Good day, and welcome to PROCEPT BioRobotics' third 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 today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Matt Bacso, Vice President, Investor Relations, for a few introductory comments. Good afternoon, and thank you for joining PROCEPT BioRobotics third 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 not to place undue reliance on these forward-looking statements, which speak only as of today's date, November 1, 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. During the call, we will also reference certain financial measures that are not prepared in accordance with GAAP. More information about how we use these non-GAAP financial measures, as well as reconciliations of these measures to their nearest GAAP equivalent, are included in our earnings release. With that, I would like to turn the call over to Reza. Good afternoon, and 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 updated 2023 guidance before opening the call to Q&A. Starting with our quarterly revenue results. We are pleased to report another record quarter with both increased customer utilization and strong system placements. Total revenue for the third quarter of 2023 was $35.1 million, representing growth of 72% compared to the third quarter of 2022. Growth in the quarter was driven by strong U.S. system sales, with U.S. utilization from our expanded install base and increased international revenues. As we have previously discussed, we believe our strategy of focusing on outstanding long-term clinical data, gaining reimbursement coverage, and building a top-performing field team have led to consistent growth of the use of Aquablation therapy. In the third quarter, we sold 38 robots in the U.S., representing unit growth of 46% compared to the prior year. The number of robot placements in Q3 was driven by growing awareness of Aquablation therapy and the addition of new capital reps in greenfield territories. As a reminder, we added 10 new capital reps in late Q4 2022, which expanded sales capacity by 50%. As expected, the capital reps added in the fourth quarter of 2022 have hit their stride, as a typical productivity ramp is six to nine months. While we recognize and monitor the challenges of the macro environment very closely, we enter the fourth quarter of 2023 with a robust capital pipeline that continues to grow meaningfully. Given the current hospital capital spending environment and now having the largest and most tenured capital sales force in the company's history, we continue to feel very good about continuing our strong commercial execution in the fourth quarter of 2023. Next, touching on quarterly utilization. U.S. handpiece and consumable revenue increased 113% compared to the third quarter of 2022. When analyzing our accounts, we continue to be extremely pleased with overall utilization trends. Our U.S. installed base in nine months has grown 62% compared to the end of 2022. While new accounts take time to ramp, we delivered monthly utilization of 6.4 handpieces per account in the third quarter. We are encouraged by what we are seeing on account-specific utilization and have multiple proof points where Aquablation therapy is viewed as the resective standard of care within a given hospital. The primary drivers of procedure growth continues to be active surgeon growth, which is a combination of new surgeons performing procedures and active surgeon retention rates greater than 90% for the first nine months of 2023. We define active surgeon retention as any surgeon who performs a case in both the current and previous quarter. As a company, we benefit greatly from this high level of surgeon retention, as our commercial team can focus on training new surgeons. Given our strong underlying momentum and utilization across our install base, the addition of UnitedHealthcare coverage and seasonal tailwinds from elective procedure volumes, we remain confident in our ability to deliver sequential increases in monthly utilization in the fourth quarter. Our revenue guidance, as Kevin will go through shortly, continues to be informed by what we are seeing in our pipeline, how opportunities progress, what customers are telling us regarding their outstanding real-world experience, productivity ramp of new capital reps, and overall close rates. All these indicators continue to trend positive as awareness around Aquablation therapy grows, which gives us confidence in achieving our 2023 growth targets. Turning to clinical updates. Since the inception of Aquablation therapy, many of our key opinion leaders have been encouraging us to pursue a prostate cancer treatment option. Having now treated greater than 30,000 BPH patients, we felt investigating the merits of Aquablation therapy to treat prostate cancer was a logical next step. In the second half of 2022, we initiated a small feasibility prostate cancer study that treated men who had both BPH and localized prostate cancer, with the purpose of assessing safety of Aquablation therapy. The results were encouraging, which gives us confidence to invest further in this clinical area. Specifically, we will be expanding enrollment to increase up to 125 patients across seven sites