Good afternoon, and welcome to PROCEPT BioRobotics' first quarter 2026 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, thank you for joining PROCEPT BioRobotics first quarter 2026 earnings conference call. Presenting on today's call are Larry Wood, Chief Executive Officer, and Kevin Waters, Chief Financial Officer. Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to several risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call. These risks and uncertainties are disclosed in more detail in PROCEPT BioRobotics filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date, April 29th, 2026. 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'll 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'd like to turn the call over to Larry. Good afternoon, and thank you for joining us. Over the past six months, we have taken decisive actions to reset the organization. We have sharpened our focus on operational excellence, accountability and commercial discipline. Our first quarter performance reflects the early impact of these efforts. We are encouraged by our Q1 results and the momentum we are building, having reported total revenue of $83.1 million, representing an annual growth of 20%. Starting with procedures, we completed approximately 12,200 U.S. procedures in the first quarter of 2026, where our commercial realignment initiatives modestly affected Q1 procedure growth, performance was largely in line with expectations. The team is adapting well, and we expect the full benefit of these changes to materialize in the second half of 2026. Regarding handpieces, we believe field inventory levels and customer purchasing behavior have normalized, with handpieces sold representing approximately 95% of procedures in the first quarter. On a weighted average basis, we continue to expect approximately a 1-to-1 ratio of handpieces to procedures for the full year. Turning to U.S. systems, we sold 49 HYDROS systems, which included two replacement systems. We remain confident in our full-year system plan and are encouraged by the early positive customer response to the AquaBeam replacement program. With regards to pricing, as we emphasized in our last earnings call, establishing price discipline remains fundamental to long-term value creation. In the first quarter of 2026, U.S. HYDROS system average selling prices of approximately $485,000. This represents an all-time high and a 14% increase compared to the fourth quarter of 2025, despite what is typically a seasonally challenging quarter for capital. Given our increased pricing discipline across the organization and strong first quarter pricing, we now expect full year 2026 system pricing to be modestly above our initial guidance range. Additionally, U.S. handpiece average selling prices were approximately $3,500, representing a 5% increase compared to the fourth quarter of 2025 and a 10% increase year-over-year. Now I'll provide an update on our commercial organization. We previously described two key changes that we believe are strategically important for long-term performance. First, we realigned our commercial team into an integrated regional structure where our clinical and sales functions now report to a common regional leader. The new structure creates a single point of accountability at the regional level to ensure clinical and commercial activities are coordinated around customer success and procedure growth. Second, we are continuing to advance our dedicated launch team to drive more consistent launches, reduce variability in activation, and accelerate procedure volume ramp for customers. We view launches as a key lever for improving downstream utilization and overall performance. The realignment of the commercial organization and implementation of the launch team was finalized in early Q1, and as expected, resulted in some short-term disruption in the first quarter. We view this as a normal transition period as teams ramp, establish account relationships, and standardize new operating processes. Most important, we believe these changes, along with our marketing programs, better position us for sustained high growth. We will continue to manage through the transition thoughtfully, and we expect the benefits to build as the organization settles into the new model. Let's look at gross margins and how we are progressing towards profitability. In the fourth quarter of 2025, we reported gross margins of 61% and indicated this level was temporary. We guided the full year 2026 gross margins of approximately 65%, reflecting expected improvement. Driven by increased price discipline and better leverage of our cost structure, we delivered first quarter gross margins of 65%. With this strong start, we expect gross margins to increase modestly on a sequential basis throughout the year. We will also continue to manage operating expenses as we work toward achieving positive Adjusted EBITDA in the fourth quarter of 2026. Turning to regulatory and clinical updates. In March, at the 41st Annual European Association of Urology Congress in London, the EAU updated clinical guidelines to give Aquablation therapy a strong recommendation as a surgical treatment for men with BPH and moderate to severe LUTS, reflecting the high quality of evidence and favorable patient outcomes. The therapy is now recommended as an alternative to TURP, especially for patients seeking to preserve ejaculatory function. This upgrade for prostates 30 mL-80 mL and the additional modes for treating prostates greater than 80 mL is supported by multiple clinical trials, including WATER and WATER II, all of which demonstrated durable improvements in urinary symptoms, preservation of ejaculatory