Have a capital component, and you're launching a new robot. You're in earnest with your second quarter with Hydros, really, I would say. I thought maybe we could start off with the trends coming off a rebounded and accelerating procedure curve in 1Q, and then kind of the trends that you've seen on the capital side in 1Q and within the context of the rest of the year. How are you feeling about the business? What trends did we see in 1Q? What drove that reacceleration, and how sustainable is that? How are you feeling about the capital pipeline? Yeah, thanks, Rich, for having us, by the way. I'll start with the procedure side of the business. Coming off of Q1, we had a nice procedure beat in the first quarter. We didn't feel at the time we would be truly rewarded for being overly aggressive on kind of the full-year handpiece guide, which is kind of we baked essentially the Q1 beat into the rest of our full-year guide. Our strategy was to preserve future beats and raises on the procedure side of the business. As we mentioned on our Q1 call, in early January and February, we were still seeing some of the lingering impacts from the saline shortage. That was primarily a Q4 phenomenon. Exiting March, strong procedure momentum. We've made some commentary here in Q2 that strength has continued into April and May, and just feel really good about the underlying trends in the business around procedures. Not just procedures themselves, but surgeon metrics, new account launches, launching accounts with multiple surgeons. Our surgeon retention rates continue to be above 90%, which is all fantastic, and feel really good about the trends we're seeing there. Helping those trends, I do think transitioning into capital is helping. The Hydros system, while early in its launch, as you've pointed out, we're seeing great receptivity. Our funnel has never been larger, both in terms of the number of systems and then also the selling prices that we're seeing in the funnel continue to be positive. Again, feel good about how we're set up for the full year on capital. That's great. Let's start a little deeper on the procedure side. I guess January was kind of just a drag on the 1 Q and understated probably what the 1 Q trend really was. In March and April, were much stronger. Anything you can tell us on daily volumes or growth rates or anything? Just what was the trajectory in those stronger months? Did that continue to get better or just kind of sustain at those elevated levels as you moved into April, May? Yeah, I think it's sustained. We saw meaningful improvement in March, and April did improve off of March somewhat. I think we're operating really for the first time in the last 12 months with really a clean slate. What I mean by that is we mentioned last year some headwinds with rack audits. We launched a new robot, and all of that is now clearly in our rearview mirror. Obviously the saline impact in the fourth quarter. The trends continue to be positive. I think the ability to continue having kind of that low to mid single-digit year-over-year growth in utilization, while maybe does not sound impressive on the surface, when you actually think about the number of systems we are adding to the business on an annual basis and the fact that we could still expand utilization, we think is a nice proof point around the receptivity of the technology. Got it. As we think of where and how you're driving that utilization growth, one of the things we think about, I don't know if it's the right way, but same-store sales, if you will, or the earlier adopter cohort and those guys and girls getting stronger or seeing increasing use up to some peak penetration. I think you've talked about high-volume BPH centers on average doing 17 a month, right? Where are we on your higher utilization cohort on moving towards that? Is everyone moving up their adoption curve at similar paces and what you would expect, the newer adopters, the middle, I don't want to say newer adopters, the middle cohort of onboards, and then your original class, if you will? Can you just talk to that? Yeah. So right now, all things being equal, you can view an Aquablation program as about a 50% market share within our existing accounts, which for us means we're very early in terms of not just cannibalizing the receptive market, but there's a whole market expansion story here too, where ultimately we feel we have the right technology to bring men off the sidelines and not just cannibalize the 17 receptive procedures that are done in a hospital, but really beginning to expand the market. We're early in that journey where we definitely still see the older cohorts increasing utilization on a quarterly basis. That same-store sales that you referenced is still a meaningful driver to our growth. At the same time, new accounts obviously contribute significantly to our growth. We're anticipating installing over 200 robots here in 2025. While those accounts do take three to four quarters to ramp up, they do contribute meaningfully to incremental procedures. I guess on the early adopter cohort, do they peak out at, I don't know, 50%, 60%, 70%, 80% of that average 17 per month? I appreciate that there's a market expansion element, but you've also said that you don't know how much of it's market expansion versus maybe just shifting where these are getting done and certain hospitals gaining share. Let's just assume 17 per month is an average. Where are you seeing your older users kind of peak out when they peak out? Yeah, it's highly variable, is the honest answer. I mean, we have numerous accounts that do well north of 17 per month where we've cannibalized