globally. The study will include men with BPH who also have Grade Group 3 or less prostate cancer. Furthermore, when combining legacy BPH data along with data from our feasibility study, we were able to provide support to the FDA to remove the prostate cancer contraindication for Aquablation therapy for men with BPH in September 2023. In September 2023, we also announced the IDE approval to investigate the safety and efficacy of Aquablation therapy specifically for prostate cancer. The IDE approval allows us to initiate a single-arm study in the United States and enroll 20 Grade Group 1 and 2 patients for localized prostate cancer at three of the most prestigious U.S. cancer centers. I want to stress that we are still very early in our research of prostate cancer, and that we remain in the evaluation phase. That said, given the traction we are experiencing today in BPH, the relationships we are developing with urologists globally, and the desire of those urologists to pursue this research, if Aquablation therapy can deliver effective and safe outcomes relative to the current prostate cancer alternatives, this could be a significant future opportunity for us. With respect to international market development activities, last month, we announced that in the United Kingdom, NICE granted its strongest endorsement, the standard arrangement recommendation for Aquablation therapy. With this strong clinical recommendation, our pipeline of large NHS hospitals has grown meaningfully. Given the accelerating interest from U.K. surgeons and strong unit economics on the handpiece and system average selling prices, we plan to make additional investment over the next 12 months in the U.K. to accelerate growth. Turning to Japan, we are more than halfway through enrolling patients in our post-market survey and expect to complete enrollment fourth quarter of 2023. While we do not expect meaningful revenue contributions from Japan in 2023, we view Japan as a very attractive market long term. Like the U.S. and the United Kingdom, our strategy is to build the clinical data to support a more robust and sustainable commercial launch. Lastly, in early August, we successfully completed an equity follow-on offering, raising an additional $162 million of net proceeds. The primary goal of the financing was to fortify the balance sheet from a position of strength, to allow us to continue to execute on our long-term strategy to become the standard of care, treating men with BPH. As of September 30, we had approximately $287 million of cash on the balance sheet, which we believe will allow the company to reach cash flow breakeven without additional financing. We also officially moved our corporate headquarters to San Jose in mid-September, which is four times the size of our previous facility. In this new facility, we will have more than enough space to meet our future growth goals. In closing, while we are not providing 2024 financial guidance at this point, I have a high 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 consistently grow, driven by an experienced capital sales team and growing awareness of Aquablation therapy. Monthly utilization accelerated sequentially in Q3 and continues to reinforce the growth of our business and strong relationship with surgeons. With the addition of UnitedHealthcare in mid-2023, we can now offer Aquablation therapy to roughly 95% of all men in the United States. We demonstrated prudent cost control in Q3 and successfully completed an equity financing to bolster our balance sheet, which we believe will take us to profitability.... And lastly, we received IDE approval to investigate Aquablation therapy for prostate cancer. We remain excited about the progress we have made since becoming a public company and our ability to execute on our plans each quarter. With that being said, our opportunities remains vast. Aquablation therapy currently represents only 6% of annual resective BPH procedures in the United States. Also, we expect to exit 2023 with greater than 310 hospital customers, which only account for 11% of the 2,700 hospitals performing resective BPH surgery. With that, I will turn the call over to Kevin. Thanks, Reza. Total revenue for the third quarter of 2023 was $35.1 million, representing growth of 72% compared to the third quarter of 2022. U.S. revenue for the quarter was $32.3 million, representing growth of 73% compared to the prior year period. U.S. handpiece and consumable revenue for the third quarter, $17 million, representing growth of 113% compared to the third quarter of 2022. U.S. handpiece revenue growth was driven by an increase in the install base of robotic systems. Monthly utilization per account of 6.4 handpieces increased sequentially by 5% compared to the second quarter of 2023. U.S. handpiece revenue growth in the third quarter was driven by both strong surgeon interest at new accounts, with most program launches having multiple surgeons. Additionally, we continue to see increased account level utilization over time as we continue to train new surgeons and increase utilization of our existing surgeon base. We shipped 4,873 handpieces in the U.S. in the third quarter, representing unit growth of 112% compared to the third