and urinary function, and effectiveness across a wide range of prostate anatomies. A strong recommendation from one of the most respected global guideline bodies reflects the strength of the clinical evidence supporting Aquablation therapy and reinforces its role as a modern surgical option for physicians seeking to deliver durable symptom relief while preserving quality-of-life outcomes that matter most to patients. At EAU, we also announced the first international launch of HYDROS in the U.K. This milestone marks the beginning of a broader global expansion. Specifically, in the first quarter, we sold seven new HYDROS systems in the United Kingdom at an average selling price of over $400,000. Building on the recent approval and strong clinical momentum, including the rapid adoption at high volume NHS hospitals, our U.K. capital pipeline continues to grow nicely. We have also received FDA clearance on our 2nd- generation FirstAssist AI software, an advancement in personalized image-guided planning for Aquablation therapy. This milestone further strengthens the capability of the HYDROS Robotic System and enables more precise identification of prostate anatomy and more complete treatment planning to help surgeons plan with greater confidence and consistency. We remain deeply committed to advancing the standard of care in urology through our continued innovation for the millions of men affected by BPH. We are approaching the completion of patient enrollment in the WATER IV study and, based on current trends, expect to be fully enrolled by the end of May. We have been very pleased with the pace of enrollment, which is on track to be completed in less than 18 months. For a clinical trial of WATER IV size and complexity, the speed of enrollment highlights strong surgical interest and a patient willingness to participate. Factors we believe will ultimately translate into broader market adoption post-approval. Based on current timelines, we expect to present the WATER IV primary endpoint at AUA in the spring of 2027. With that, I will turn the call over to Kevin. Thanks, Larry. Total revenue for the first quarter of 2026 was $83.1 million, representing 20% year-over-year growth. U.S. revenue for the quarter was $72 million, reflecting 19% growth compared to the prior year period. Turning to U.S. procedures. We completed approximately 12,200 U.S. procedures in the first quarter of 2026, representing approximately 30% year-over-year growth. The percentage of handpieces sold to procedure volume was approximately 95%, with handpiece average selling price of approximately $3,500. As a result, total U.S. handpiece and other consumable revenue was $43 million in the first quarter of 2026, representing 13% growth compared to the first quarter of 2025. Turning to U.S. systems. Total U.S. system revenue was $23.4 million in the first quarter, representing 25% year-over-year growth. We sold 49 HYDROS systems at an average selling price of approximately $485,000 for new U.S. systems. Additionally, the 49 systems include two replacement systems, representing the early stages of what we expect to become a growing replacement cycle. We exited the first quarter of 2026 with a U.S. install base of 765 systems. International revenue in the first quarter of 2026 was $11.1 million, representing year-over-year growth of 25%. Moving down the income statement. Gross margin for the first quarter of 2026 was 65%, compared to 64% in the first quarter of 2025 and 61% in the fourth quarter of 2025. The improvement was driven by increased pricing, cost discipline, and favorable product mix. Total operating expenses for the first quarter of 2026 were $86.6 million, compared to $71.6 million in the prior year period. The increase reflects continued investment to support commercial expansion, ongoing innovation across our BPH platform technology, and increased funding for our WATER IV prostate cancer trial, positioning us to drive long-term growth and expand our clinical and technology leadership. Net loss for the first quarter of 2026 was $31.6 million compared to a net loss of $24.7 million in the first quarter of 2025. Adjusted EBITDA was a loss of $18.1 million in the first quarter of 2026 compared to a loss of $15.8 million in the prior year period. Cash, cash equivalents, and restricted cash totaled $249 million as of March 31, 2026, providing a strong balance sheet to support our strategic priorities. We expect cash usage to improve throughout the year, driven by greater operating leverage and improvements in working capital. Moving to our 2026 financial guidance. We continue to expect full year 2026 total revenue to be in the range of approximately $390 million-$410 million, representing growth of approximately 27%-33% compared to 2025. This guidance range continues to assume international revenue to be in the range of $50 million-$51 million. Additionally, we continue to expect 2026 total U.S. procedures to be in the range of 60,000-64,000, representing growth of approximately 39%-48%. With respect to new U.S. system pricing, we now expect pricing to range between $450,000-$460,000 for the remainder of the year, depending on customer mix between individual accounts and large IDNs. While first quarter U.S. system revenue and pricing exceeded expectations, and we remain encouraged by both pricing and sales momentum, our focus is on ensuring this performance is sustainable. Based on current trends, we have strong confidence in our full year total revenue guidance. We will provide further detail on these metrics as the year progresses. Turning to gross margins. We continue to expect full year 2026 gross margin to be approximately 65%. This