Good afternoon and welcome to PROCEPT BioRobotics' Q4 and year-end 2024 earnings conference call. At this time, all participants are in 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' Q4 and year-end 2024 earnings conference call. Presenting on today's call are Reza Zadno, Chief Executive Officer, Kevin Waters, Chief Financial Officer, and Sham Shiblaq, Chief Commercial 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 under reliance on these forward-looking statements, which speak only as of today's date, February 25th, 2025. 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. Other 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 Sham, who will provide an overview of the HYDROS Robotic System's commercial launch and Q4 procedure trends. Lastly, Kevin will provide additional details regarding our financial performance and initial 2025 financial guidance. Starting with our quarterly revenue results, total revenue for the Q4 of 2024 was $68.2 million, representing growth of 57% compared to the Q4 of 2023. Growth in the quarter was driven by increased robot sales and increased procedures, both at higher average selling prices and record international revenues. We exited the Q4 of 2024 with a U.S. installed base of 505 systems, representing growth of 60% compared to the prior year period. We sold a total of 190 robotic systems in 2024. On a full-year basis, total revenue was $224.5 million, representing growth of 65%. At PROCEPT, our focus is to first transform the global treatment of BPH and become the standard of care. While we have delivered robust growth over the last few years, we only have approximately 10% U.S. BPH resective market share. Given the size of the BPH market, we still have a long runway in front of us. In pursuit of our long-term vision, 2024 was a productive year for PROCEPT in two key areas. First, in August, we received FDA 510(k) clearance for our next-generation HYDROS Robotic System, a major milestone for PROCEPT. HYDROS brings significant advancement over the AquaBeam system, incorporating years of research, development, and customer feedback. Designed for mass market adoption with advanced features to enhance surgeon accuracy and enhance the care team's usability experience, we believe HYDROS will be the platform we can innovate on in the future. With the introduction of the HYDROS Robotic System, we unveiled FirstAssist AI. This feature combines ultrasound imaging with the advanced planning software to assist urologists in identifying key anatomical landmarks, enabling precise targeting of the resection area using the water jet. By tailoring the tissue removal plan to individual anatomy, First Assist AI aims to enhance procedural accuracy and outcomes. Structurally, the HYDROS Robotic System fully integrates an advanced ultrasound system and a single-use digital cystoscope, providing the ability to improve visualization and streamline the operating room setup process. The HYDROS handpiece that comes preassembled with a single-use digital scope eliminates the need for cystoscope reprocessing between procedures. These advanced features further enhance the efficiency of the procedure and are designed to deliver safe, effective, and durable results for men suffering from BPH, regardless of prostate size and shape or surgeon experience. The market receptivity of HYDROS has exceeded expectations, which has manifested itself into a robust capital pipeline and a higher HYDROS selling price. The second major milestone we achieved in 2024 was related to our prostate cancer initiative. First, we successfully demonstrated Aquablation therapy does not spread cancer cells throughout the body during resection. This study, published in a peer-reviewed journal along with other supporting data, enabled us to persuade FDA to lift the contraindication for Aquablation procedures in treating BPH patients that also have an active diagnosis of prostate cancer in the United States. Second, we finished enrollment of PRCT002, an FDA IDE feasibility study in men with grade group one or two prostate cancer. We are excited to share our cancer data at AUA in late April. Building on the PRCT002 feasibility data, in September 2024, we received FDA IDE approval to initiate a pivotal randomized clinical study for prostate cancer while also receiving breakthrough device designation. The trial, known as WATER IV PCa, is a global multi-center prospective randomized clinical study assessing the safety and efficacy of Aquablation therapy compared to radical prostatectomy in men with grade group one to three localized prostate cancer. The study will enroll up to 280 patients at up to 50 centers with 10-year follow-up. We strongly believe that the need to improve safety and quality of life outcomes for millions of men needing treatment for prostate cancer is an area that remains significantly underserved. We believe Aquablation therapy could become a first-line surgical treatment for localized prostate cancer. Initiating an FDA randomized trial against radical prostatectomy is the first big step in pursuing specific treatment of prostate cancer indication, which no other market-leading treatment has today. 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. With that, I will turn the call over to Sham to provide more details on our HYDROS launch and Q4 procedures. Thanks, Reza. First, I want to reiterate Reza's comments and the team's exceptional performance and execution in 2024 that required an all-in attitude from every part of the organization. Turning to the HYDROS launch, in the Q4, we sold 60 systems, of which 95% were comprised of HYDROS for an average selling price of approximately $460,000. After receiving FDA clearance for HYDROS midway through our fiscal third quarter of 2024, we transitioned into the Q4 with awareness and excitement around the launch spreading quickly, which certainly played into our favor as we were able to finish the year very strong. Initial feedback from customers has been very encouraging. Aside from HYDROS fully integrated and sleek design, surgeons continue to be impressed with the new FirstAssist AI feature, which we believe has the potential to enable all urologists, new and experienced urologists, to improve outcomes for their patients. Other feedback we received, particularly from hospital support staff, is how improved the surgeon and staff experience is at every stage of the Aquablation therapy procedure. Specifically, with a single footprint and improved user interface, the integrated tower facilitates efficient operating room setup, procedural workflow, and operating room turnover. Hospital CFOs are also happy to see that the new HYDROS handpiece utilizes a single-use digital scope that eliminates the need for scope reprocessing