quarter of 2022, with average selling prices of approximately $3,140. In the third quarter, we sold 38 robotic systems, generating total U.S. system revenue of $13.5 million, an increase of 37% compared to the third quarter of 2022. Our U.S. install base at the end of the third quarter is now at 271 systems, which is an increase of 95% compared to the third quarter of 2022. Third quarter system average selling prices were $353,000 and remain within our expected range, given quarterly variability. International revenue for the third quarter was $2.8 million, representing growth of 62%. Gross margin for the third quarter of 2023 was 54%, compared to 50% in the prior year period. Gross margin expansion in Q3 was primarily due to the increase in revenues and our ability to absorb overhead expenses over a larger number of units produced. Moving down the income statement. Total operating expenses in the third quarter of 2023 were $44.5 million, compared to $32.3 million in the same period of the prior year. Compared to the second quarter of 2023, total operating expenses increased by only $400,000, which is the lowest sequential increase over the previous two years. The increase was driven by increased sales and marketing expenses, primarily to expand the commercial organization and variable compensation expense, increased research and development expenses, and general and administrative expenses. Total interest and other income were $1 million, as quarterly interest expense from our $52 million term loan was offset by favorable interest income from our cash balances, which were significantly increased with our recent equity financing in early August. Net loss was $24.6 million for the third quarter of 2023, compared to $22.6 million in the same period of the prior year. Adjusted EBITDA was a loss of $19.4 million, compared to a loss of $18.3 million in the third quarter of 2022. Our cash and cash equivalents balance as of September 30th was approximately $287 million, which includes the $162 million of net proceeds raised in our equity offering in August. Moving to our 2023 financial outlook. We are increasing our full year 2023 total revenue guidance to approximately $133.5 million, representing growth of 78% compared to 2022. We are increasing our revenue guidance based on the following factors: Starting with U.S. systems, we now expect full year system sales to be 145 systems. Given normal seasonality and a more experienced capital sales team, we expect fourth quarter system sales to increase relative to the third quarter. Turning to U.S. handpiece revenue, we continue to expect full year utilization to be approximately in the mid-sixties, as measured by weighted average handpieces sold per account per month, which implies approximately 6.75 handpieces sold per account in the fourth quarter. Given normal fourth quarter procedure seasonality, we believe this will more than offset the expanding install base, thus allowing utilization to continue to increase sequentially. Additionally, we expect handpiece average selling price to be comparable to the third quarter and our other consumables revenue to be $1.9 million. Lastly, on revenue, given another strong quarter and positive momentum, we now expect full year international revenue to be approximately $11.5 million. Moving down the income statement. We now expect full year 2023 growth margins to be in the range of 54%-55%. We continue to expect operating expenses to be approximately $174 million. Given our recent capital raise and subsequently larger cash balance, we expect Q4 net interest income to be $2.1 million, resulting in full year net interest income of $3.3 million. Lastly, we expect Adjusted EBITDA to be a loss of $76.9 million. With that, I will 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 upcoming investor conferences. At this point, we will take questions. Operator? Thank you. To ask a question, please press star one one on your phone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. One moment, please, for our first question. Our first question will come from Craig Bijou of Bank of America. Your line is open. Great. Good afternoon, guys. Thanks for taking the questions, and congrats on a very strong quarter. Want to start with utilization as I usually do, and it seems, you know, pretty important to you guys. Reza, I appreciate your comments on trends of previous cohorts, but would love to hear kind of, you know, as you're adding a number of new systems, you know, how those system utilizations, the newer systems, how they ramp and just a little bit more color there. Hey, Craig, we're gonna give us one second here. We just had a fire alarm go off in the building. It's just turned off. I apologize to everyone here. Can you please repeat your question? We're gonna reset here. Thank you very much, Craig. Sorry about that. No problem. All right. You guys are all right. So, utilization. So I guess the question just comes down to, I wanted to know how you guys are seeing utilization with some of the new systems that you're adding. You know, appreciate Reza's comments that the older cohorts are still increasing, but wanted to understand, you know, when you place a new system, you know, how you're