includes $5 million-$6 million of tariff expense compared to $1.3 million in fiscal 2025. Our gross margin guidance does not reflect any potential benefit from previously paid tariff refunds, which could provide upside to 2026 gross margins. We continue to expect full year 2026 Adjusted EBITDA loss to be in the range of $30 million-$17 million. This guidance reflects positive EBITDA in the fourth quarter of 2026 at both the low and high ends of the revenue range. In the second quarter of 2026, we expect total revenue to be in the range of $91 million-$95 million, representing growth of 15%-20%. I would now like to pass it back to Larry for closing comments. Thanks, Kevin. In closing, while we have undergone significant change over the past six months, we believe these steps are essential to driving sustainable high growth and to establishing a clear path to profitability. In summary, while we are mostly complete with our U.S. commercial realignment initiatives and expect more consistent commercial execution over the course of the second quarter as reflected in our total revenue guidance, we have established pricing discipline across the organization, which we believe is critical to our long-term success. The U.S. capital pipeline continues to build, increasing our confidence in the sustainability of higher average selling pricing and the conversion of this pipeline into sales. Lastly, WATER IV enrollment is ahead of schedule, and we expect to complete enrollment in May. 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. At this point, we will be happy to take questions. Operator? Our first question comes from Matthew O'Brien of Piper Sandler. Your line is open. Good afternoon. Thanks for taking the questions. The first one is just a broader question. It's kind of on the, on the puts and takes that we saw here in Q1, the strength on the capital side. I'd love just to hear about where that, you know, where that originated, plus the ASP benefit that you're getting. On the handpiece side, I don't know, Larry, if there's a way to kind of frame up some of the disruption that you saw this quarter and then kind of how long it should linger and when we should be past that. I do have a follow-up. Yeah. Thanks, Matt. You know, I think the capital quarter was pretty broad-based. You know, we didn't really have a lot of large IDN orders or anything like that, so it was pretty broad-based, and I think that also contributed to the ASP upside. You know, we did certainly implement pricing discipline. You know, much of like what we did with handpieces, we implemented that on capital as well. That's, you know, just an important part of our journey toward profitability. On the handpieces, you know, the realignment of the sales force has been complete, and I think we're just at a very just natural transition phase where we're reestablishing account relationships and backfilling some of the key positions for people that have moved over to the launch teams. We expect the momentum on procedures to build throughout the quarter. Or sorry, throughout the year. You know, we remain, I believe, on track, you know, related to our guidance and, you know, those are certainly our goals. You know, we're not where we wanna be yet, but I think we've made the changes we need to make, and we're building, and I think the team's gonna continue to grow into these roles. You know, I'm, you know, excited about what the future looks like. Okay, appreciate that. It's very helpful. On the second question on that guide side, just if I'm looking at the roughly, I think it was $93 million midpoint of the range for Q2, just talk about, you know, plus all the, again, the ASP benefit you're gonna get on the system side. Just talk about the confidence in the, in the, especially the back half, it seems like it's a little bit more loaded than normal to get to the midpoint of that range and just the confidence there getting even to the midpoint or even higher just again, given the ASP benefit that you're talking about on the system side. Thanks. Yeah, Matt, I'll take that. Regarding Q2 in our prepared remarks, we did say that we are guiding to new systems in the $450,000-$460,000 range, even with the strength that we saw in the first quarter. I would definitely suggest our confidence in executing within our guidance range this year has increased with our Q1 performance. We did just feel it's prudent to maintain current expectations as we continue to emerge from the recent commercial realignment. Look, we feel good about the full year across all metrics. As I said in my prepared remarks, it'll probably be the end of Q2 where we start to formally update some metrics around pricing and volume, given what we've seen in the first six months here. Got it. Thank you. Thank you. Our next question comes from Nathan Treybeck of Wells Fargo. Your line is open. Great. Good afternoon. Procedures were flat quarter-over-quarter. Is there any way to quantify how much of this is driven by disruption from the commercial order changes in the inventory destocking? I guess, have you seen any underlying softening in demand or referral funnels? No, I think what we saw in Q1 was just sort of some normal seasonality that we see. We know when we start the year, and that's not uncommon for us. I think that was all pretty normal. You know, it's hard to quantify, you know, the sales force part of it in terms of people growing into their new roles and just sort of the normal seasonality we see in Q1. We're gonna continue to drive, you know, procedures throughout the course of the year. You know, we had strong system placements and the combination of some strong system placements along