Good afternoon and welcome to PROCEPT BioRobotics' second quarter 2024 earnings conference call. At this time, all participants are in 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 of Investor Relations, for a few introductory comments. Good afternoon and thank you for joining PROCEPT BioRobotics' second quarter 2024 earnings conference call. Presenting on today's call are Reza Zadno, Chief Executive Officer, and Kevin Waters, Chief Financial Officer. Also present is Sham Shiblaq, Chief Commercial Officer, who will participate in the Q&A session. 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 under reliance on these forward-looking statements, which speak only as of today's date, August 1, 2024. 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 will 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 general business update followed by Kevin, who will then provide additional detail regarding our financial performance and updated 2024 guidance. Starting with our quarterly revenue results, we are pleased to report another strong quarter, with total revenue for the second quarter of 2024 of $53.4 million, representing growth of 61% compared to the second quarter of 2023. Growth in the quarter was driven by strong U.S. system sales, increased utilization from expanded U.S. install base, and record international revenues. We exited the second quarter of 2024 with a U.S. install base of 400 systems, representing growth of 72% compared to the prior year period. Despite 42% of our U.S. install base being active for less than 12 months, U.S. monthly utilization increased approximately 15% compared to the prior year period. The significant increase in new accounts in conjunction with our ability to move accounts faster up the utilization curve demonstrates both our team's consistent commercial execution and growing customer and patient demand for Aquablation therapy. Multiple factors continue to trend positively, allowing us to execute against our 2024 revenue objectives. Additionally, we continue to make progress, expanding gross margins and maintaining good operating expense control. We believe these underlying fundamentals reflect the technology that is laying the foundation to become the BPH Surgical Standard of Care and a business that will be a leading global urology company. Regarding the hospital CapEx environment and PROCEPT's capital rep team, we continue to believe the market is stable to improving compared to the previous 12 months. Specifically, we are having more proactive conversations with hospital CFOs who just a few quarters ago were exercising more caution in pursuing general CapEx investment given lingering macro headwinds. With a growing and increasingly educated patient population, along with motivated urologists, we are seeing hospitals prioritizing investment in our robotic system to ensure they stay competitive and not lose patients to other area hospitals. Given the disruptive nature of our technology and that achieving consistent resection outcomes is independent of surgeon skill or experience, we believe every BPH hospital can now build a robust BPH practice with Aquablation therapy and not have to refer patients out to specialists. As we turn to our capital pipeline, we remain excited about the opportunity. The number of robot placement opportunities continues to grow nicely, which has been driven by the addition of new capital reps. We entered 2024 with approximately 40 capital sales reps, of which 10 were added in the fourth quarter of 2023. With a productivity ramp of 6-9 months, we expect the capital reps added in the fourth quarter of 2023 to start contributing meaningfully to U.S. system sales in the second half of 2024. Even with our recent success, we are still very early in our adoption curve, with a long runway in front of us selling to BPH hospitals. Next, touching on utilization and surgeon activity, U.S. handpiece fees and other consumables revenues growth increased 101% compared to the second quarter of 2023. When analyzing our accounts, we remain pleased with the overall utilization trend. In the past 12 months, our U.S. install base has grown 72% compared to the second quarter of 2023. These new accounts take time to ramp to the levels of mature accounts. We are encouraged by what we are seeing on account-specific utilization, and we believe we have multiple proof points where Aquablation therapy is viewed as the resective standard of care within a given hospital. In addition to adding new accounts, a primary driver of procedure growth continues to be active surgeon growth, which is a combination of new surgeons performing procedures and active surgeon retention rates exceeding 90%. As a company, we benefit greatly from this high level of surgeon retention, as our commercial team can focus on training new surgeons. Regarding surgeon interest, in early May, the 2024 American Urological Association Conference, or AUA, was held in San Antonio. Given our recent growth, AUA 2024 was particularly exciting for PROCEPT, as it marked the first year we could clearly see and feel growing market acceptance and awareness of Aquablation therapy. Specifically, there was a BPH session of poster presentation that was not sponsored by industry, where a significant number of Aquablation therapy papers were presented. The presenters highlighted real-world outcomes that were consistent with the company's clinical trials. This rapid increase in real-world Aquablation therapy publications continues to provide more confidence for future adopters of the technology. Throughout the weekend, we also held educational and training sessions where over 100 new surgeons participated. Additionally, our expansion into prostate cancer garnered noticeable attention at the AUA, with a growing number of urologists requesting more information on how Aquablation therapy could treat prostate cancer. Since prostate cancer is a very slow-moving disease with a low mortality rate, it is no secret that in many low and intermediate risk cases, legacy treatments cause unnecessary harm at the request of patients who demand the cancer be removed from their body. These decisions can lead to a significant decrease in a patient's quality of life. Given this backdrop, many