seeing that ramp. Yeah. Thanks. Thanks, Craig. Sorry for the disruption. We are very happy with the utilization we saw in Q3 and some of the underlying trends. I want to talk about those. Historically, Q3 is a flat, but we saw in this quarter we saw an increase, and that was, number one, our existing surgeons. Generally existing surgeons is flat. We saw an increase in our existing surgeons. We also had the largest number of new surgeons in this quarter that entered, and that contributed to this increase in utilization and also the retention. So these are the three factors that led to a very good utilization in Q3. And I'll now let Kevin to add to this. Yeah, no, it's a good summary. And, you know, Craig, when we look at new accounts, I mean, we are seeing today, and I think it's a testament to our focus on our Aquablation sales rep team and focusing on utilization. So when we launch new accounts today, we typically have two to three surgeons in that account, and again, a lot of that's due to our sales team, but a lot of it is due to just general growing awareness and market acceptance of Aquablation. If I go back two years, pre-IPO, I mean, most accounts would launch with one surgeon, and now we're seeing two to three. On top of that, we're seeing many program launches within the third quarter. So it was a really nice quarter for new account launches. And we are also hearing our surgeons telling us that the patients are asking. Awareness among patients has increased, and they are asking for this treatment. Great. That's helpful. And I wanna ask also about the sales funnel. You guys track that rather closely. You know, I appreciate you guys expect a sequential pickup in systems in Q4 versus what you saw in Q3. So just wanted to see, you know, any changes in, you know, kind of the conviction or the confidence that you have in your visibility, and any lengthening of sales cycles or anything else from, you know, that may be, you know, capital market or capital purchasing impacted? So, I wanna answer first part of your question. You know, the demand is really driven by surgeons. As we have said in the past, once we identify the surgeon champion, it's very difficult to lose that deal. It generally goes to the finish line, and there is a demand by surgeons for our technology. And we have also increased our sales force this year is about 50% larger than the same time last year. And awareness among the surgeons have increased. These are the parameters driving for the capital, and that's what gives us confidence. And then, Kevin, to add- Yeah, I think specifically, Craig, I mean, to your question, I think we have a higher degree of confidence and conviction today in our capital pipeline than we did when we entered the year. I mean, our guidance still suggests that 55% of all of our sales are going to come in the back half of the year. And now that we're kind of only one quarter left to go in the year, we obviously feel much better about our ability to achieve that number, just given that time's gone by. And I just think the second point, too, is, you know, this is the first year where we had such a large addition to our capital team, and we were really dependent on those folks being productive in the back half of the year. And that was an unknown at the beginning of the year. I think now we see in our pipeline, these reps being productive. We see deals coming into the funnel. We see the same sales cycle, so we don't see any lengthening, and we see similar close rates. So I think all of those things give us more confidence today than when we entered 2023. Thanks for taking the questions, guys. Thanks, Craig. Sorry again about the hiccup there at the beginning. Thank you. One moment, please, for our next question. Our next question will come from Joshua Jennings of TD Cowen. Your line is open. Hi. Good afternoon. Thanks for taking the questions, and congratulations on another strong quarter. I wanted to follow up on Craig's question, Reza and Kevin, and just thinking about 2024, I mean, the street's just north of $200 million, implies 50%+ revenue growth. I think you probably have some of the key drivers of strong revenue growth in 2024. I know you're not issuing guidance. I was hoping you could just take us through some of those key drivers and how we should be thinking as we're thinking about updating our models and forecast for 2024. Thanks, Josh. You know, I'm not providing financial guidance, but as I summarized in my prepared remarks, we feel very good about the business going forward, and every metric is moving in the right direction. And these are the tailwinds that have a strong pipeline. We saw the increased utilization, the United coming on board, now 95% access to this therapy among patients. We demonstrated also a prudent cost control, and with the recent financing, we strengthen our balance sheet. Combination of these will take us to profitability. I also want to mention that we are very early still in this ramp, whether it's on utilization or robot placement. So these are all those parameters that gives us confidence going to 2024. Kevin, you want to? Yeah, Josh, I mean, the drivers specifically that you referenced, I mean, at the end of the day, our