and further streamlined setup, which saves time and money. As we enter 2025, we feel very good about the underlying trends, particularly around system average selling prices, customer demand, and HYDROS user sentiments. Next, I want to provide details on recent macro events that impacted Aquablation procedures in the Q4. We had tremendous momentum heading into our seasonally strongest quarter following a very strong September. Given that BPH is an elective procedure, we typically see very strong seasonality in our fiscal Q4. This is due to typical winter elective surgery volume increases after the summer season and is bolstered by the large percentage of patients who utilize the Q4 to schedule procedures once they have met annual insurance deductibles. We estimate approximately 50% of all BPH resective surgeries are Medicare, with the other half being private pay. However, in late September, Hurricane Helene flooded Baxter's saline facility in North Carolina. Due to the severity of the storm and resulting damage, Baxter's saline production capabilities were disrupted. Why is this important? First, based on industry reports, Baxter accounts for over 50% of U.S. market share for saline production. Second, all resective BPH procedures require the use of saline to irrigate the prostate and bladder during and post-surgery. As it pertains to interquarter trends, we saw a more drastic and unexpected decline in the month of November. Based on our assessment of our install base, approximately 50% of our accounts used Baxter as their primary supplier of saline. We saw these accounts either stop performing BPH procedures or significantly reduce volumes given that BPH is an elective procedure and can be deferred in favor of more critical procedures. From the hospital's perspective, we were informed that even if they were receiving saline orders, it was typically not at 100% of requested amounts and thus were deprioritizing elective procedures. To help quantify the impact in the Q4, since roughly 50% of our accounts were not impacted due to supplier arrangements or having adequate supply, those unaffected accounts demonstrated normal seasonal strength in the Q4. Conversely, the other 50% of accounts that experienced saline shortages realized material slowdowns in November, with a modest recovery starting in December as saline deliveries increased. Given this acute macro challenge, we estimate a lack of saline resulted in a delay or cancellation of between 10%-20% or up to 2,000 of our expected procedures in the Q4, which ultimately impacts handpiece order patterns. In mid-November, recognizing that accounts affected by the saline shortage would not be rescheduling procedures in December, we realigned our commercial team's efforts to proactively schedule cases for the Q1. With an understanding of the anticipated timeline for saline shipments to hospitals, our goal was to ensure procedure volumes in the Q1 returned to meeting our expectations. As a result of this proactive strategy, we witnessed a strong recovery in procedure volumes in February and feel positive about the momentum heading into March. As it pertains to recent HYDROS account launches, given the saline shortage dynamic, many of our new account launches either restricted the number of procedures they were able to perform or pushed the launch into the Q1 of 2025. In a moment, Kevin will elaborate more on what this all means for the Q1 of 2025. Lastly, I'm once again incredibly proud of the commercial team and their focus and determination to execute through these short-term challenges. I am particularly proud of their resolve in being able to pivot and ensure delayed procedures are rescheduled. Specifically, in January and February, we have enhanced our value proposition to hospitals in that we have demonstrated how impactful it is to stack multiple Aquablation procedures in a single operating room day to drive efficiency. This not only helps hospitals, but it also is a significant help to PROCEPT because it optimizes the team's resources when covering procedures. Moving forward, we believe this will be a driver of increased procedure growth in 2025. With that, I'll turn the call over to Kevin. Thanks, Sham. Total revenue for the Q4 of 2024 was $68.2 million, representing growth of 57% compared to the Q4 of 2023. U.S. revenue for the Q4 was $60.4 million, representing growth of 50% compared to the prior year period. We generated total U.S. system revenue of $27.6 million, representing system revenue growth of 67% compared to the Q4 of 2023. In the Q4, we sold 60 new robotic systems at a blended average selling price of approximately $460,000. As anticipated, over 95% of our U.S. system sales were comprised of HYDROS systems. Additionally, we sold three trading units during the quarter, generating total revenue of $245,000. U.S. handpiece and consumable revenue for the Q4 of 2024 was $29.3 million, representing growth of 36% compared to the Q4 of 2023. We shipped approximately 8,750 handpieces at average selling prices of approximately $3,200 in the U.S. in the Q4, representing unit growth of 37% compared to the Q4 of 2023. As previously mentioned by Sham, we estimate the saline supply shortage in the Q4 resulted in up to 2,000 procedures not being performed. This estimate was derived from an internal quantitative analysis of account historical trends, as well as direct feedback obtained through customer interactions and surveys. We also recorded approximately $1.6 million of other consumable revenue in the Q4 of 2024. International revenue in the Q4 of 2024 was $7.8 million, representing growth of 137% compared to the prior year period. Growth in the Q4 was once again driven primarily by strong sales momentum in the United Kingdom. Gross margin for the Q4 of 2024 was 64%, representing an all-time high. Gross margin expansion in the Q4 was primarily due to improved operational efficiencies and higher HYDROS system average selling prices. Moving down the income statement, total operating expenses for the Q4 of 2024 amounted to $63.4 million compared to $50.8 million during the same period in the prior year and $59.3 million in the third quarter of 2024. Q4 operating expenses exceeded our previously issued guidance by approximately 3.5%. This variance is primarily attributable to higher variable compensation expenses driven by HYDROS system overachievement. The year-over-year increase was driven primarily by increased sales and marketing expenses, mostly to expand the commercial organization and increased general and administrative expenses, offset by lower sequential research and development expenses following the significant effort around HYDROS development in the second and third quarter of 2024. We are very pleased with the operating