surgeons at the AUA were very interested in learning more about Aquablation therapy's potential efficacy, knowing that the safety profile demonstrated in the BPH is so attractive. Furthering our expansion into prostate cancer, in April, we initiated enrollment of PRCT-002, PROCEPT's first IDE studying men with localized prostate cancer. As a reminder, PRCT-002 is an FDA-approved single-arm study of 20 patients with Grade Group one and two prostate cancer. I'm excited to announce enrollment is progressing nicely and that we expect to complete enrollment in the third quarter. We look forward to tracking these patients in the coming months and plan to provide additional information when it becomes available. Turning to recent reimbursement and payer coverage updates, between late March and June, we received positive coverage policies from Blue Cross Blue Shield of Arkansas and Blue Cross Blue Shield of Louisiana. Combined, both plans account for roughly 1.5 million covered lives. While relatively insignificant given our existing 95% payer coverage, we do believe the addition of these Blue Cross Blue Shield plans will have a positive incremental impact on utilization locally, considering we have numerous systems in those states. Additionally, in mid-July, CMS published its 2025 proposed rule for the hospital outpatient prospective payment system. The level 6 APC code for Aquablation has a proposed payment that would provide the hospital $9,209 and the ASC setting $6,666 for each Aquablation procedure, which is a 5% and 7% increase respectively over the 2024 rates. The final rule is expected to be published in November. Also, as a reminder, in mid-June, we announced that the American Medical Association established a new current procedural terminology, or CPT Category 1 code for Aquablation therapy to treat BPH. The Category 1 CPT code will replace the existing Category 3 CPT code starting January 1, 2026. With respect to international market development activities, we generated $5.7 million of international revenue in the second quarter of 2024, representing growth of 79% compared to the prior year period. Growth in the second quarter was once again driven primarily by strong sales momentum in the United Kingdom. Additionally, we sold our first two systems to Japanese hospitals in the second quarter. Following the completion of the post-market study earlier this year, our Japanese pipeline has increased nicely. Positive ASPs in the market and historical acceptance of new technologies give us confidence in our future investments and our ability to accelerate the penetration of the Japanese market in 2025. Similarly to the excitement we generated at the AUA conference in the United States, we also had a sizable presence at the British Association of Urological Surgeons in Birmingham, England. This was the first conference since NICE granted its standard arrangement recommendation for Aquablation therapy, and the interest from surgeons reinforced our confidence in penetrating the U.K. market. Lastly, I want to comment on new changes made to our Board of Directors. In mid-April, we welcomed Larry Wood to our Board of Directors. Larry joins PROCEPT with over 35 years of medical device experience, most notably at Edwards Lifesciences, where he is currently Group President of its TAVR and Surgical Structural Heart business. Additionally, in mid-July, we welcomed Tom Prescott as our new Chairman of the Board. Tom joins PROCEPT with decades of medical device experience, most notably as President and CEO of Align Technology from 2002 to 2015. Specifically, under Tom's leadership, Align transformed the orthodontic dental market, growing revenue from $75 million to near $1 billion when he retired. We believe Larry and Tom's experience and leadership in strategic areas related to commercialization, operations, clinical, and regulatory efforts will help PROCEPT efficiently scale in the coming years. We are also pleased that Dr. Fred Moll, who has served as our Chairman since 2021, will continue to serve on our Board of Directors as well. To conclude my prepared remarks, every key metric we track continues to move in the right direction. In summary, our pipeline and sales funnel continue to grow nicely in what we currently believe is a stable to improving macro environment. On average, the longer an account has been active, the more procedures it performs. We are launching new accounts with more surgeons while sustaining excellent retention rates. Our international business continues to exceed expectations. Our commercial organization is the largest and most tenured in the company's history, which we believe will lead to increased productivity. And lastly, we have continued to exceed our guidance around profitability metrics, primarily with the expansion of gross margins throughout 2024. Given this positive momentum, we believe Aquablation therapy is laying the foundation to become the BPH surgical standard of care, and PROCEPT is emerging as a leading global urology company. And with that, I will turn the call over to Kevin. Thanks, Reza. Total revenue for the second quarter of 2024 was $53.4 million, representing growth of 61% compared to the second quarter of 2023. U.S. revenue for the quarter was $47.7 million, representing growth of 59% compared to the prior year period. In the second quarter, we sold 47 AquaBeam robotic systems with average selling prices of $378,000, generating total U.S. system revenue of $17.8 million, representing system revenue growth of 20% compared to the second quarter of 2023. Also, we did not place any units at an ASC in the U.S. in the second quarter. U.S. handpieces and consumable revenue for the second quarter of 2024 was $27.3 million, representing growth of approximately 101% compared to the second quarter of 2023. Hand piece growth was driven by an increase in the install base of AquaBeam robotic systems. Additionally, monthly utilization of 7.1 hand pieces per account increased approximately 15% compared to the second quarter of 2023. Utilization in the second quarter exceeded our expectations and represents a 4% sequential increase from the first quarter. Overall, we continue to see increased utilization across cohorts, which is a direct