with our launch teams, we think also is gonna be a contributor to procedures as we, as we get deeper in the year and we have more launch team systems in the field, and we think that's gonna help us. Great. Thanks. For my follow-up, so handpiece sales were below your target of 1-to-1 to procedures. You know, you mentioned inventory rightsizing is completed, but can you help us understand how much residual destocking impact there was in Q1? Could handpieces fall below procedures in upcoming quarters? Yeah, no, we tried to guide that for the full year, we are going to be 1-to-1 on handpieces, and we still remain very confident that is going to be the case. I think the bottom line is, you know, if we are 95%, you know, I am not going to really apologize for it. If we are 105%, we are not going to brag about it. I think handpiece sales are always going to fluctuate a little bit based on the number of systems we launch and all these other sorts of things. I think that it is normalized. The number that we are focused on are procedures because, you know, eventually procedures and handpiece sales have to equalize out over time. You know, it is not going to be about how much inventory people carry, it is going to be how many procedures we drive. We feel like that is largely normalized now, but we remain confident in the 1-to-1 full year ratio that we provided at our investor conference. Thank you. Our next question comes from Mike Kratky of Leerink Partners. Your line is open. Hi, everyone. Thanks very much for taking my questions. Maybe just one quick one. You mentioned the $450,000-$460,000. Was that the full year average, or was that for the remainder of the year? I would classify it as for the remainder of the year. You could put in, that puts the full year average more towards the upper end, probably around $460,000 when you average that out, Mike. Got it. Yeah. Just to add to that, you know, part of our thinking on this is we didn't have a lot of big IDN orders in Q1. You know, when we get larger IDN orders, that can sometimes have a little bit more effect on price. I think even broader than that, we don't wanna get out over our skis on ASP commitments because, you know, there are certain places where we wanna maintain some flexibility. We are driving price discipline across the organization, we're gonna continue to do that. Understood. Maybe just as a quick follow-up, you know, Kevin, totally appreciate your comments on prudence and, you know, maybe some conservatism for now, given it's early in the year. You're reiterating your U.S. systems revenue guidance in the backdrop of the higher ASPs. Is there anything fundamental from a, you know, number of units sold perspective that, you know, is maybe changing? Or is this really just as usual? Yeah, look, I don't think it's changing, but I definitely believe the Q1 performance gives us greater conviction and confidence around achieving our full year guide. That should be implied with our performance. At the same time, you know, we're just coming off a Q4 shortfall. We're coming off a commercial realignment and, you know, we just wanna make sure that we maintain current expectations and not get out over our skis, as Larry mentioned. Our confidence in executing the full year on systems, particularly with the Q1 performance, is higher today than it was when we gave guidance in February. Understood. Congrats again. Thank you. Our next question comes from Richard Newitter of Truist. Your line is open. Excuse me. Hi, thanks for taking the questions. Maybe just to start, trying to get a sense for, of the new initiatives or the, you know, kind of the way you're approaching the market and the selling organization that you outlined. Can you highlight where you're seeing or where we should expect to see the proof points or the benefits show up fastest? Like, are there, I think there were three main ones that you had. Like, where are you seeing the improvements show up most meaningfully and soonest? You know, I get that you're pointing more to the back half, but I'm just curious where it's most evident that the progress is going the way you want it to be going in the first half. Thanks. Well, I think we have a lot of confidence in our launch teams. I think, you know, we moved some of our more senior people over there with a lot of experience, and I think the key thing there is the more systems we put in the field that we do under the launch team model, which is gonna build throughout the year, that we continue to see benefit of that. I think, you know, that's one that we have great confidence in. You know, the patient awareness activities, we're running a multiple pilots on that. Once those pilots read out, it'll help us really prioritize what things are most effective and what things we should be, we should be driving. I think that's just a prudent way to approach some of these new marketing programs. I think it's also really important people understand that there's always just gonna be a lag between driving patient awareness and a patient getting a procedure. It's not that a patient, you know, gets new information, they get an email, they see something on social media or maybe they hear a radio ad, and they show up at a doctor and they get treated the next day. They have to come in, you know, they have to schedule their appointment, they have to get a workup. I think most systems in the country probably schedule people a month out or so. There's always gonna be a natural lag between some of these initiatives and actually seeing the patients get treated. We're encouraged by all of the things. I think, you know, we spend a lot of time with the sales team, and I think people