expense leverage we have demonstrated in 2024. When comparing revenue growth to operating expense growth, revenues increased 65% in fiscal year 2024 on 30% operating expense growth. We believe our path to profitability is becoming increasingly clear as reflected in our 2024 results. This clarity is driven by our recent gross margin expansion into the mid-60% range, which is a direct result of our ability to leverage existing overhead at higher revenue levels, along with increased average selling prices across the board. Furthermore, our consistent track record of growing revenue at a significantly faster pace than operating expenses continues to reinforce our trajectory toward profitability, which I will elaborate on further when providing our 2025 guidance. Net loss was $18.9 million for the Q4 of 2024 compared to $27.5 million in the same period of the prior year. Adjusted EBITDA was a loss of $10.3 million compared to a loss of $23.3 million in the Q4 of 2023. Following our most recent capital raise in late October, our cash, cash equivalents, and restricted cash balances as of December 31st were $337 million. Moving to our 2025 financial guidance, we expect full year 2025 total revenue to be approximately $320 million, representing growth of approximately 43% compared to 2024. Beginning with U.S. systems, we expect to sell approximately 210 new robotic systems in 2025. In line with previous years, our robotic sales are estimated to be distributed such that approximately 45% of the total will occur in the first half of 2025. While pleased with the direction of new HYDROS system pricing, we want to stress that capital pricing can be variable quarter to quarter. Thus, our updated guidance assumes new system pricing to be in the range of $430 to 440 thousand. Our primary focus in 2025 remains on the substantial opportunity to sell HYDROS and greenfield accounts. However, we are also seeing interest from existing customers who are looking to either replace their current AquaBeam system or acquire a second system, which would be HYDROS. In response to this demand, we are incorporating approximately $3 million in system replacement revenue into our 2025 guidance, though this will predominantly be realized in the second half of the year. We continue to believe that the replacement opportunity will serve as a significant long-term driver for the business, although we are still in the early stages of the adoption curve, considering the 2,700 hospitals in the United States currently offering BPH resection options to their patients. Turning to U.S. handpieces, on a full year basis, we expect to sell approximately 52,500 handpieces, representing 63% unit growth compared to 2024. We also expect handpiece average selling prices to be approximately $3,200. We expect other consumables revenue to be approximately $8 million for the full year. Additionally, we expect U.S. service revenue to be approximately $15.5 million for the full year. Lastly, on international revenue, given strong positive momentum in the United Kingdom and pending launches in Japan, we expect full year international revenue to be approximately $32.5 million, representing annual growth of 36%. Regarding gross margins, we expect full year 2025 gross margins to be approximately 64.5%, which would be an approximate 400 basis point improvement over 2024. Q1 2025 gross margins should be relatively consistent to the Q4 of 2024. Turning to operating expenses, we expect full year 2025 operating expenses to be approximately $300 million, representing growth of 28% over 2024. In the Q1 of 2025, our operating expense guidance assumes spend of approximately $71 million. While we are forecasting our 2025 revenue to operating expense ratio will be down compared to 2024 levels, I want to provide additional context. First, we believe our strong balance sheet offers us the flexibility to invest strategically in key areas to drive long-term growth. Specifically, we are making targeted investments to accelerate enrollment in the WATER IV trial. The quicker we enroll patients, the sooner we can potentially begin generating revenue from prostate cancer treatment. Additionally, it is important to note that clinical trial expenses are heavily front-end loaded, as most expenses occur during enrollment. We expect these costs will gradually decrease over time, particularly into 2026. Second, the total incremental operating expenses in our 2025 guidance amount to $66 million. Of this, approximately $19.5 million is attributed to non-cash stock-based compensation, which supports our expanding workforce and reflects our commitment to rewarding employees with equity, thereby aligning their interests with those of our shareholders. On an apples-to-apples basis, if you exclude incremental stock-based compensation, core operating expense growth would be 20% compared to 2024 levels. Finally, consistent with our 2024 guidance philosophy, we aim to provide an initial operating expense target that is expected to remain stable throughout the year, with the potential to support higher revenue levels. This approach ensures any revenue outperformance could contribute directly to the bottom line. Given current interest rates, we expect to generate net interest income of $13.5 million in 2025. When accounting for all these variables, we expect full year 2025 Adjusted EBITDA loss to be approximately $35 million. Regarding Q1 revenue, we are forecasting total Q1 revenue of $65.5 million. U.S. system revenue is expected to be approximately $18.7 million, and we anticipate selling approximately 10,750 handpieces in the United States. In terms of handpiece sales, we did experience some residual impacts from the saline shortage in January. However, February has returned to expected levels, and we are optimistic about the positive trajectory we are seeing in daily procedures. Additionally, the saline shortage affected our ability to launch new accounts in both the Q4 and early January. However, as we exit February, we have clear visibility and are on track in our Q1 to launch the largest number of accounts ever in a given quarter. As we have communicated, we have observed that it takes new accounts approximately two to three quarters to reach a sustained and normal level of monthly procedural volume. To summarize, the challenges experienced in the Q4 appear to be largely behind us, and we have strong visibility into March procedure volumes. At this point, I'd like to turn the call back to Reza for closing comments. Thanks, Kevin. In closing, I want to provide a brief preview of AUA 2025. AUA 2025 will be an exciting event for PROCEPT, as this will be the first year we present cancer results for our population from both of our trials, PRCT001 and PRCT002. The data we plan