business is fairly simple. We sell capital, and the capital is used through what we measure as utilization, right? And those drivers don't change. In 2024, I do think you see a business, though, that shifts more heavily weighted, obviously, to disposables as we grow our installed base. So that's point one. Point two, we're obviously aware of the management team and as a company, the street expectations. And if you look at utilization expected of the company in 2024, it's roughly equivalent to what we're guiding to in Q4 of 2023, which I would suggest is a proof point that what expectations are not terribly ahead of even where we're at today. So that's point one on utilization. And then point two, we still believe our ability to sell capital is directly correlated to the number of capital reps that we have in the field that are productive. We're going to exit the year probably close to the 35-40 range of capital reps, which we think if you just take average productivity, I mean, you could do the math yourself and back into kind of what a system number would look like for 2024. But to Reza's comment, we're very early in our penetration, and therefore, we don't expect diminishing returns as we add capital reps. But so I appreciate we're not answering your question directly on 2024, but as Reza mentioned, the growth drivers of the business are in place to allow this business to continue to grow at, I'd say, rates that far exceed most other med device companies. No, that was, that was very helpful. Thank you. Just to follow up, you know, as you're seeing the AquaBeam System and AquaBeam treatment being adopted at centers and deeply penetrating those accounts, becoming standard of care at those centers, I was just hoping to get a feel for what's being displaced. Are there-- is there, is there a low-hanging fruit in the resective, either approach or technology bucket, you know, TURP, HoLEP, GreenLight, prostatectomies, a really broad-based, I guess, replacement of those approaches? I really wanted to ask that and just hear also about just the conversion of HoLEP surgeons and that rate to date in the United States. Thanks for taking the questions. Thanks, Josh. So when we ask this question from our surgeons, definitely, TURP and GreenLight are the ones that, we ask them if you didn't use our technology, what else you could use? The majority of the cases are from TURP and GreenLight, and that's because TURP, again, with the data we have still is what the largest, resective, treatment. And as far as the larger prostate, I mean, definitely we are physicians use our product for larger prostate. The advantage compared to other therapies is the shorter therapy time, faster recovery, and also not that much dependent on surgeon skill. So these are definitely for larger prostate, the advantage we have is in those areas. Yeah. I'd also just add, specific to your question on HoLEP, I mean, if you look at the resective market, you know, Josh, HoLEP is about 10% of the resective surgical market, maybe something slightly less of that. And the reality of that procedure, it's a very long procedure. It's difficult to perform. It's, it's highly specialized. I don't think anybody would suggest that HoLEP would have the ability to become the standard of care over time. So as Reza mentioned, it, it primarily is TURP and GreenLight. I'm, I'm sure we're getting some HoLEP cases, but there's also, I would say, many HoLEP loyalists, that our growth is not dependent on cannibalizing in the near term. Great. Thanks again. Thank you. One moment please, for our next question. Our next question will come from Matthew O'Brien with Piper Sandler. Your line is open. Afternoon, thanks for taking my questions, and I'll refrain from trying to make a joke about the smoke alarm going off because your business is on fire. But- We appreciate it. First call in the new facility here, but it was interesting. But we're good. Got it. So on the utilization side, I'm just curious about the performance there, because again, in Q4, we're expecting a pretty big step up as far as utilization goes for the existing systems. You grew 5% sequentially in what's typically a seasonally slow quarter. So can you just talk about some of the momentum you're seeing? And again, kind of the Craig'ss question, across the cohorts, are some of the people that have been using you for a while at 10 cases per month on average? And then, you know, what kind of benefit are you baking in for United in Q4 specifically? Yeah, so I think all of your questions point to kind of our comfort around our ability to expand utilization in the fourth quarter, right? I mean, that's really what it comes down to. And our Q4 guidance implies utilization of about 6.75, 6.8 procedures per month per account in the fourth quarter. And when you look at that metric regarding cohorts, so to achieve that in the fourth quarter, we do not need any accounts that purchase systems in 2023 to be at that corporate level. And that means, by definition, that the accounts that have been with us prior to 2023 are doing north of 6.8, and in many cases, as you pointed out, you know, well north of 6.8, and that is what is expanding utilization in the fourth quarter. I'd also