reflection of strong commercial execution, which includes training new surgeons, high surgeon retention, and opening new accounts in a timely manner. We shipped approximately 8,000 hand pieces in the U.S. in the second quarter, representing unit growth of 105% compared to the second quarter of 2023. Second quarter hand piece average selling prices were approximately $3,200. We also recorded $1.7 million of other consumable revenue in the second quarter of 2024. International revenue for the second quarter was $5.7 million, representing growth of approximately 79%. Gross margin for the second quarter of 2024 was 59%, representing an all-time high and 200 basis points above our second quarter guidance we provided in May. Gross margin expansion in the second quarter was once again due to strong execution from our operations team and our ability to absorb overhead expenses along with revenue overachievement. Moving down the income statement, total operating expenses in the second quarter of 2024 were $58.3 million compared to $44.1 million in the same period of the prior year and $52.7 million in the first quarter of 2024. The increase was driven primarily by increased sales and marketing expenses, mostly to expand the commercial organization and increase research and development expenses. We are very pleased with the operating expense leverage we have demonstrated in the first half of 2024. When comparing revenue growth to operating expense growth, revenues increased 70% in the first six months of 2024 on 31% operating expense growth. Total interest and other income was $1.2 million, as quarterly interest expense from our $52 million term loan plus $300,000 of foreign currency losses was offset by favorable interest income from our cash balances. Net loss was $25.6 million for the second quarter of 2024 compared to $25.3 million in the same period of the prior year. Adjusted EBITDA was a loss of $18 million compared to a loss of $19.9 million in the second quarter of 2023. Our cash and cash equivalents balance as of June 30 was $217 million. We reported cash usage in the quarter of $11.5 million, which is a significant improvement from the $31.6 million usage in the first quarter of 2024. Most of this progress was driven by improvements in working capital. We believe our strong balance sheet will provide the liquidity and capital resources needed to support and grow our current business. Moving to our 2024 financial guidance, we now expect full year 2024 total revenue to be approximately $217 million, representing growth of approximately 59% compared to 2023. Starting with U.S. systems, we continue to expect to sell approximately 185 systems in 2024. In terms of cadence, we expect third quarter system sales to be in the low 40s, with fourth quarter system sales being our strongest quarter of the year. We also anticipate system average selling prices in the second half of 2024 to be approximately $380,000. Turning to U.S. hand pieces, we expect to sell approximately 33,350 hand pieces for the full year, with average selling prices of approximately $3,200. We also expect other consumables revenue to be approximately $7.8 million for the full year. Regarding quarterly cadence, and given the strength we saw in the second quarter, we expect third quarter utilization to be down slightly compared to the second quarter, with fourth quarter utilization increasing sequentially due to normal seasonal strength and an aging installed base. Additionally, we now expect U.S. service revenue to be approximately $11.7 million. Lastly, on international revenue, given another strong quarter and positive momentum in the United Kingdom, we now expect full year international revenue to be approximately $20.5 million, representing annual growth of approximately 73%. Moving down the income statement, we now expect full year 2024 gross margins to be approximately 59%, an increase from our previously issued guidance of 58%-59%. Regarding quarterly cadence, we continue to expect gross margins to modestly increase sequentially in the second half of the year. Turning to operating expenses, we continue to expect full year 2024 operating expenses to be approximately $231.5 million, representing growth of 29%. In terms of quarterly cadence, we expect the third quarter operating expense to be approximately $59 million. Given current interest rates, we expect to generate net interest income of approximately $6.1 million in 2024. Given the increase in revenue and gross margin, along with our continued view on operating expenses, we now expect full year 2024 adjusted EBITDA loss to be approximately $67.5 million, an improvement from a loss of $70 million from our previous guidance, and up almost $6 million from our initial guidance provided in February. 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 upcoming investor conferences. At this point, we will take questions. Operator. And thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We compile the Q&A roster, and we ask that you limit yourself to one question, one follow-up. Again, that's one question, one follow-up. And one moment for our first question. And our first question comes from Craig Bijou from Bank of America Securities. Your line is now open. Good afternoon, guys. Thanks for taking the questions and congrats on another strong quarter. So I want to start, or I want to ask about two things, but firstly, on the expense side, obviously really stood out your cash burn getting lower was clearly impressive. And the gross margin coming in better than what you guys had said it was going to be last quarter. So maybe just big picture, Kevin, if you can just kind of talk about your ability to leverage the business on the gross margin line, on the OPEX line, and then how we should think about kind of the cadence, not just this year, but kind of looking ahead and where can those margins go and how to think about your cash burn moving forward too. Yeah. Thanks, Craig, for the question. To address just first what occurred this quarter and kind of 2024 gross margins, we've been consistent in saying that the biggest contributor for gross margin expansion for us is our ability to leverage the fixed costs that we've built into the business and absorb the related