to present will include procedural anatomical capabilities and safety functional outcomes with respect to incontinence and erectile function and oncologic control measured with biopsy. Given the reproducible nature of our procedure and its safety profile seen during the treatment of BPH, we believe AUA 2025 will provide a glimpse into the future as to how early-stage prostate cancer will be treated. Furthermore, we are the first company ever to receive IDE approval from the FDA to enroll a randomized trial against radical prostatectomy for prostate cancer. We view this as the first big step in pursuing a specific treatment for prostate cancer indication, which no other treatment has today. Given the amount of quality level one clinical evidence we will be gathering over the next few years, we believe we will be in an advantageous position to drive rapid change in a massively underserved market. And finally, to conclude my prepared remarks, we are seeing multiple factors continue to trend positively, allowing us to execute our long-term strategy plan. In summary, the U.S. HYDROS launch is off to a great start, and customers are thrilled with the improved features. Our pipeline and sales funnel continue to grow nicely at average selling price for HYDROS that are trending higher than our previous AquaBeam system. Our international business continues to build momentum in the U.K. and Japan. Our commercial organization is the largest and most tenured in the company's history, which we believe will lead to increased productivity. We are the first company ever to receive IDE approval from the FDA to enroll a randomized trial against radical prostatectomy for prostate cancer. We view this as the first big step in pursuing a specific treatment of prostate cancer indication. And lastly, following an acute saline supply disruption in the Q4, we are off to a positive start in the Q1 and feel very confident in delivering another year of strong procedure growth. 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. 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 investment 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 telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from Craig Bijou of Bank of America Securities. Your line is open. Good afternoon. Thanks, guys, for taking the questions. I'll lump a couple in here, but they're around the impact from the saline shortage. First, Kevin or Sham, I'd love to understand how maybe the 10% to 20% in delay or cancellation procedures and kind of reconcile that with your estimate and how you got to the estimate of the 2,000 procedures. Beyond that, is there, I guess, thinking about either the month where you weren't impacted or the hospitals that weren't impacted, is there a way that you can kind of frame what utilization was in that period? Then I'll have a quick follow-up on 2025 impact. Great. Thanks, Craig. I'll take that. This is Kevin. Before I get into your question, I do want to reiterate we're really pleased with our overall performance in 2024. Particularly, we had the launch of our next-generation HYDROS system. We saw significant procedure market share gains. And lastly, we did see significant gross margin expansion, which we hope is a valid proof point on a pathway to profitability here. But to get to your question specifically, as noted in our prepared remarks, we did estimate the impact in Q4 of up to 2,000 procedures from the saline shortage. And this really is multifactorial. We analyzed many different variables. I'm going to go through a few of those here today. So first, we did attribute an amount lost to procedures. Frankly, we just know we directly lost as they were scheduled or they were to be scheduled and were not performed. That analysis was done two different ways. We had direct customer inquiries in January where we went out and actually performed a customer survey to assess the impact. And then also, we had direct knowledge of our reps who, as you know, are currently in every case. We have a high degree of visibility into that factor. Second, I would say is more of a quantitative analysis. Internally, we understand our Q4 ordering patterns. We performed an internal analysis there regarding normal expectations for growth, particularly coming off a very strong September. And this supported the qualitative analysis we did through surveys and rep feedback. So that's factor number two. And then lastly, and this is important, we did quantify lost procedures from new accounts that did not start their Aquablation programs due to the saline shortage. What I mean by that is, as a reminder, under normal circumstances, once a new system is sold, it typically does not perform procedures in that quarter it's sold. Given this dynamic, we've always talked about that natural lag to utilization. However, because the saline impact was so widespread in the Q4, the reality is the majority of accounts we sold to in the third quarter were pushed into the Q1, or they were somewhat materially limited from a procedure standpoint. It's not exact, which is why we provided a range, but I think we feel very good that it was up to 2,000 procedures. So that's the first part of your question. The second part of your question, we definitely saw inter-quarter trends. October was a normal October for us. Sure, we started to hear from accounts. We saw some impacts. When we were on our Q3 call, we did not anticipate how widespread this issue was going to become. We really saw a precipitous drop in November. Then when you get into December, you start to see some recovery in the back half. But more importantly, what we're seeing in Q1 is a lingering impact in January, a very strong February, and a high degree of procedures coming back and accounts being launched in March. So apologies for the length there, but I hope I answered both of your questions. Yeah. I'll take the second part of this, Craig, on the hospitals that weren't impacted. I'm glad you noticed that because we did have about 50% of our hospitals that didn't have an impact with saline shortage in the Q4. When we look at the trends of the hospitals that had a normalized utilization in the Q4, we were very encouraged because they performed exactly as we expected in the Q4, which is seasonally a very strong quarter for all procedures, especially elective procedures. I mean, they delivered strong sequential growth in that period of time. And we're in every single case. We track these metrics very closely. And so we continue to be very excited and bullish about the trends that are going on with our procedures. And if you just look at that segment of customers, it performed as expected. Got it. Thanks, Sham, for the colors. If I could just squeeze in a follow-up, just on Q1, it seems like