have good conviction about the changes we've made and the new roles that we have for people. It still just takes time for people to reestablish account relationships and to get some of the new people trained to backfill some of the launch teams. I think these are all very natural things. They're not like, they're not things that we think are gonna be a struggle, but that's why we've always modeled, and we try to be really clear about this at the investor conference, these things are gonna contribute more in the back half of the year than they are in the early part of the year. Got it. That's really helpful. Just, you know, this is now the first quarter or the first three months that you've been able to really see how physicians would react to kind of the physician fee payment changes that happened to all resective procedures going down, including yours. I guess, you know, what are you hearing and seeing out there? Do you feel better or worse, unchanged versus kind of the way you were talking to us before we obviously had these changes in place? Thanks. I think we had pretty much factored those things in in February when we spoke before. I don't think anything's remarkably changed from what we talked about in February. I think, you know, the economics for all these procedures are what they are. It is really about driving the clinical benefit and making sure patients understand how differentiated our procedure is versus competitive procedures. I think when physicians understand that as well and patients understand it, I think that's what drives therapy adoption and, you know, taking share from competitive procedures. I don't think anything's meaningfully changed on that. Thank you. Thank you. Our next question comes from Josh Jennings of TD Cowen. Your line is open. Hi. Good afternoon. Thanks for taking the questions. Nice to see the solid start to the year. I wanted to start off and just follow up on the reimbursement question and just, if any way you could help us frame up the potential for Aquablation procedure to kinda move up in the APC level as we go through these proposed rules and then final rules over the next couple months? Yeah. We haven't built that into our modeling. I think one of the important things to remember, Josh, is that even when these codes change, they always collect actual costs. You know, Medicare doesn't pay for value, they pay for resource consumption. You know, I think if you make our economics the primary part of the story here, you're always gonna be sort of chasing those ghosts. What we're focused on is, at the current levels that reimbursement exists, how is this an economically solid procedure for hospitals? How do we drive patients in? I think the other part about it is, how do we help hospitals be efficient with the procedure? How do we help them be efficient with procedure time? How do we help them be efficient with discharge, be efficient in avoiding complications? When we do that, I think the economics for this procedure work well. We haven't factored anything into our guidance about changing APC levels. If that happened, it would be, you know, certainly an upside to reimbursement. Thanks for that. Just to follow up, sorry if I missed this in the earlier remarks, but sounds like there is more positive reception than anticipated for replacement systems, HYDROS replacements. Any new outlook just in terms of how replacements kinda factor into through the rest of the 2026? Maybe just remind us why you expect replacements to pick up next year. Thanks a lot. Yeah. Thanks, Josh. Yeah. You know, I think just in simplest terms, given a typical capital cycle, we just really launched our replacement program kind of at the beginning of the year, the fact that we got two replacements already in, I think, you know, we were very encouraged by. I think we've had a lot of customers now that they realize they can get a trade-in value for their legacy system, which, you know, helps them with a replacement strategy. I think we just, you know, probably feel confident that replacements are going to be, you know, something that we're going to really hone the program in this year, I think it's going to be a much bigger part of our story in 2027. We're encouraged with our early start and, you know, we just gotta continue to drive execution on that. Thank you. Our next question comes from Chris Pasquale of Nephron Research. Your line is open. Thanks. Besides all the moving pieces you guys had going on, there was also quite a bit of severe weather during the quarter. These cases are reschedulable if the need arises. Did you see procedures getting pushed from 1 Q into 2 Q because of that, or was all of that disruption sort of contained within February and March? Yeah, thanks. You know, Chris, I mean, certainly there was some severe weather in the year, and we know that there were some case cancellations and whatnot. How many of those cases came back on the schedule and how many of those patients got something else? I think it'd be really difficult for us to say. I think most of that's probably out of the system at this point because most of that happened early in the quarter. I don't think it materially impacted our quarter, and I'm sort of just not really inclined to, you know, attribute anything to weather or weather-related issues. Our numbers are our numbers. They have to stand alone. If, you know, if there's severe weather and cases get canceled, it's our team's job to make sure that they get rescheduled and they get done. We just don't really make any allowances for that here and just keep people focused on the execution that we control. Yeah, fair enough. I'd love to hear a little bit