overhead on increased revenues. That's really what you saw come to fruition in our second quarter and what's implied is going to continue in our future guidance. On top of that, we did talk at the end of 2023 about a few operational things around moving to our new facility, around things like first-pass yield and scrap and warranty. We've put a lot of focus in those areas in the first six months of 2024. That really has helped expand gross margins to the 59% we saw in the second quarter. Regarding cadence throughout the rest of the year, we continue to expect this number to expand in the third quarter, I think somewhere in the 59.5%-60% range, and then exiting the year north of 60% to get to the full year guide of 59%, which is, I think, a tremendous achievement from last year when we were ending the full year at 52%. So good margin improvement there. That kind of leads into your last question, just kind of longer-term potential of the business. While on this call, we're not prepared to talk about 2025 on this call, I do think, given the trajectory we're on with margins, particularly exiting the year in the low 40s, given our operating expense leverage ratio, it just gives us increased confidence with this margin profile and with our growth that longer-term growth could be a highly profitable business. And that's really good to see come to fruition here in the first six months of 2024. Yeah. Thanks, Kevin. And just following up, maybe on the comments on the international business and the record quarter you guys had, I do think that we don't talk enough about the international expansion opportunities that you guys do have. So maybe just talk about what you've seen thus far in the U.K. And then obviously, Japan is something to look forward to that's really going to start ramping soon. So maybe talk about how the size of those opportunities relative to your current U.S. opportunity. Thanks, Craig. Yes, we are very happy with the strong second quarter international driven primarily with U.K. As we have previously said, the NICE endorsement was a great driver for this. Always similar to the U.S., started with the clinical data. Now we are starting to have a good install base in U.K. so that we can have more predictable utilization. I'm happy to say that we also placed 2 robots in Japan. Having said that, investors should expect that we are going to stay conservative about our cadence and the international team we put in international was about 18 months ago. So it's only 2024 was the first full year on the international. But we have the same enthusiasm on the clinical data and making the practices more efficient on the international. I'm going to ask if Sham wants to add anything to my comments. Sure. Yeah, Craig, I would just add that the process that we're using to commercialize in the U.K. and Japan is very similar to the process that we've used in the U.S. So when you think about the structure of the team, you think about onboarding, you think about building the funnel. We have a lot of great data over the years in the U.S. that we've been able to use to build our business, provide predictability, and be able to forecast. And we feel the same way about our U.K. business now that we've had a nice start to the business there. And then, as you mentioned, we're really excited about Japan as well. And so we look at 2025 as being a great year for Japan. This is going to be our first full year in the U.K. with our business and our team just starting to get ramped up. And so we're excited to finish out the year and then provide some great visibility in the future years in the U.K. as well. Thanks. And congrats again. Thanks, Craig. Thank you. And thank you. One moment for our next question. Our next question comes from Matthew O'Brien from Piper Sandler. Your line is now open. Great. Thanks for taking the question. Maybe just starting with the back half guide, what's implied anyway. If I look the last couple of years, you generated 58% and 59% of sales in the back half of the year. This time, you're guiding to more like 54%. So it kind of implies a little bit of a slowdown given what we've seen on the handpiece side, especially. Then with all those new reps on the commercial side, I'm just not sure why there's that disconnect. So just anything we should be mindful of in terms of why there might be a slight acceleration in the back half versus what you've done here in the first half. Thanks. Thanks, Matt. This is Kevin. As you pointed out, we had to really. I'll start with handpieces and utilization. We did have a very strong, stronger than expected, even internally, second quarter on utilization, increasing 15% sequentially. If you look at kind of what Q2 of 2023 did, utilization was actually down. So our first half, I would argue, is much stronger than our historical trends. I wouldn't read in anything into kind of the back half versus first half. But I will say implied in our back half guide, we still do feel it's prudent to manage expectations, just given how sensitive monthly utilization can be quarter to quarter. To put that in perspective, we plan to launch almost 100 new accounts in the back half of the year, which is almost 25% of our total install base. We've been very consistent in saying that it takes 6-9 months for an account to ramp up. But at the same time, we've been able to overcome that with launching accounts with multiple surgeons and growing utilization quicker than we did historically. So there's a little bit of just expectation management in the back half. I wouldn't read anything into that, thinking there's a slowdown in utilization at all. And then with capital, I'll flip the capital. Our guidance does assume a number in the low 40s in the third quarter, which puts the fourth quarter somewhere in the high 50s, I think somewhere in the 57-59 range. And if you look at the productivity of our sales force, that actually assumes that we have the same productivity on a per-rep basis in the fourth quarter of 2024 than the fourth quarter of 2023. So no slowdown there and no real change in what we're seeing with how deals progress through the funnel at all. Got it. And then sorry to leave you out, Reza, but I did have a question for Sham. It's really on the