there's probably some puts and takes there, still some residual effect, but then you did talk about seeing procedures come back that maybe they were delayed or canceled and done in Q1. So just comment on that, if you wouldn't mind, and maybe how we should think about utilization growth overall going forward? Thanks, Craig. I'll take all your questions. First, I'd suggest our Q1 guidance doesn't fully assume that all 2,000 procedures we lost in Q4 come back. I think we get the majority of those back, but there's a practical reality here where they will not all come back in the Q1. And when you look at our guide in Q1 of 10,750 handpieces, this does apply to overall utilization relatively flat to Q1 of 2024. But as I previously said, we did see lingering impacts from this into January. So I'd suggest on an apples-to-apples basis, when we're looking at February and March where the saline impact is behind us, we are seeing expanding utilization in those accounts. And then just lastly, and this is more of a philosophical comment, we are coming off a Q4, which is the Q1 where we've experienced some significant headwinds on the procedure side of the business. And while we feel very good about the procedure trends we're seeing in the Q1, we want to maintain a sense of just cautious optimism here in our guidance to ensure we continue to outperform expectations that we communicate. Thanks, guys. Thanks, Craig. Good to hear from you. Thank you. Our next question comes from Matthew O'Brien of Piper Sandler. Your line is open. Afternoon. I have two questions as well. One of them to start with is just on the ASP side in terms of what you're assuming here for the handpiece number in the U.S. I think, Kevin, it's down about 6.5% year over year is what we're assuming here. That's the biggest drop I think we've seen from the company. What's precipitating that kind of drop on the handpiece side? Yeah. So sorry, let's talk specifically about handpiece ASP. So our guidance for the full year implies $3,200 ASP for our handpieces, which is actually up slightly from 2024, relatively consistent. I think what you're picking up on, Matt, in your model is other consumables, which is another part of our business that goes into handpiece revenue, but it's not directly correlated to handpiece ASPs. Other consumables include drapes, accessories that we sell. We're guiding to a number there of about $8 million. That's coming off a $7 million number in 2024. But I think that's why you're getting a lower ASP. The fact is our handpiece ASP is steady at $3,200. And on HYDROS. Got it. it. Yep. Sorry. Go ahead. Does that help? It does. I keep forgetting about that. But go ahead on HYDROS. Yeah. And let me just talk about HYDROS ASP. So first off, I'd always say we've always guided relatively conservatively on price. We do expect to get a higher handpiece ASP for HYDROS than AquaBeam. But it's important to remember the majority of 2025 procedures are still on the AquaBeam system. AquaBeam's 80% of our installed base since we head into 2025. So by analogy, you should assume it's the majority of procedures which are at the lower ASP. But year over year, we're relatively consistent. Got it. Okay. Appreciate that. And thanks for the clarity. Just on the OpEx spend here for the full year, I mean, the total number I think is a little bit higher than what we had been expecting, maybe some of the street. And I think it makes sense with these extra investments that you're making. Can you talk about the upfront loading that's going on right now, especially with WATER IV, and then the extra spend there? How much faster can you make that enrollment, or do we have to wait to AUA to really hear more about it? Yeah. So OpEx in totality is up about $66 million. I do appreciate that's slightly higher than expectations heading into this call. With that said, I did call out in my prepared remarks that about $20 million of that $66 million is incremental non-cash-based stock compensation that, as we head into year five of a public company in 2026, that year-over-year comparable should start to come down. So if you exclude stock-based comp, our OpEx growth is actually 20% and not 28%. And so that's the year-over-year. In terms of R&D investments, we do feel that by making targeted investments, we can accelerate WATER IV on the front end. Think of that spend, just to characterize it, as about $10 million in 2025 in absolute dollars. That is somewhat front-loaded, as I called out. It does mean that R&D as a total of revenue will be about 25% in 2025. That's an improvement from 28% in 2024, but this will start to come down over time. I think we've talked about this business getting to kind of a mid-teens run rate on R&D as a percent of revenue in the near future here. Got it. Thank you. Thank you. Our next question comes from Patrick Wood of Morgan Stanley. Your line is open. Beautiful. Thank you for taking the question. I'd love to unpack a little bit more on the HYDROS feedback, the kind of accounts that you're seeing, how it compares the high volume versus the low volume, or I should say lower volume accounts. Just feedback from how your conversations with customers are going on that side. And then I have one quick follow-up. Yeah. Thanks. As we mentioned, I prepared to remark that HYDROS launch exceeds our expectation. Customers are very excited about the features we have put in this robot, the FirstAssist AI. 95% of the procedures are using the AI. In fact, they are making little or no adjustment to what the ultrasound and the computer is offering. And of course, other features that help the staff to be more efficient, make the practice more streamlined, the workflow. And of course, the hospital CFOs are very excited about the fact that they don't need to re-sterilize the scope. I'm going to let Sham to talk about that. Yeah. Yeah. Thanks. Yeah. Patrick, this is Sham. I'll take the question on the mix. So just to kind of frame up the conversation on mix of hospitals, keep in mind there's about 2,700 hospitals in the U.S. perform BPH. In the early years of commercialization, we hyper-focused on the high-volume BPH hospitals. And we've talked about that number being 860. And that was the initial strategy. But what we've seen over the recent years with the momentum is a surging demand by medium and low-volume BPH hospitals. Keep in mind these medium and low-volume BPH hospitals, many of them are very large hospitals. They historically have not done a lot of BPH. However, with the surge of demand, like I said, with Aquablation, we're seeing many of those hospitals begin to acquire Aquablation systems. So really, in sum here, the mix has been moving over the years significantly more to medium and low-volume BPH hospitals as surgeons begin to