suggest that in BPH procedures, it is an elective procedure. We do expect some normal seasonal tailwinds from our existing surgeons in Q4 as they do more procedures than they did in the previous quarter. Then I guess just the last point around kind of how we are comfortable with expanding utilization. Our historical growth in 2022 was that the growth we experienced last year in our fourth quarter, the guidance we're giving today is very comparable to that sequential growth. It's about 5%-6% sequential increase in utilization in Q4 2023, which would be very comparable to what we did in Q4 2022 as well. So a multitude of factors that get us comfortable that we could continue to expand utilization, even with a greatly expanding installed base in the fourth quarter. Got it. Appreciate that feedback. And then, Kevin, another one for you, just more on the margin side of things. Gross margins down just a little bit, not the end of the world. Love to hear what happened there, but then also it looks like the cash burn came down quite a bit, and I know that's an area investors have been, you know, focused on. So can you just talk about some of the levers that you're pulling on the operating margin side of things and the cash burn side of things? Thank you. Yes, I'll address both those. So first, margins. So those gross margins, they were around our expectations, but as you pointed out, down sequentially. The main contributor for margin being down sequentially is really the impact of our system ASPs and the impact of that on overall gross margins. If we had capital pricing similar to Q2, our gross margins, in fact, would have been roughly 180 basis points higher, which would have translated to 56% versus 54%. But as we've continually said on previous calls, we do expect quarter-to-quarter variability on system pricing, and we actually see that rebounding back to $370 in Q4. So we think that's kind of a temporary situation. I'd also point out, while not as material as pricing, we did produce, as a company, relatively fewer units in the third quarter, and therefore, our average costs were marginally higher. But now that we're fully into our new facility, we do expect production volumes to return to more historical levels, and this won't negatively impact margins in the future. But we feel good, although I appreciate this quarter-to-quarter variability, but the trend over time is up and to the right with gross margins. Your second question, I'm glad you asked, on cash. This was, as you pointed out, from an operating cash flow point, significantly improved over the previous two quarters. We were in the $35 million in Q1, $28 million in Q2, and you saw that number drop below $20 million in the third quarter. This is purposeful by the company, particularly given our recent equity raise. You know, we feel that as a business, we're definitely investing in the long term, we're investing in our commercial team, but at the same time, we're being prudent with our cash. We understand in this environment that a pathway to profitability and having OpEx discipline is important. It's always important, but particularly in this environment, you know, we believe that we need to show investors that we can grow the top line and demonstrate leverage on the bottom line. That's what we feel we did in the third quarter. Our guidance suggests on OpEx, that's going to continue in the fourth quarter with relatively flat operating expenses. Very helpful. Thank you. Thank you. One moment, please, for our next question. Our next question will come from Richard Newitter of Truist Securities. Your line is open. Hi, thanks for taking the questions. Congrats on the quarter. Just a couple from me. You mentioned, I, I think, Kevin, you know, a productivity for your capital reps.... In the past, I think you said you target that getting north of four to five, you know, systems per rep, if you're heading into next year with 35-40. I mean, is that, that the right kind of rule of thumb, thumb to just be thinking about broad strokes? Yeah, broad strokes is a good rule of thumb. I would remind you that we've said to get to that productivity, it does take a rep on average six to nine months, but we believe that productivity is in the ballpark, correct. Okay. And then can you comment at all on the percent of IDN, either orders or, you know, I know you've said that you're at the highest level of IDN contracting, exiting 2Q or entering 2023, maybe that was the comment. Can you just talk about those percentages and, you know, one, what percent are you at, and where do you expect to be as you exit the year in terms of IDN as percentage of total orders? And then, two, how, if at all, does that impact, you know, pricing? Do those results reflect multisystem orders and or is there anything you can give us in terms of IDN orders and where they fall on the kind of the range of ASPs that you've delineated in the past between $350,000 and $400,000? Thank you. Yeah. Thanks, Rich. Let me start with pricing. So our IDN relationships do not impact our system ASPs negatively. So I'll just start with that. That's the quarter-to-quarter variability around system pricing is not a reflection of IDN deals. So I'll just start with that