commercial team. Just curious how the commercial team, especially on the capital side, is trending. Because when you expand the sales force, I know it's smaller numbers, but still 30%, that can get a little unwieldy and maybe not as much as productive as you want it. So I'm curious how that's trending as far as your expectations. And then just any updates on the IDNs and the team there and how things are trending with that group. Thank you. Thanks, Matt. The one thing I would say on the capital team is we do continue to expand, but when you look at the numbers in some, they're not drastically different than prior years. So the team has gotten bigger. The processes are well in place now to onboard new employees, get them through training, and get them to be more productive. As we've talked about before, we are thrilled with the level of talent we bring in at the rep level. At the management level, we're bringing in some really experienced managers from the capital environment, many of them robotic capital managers. That helps to onboard and helps to get up to speed quickly. We fully expect that team will be very productive in the back half of this year, as Kevin mentioned. Regarding strategic accounts, this is a big difference for us in 2024 versus 2023. We specifically hired a strategic account team, and it also added a junior capital rep team with the intent to help not only build our pipeline but be able to bring these deals to fruition. What we see in strategic accounts that is maybe slightly different than a standalone hospital is when you start to have multiple systems start to bubble up to the purchase phase, the corporate accounts team will work with the IDNs to ensure that they acquire the technology the best way possible for them. When the numbers were smaller, it wasn't as important because you do a local or regional funding. When the numbers get larger, the national accounts team becomes very, very important to us. So we're very happy with the progress so far this year, and I think they'll just be better as time goes on. Very helpful. Thank you. Hey. Appreciate it. And thank you. And one moment for our next question. And our next question comes from Richard Newitter from Truist Securities. Your line is now open. Hi. Thanks for taking the questions and congrats on the strong quarter. First question, just on the system ASP, $380,000, definitely above trend, what we modeled at where you've been, and that's what you're trying to service the year. Maybe just comment on that and just the capital outlook and the funnel broadly as a follow-up. Yeah. Thanks, Rich. This is Kevin. And our guide is based on what we see in the funnel. We have very good line of sight of the deals that are in the pipeline today. Given this, we felt comfortable kind of raising that ASP for the back half of the year to $380, coming off of a $378 ASP in the second quarter. We continue to have very productive conversations with hospital CFOs and administrators about the ROI on our system, the ability for them to retain patients that they may otherwise would have had to refer out, the ability to standardize kind of the treatment algorithm. All of those things are leading ASPs to creep higher on systems, which is good to see. That's really helpful. Thank you. Maybe just one other one. I know over the last year, there's been RAC audits by Medicare kind of out there with respect to just looking at prostate size and things like that, needing to get extra pre-authorization steps to get the surgery. I'm just curious. Obviously, it hasn't impacted your utilization or your numbers at all, but I'm just curious if you've seen that at all, how you deal with it out in the field and just on the insurance backdrop, if there's anything else that's worth calling out. Thanks. I'll turn it over to Sham. Sham can probably answer that one better. Sure. Yeah. I'm happy to take the question. So we're very aware of the RAC audits. Maybe I'll give a small background on RAC audits and then talk about PROCEPT and our customers and how we're assisting them as they go through that process. RAC audits have been around for a long time. They're very common across healthcare. Medicare started doing it about 15 years ago. Regarding our customers, we started to see this late summer of 2023. Now, you all should know that during the COVID years, Medicare was not doing audits for years. They started to do them again last year. Despite the last 9-12 months, as you mentioned, we've been able to execute and increase utilization nicely. To provide some more context, this is Medicare-specific. Medicare currently does have a prostate size limitation of 150 grams, as you mentioned. So our FDA labeling doesn't match that. Just to be clear, our FDA labeling does not have a size limitation. So we've begun working with our surgeons and Medicare to have this restriction removed. I would also point out that we recently have been successful with 5 of the 7 Medicare contractors in removing the age restriction. So when we first received our Medicare coverage, there was a restriction of 80 years, and that's been removed now with 5 of the 7 contractors. So we feel confident over time we'll be able to get the size restriction removed as well. Regarding the numbers, just so you can think about how does this impact the business, we estimate half of our patients with BPH are comprised of traditional Medicare and Medicare Advantage. But it's also important to note that RAC audits are only focused on traditional Medicare. So that means that about a quarter of the BPH market will be traditional Medicare. And then you think about the size, less than 10% of our procedures are over 150 grams. So this limitation, it does have a minimal impact on our ability to expand and achieve our utilization targets. So we continue to work closely with our accounts to ensure their compliance. And we've even been more proactive in recent quarters, helping them out. That's worked out well, and our accounts are appreciative of the partnership. Thank you. Thanks, Rich. And thank you. An d one moment for our next question. And our next question comes from Brandon Vazquez from William Blair. Your line is now open. Hey, everyone. Thanks for taking the question. Reza, you had made a