their full receptive business, and now they're doing more procedures. In general, I look at that number more as a comfort factor as to where we need to be, right? The fact is, while we haven't guided past 2025, we're obviously aware of where expectations are in 2026 and 2027. If my memory serves me correctly, I think expectations in 2027 are for right around eight to eight and a half procedures a month. Even in 24 months down the road, it's not as if we have to be 100% market share in any given account. We already, again, have multiple proof points of us doing more than that. We have a long way to go here. It's early. I'd also suggest with Hydros, the new robotic platform, that our expectation would be that system allows for greater utilization than the previous system, given a lot of the features there with Hydros as well. We have a long way to go. We're happy with the success we've had. As a management team, we're not sitting around worrying about where our future growth is going to come from. The reason why I asked that question, and you kind of started to just get at it, but while we're really barely at mid-teens US penetration into the existing receptive 10, let alone the expanding one, what I think some investors are worried about is, "Hey, this is 15% or mid-teens% on its way to maybe two-thirds or 70%." What if we think that's the case, but we're really going to hit the wall at 25% or 30% penetration that we just don't know about? That is why I kind of asked that. I guess, what can you tell investors that gives you confidence that we're not going to hit a wall like that? I think the variable that we talk about internally is placements, right? I think if investors believe that we'll continue to be able to sell capital, we're going to get the procedures. As Kevin mentioned, we're roughly, call it 50% penetrated within existing accounts today, doing seven to eight procedures a month, with the opportunity being somewhere in that teens range. Our pipeline is significant. I think that Hydros lends itself well to being that next platform to reach the mid-market to broader market, broader adoption. Selling capital is always going to be a component of our business. If we continue to sell capital, we're going to get those procedures. By getting those procedures, the penetration rate will increase. Got it. Part of that's just if they're buying the system, they're going to use it, kind of? Yep. Yep. I mean, I think one of the variables that's different between Hydros and maybe some of the earlier cohorts with Aquabeam is that with Aquabeam, we were only really launching with one or two surgeons. Now we're launching with sometimes two, three, and four surgeons, just given the awareness of the procedure and marching more towards that 20% market share in the hospital market. You made a comment, Hydros is in some way unlocking some sort of utilization, incremental utilization. How? Is that a procedure time item? Is that an efficiency item? It's more efficiency as opposed to procedure time. What we mean by that is first, it starts with the hospital support staff. So with our previous generation system, I'd suggest that was a little more complex in setup for the staff. And many hospitals had to rely on the same or staff to complete cases. We believe with Hydros, we've mitigated that need to where now you're not relying on kind of a single point of failure within a given hospital. I think a lot of us have heard from other companies about shortages in hospital staffing over the last two to three years. That never did impact us directly, but Hydros definitely helps in that type of environment to not rely on the same staff. I think from an administrative standpoint and the top-down, Hydros also could be a more profitable procedure. You now have a single-loaded scope. You do not have to send out the scope for reprocessing and sterilization. That helps somewhat as well, where now it is not only just bottoms up, but also the top-down with administration seeing the benefits there of Hydros. Got it. Do you have an anecdotal kind of evidence of more procedures per account in Hydros accounts versus non-Hydros accounts? It's early, right? I mean, we just launched Hydros in Q3. I mean, we were pretty transparent in saying we didn't launch the majority of those accounts in the fourth quarter, given what was going on with saline. We're really only a full quarter into seeing what a good Hydros launch can look like. Anecdotally, yes, definitely. I mean, we were definitely hearing from customers daily that all of the features that we just went through, setup, economic return, and that's not even getting into some of the clinical benefits around AI, which we're now seeing 95% of Hydros customers use the first-assist AI feature, which is also helping. Over time, we do think that Hydros lends itself to higher utilization. You've talked about moving into, and the definition here might be a little off, but middle adopters, if you will, or lower volume BPH accounts. That doesn't mean low volume, but lower volume than "high volume" BPH accounts. I guess, can you talk about what, if anything, that means for utilization per account? Now, this group of middle-of-the-road volume accounts, are they on similar trajectories to what your higher volume accounts used to be? Yeah. Let me level set the audience and the folks on the web here and get into some details when we talk about the market and how we see it. There are 2,700 hospitals in the U.S. that do BPH surgery. Of those 2,700, there are 860 that we view as high volume. We define high volume as any account that does over 100 BPH procedures in any