do more Aquablation in those centers. Super helpful. And then maybe as a very quick follow-up, I don't want to get hung up on the 2,000, but any thought on the risk that some of those patients ended up going for procedures that had a slightly lower saline? Obviously, it depends on prostate size, but a lower saline requirement where they went for a PAE or something else. Any sense of what the risk of that backlog being pulled away is? No. This is Kevin. We don't feel like we lost any procedures to other resective modalities. I mean, the reality is where we saw accounts not performing Aquablation, they weren't performing any resective procedures. And when you look at the saline used for an Aquablation, it is less than other comparative resective technologies. So no, no is the short answer. We don't feel we lost any procedures to other modalities. Beautiful. Thanks, guys. Thank you. Thank you. Our next question comes from Brandon Vazquez of William Blair. Your line is open. Hey, everyone. Thanks for taking the question. I'll just ask two upfront here. First, on the procedure side, and I hate to kind of myopically focus on near-term trends, but in Q1, we're talking about utilization that's flat-ish year over year, but we're also seeing very excited about what we're seeing in terms of rescheduling accounts, opening record new accounts. I frankly would have expected that maybe to be a little bit higher. So maybe talk to us a little bit about, do we see that come through a little bit later, the follow-through on this optimism? Why, maybe we don't see that a little bit higher in Q1? The follow-up question maybe for Sham is just as you look at, we don't have perfect numbers anymore since this mix of systems and where they're being placed is changing. But regardless, you're probably looking at greater than 50% penetration into high-volume accounts have an Aquablation system as we go through 2025. What does that mean for system placements as we go forward? What does that mean for the durability of system placements from here? Thanks, guys. Thanks, Brandon. I'll take the first part of your question, and the Q1 utilization as an absolute metric is heavily impacted by the lingering impacts in January. So without reading into it too much, it really is flat year over year because of the impacts we're seeing in January, but we're seeing tremendous momentum in both February and March. And then I would just remember my comments about us coming off of Q4 and us just being somewhat cautious in our guidance just to continue to ensure we hit our expectations that we put out there as a company. You should start to see in the second and third quarter improved year-over-year utilization. We're not issuing quarterly guidance at this time for Q2 and Q3, but what I can say, what our guidance would imply is that we're going to be exiting the year, Q4, with utilization growth year-over-year of 20%. Now, I appreciate that's off a comparable that's not apples-to-apples, but this business is hyper-focused on utilization expansion, not only driving utilization with new accounts, but ensuring if the accounts we're in, we're driving those current surgeons to do more procedures. And with that, maybe I'll turn it over to Sham to talk about the second part of your question. Yeah. Hey, Brandon. Sham, without giving you specific numbers on the mix, I would just tell you that our data suggests at the current run rate, we have over four years left of pipeline available for high-volume BPH hospitals, let alone a significant opportunity with low and medium-volume BPH hospitals. This doesn't account for second systems. It doesn't account for potential trade opportunities. It doesn't account for other factors in our business in the future which could drive sales. So this is just strictly greenfield sales. Thank you. Our next question comes from Richard Newitter of Truist Securities. Your line is open. Hi. Thanks for taking the questions. Just the first one, I think you had mentioned that as you were launching HYDROS initially, you had distraction to the kind of consumables or handpiece sales force. It didn't really or maybe I missed it, but I didn't hear you guys talk about that at all. Sounds like maybe that's in the rearview. Could you discuss what, if any, impact kind of was there in the Q4 lingering into the Q1? And can we assume that's behind us moving through Q2 to Q4? And then I have a follow-up. Richard, this is Sham. I'll take the first one on the rep impact. We did talk about that in Q3 and Q4 as we have a large field team need to be training on HYDROS. If there's a silver lining in the saline impact is we accelerated training in the Q4. And as we turn the year to the new year here, we have that completely behind us. And so in January, every rep is fully trained on the HYDROS system, and that's no longer something we see as an impact to utilization. Okay. Great. And then just on the replacement revenue, I think you said that's $3 million anticipated for 2025. Should we be thinking that that's or can you talk a little bit about customers that have maybe purchased a system within the last one to two years and then maybe some of the older portions of your installed base? I would imagine there's a true-up kind of ASP for more recent purchasers than there is for those who have an older system and are upgrading. Should we assume that the ASP was obviously something less than $460,000? But I mean, should we assume that's in the $50,000 to 100,000 range on average? Any help there would be helpful. Thank you. Yeah. Let me address your comments on ASPs and replacements, and then I'll turn over to Sham about kind of our focus and opportunity in both greenfield and replacement. So I would suggest that the replacements that we've talked about in 2024 are not reflective of what an ongoing replacement cycle should look like for average selling prices. And what I mean by that is the replacements that we executed on in Q3 and Q4 were really for AquaBeam customers that had purchased in the previous six months. And therefore, you're correct that those ASPs are fairly low. They're in the $50,000 to 100,000 range. And those are almost more as exchanges as opposed to replacements given HYDROS was not available when they bought AquaBeam. As we move forward, I think we get into a much more normal replacement opportunity where if you have a Hydro excuse me, if you have an AquaBeam that you bought five years ago, the reality is you're going to buy HYDROS at the same ASP that a greenfield would buy. But if you bought AquaBeam in the last two to three years, you will get some discount, but that discount is more in the $100K to 150K range, not $300K, which you've been seeing in the last six months. So that's on ASPs, and I hope you appreciate