comment that about 42% of your active install base in the U.S. is less than 12 months at this point. Despite that, obviously, you guys had a nice utilization quarter. Can you talk a little bit about the difference in utilization from maybe those 42% of accounts that are, call them, less than 12 months? And then those that are longer than 12 months, anything you can tell us, are those under 12 months on average accretive to the total utilization you guys are seeing, or is that still to come? So any commentary around there? Yeah. Yeah. Thanks. As we have said in the past, it takes about 3-4 quarters for the account to get to about 7 per account per month. So the longer the accounts stay with us, the higher is their utilization. So we continue seeing that in our accounts. And for the reasons that we mentioned, standardizing the procedure allows attracting surgeons to that hospital. And I don't know, Kevin, do you want to add anything about the back half of the year? Yeah. I guess I could be a little. I'll provide some specificity to the numbers just in how we see that cohort building over time, maybe to get to the heart of your question. I think it's important to remember the first quarter, even when we sell a robot, the majority of those accounts are not doing procedures in that given quarter. We may sell a handful of handpieces, think on average 5. But in general, procedures aren't occurring until the following quarter. So therefore, you have very low utilization in the first quarter, less than 2. And then in the second quarter, they start to ramp up, but they perform at less than the corporate average. And our corporate average in this quarter was 7. So they're doing less than 7. And then, as Reza mentioned, by the time they get to the 3rd quarter, they're doing roughly the corporate average. And then you really start to see them shine, so to speak, in quarters 4, 5, and 6, where they're typically doing north of the corporate average. And that trend's been very consistent. The one nuance that we have seen, which is a positive thing, is that ramp appears to be moving faster with newer cohorts, given our focus on launching accounts with multiple cases and multiple surgeons. Great. Thank you. That's very helpful. And then there was also a comment in the prepared remarks about how surgeons are already coming to you guys and asking about how to treat prostate cancer with Aquablation. Just kind of curious if you guys are seeing that interest kind of creep into some early treatment of prostate cancer already of patients today, or are they just kind of inquiring information, but you're not really seeing the patients treated yet? Thanks. Thanks. So I mean, we saw some of that enthusiasm at AUA. That's where we saw clearly the growing market acceptance and awareness of Aquablation. But at the same time, again, at AUA, as you remember, on the first day, we had the surgeon panel discussion on both BPH and cancer. So cancer definitely has some halo effect, enthusiasm among surgeons for the potential future of our technology for cancer. At AUA, it was the same. They were asking questions about the study, the progression of study. And as I mentioned in our remark, we are expecting in this quarter to finish the PRCT-002 study. All right. Thanks, guys. And thank you. One moment for our next question. Our next question comes from Josh Jennings from TD Cowen. Your line is now open. Hi. Good evening. Thanks for taking the questions. It's great to see such a strong first half of the year. I wanted to just ask, I know we've talked about this in the past, but just the replacement cycle and just an update on your thoughts there. I may have even asked this on the last call. I can't remember. But just any plans for the next generation AquaBeam system. And if not divulging anything, when could we hear about the enhancements that are being developed today? Yeah. Thanks, Josh. This is Kevin. Look, I think if you look at our R&D spend sequentially, it's fair to say that we are working on some exciting projects internally that we do believe will be transformative for PROCEPT and continue to allow us to maintain the significant clinical and technological advantage that we've been able to establish in the market. We're not prepared today to talk about timing, but our spend has crept up recently, which would suggest that we're accelerating things internally. We talked around things: ease of use, workflow, artificial intelligence, assisted planning, given all the data we have. And those are things we continue to work on. And Reza, Sham, we all feel very good about that progress. And hopefully, there'll be some time in the not-too-distant future where we'll be able to talk with more specificity about timing. Great. Sorry to ask a repeat of Brandon's question, but we've been hearing since AUA about physicians being more willing currently to treat patients with concomitant BPH and localized prostate cancer. Utilization rate is strong. I'm sure there's some contribution there. I don't know if there's any way to quantify that, for one. And then two, sorry, a two-tiered question. We've also talked to some da Vinci surgeons who told us that they are acquiring Aquablation specifically for this indication and just want to know if that's a trend as well. Thanks for taking the questions. So as you know, we removed the cancer contraindication for the treatment of BPH. And that is not a significant increase in the market. We are not promoting our product for the treatment of cancer in prostate. All we have presented was the preliminary data that we had from outside the United States, which were presented at AUA, where surgeons and us are excited. It's the very strong safety profile of the product, more specifically on incontinence and erectile dysfunction. And that's what patients are, as we read in our prepared remark, patients who want to remove the cancer without having these side effects. That's where there are millions of men in the United States on the sidelines. They are avoiding these treatments because of these side effects. But we are not promoting today for the cancer treatment. We are running these studies. Regarding, hey, Josh, that's Sham, regarding the patients that are being treated for BPH with Aquablation