given year. To be clear, our strategy is still focused on the 860 high-volume hospitals of our installed base today. Roughly 65-70% are in those high-volume hospitals. That continues to be our focus. That is the low-hanging fruit. Our goal is to penetrate 90-plus% of those over time. That is the focus of the sales team. However, what's kind of happening since we've commercialized is we're seeing hospitals that typically did not do a lot of BPH receptive procedures be very interested in the technology. What's driving that is the fact is those hospitals, they're large hospitals. They just typically didn't do a lot of BPH surgery. They still see numerous BPH patients. Historically, they were just referring those patients out because they didn't want to deal with alternatives available because, frankly, they're not very good on the receptive side. I would suggest that the medium-volume hospitals, their trajectory looks a lot like a high-volume hospital. Low-volume hospitals, which do less procedures, obviously, in a medium-volume hospital, they're less than 10% of our total installed base. They're still not terribly meaningful. Perhaps over time, those lower hospitals could be somewhat of a drag on overall utilization, but they're not the majority of hospitals out there anyhow. We feel good that the utilization of medium-volume hospitals is not going to be on any different trajectory than a high-volume hospital. Thus, we do not expect this to be overall dilutive to our utilization here as we move forward. I think switching gears to the capital side for a minute. You saw more IDNs, or the proportion of your placements coming from IDNs has increased. I know you've been talking about that for a couple of years and working towards that. Can you tell us, what does it mean now that you're there and you have more conversations at the corporate level? Should we expect bulk orders? Are these bulk orders? How should we think about an increasing percentage of IDN placements? Yeah. Look, the reality is if you're going to become the standard of care in the surgical BPH receptive space, you're going to need to have the support of the IDN networks. The largest 17 IDNs in the US account for roughly 25-30% of all BPH surgeries. You're incapable of becoming the standard of care if you don't have the support of IDNs. What we've seen over time has been extremely positive. When you look at other surgical robotic companies, I think they'd also suggest that having partnerships with IDNs is a key element to growth and success. We view this as an extremely important part of our sales strategy. We're in a good standing with the large IDNs. The bulk orders that you reference, where we would like to get this company to down the road is where we know at the beginning of every year how many robots these large IDNs are going to purchase. We're not there yet. That's where we see this relationship going. That takes time. Again, other comparable robotic companies, you're looking at anywhere 10-plus years to really have these relationships start to bear fruit. I'd suggest we're going to be much earlier than that, but it's going to be more a post-2025 type of incremental tailwind to the business. I guess, what would you say to someone who said, "Oh, there's more IDN-related purchasing. Therefore, they're getting to the same place we thought they would be with bulk purchase orders?" How do you respond to that? Yeah. I think those relationships allow us to have a much more predictable capital sales funnel and process. I think any investor or any med tech executive who deals with capital equipment, the predictability of when these sales occur is always a pain point, right, across the board. By having these relationships, I think you remove that. You have a much more predictable sales funnel, which allows you to resource appropriately and allows you to not surprise folks. I think we've been pretty good as a public company on that journey. IDNs, if anything, should just continue to help foster that predictability. Is your conversion of your pipeline improving now that you're having more coming from IDNs? We've always been pretty good about converting our pipeline. The predictability around when those deals are going to close definitely has improved with our IDN relationships, for sure. What about ASPs? How do we think of ASPs with these increasing? Yeah. Insignificant. I mean, pricing for IDNs, just like pricing for our end-user hospital customers, it's variable. I would not suggest that large IDNs have a lower price than the corporate average. There are some that are higher. There are some that are lower. But it's a little bit all over the map. You mentioned, I think in an earlier remark, pricing has been surprisingly positive. Or maybe not surprisingly, but positive. You used those words. Can you elaborate on that a little bit? Yeah. I mean, when we went public in 2021, I think the average selling price of our robot was around $300,000. We're now in this $430,000-$440,000 range. I view that as, again, a testament to the technology, but also I think it helps answer the question about the capital environment impacting our business. Because if the capital environment were to impact our business, I don't think you'd be able to expand ASPs in such a meaningful manner. Internally, I think we feel there's more room to go up than down there longer term, particularly with Hydros now being the platform we're going to continue to innovate on. I think over time, we could add value adds to the customer that can garner a higher price. If we landed in the $430-$440 in perpetuity, I think we feel pretty good about running a