the difference there between kind of the replacements in an initial launch, which address near-term customer concerns, and then just a normal ongoing replacement cycle. And I'll turn over to Sham to kind of talk about the strategy and the why here. Hey, Richard. So I think it's an interesting dynamic that we have going on. The HYDROS value is compelling for our customers. The customers are excited, and we are getting inbound interest into looking at second system or trade opportunities. And what we're trying to do with our sales team is ensure that we don't lose focus. We stay very disciplined on our effort to become the standard of care in BPH. In order to do that, we need to continue to focus on greenfield hospitals and then focus on opportunities where we believe we can do trades in an expeditious fashion. So selling a trade, even though on the outside may seem like it's faster, it takes a lot of time and energy to work through a hospital purchasing process on a trade. And so that takes away from greenfield selling time. So the focus for our capital sales team in 2025 continues to be greenfield sales. When those opportunities come for trades, and they will be at larger sales than we've seen in 2024, we will take advantage of those as long as it makes sense and doesn't distract from greenfield sales. If I could, just one follow-up on that. One follow-up on that. Is there downward pressure on the overall company ASP from that $3 million relative to the $435,000, or that $435,000 is separate from replacement revenue? That is separate. So just to be specific here, we guided the 210 systems at an ASP of $430,000 to 440,000. Those are completely separate than the $3 million in incremental revenue. You could ascribe that, Rich, to about, think of 10 replacements, somewhere in that range in 2025 to get to that $3 million number. Thank you. Thank you. Our next question comes from Chris Pasquale of Nephron Research. Your line is open. Thanks. International really seems to have inflected in the back half of 2024. I know it gets overshadowed by the U.S. business, but we saw a big step up there. Guidance for 2025 seems to imply continued momentum. The utilization number in particular in the Q4 seems to have been quite strong. Maybe just spend a minute on where you're seeing the strength there and what the next dominoes are for you guys in terms of OUS expansion. Yeah. Maybe I'll start with just providing some help on what was comprised of international. Consistent with previous quarters, the upside in the Q4 is primarily demand driven from the U.K., both on new systems, but as you pointed out, some really nice procedure growth and utilization. I think our 2025 guidance really reflects the fact that we're just getting started in the U.K. and have a lot of runway left here. I'll turn it over to Sham to perhaps talk about some of the other regions that were making some initial inroads, but at the same time, we do not have a significant amount of revenue in 2025. Yeah. I think I'll touch on the U.K. just a little bit more color and then talk about outside the U.K. The first thing I would say is I've been spending some time over in the U.K. just due to the momentum that's happening in the business there. Very akin to our experience in the U.S., we're now seeing the government hospitals adopt the technology, but also the private sector has started to adopt in a very nice fashion in the U.K. Recently, I was over there and met with the executive team of the largest IDN, and they are looking for a strategy to expand Aquablation throughout the country. So just really, really exciting opportunity there in the U.K. to become standard of care for BPH procedure as well. Outside of the U.K., our primary focus is direct businesses in Japan. We now have established reimbursement. The KOL network is building. 2025 will be very much a focus on expanding the install base to a heavy focus on greenfield sales. And like the US, we'll start in the U.K. We'll start to build a procedure business over years as we build that direct team in Japan. And beyond those two countries, we obviously have a large opportunity, and we're focused on countries where we believe we can move the market in the years to come. So building really good market development activities and building KOLs in those markets. Thanks. And then this is just one detailed one, but did the size of the WATER IV trial change from what you had contemplated back in the fall? I thought it was 180 before, and now it's 280, but maybe I misheard. No, no. We had said WATER IV would be a 280-patient randomized study in the United States. Okay. Thanks, Reza. Thank you. Our next question comes from Nathan Treybeck of Wells Fargo. Your line is open. Hi. Thanks for taking the question. Just circling back to the replacement opportunity, is there any way you could kind of help us understand the gross margin impact from replacements and then just generally for 2025? How should we think about gross margin cadence through a year, and where do you think you can exit in Q4? Yeah. So Rich had just asked this question. The replacement opportunity is factored into our gross margin guide. We're assuming about 10 replacements at a $300,000 ASP in the U.S. We're assuming 210 greenfields in the U.S. at $430,000 to 440,000. So our margin expansion takes into account any dilutive impacts that we would have from replacement opportunities. The second part of your question on gross margins, can you just repeat exactly just so I can make sure I answer your question? Yeah. Basically, how do you expect gross margin to trend through the year and the exit rate in Q4? Yeah. So we exited, just to remind everybody, this year, 2024, with Q4 margins of 64% and full-year margins of 61%. Now, that was a meaningful improvement from 52% in 2023. And then we have guided on a full-year basis here to kind of right mid-60s, 64.5%. That would suggest an exit velocity of somewhere in the 65%-66% range in the Q4. We're pleased with that growth, but I don't want anybody to think we're disappointed given how robust 2024 was. The reality is 2024 was always transformational for us from a gross margins. This was the year we saw a meaningful impact of leveraging our overhead. It's the year we moved in fully to our new facility and took advantage of that. On top of that, we had a nice surprise in 2024 with significantly average selling prices, particularly on the capital side of the business. Given where we're at today in the mid-60s, we don't expect the same magnitude of move in 2025. But again, we're going to be exiting the year close to 66%, which we believe, importantly, will be another proof point on a very clear pathway to profitability. Okay. And so at this point, my understanding is there's a rep at every