that also have a form of prostate cancer, a lower intermediate disease that's currently under active surveillance or watchful waiting, many of those patients are treated for BPH with our system. Some of that data has already been presented at the AUA. You saw some of that data. We continue to be pretty excited about the opportunity to treat BPH and those patients also having great results long-term in other ways as well. I think that's an opportunity that urologists are very excited to watch. We're keen to report on that data in the future. So we think that's going to be an opportunity. But at this point, obviously, we're focused on BPH patients, and many of them have cancer. So it does kind of go hand in hand. We'll be treating patients with cancer because of the BPH indication. Great. If I could just take a quick follow-up in this, is this a TAM expanding indication, or do you guys include this in terms of the number of BPH surgeries as you build your TAM historically? Thanks. Yeah. No. So right. I mean, currently, the current market includes those patients that have cancer. So when we think about TAM expansion, that would be just cancer treatment itself. So I don't see this as an expansion for the BPH indication. Great. Thanks a lot. Thanks, Josh. Thank you. One moment for our next question. Our next question comes from Nathan Treybeck from Wells Fargo. Your line is now open. Hi. This is Dino Weinstock on for Nathan Treybeck. Congratulations on the strong quarter. On replacements for Q2, it looks like 1 system came out of the install base alongside the 47 placements. Could you talk about why the system came out of the total install base? Yeah. It's a great observation. The system did not come out of the install base, actually. So to break this down, we did sell 47 systems in the quarter, but the install base went up 46, which is, I think, what you're alluding to. And this goes back to Q2 of 2023. And if you recall, we placed a system in the second quarter of 2023 under an operating lease. This was the first operating lease that the company had executed. This system actually converted to a sale this quarter at a very reasonable average selling price. So we included it in our sale number, but it was already in the install base. And when we had put that system under lease in Q2, we said this was going to occur. And it was good to see this account commit to a purchase. At this point, we're not thinking of kind of changing, obviously, our sales mechanism and how we sell. But it was good to see our first operating lease we've done convert to a sale at an ASP that was not materially different than the rest of our sales. So really good to see. Got it. That's very helpful. And can you also talk about your expectations for multi-system purchases by IDNs at the corporate level in 2024? And are they necessary to reach above your guidance of 185 placements? Thank you. Yeah. Look, it's not as black and white as the question may appear on the surface. To be direct, we are not relying on multi-system IDN orders to meet the guidance that we put forth. With that said, what we've seen over the last few quarters is multi-system orders get executed at the corporate level that were already in our funnel, that were planning to be executed at the local level, but now are being used by corporate funds. And I would suggest that we do expect that to continue to happen. But we are not reliant on an unexpected multi-system order from a large IDN to meet the guidance that we provided for our systems in 2024. Thank you. You're welcome. Thank you. One moment for our next question. And our next question comes from Ryan Zimmerman from BTIG. Your line is now open. Hey, guys. Thanks for taking our questions. Can you hear me okay? Perfect. Okay. Good. Just a couple for me this evening. So one, Sham, you were over in the U.K. We were over there maybe a month ago. The NHS had a big cyber attack. We talked to a few urologists who had said that there might have been some trickle-down to the procedure level. I just was curious if you're seeing any of that impact and just remind us how much of your OUS or your total sales is related to the U.K. at this point. Then I have a follow-up question on margins. Sure. Yeah, we're fully aware of the cyber attack that happened. It actually wasn't widespread in NHS. We had one hospital that dealt with it. Actually, they created protocols to go around cybersecurity. There's many surgeries in that specific hospital, a large hospital in London, that have been shut down. Aquablation wasn't impacted. They actually created a protocol to allow them to continue doing Aquablation due to the safety of the procedure and no additional processes needed. So we felt pretty good about our ability to be able to work around that issue that other companies are dealing with right now. Kevin, do you want to take the last part of that? Yeah. So to your question, in rough numbers, I mean, we're not going to provide a level of specificity, but approximately 50%, to just ballpark it for you, Ryan, of our international sales are derived from the U.K. And I will say that the primary driver of us raising international guidance now on our last two calls has been the momentum we're seeing in the U.K. So we're seeing great momentum. We weren't impacted by the cyber attacks, as Sham referenced. And you didn't ask what I'm going to say. Anyways, the ASPs we're seeing in the U.K. with the NICE endorsement are actually very comparable to the U.S., which is contributing as well to our improved margins. And I'll turn it back over to you. I think you said you had another question on margins anyhow. Yeah. No, that's good to hear, guys. On margins, Kevin, so I know you're not going to give the 25 guide on margins. But as I think about just the margin trajectory and the proportion of sales that are capital today versus consumable, first, remind us kind of, if you're comfortable on the margin around capital. And just as you move away from capital sales more and more, what kind of leverage do you think you can get from your handpieces in terms of your margin trajectory? If you're going to do 59% this year, you had a nice step up, certainly this quarter with the good utilization. But I'm just wondering kind