more about the U.K. opportunity and what that looks like. International, small part of the business today that's been a consistent outperformer. Can you talk a little bit about sort of what you think the denominator is for that particular market? Are there other areas that you're excited about in terms of next steps internationally? Yeah. You know, when I stepped into the role, I really felt there was opportunities in international. You know, international isn't a very homogeneous place. There's a lot of variation, obviously. Some countries have really solid reimbursement and, you know, the capital opportunities there are solid, and so we focused on those places, and the U.K. is certainly our biggest place in Europe. We were excited to launch HYDROS. I think we had a great showing at EAU, and combined with the latest guidelines, I think it was an overall very positive meeting for us. We continue to evaluate what other markets in Europe that we should be looking at as opportunities, but it's not gonna be everywhere. I think over time, it's Europe and international is gonna become a bigger and bigger part of our story. That's gonna just take time to develop. Thanks. Thank you. Our next question comes from Stephanie Elghazi of Bank of America Securities. Your line is open. Hey, thanks for taking the question. Wanted to ask on Q1 procedures were a little light of the street and grew 31%, and you're still expecting a ramp in procedures to 50% growth in the second half. Can you remind us what's driving that acceleration and your confidence in that? Yeah. Thanks. Thanks for the question. You know, I think we always expected the first half of the year to be slower than the second half of the year. You know, we always expect to see a little bit of seasonality in Q1, and, you know, we certainly did see that, but it was pretty much at expected levels. We implemented all of our organization changes in the sales force early in the year, and so people are growing into those roles, and they're, you know, reestablishing that account management. The launch teams are starting to launch systems under the launch team model. They started in the quarter. You know, it takes time for those to build and for those to contribute. I think it is the combination of people maturing in the roles, reestablishing these account relationships. I think in the back half of the year, we start seeing more benefit from some of our patient activation activities, and I think we get the, you know, the full benefit of all of our newly launched systems this year and those contributing at a higher level than what we've seen historically. You know, the more systems you place under that model and the better they do, the more that builds for the back half of the year. That's what's driving that. Got it. Thank you. On the Q2 guidance, the midpoint of $93 million is a little below the street at $95 million. Maybe could you help us understand that? I'm just curious what's changed on your view of Q2. Maybe it's some of what you had just talked about, but is there more lingering disruption from the commercial organization changes than you thought or anything else? No, this is Kevin. Nothing's really changed in our thinking. If anything, you know, as I said earlier, I think we feel more positive in our initial guide today than we did when we provided that a few months ago. We have never provided Q2 guidance as part of Investor Day. This is really the first time, and really just sticking with the philosophy right now that we think it's prudent to keep expectations reasonable and give us a chance to outperform as opposed to getting out ahead of ourselves. There's nothing unique or different in Q2, and we continue to feel good about the trajectory on both systems, procedures, and our international business. Thank you. Our next question comes from Suraj Kalia of Oppenheimer. Your line is open. Larry, Kevin, congrats on a good start to the year. Larry, a lot of commentary on handpieces and procedures. Maybe if I could ask one question slightly differently. Of the 47 HYDROS systems, right, you've given your site numbers in the U.S. Our rough math, Larry, is suggesting, you know, it's around the 17-ish number of procedures per site per quarter, roughly in that ballpark. Maybe if you could talk to what are you seeing in utilization in your sites? Where do you think your share capture is within those sites? Is this the bogey that we should be thinking about, you know, as we map out the year and new store, same store sales? Yeah. Thanks for the question. You know, we talked about this a little bit at the investor conference. Our sites are highly variable, and so trying to create averages and trying to create average utilization, especially when we have, you know, a mix of AquaBeam and a mix of HYDROS, and going forward, we're going to have a mix of, you know, kind of our launch team, launch systems and some of our legacy systems. I just think it's hard to be able to create an average. I appreciate why everybody wants to do that because it's easy to just plug into a formula. I think what people should be focused on is just our pure procedure growth. You know, we put our procedure numbers that we expect to do this year. We put our ASP numbers, we put our system numbers on the board, that's what we just have to go drive to. The key for us is showing, you know, growth quarter-over-quarter on our procedure growth. That's what we're going to be driving to. I think, you know, I'm certainly not focusing the team on, you know, go to our lowest utilization places and trying to bring them to the mean. We map out literally every system in the country and say, "Where are the biggest