highly profitable company at that point. Just on the capital environment, 1Q is always a tricky one for all capital companies. It does not feel like anything kind of fell off a cliff with a lot of noise in the background. I am just curious, now that we are a few months past Liberation Day, just learning about it and the new world that we are kind of living in, what are you seeing? How do you feel about kind of the capital environment and the outlook? Yeah. We don't sense any really material shift in overall sentiment. We've been pretty consistent in saying that we think the environment's relatively stable. I think we're very fortunate as a company with how we're positioned within a hospital, one with pricing, right? I mean, our capital, while $430,000 to $440,000, it's not $2 million to $3 million. It could typically be approved and funded at the local level. Most hospitals aren't dependent on third-party financing. They're not dependent on board approvals. Therefore, we can get through that process. I think more important than that is what we actually offer to these hospitals. When I think of a slowing capital environment, in my experience, that tends to impact replacement markets in a much more meaningful manner than the greenfield markets we're in. What I mean by that is if you had a robot that's 8-10 years old in tough economic times, when I talk to hospital CFOs, they're willing to hold on to that equipment for two, three more years. Whereas with Aquablation and with the Hydros system, they view this as a benefit to the hospital. It allows them to retain patients. It allows them to retain surgeons. It allows them to treat more patients than they otherwise would have treated without launching a program. When you operate in that environment, that's much different than replacing a 10-year-old piece of capital. I think we've been fortunate where even if the economy were to worsen, we'd be okay in kind of doing what we say we're going to do here in 2025. Got it. You have a CPT code change coming up. You're going from Cat 3 to Cat 1. I know this is something that's come up in a number of investor conversations. I think you've commented in a public forum in the last few weeks. Can you just remind us what your running assumption is with respect to how this will impact the physician fee payment for all receptive procedures and then yours specifically on a relative basis to other receptive procedures? Yeah. Let me start with saying I can't go into too much detail. We are under NDA with CMS and AMA, excuse me. Given that backdrop, we still view this risk to our business as quite low in terms of the physician fee. Why I say that is we do believe that as part of this meeting, all receptive modalities are being reviewed. Given we're going to exit this year at about 20% of the receptive market, historical precedents would suggest that when a company gets our size, they will take a hard look at the whole category. What's important for PROCEPT is really the relative value a surgeon gets paid compared to the other receptive modalities as opposed to the absolute dollar amount itself. I mean, our expectation is that physician payment will go down. We think it's going to go down in a reasonable manner. We also do not believe this will impact adoption at all. In fact, internally, it's a non-event in terms of how we're going to forecast the business in 2026. The much more important piece of our procedure from a reimbursement standpoint is the facility payment that the hospital gets paid. We are solidly in APC level 6. We view it as very minimal risk that would ever change. That's reviewed, by the way, in the normal course every year. Nothing new here in 2025. When you look at the price of our procedure, which dictates the facility fee, the price of our procedure, if anything, has been increasing over the last 12 to 24 months, which would support a higher reimbursement level, not a lower reimbursement level on the facility fee. Our running assumption is that we see a decrease slightly to the physician payment. That is going to be in line with other resective procedures. Our expectation is that we maintain our APC level 6, which is the facility payment. It is going to be business as usual. What supports that, by the way, and I think this is an important point, is when you look across the spectrum in the U.S. as to what physicians are paid, it is highly variable today. While we get mapped to a TURP, and a typical surgeon will get anywhere from $700-$800 for their hour of time, we see in some territories that could be as low as $600. In some territories, it could be as high as $900. As a company, we do not see any difference in utilization amongst the surgeon who gets paid $600 or $900. It is important to remember this is a hospital-based procedure. The surgeon is using Aquablation for a variety of other benefits that are not driven by economics. You're not necessarily anticipating a bigger amount of decrease in reimbursement for Aquablation relative to other resective procedures. That's our expectation, correct. That won't happen. That will not happen. Okay. Got it. Is there any potential that you could get upgraded on the APC level? Is that even in the cards? Is that something maybe not in the cards this year, but next year? It's reviewed every year, and it's reviewed on hospital charges. I will say when we review our charges, we are closer to APC level 7 than we are to APC level 5. We're at the upper end of APC level 6. Our base case is that we maintain our APC level 6. If we were to get additional facility reimbursement, I think that obviously would be an extreme positive for the