procedure. And I believe you talked about this in the past, but eventually, you want to move beyond that where you don't need a rep at every procedure. I guess, what are you thinking about timing in terms of transitioning how the procedure is done and how many reps you need in the field? Thanks. Yeah. Hey, Nate, it's Sham. So I think there's a couple of factors here that we're considering before we make that decision to be something that's more widespread. Number one is, in high-volume hospitals, there are 12 BPH surgeons. And so our opportunity to sell to the other surgeons that aren't using our technology becomes more and more challenging when we're not in the operating room. It's an unbelievable sales opportunity for our field team to be in those cases and cross-selling to those other surgeons. The other piece of this is simply the efficiencies of the procedure. When we're in there and we're helping staff, and there's a lot of different staff that covers procedures, we're able to get through a lot more cases in a day when our reps are in the room. With HYDROS, that equation could change for us. That's one of the reasons why we're excited about HYDROS is our ability to allow more and more different staff members to have a procedure that can be more efficient for our surgeons. So the short answer to your question is we plan to pilot some of these HYDROS accounts in 2025, and we'll see how that goes. And over time, we definitely will see more and more independent surgeons. But for now, we see it as an opportunity when we're in those hospitals to bring more and more surgeons on technology. Thank you. Thank you. Our next question comes from Mike Kratky of Leerink Partners. Your line is open. Yeah. Hi, everyone. Thanks for taking our question. Kevin, maybe just to go back to what you talked about, I think you've historically talked about 65% gross margins being in the range at which you could start to get a pretty clear path to profitability. So is it fair to think if you're exiting this year at 66%? I I mean, not to get ahead of ourselves, but does that give you pretty good confidence that 2026 then is the year that that could happen and then have one follow-up? Yeah. I'm going to keep my commentary focused on 2025, but I think it'll help with your question anyhow. And I'm going to talk about EBITDA in particular. So we did provide quarterly EBITDA guidance, and I'm going to talk about the Q4. However, we do expect to see sequential improvements in EBITDA throughout the year. And we do believe exiting 2025, we're going to show a very clear pathway to sustained profitability. However, we're not going to comment today on what specific quarter that's going to be or actually comment on 2026 either. But to get to our implied guidance, you get to a place exiting 2025, again, where it should be very clear that this is a business with significant top-line growth, expanding margins, leveraged OpEx, and no question about our ability to generate profits moving forward. Okay. Yeah. Super helpful. And then maybe just one follow-up. Earlier, you mentioned your guidance implies your handpiece ASP, I think, is up slightly, but most of that's still coming from AquaBeam. So can you help quantify how much higher your HYDROS handpiece revenue is or your, sorry, ASP is versus AquaBeam on an apples-to-apples basis? Yeah. It's too early to comment on specificity. The reality is we're still working through a lot of the HYDROS negotiations. Our installed base of HYDROS is still less than 100 systems that we've sold. So we feel good that we're getting increased ASP, but it's probably too early to comment on what that delta looks like as we're working through multiple customer negotiations. Is that fair? Yeah. Understood. Thanks very much. Yes. Thank you. Thank you. Our next question comes from Josh Jennings of TD Cowen. Your line is open. Hi. Good afternoon. Thanks a lot for taking the question. Just maybe a hard one to answer, but I was hoping you could just share what competitors are doing as PROCEPT is driving the Aquablation treatment towards standard of care. Are you seeing significant countermarketing in the field? Are there any technology advancements that you guys are on your radar? Love to just hear how you're thinking about the competitive landscape and if it's getting tougher or if you guys are even more confident after the past multi-year run you've been on. Hi, Josh. This is Reza. Definitely on the competitive front in the last couple of years, technologies we see are generally in the non-resective area. On the resective, especially, we do not see companies running even an IDE trial, and also so this is for BPH treatment, and as far as the prostate cancer, yes, we see some technologies for focal therapy, and we are still the only company running an IDE randomized study IDE in the United States, so we are very confident with our technology. I'm going to let Sham. He can add more color to this. Yeah. Hi, Josh and Sham. I think on the resective front, we've made significant progress in our journey to become a standard of care. We'll exit 2025 at roughly 20% of the resective market. And when you look at the competition, the resective market, the gold standard for 100 years has been TURP. And who sells TURP? There's a lot of different products that sell TURP. So we don't really have a direct competitor when it comes to TURP, which is a massive advantage for Aquablation and for PROCEPT. The other companies Reza touched on, the non-resective technologies, which tend to be office-based. But in the hospital market, we feel like we've got an unbelievable opportunity to really continue our journey to becoming standard of care. Awesome. And just wanted to check in on your system guidance and assumptions baked in. I know we're going to see some early prostate cancer data at AUA, is my understanding. Sorry, I may have missed part of the prepared remark session earlier. But I mean, are you baking in any prostate cancer indication-driven system sales in 2025 system guidance, or is that not baked in? Thanks a lot. No, our guidance does not assume any revenue or systems or procedures attributable to prostate cancer, so as far as AUA's. Second part of your question, definitely, we are very excited. We'll give an update on WATER IV and there will be data presented on PRCT001, PRCT002, and so these are some of the information that will be presented at AUA. Outstanding. Thank you. Thank you. We have no further questions at this time. I'd like to turn it back to Reza Zadno, CEO, for closing remarks. I want to thank everyone for attending our earnings call. We hope to see you at the upcoming conferences and have a nice day. This concludes today's conference call. Thank you for participating, and you may now disconnect.