opportunities? Where are there under usage? Where are there share takes? Where are there motivated people?" That's just our focus. I would just continue to focus on procedure growth quarter-over-quarter. Fair enough. Larry, one follow-up question on WATER IV. You'll have a readout in spring 2027. Let's assume it's positive, right? Logic tells you there would be a collateral pull-through both on the BPH side and on the prostate cancer side, right? Larry, should we think about is it gonna be a symmetric payoff, or do you envision there could be some level of asymmetricity? In other words, let's say superiority, there is some kink somewhere. Does it impact BPH also? How are you all thinking about that? Thank you for taking my questions. Yeah. That question may be above my education level. I'll say, like I don't know the WATER IV data. Nobody knows the WATER IV data at this point. You know, I don't wanna speculate about data. I think just broadly speaking, the more positive that data is, the more disruptive it has the potential for being for patients with prostate cancer. Obviously, anybody that already has a system that's already trained would be able to, you know, adapt quickly to treating those patients. You know, we would certainly do everything we could to facilitate that. I think it's just gonna matter most of the strength of the data and how doctors interpreted that as it relates to, as it relates to where this fits in treating patients with prostate cancer. All of those things being said, we think it's a perfect adjacency for us. It's rare that you can get this kind of leverage out of the same exact system, the same exact handpiece, and largely the same users. That gets us leverage all out of our sales force as well. We're just focused on running a great trial and then presenting that data when it comes out at AUA next year. You know, we're all, you know, cautiously optimistic it's gonna be positive. We'll have a lot more view once the data is public, and we can talk about it and be more granular. Thank you. Thank you. Our next question comes from David Rescott of RW Baird. Your line is open. Great. Thanks for taking the questions here. I wanted to ask on procedure utilization. I recall at the Investor Day, you had called out, you know, different levels of procedure contribution from that, the class of systems sold pre 2025, those sold in 2025 and those expected to be sold in 2026. You know, just curious on the progress you've seen so far in Q1, maybe how that level of contribution from the different groups have stacked up relative to your initial expectations, and then what your expectations are through the rest of the year from that segmentation perspective to get to, you know, the lower end, the midpoint or upper end of the procedure guide for the year. Yeah. I'll just say that, you know, we're still early in the, in the launch model and the ability of those systems to contribute significantly to our overall total number is just very limited at this point. I will say we remain extremely confident in the launch team model, and I think when we, you know, saw the readout from our pilot that we shared at the investor conference, and I think for all the same reasons, we continue to believe that that's gonna be a very important part of our story. It really just comes down to making sure, you know, as many systems we sell as possible, you know, start off great because our view is when they start off great, they tend to stay great. They tend to get established and they become, you know, a huge part of how BPH gets treated in those accounts. You know, we don't wanna get too far ahead of ourselves, and I think it's too early to declare victory on any of our programs yet. We just remain laser-focused on all of them and making sure we're tracking the metrics, we're tracking the progress that we're making, and we're driving our procedure numbers and doing that to the, to the very best of our ability. That, that's our focus now. We're just sort of head down and trying to drive the organizational excellence that we need to get where we need to go. Thanks. Maybe on this system ASP in the U.S. that you delivered in the quarter and then the subsequent guide through the remainder of the year. You called out this pricing discipline maybe being a factor for the higher ASPs you saw in the first quarter. Obviously also shows that there clearly is an appetite, maybe at least from the center's perspective paying a higher price for some of these systems. Maybe can you help reconcile why the guide for the second half of the year or sorry, for the remainder of the year would assume an ASP below what you delivered in the first quarter? Is there, you know, potential for what you saw in Q1 to maybe be a more realistic number as you go through the year from a system ASP perspective? Thank you. Yeah. Yeah, I think as Kevin said earlier, you know, it, a little bit of it comes down to customer mix. You know, we talked about it a little bit in our Q4 number. We had probably more IDN sales in Q4, and so that took our ASP down a little bit from what we'd seen earlier in the year last year, and we had less IDNs in Q1. You know, we are gonna continue to drive price discipline and we're gonna continue to try and get the highest ASP that we can, and we think our value proposition is very strong. You know, we don't wanna react to one quarter and get out over our skis for what the whole year ASP is gonna be. What we're just trying to do is be measured about that. You know, that's why Kevin, you know, covered that, you know, we now think that you can model at $450,000-$460,000 for the remainder of the year, and we think that that's, you