company. It would allow us to take a look at our handpiece pricing. It would allow us to look at our capital pricing now with a higher APC level. I just want to be crystal clear. We are not assuming that the company is going to move to APC level 7 as part of this. We're closer to APC level 7 than 5. Got it. I want to hit on margin and then maybe not give it its due course, but touch on prostate cancer. Right. All right. On margin, Kevin, it feels like you fully loaded your OpEx guidance and maybe did not go as you left some room, as you said, beat and raise potential if all goes as planned on the top line. Does that mean that as and if you outperform on the top line that we should see drop through to the bottom line? Or how are you thinking about reinvestment if the top line materializes better than what we are all thinking in guidance? Yeah. First comment I want to make is we're at a point in our commercialization where we will always invest in the business if we think it's going to continue to drive top line growth, right? Profitability is paramount, don't get me wrong. At the same time, with $300 million-plus of cash on the balance sheet and showing a very clear pathway, particularly with gross margin expansion, we will not miss opportunities to invest in the business to continue to grow growth when we're so early in our trajectory. With that said, we feel really good about where we're sitting here in 2025. We guided to an OpEx number around $300 million. We've said we think that could support much higher revenue levels than our current guidance out there. Just philosophically, this is something we changed in 2024 where we wanted to give the street a fully baked OpEx number and leaving potential for revenue upside such that any overachievement has the potential to drop through to the bottom line. If I go back a few years, in 2023, we were constantly beating the top line. We were constantly guiding up OpEx. I'll use the term investor fatigue a little bit was the feedback we received. We did not want to repeat that mistake in 2024. That's just philosophically how we're going to move forward. We kind of give you guys a fully baked OpEx number with a lot of room for upside on the top line. Okay. That's helpful. Anything on the cadence of how that will flow this year that we should be? No. I think if you just look at consensus, it's modeled appropriately. And there's nothing to point out there. On prostate cancer, look, you guys spent a lot of time at your AUA analyst day going over this. I guess three minutes is not enough time here. What would you highlight as the main two or three themes or points that you would want investors to take away from that AUA meeting? Yeah. So there's a few. I mean, the first thing we just wanted to put out there, and this was never really a concern with oncologists. I think if you do calls with just a run-of-the-mill urologist or even other investor calls, this belief that we had the potential to spread cancer, we wanted to make sure that we addressed that. In two minutes, I can't get into too much of the detail here. We feel very good that Aquablation does not spread cancer. We've had a contraindication removed to treat patients that have known prostate cancer from the FDA. We have early data from our 001 and 002 patients that would suggest this is not the case. Frankly, that's never been a concern of ours. It seemed to be a concern out there in the market that we wanted to address. That was goal one. Goal two is with BPH, you basically are treating a patient in the transitional zone and just creating a tunnel. With prostate cancer, you have to have a much more aggressive form of treatment. Most of prostate cancer lives in the peripheral zone that resides below the transition zone. It is somewhat a different modality to get to. We wanted to show folks that we have the ability to treat. We would not have embarked on this journey if it frankly did not work. We wanted to kind of give people some real-time proof points as to how we are going to treat a patient. That was goal two. Goal three was really just to talk about the endpoints and the timelines around our study, the fact that we do have a six-month endpoint. We have breakthrough device designation with the FDA. We feel good about our ability to be one of the only companies out there that can get an actual claim to treat prostate cancer given our FDA-supported study. There are a lot of companies that have done randomized studies. I think we are one of the few, if not the only, to do one that is supported and approved by the FDA with a pathway to get our own claim. Lastly, I just want to put some timelines around what this looks like. I think there was a lot of confusion out there. What we wanted to suggest is that in a normal environment, this would be a 24-month enrollment. That would put commercialization sometime in early 2028, which is how we are thinking about it. At the same time, we think we could influence this kind of in the six-month time period, have the majority of patients enrolled by the end of this year with a goal to have everybody fully enrolled in 18 months versus 24. We just wanted to put that out there as well. The earliest would be late 2027. Think early 2028 as your base case. Yeah. Yeah. I think early 2028 is the right way to look at it. With a claim, by the way, there's other pathways we could go down in the interim period. But to get a claim to treat prostate cancer, we'd be looking at early 2028. Okay. I think we're at time here. That was very comprehensive. Thanks, Kevin. Thanks, Matt. Appreciate it. Thanks for having us. Thanks, everybody. Thanks, everybody.