where your confidence level is, you know, at this point, especially where you are in the quarter. You know, is this a pretty high confidence that, you know, your 2Q numbers based on what spills into 2Q from 1Q, plus assuming your conversion rates, you know, hold. Is this pretty much a stronger kind of visibility level than what you had heading into 1Q? Yeah, I mean, I don't know if I'd characterize it as stronger visibility because I feel like we had strong visibility in February into our funnel in the first half. What you are seeing is some spill over into the second quarter just primarily due to timing. Again, I'll go back to just our comments around our pipeline, that once a deal enters the pipeline, it has a high degree of profitability of closing. Could we have one or two or three Q2 deals spill into Q3? That can happen from quarter to quarter. I mean, timing could be variable, but we remain focused on kind of the full year number, achieving the guidance that we put out there on system sales. We have a greater degree of confidence in that number today than we did when we released earnings 2 months ago, even though Q1 came in at the low end of the range. There are factors that we mentioned, you know, the United covering the transitional pass-through going for another one year. The recent rep hires that we have made, they are making great progress. On the surgeon front, we are seeing increased retention and all these are all in the largest IDN that we signed up. These are all the factors that gives us more confidence. Okay, thanks. Well, actually, on that point, Reza, and it segues into a question I have on reimbursement broadly. Just you mentioned transitional pass-through extension as maybe being an incremental good guy in your discussions in getting capital over the finish line. You know, that's transient. Does that mean that when that goes away in January of 2024, that flips to an incremental headwind? Then just secondly, when you answer that question, I'm just curious, we get questions from investors just on the overall reimbursement outlook. You know, to the extent that you have discussions with the industry participants, do you have any sense as to how, you know, how confident you are that reimbursement stays at the levels that it is, which is right now pretty profitable? Thanks. Yes. Transitional pass-through was supposed to go away at the end of 2023, and we had stopped talking about it a few months in around the second half of 2022. That wasn't an obstacle. Just the extension of that is a plus. We do not see that if it goes away, it's gonna make any headwind because it's we had stopped talking about it end of 2022. As far as the reason for that when it was extended was because 2020 was a COVID year and many companies could not benefit from the transitional pass-through, normally it's for 3 years. That was extended for 1 year. As far as reimbursement is concerned, you know, we are at, as you know, we are at APC level 6, and for the last 2, 3 years has stayed there. In fact, if anything, in around the last year for 2023 was a slight uptick on that payment. We don't anticipate APC level 6 to change because it's based on the cost of the system. This is Kevin. This is why from a pricing standpoint, we're very disciplined about our handpiece pricing. You can see over the last eight quarters, if anything, handpiece ASPs are trending upwards, not downwards. Based on that data we have, we would have a strong confidence level given our pricing dynamics of staying at APC level six. Thanks. If I could just squeeze one more in just on the, you know, the mix towards lower volume or low to mid volume utilization accounts increasing as a% of the installed base. Just curious, should we be thinking about that ratio going up? You know, if so, or even if not, what kind of impact will this have on the utilization kinda growth rate? Does it drag it down? Yeah. I think 30% is the right way to think about it moving forward. I mean, I appreciate I'm not being terribly specific there, but I don't see why in the near term it should change from our historical norms and would be a drag on utilization. In fact, we are seeing many of these low volume accounts start doing utilization at comparative levels. One thing to keep in mind, and Reza said it in his remarks, is a low volume account doesn't mean a low volume surgery hospital. These are hospitals that are very used to turning over patients, having a high volume of patients, and having a lot of surgeons. They're just not doing a lot of BPH, and they're not doing a lot of BPH because they frankly didn't have a great alternative previously, and now they do. It's not as if we have to convert this hospital into now doing a lot of surgery. They're already doing surgery. Yeah. We remain focused on high volume accounts and these low volume accounts will happen opportunistically. Based on the case by case, we look at them. Thank you. One moment, please. Our next question comes from the line of Nathan Treybick of Wells Fargo. Your line is open. Hi. Thanks for taking the question. I just wanted to circle back to the capital placements in Q1. You mentioned IDNs were taking a cautious approach and now you're seeing improvement in Q2. Can you give color on why they're being more cautious? Is there a macro outlook out there that, you know, people were focused on? What has changed now that they are opening up budgets? Look, it's hard to tell if it's macro related or IDN specific related, but what we did see are many of our large IDNs just not allocating capital funds in the first quarter. Whether that's macro or specific to budget allocations to that IDN, I'm sure it's a mixed bag. What we are seeing to my comments is those funds now being released for Aquablation in the second quarter. That is, you know, a very primary reason why the ramp from Q1 to Q2 we think is very achievable. Okay. kind of sticking to that, last quarter you gave a metric around, you know, the number of opportunities that you had a high level of confidence will close, that it increased 30%. Can you provide an update on where the funnel is now relative to the end of 2022? Thanks. Yeah, We didn't pin down a%, but what we will say is it continues to grow. What we are seeing is the new reps that we've hired are having meaningful additions to the funnel, and the funnel continues to increase. We continue to monitor it continues to grow. Great. Thanks. Thank you. One moment, please. Our next question comes from the line of Matthew Mishan of KeyBanc. Your line is open. Great. Thank you for taking the questions. Yeah, I'll take the other side of this capital question. You kinda tend to move at a predictable pace for net system adds. Do you see an opportunity, as capital budgets are released and the procedural environment looks good, do you see an opportunity to still exceed the 140 capital placements, you know, for 2023? Is that a really good number that you really think you'll stick with? Well, it's a number we have a high conviction of achieving, the 140. You know, given the opportunities and given how lowly penetrated we are in the current market and what's in front of us, I think we have a long runway ahead of us of capital sales. It's not as if we are looking to sell 140 systems, and we don't have a future market to go attack. There's much more upside to the 140 in the future given the current opportunities out there. We feel very good about the 140 and the high degree of conviction around that. Okay. On the accounts where you've placed, you've seen utilization, you know, increase on the system, which is a positive. Just how sticky are the procedures once a doc starts to use it? Have you seen any procedures slipping, you know, where somebody uses it and then, not any, but seeing some procedure people use it and then say, "Yeah, I won't use it as much," or is it, you know, tending to really be sticky? It is, as you mentioned, sticky in the sense that we have more than 90% surgeon retention. That's mainly because of the clinical outcomes and that they standardize. At the same time, I should mention we have a highly trained commercial organization, both on the capital rep that work very collaboratively with the hospital administration and the clinical support staff that's present to support. In fact, we also had mentioned in our last quarter, the meeting that we had a Net Promoter Score of 92%. All of these come together as customer satisfaction. They are using it both because of clinical outcomes and the support we are giving to them. Thank you. We have seen sequential utilization growth, and these are all the indicators. Thank you. One moment please. I'm showing no further questions at this time. I'll turn the call back over to Reza Zadno, CEO, for any closing remarks. Yes. Thanks everyone for attending this meeting. We look forward to seeing you in future meetings. Tomorrow we have an investor day. Have a nice day. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day. Great.