of what your ability is beyond this to continue to drive your margins higher. Because I mean, again, you talked about leverage, particularly on the operating expense side, but I'm curious more on the gross margin line. Thanks for taking the question. This is a great question, Ryan. I'll suggest this. And again, I'm not going to provide guidance to 2025, but hopefully, at the 30,000-foot level, I can answer some of your questions. The single biggest driver for our margin expansion is total revenue as opposed to the actual mix between consumable and capital. Longer term, I would suggest that mix becomes more important, but that's even beyond 2025, Ryan. Right now, our overhead absorption is the single biggest driver. And that's equally allocated amongst both our capital and disposable. So the expansion in 2024 that we're seeing is more reflective of absorbing total overhead and some operational efficiencies as opposed to the mix of 60% now of our business being consumables. That will help more longer term. And then just to talk about longer term, look, we're really pleased with the margin expansion we've seen in 2024. And we feel we have a business cost structure that allows this improvement to continue. And we've talked about seeing comparative margin improvements as we move throughout the next few years. And we can do that just by volume alone. But longer term, as a management team, we're really excited about looking at other products or projects, excuse me, around cost reduction initiatives and things of that nature, particularly on the disposable. But that really doesn't start to manifest itself into our income statement until probably later 2026, 2027. And Kevin, just to follow up, the margin profile of capital relative to consumable, are you comfortable sharing that? What I would say is the capital is not a drag on our overall margins to the extent it may be for some other capital investments. Thank you. Awesome. And thank you. And one moment for our next question. And our next question comes from Mike Kratky from Leerink Partners. Your line is now open. Hey, guys. This is Brett on for Mike. Thanks for taking the questions and congrats on another great quarter. So I do want to hit on margins again. Obviously, you're raising the EBITDA guide by $2 million to $8 million, and the revenue guide by about $3.5 million. So obviously, that's implying a pretty decent incremental margin, pretty high versus what you've shown historically. Just want to get a sense for your confidence in the durability of that incremental margin going forward and what are some of the key toggles that we can see that can either flex that up or down going forward? Yeah. I apologize if I sound like a broken record here. But again, I think it's durable because the single biggest driver of margin improvement is increased revenues. It's not as if we're reliant on offshoring manufacturing or significant cost reductions in our product to get margin expansion in the near term. Again, when I was answering Ryan's question, I think those really start to impact the business beyond 2025. So that gives us a high level of confidence with where we're at today that we have a very high fixed cost structure that we think is highly leverageable as we grow revenue. And we've been telling investors since we went public that we're building this business to support a $500 million-plus business. And with that, you have to create a certain structure of overhead that was detrimental or hurtful to margins in our early years. But we're starting to now see that leverage come to fruition. And given that it's just leverage, we feel very good about our ability moving forward here to expand margins. I would also just lastly point out that the operations team here has improved things around first-pass yield, around warranty. And a lot of that is attributable to us now fully being in our new facility. We moved facilities last year into a facility that's four times the size we were previously in. We had a few speed bumps that we hit in that transition that are now fully behind us. We feel really confident. Got it. No, that's super helpful. Then just as a follow-up, going back to that 90% retention rate on the existing surgeons that you have, that's obviously very strong. But of that 10% that do fall off, is there any feedback that you received that kind of impacts your commercial strategy and the go-to-market? Anything there that just you could call out that helps it there? I'm going to turn it over to Sham and Rez. I want to be clear on the metric and what that actually means. So when we say 90% retention, that means for the second quarter, 90% of the surgeons that did a procedure in Q1 also did a procedure in Q2. What it doesn't account for are surgeons that are dabblers, that perhaps did a procedure in Q4, did not do a procedure in Q1, and then came back in Q2. So the actual retention is actually much higher than 90%. And I'll turn it over to Sham to maybe discuss why you would have any fallout at all. I would just add that you have to take a step back and remember that BPH is a very commonly treated procedure. There's over 12,000 urologists that do at least one BPH procedure a year. So with that number in mind, we are going to have low-volume BPH surgeons do Aquablation. And we love it because our technology has a low learning curve. It works very, very predictably. And so you have the ability to standardize treatment across different sizes of prostates and shapes. So you have low-volume BPH surgeons who will use our technology but maybe don't do a lot of BPH surgery. So when you think about that surgeon, not somebody who's necessarily fallen out, it's just somebody who doesn't do cases consistently. And then we're in the operating room to support those surgeons. They have a great experience. And we rarely lose surgeons, but not every surgeon does a case every quarter. And thank you. And I'm showing no further questions. I would now like to turn the call back over to Reza Zadno, CEO, for closing remarks. Thank you, everyone, for attending our second quarter earnings call. We hope to see you in the future conferences. And have a nice day. This concludes today's conference call. Thank you for participating. You may now disconnect.