one. To your broader question on IDNs, we do continue to partner with IDN-affiliated hospitals. As we've mentioned, we do believe we're on track to have the majority of all large IDNs under contract by the end of 2023, which for a business at our stage of commercialization, is something, you know, we're really frankly proud of, as a management team here. And I just think it's a great testament to the technology. With that said, I think you're hearing from other companies that sell capital, and we're not any different. We are not seeing large bulk buys from our IDN partners in 2023. And our guidance is not dependent on any improvement in this environment in Q4. I think when we entered the year, while we said we weren't dependent on large bulk buys, I think we were thinking, you know, we had the possibility to get a few this year, but those just are gonna be pushed into 2024. And if anything, I think we view our IDN relationship as a future tailwind for us because we're able to meet our 2023 capital expectations really without any bulk buys. It's been kind of onesies and twosies, negotiating with individual hospitals under their RFP process as opposed to any type of large bulk buys. So none in our current sales in the first half or in the first nine months of 2023, but something we continue to work on and are working on deepening those relationships daily. Okay. Thank you very much. Thank you. One moment, please, for our next question. Our next question will come from Neil Chatterji of B. Riley. Your line is open. Pardon me, Neil Chatterji, your line is open. If your phone is on mute, please unmute your line. If you're using a headset, please put on your headphones. Mr. Neil- Go to the next. Mm-hmm. Thank you. Okay. One moment. Again, one moment for our next question. The next question will come from Brandon Vazquez of William Blair. Your line is open. Hi, everyone. Thanks for taking the call. One, maybe a quick clarification question and a little bit about future plans. On the capital rep side, I think you had just mentioned you'd exit this year with somewhere between 35-40. Are you able to shore us up on where you are today? And then as you look to next year, I think you've discussed before that there's room for further expansion as you look to 2024. Do you hire a cohort for 2024 as we go into the year, or do you hire that cohort in 2024? Any updated thoughts around that? Yeah, we're probably, in regards to U.K., we're about halfway, to be fair, to where we want to be. So think of around 35 sitting here today, which means we have another class, probably five, coming in here in the next two months. I'd also suggest that in 2024, you know, the plan isn't to stop, but at the same time, I don't think we're in a position to call out the exact number of capital folks we're going to add. You know, as the business gets more complicated and we get into more accounts, it's not just gonna be capital reps we hire. We're looking at things like strategic account managers. We're looking at key accounts. We're looking at IDN relationships. So I think it becomes a little messier, so to speak, in 2024, but we definitely continue to plan to invest in that business. But we still want to make sure we're investing responsibly, making sure we're not sacrificing outcomes, making sure we're not moving too fast, being very methodical about how we execute the whole organization. Okay, thanks. So then internationally, I mean, you guys have had a couple of nice wins, especially in the U.K. You've mentioned that you might step up investments in the U.K. through 2024. Can you talk a little bit about what those investments are, when that can accelerate? I mean, you have good reimbursement there, you have endorsements, you're making some investments. Is there any reason that UK opportunity can't be a high-growth area, or as high of a growth of an area that we're seeing in the U.S.? ... Definitely we are very pleased with the, another solid quarter we have from international. Our international strategy has always been to market development and, working with KOLs and increase awareness. As you mentioned, recent announcement by NICE, having this third arrangement is a great driver and catalyst for both our product in the U.K. For that, we will increase our sales infrastructure in U.S., in, in U.K. and, international, definitely Japan and, but staying more focused on, on U.K. Our, immediate action will be increasing infrastructure. But I'm, I'm with Kevin. Yeah, I just think the only point I'd add to Reza's comment is, I don't believe our commentary around investing more in the U.K. is going to change kind of the OpEx leverage of the business. So I think we're investing in the U.K., but it'll be absorbed into the run rate of the company, as opposed to anything materially incremental if you're thinking about it from an OpEx standpoint. From an opportunity point of view, international, we are targeting those geographies that is a great market. We see international as a great opportunity, but we are moving very methodically and making sure we have the reimbursement and KOL and awareness in place. Got it. Thanks a lot for taking the questions. Okay. Thank you. One moment for our next question. Our next