know, that's a good modeling number. We'll certainly update that quarter or next quarter where we land. Depending on how that quarter lands, I think it'll give us a lot more confidence in how durable the pricing ASP is going to be. I'm very pleased overall with the operational discipline that we're showing. We guided, you know, if you go back to look at handpieces, we guided handpieces this year that you should model at $3,500. We were able to achieve that in Q1, and so I think that bodes well for us for the rest of the year. We're gonna continue to drive that same sort of transition on systems, but, you know, as Kevin and I both said, we just don't wanna get out ahead of ourselves. Thank you. Our next question comes from Mason Carrico of Stephens. Your line is open. Hey, guys. Appreciate you fit me in here. I'll keep it to one. Could you characterize, I guess, what percentage of the sales funnel today is being driven more by, you know, bottoms up surgeon champion versus top-down admin of these larger systems? Are you seeing, you know, the new launch team attract more surgeon champions to deals that are sourced, you know, top-down today versus, I guess, where you guys were six months ago? Well, yeah. I'll start, then maybe I'll ask Kevin to add a little bit of color 'cause he's very deep on our capital cycle and for some of those things. One of the things that is core to what we're doing on the capital side, though, is we don't wanna sell a system to anybody, frankly, if there's not a surgeon champion who's established. We want people to always be, you know, standing on the dock waiting for the system. We wanna have our launch team ready to go. We wanna have patients pre-screened, and we, you know, we wanna drive that system very, very quickly. I think historically, we just were much looser on that process. If somebody, you know, wanted to buy a robot, and, you know, we hadn't identified a champion yet, it showed up on the dock, then, you know, the team would start working on that process. Now we just have a much more integrated approach on that of making sure, like when, you know, when we sell a system, that there's a home for it and there's a champion who's ready to go. Then we bring the launch team in, and we try to drive case excellence from the very first cases we do with that system and try to establish it as a core therapy within their urology program. I just think we're just so much tighter about that now organizationally, and we're still building that muscle. That's gonna be what I think really differentiates the organizational performance as we move through time. I'll ask you, Kevin, want to add anything on customer mix or some of these other things? Yeah, I'll just add a follow-up point that I think it is a common misconception where we have said, and we are seeing great relationships now with the top-down, with large IDNs. At the same time, that does not mean we don't have the bottoms-up surgeon support within that IDN network. Historically, we only had the surgeon support, whereas now we're definitely being viewed as a viable technology across a much broader hospital network, and that is what we're seeing. To remind you, our Q1 results did not have any of those large IDN sales, that's just another factor as well that gives us confidence in the full-year system guidance. I guess just to, just to finish the thought, it's really both. If you have top-level administrative support and you don't have a surgeon champion, you can get the capital sale, but you're not gonna get the pull-through on procedures that you want. If you have a surgeon champion, but you don't have, you know, the administration that's supporting bringing a new therapy in, then you're gonna struggle to get the capital sale, and that cycle is gonna go on longer. I think what we're just really trying to do is just be super integrated about that and drive to where we have both pieces of those puzzle. Because when those two things come together really strongly, I think that's where we really drive utilization to where we want it to be. Got it. That's helpful. I'll leave it there. Thanks, guys. Thank you. Our next question comes from Brandon Vazquez of William Blair. Your line is open. Hey, guys. It's Max on for Brandon. I'll just do one quick one as well. First quarter gross margin was 65%. You guys reiterated the full year expectation of about 65%. Can you just walk us through some of the puts and takes, given some of the revenue mix and ASP dynamics on the year, and how that relates to gross margin and how we should be thinking about cadence for the rest of the year? Thanks. I can walk you through the year. Good question. You pointed out in Q1 we did deliver 65% gross margin. That was driven sequentially by higher handpiece and system pricing and just our overall ability to leverage our overhead expenses. As we move throughout the year, Q2 and Q3 should take a very modest expansion in the next two quarters, somewhere in the 10 basis points-20 basis points range over the next two quarters. When you get to the fourth quarter, you know, you have a multitude of factors. You have favorable revenue mix towards higher-margin handpieces. We have improved overhead absorption. Then just in general, we'll have total revenues, and we should be exiting the year in the 66%+ range. That will still translate to a full-year margin at 65%. Definitely coming off of Q1, landing at our full-year guide in Q1 at 65% gives us a greater degree of comfort with our full-year margin guidance. Got it. Thanks, guys. Thank you. This concludes our question- and- answer session and also today's conference call. Thank you for participating, and you may now disconnect.