question will come from Neil Chatterji of B. Riley. Your line is open. So Neil Chatterji, your line is- We'll send Neil a separate note. Why don't we, why don't we keep moving here? Okay. I think Neil's having technical issues, and we'll try and... Let's put him at the end and see what happens. Okay. Thank you. One moment, please, for our next question. The next question will come from Nathan Treybeck of Wells Fargo. Your line is open. Hi, guys, congrats on the great quarter. I just want to... Can you just touch on the drivers of system ASP variability quarter over quarter? I think generally there were expectations that ASP will be down, you know, sequentially in Q1 and then kind of stable Q2 through Q4. So maybe if you could just touch on what is driving the variability. Thanks. Yes, thanks, Nathan. So look, we've mentioned this on previous calls, and we have talked kind of about, you know, our overall mission to partner with our hospital customers, drive procedure growth, and gain market share. And, you know, we do have internal limits for, so to speak, on pricing, but at the same time, we are willing to negotiate on capital. And if that means we can get a system in sooner, if we have a committed surgeon that we know is going to do a lot of volume, we will be willing to negotiate on pricing. And I think you are going to start to see in our business some seasonality, not only in systems sold, but also in system ASPs. It appears to us that, you know, Q1 and Q3 appear to be, I would say, a weaker capital quarter, where, you know, we've seen ASPs now be roughly in the $350-$355 range. But we saw Q2, as you pointed out, at $370, and when we look at the funnel in Q4, we see an increase from Q3. So I, I do think there's just going to be some quarter-to-quarter variability, but at the same time, when we make the decision on price, it's always in light of the bigger opportunity and how fast can that hospital become an Aquablation standard of care center, so to speak. And that's a trade-off, you know, we're willing to make, and it's individual negotiations with each hospital. But we don't have, as a management team, any concerns kind of about our long-term capital pricing and our ability to get a fair price and a fair margin for our system. Okay, thanks for that. And then in terms of just system sales outside the U.S., they were down pretty meaningfully quarter-over-quarter. Can you just talk about what drove this and I guess your outlook for Q4 and then maybe into 2024? Thanks. Yeah. It's timing, Nathan, to be honest. I mean, at these volumes, if you think of your European customers, particularly in capital, I mean, I think the seasonality in Q3 is even more pronounced than the U.S., quite frankly. We did see strong utilization overseas, even with that seasonal factor. But when we look at the pipeline, we had a very robust Q2, where you're talking about relatively few units as well, right? And we see a good funnel in Q4, and I would expect capital to rebound in Q4 based on what we see in the pipeline. But we're not reading into anything other than timing on capital internationally. Great. Thanks. Thank you very much. Thank you. One moment for our next question. Our next question will come from Mike Kratky of Leerink Partners. Your line is open. Hi, everyone. Thanks for taking our question. Can you provide a little more color on next steps for Aquablation in prostate cancer, and how are you thinking about the overall size of that market opportunity and just your level of confidence that that could be an effective treatment option for patients? Yeah, thank you for the question. We are very excited about the cancer opportunity, but we... This is very early. And the reason we started this study, as we mentioned from the very beginning of the company, KOLs were asking us to enter this segment. And because this is the same anatomy, same procedure, and the same surgeon, and it made sense considering some of the data we have gathered in our FDA trial on the procedure. If we can show similar results in the cancer treatment, this could be a great opportunity for millions of men who are sitting on the sidelines. But again, this is very early. This is a great opportunity, very early. It makes perfect sense for us to have that as our next indication. I'm going to add, even though you didn't ask, I think the beauty of this indication for PROCEPT is the project currently doesn't require any material increases to our R&D spend, our R&D group. This is purely a clinical effort over the next one to two years, which is nice as we get to move forward and make a lot of progress, but keep 99% of the organization's resources and focus on our opportunity in BPH. So we're really excited about it. Understood. Thanks. Welcome. Glad to have you on board. Thank you very much. Thank you. This will end our Q&A session on the call. I would now like to turn the conference back to the CEO, Reza Zadno, for closing remarks. For attending our earnings call. We look forward to seeing you and speaking with you in the future conferences. Have a very nice day. This concludes today's conference call. Thank you all for participating. Thank you for participating, you may now disconnect and have a pleasant day.