Good day, and thank you for standing by. Welcome to Q2 2026 PROCEPT BioRobotics earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Webb Campbell, Investor Relations. Good afternoon, and thank you for joining PROCEPT BioRobotics second 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, August fourth, 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 this 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. This was an important quarter for PROCEPT as we continue to execute against the priorities we established at the beginning of the year. Coming into the year, we made several significant changes to our commercial organization, including realigning our regional structure and establishing a dedicated launch team to support the continued rollout of the HYDROS Robotic System. We also initiated patient activation pilots designed to help patients better understand Aquablation as a treatment option and make it easier for those seeking care to connect with participating physicians. Today, we remain focused on execution across the organization, including driving strong HYDROS system sales and procedure volume. I am encouraged by the dedication and effort of our team and the progress we're making, and I remain confident in the significant growth opportunity ahead. In the second quarter, we delivered total revenue of $94.5 million, growing 19% year-over-year. We completed over 13,100 U.S. procedures, growing 21%, a strong increase, but softer than our expectations. Importantly, the shortfall was not broad-based across our installed base. It was concentrated primarily in the legacy AquaBeam accounts. Our newer HYDROS accounts continue to perform well, with procedures per account significantly exceeding those of our legacy AquaBeam accounts during the second quarter. We believe this performance demonstrates the value of the HYDROS platform. Its enhanced imaging, workflow, and clinical capabilities are helping physicians adopt Aquablation more quickly and utilize the system more consistently. The contrast between the performance of HYDROS and legacy AquaBeam accounts has also made the opportunity in our existing installed base increasingly clear. We are therefore accelerating our efforts to upgrade legacy AquaBeam systems to HYDROS. We sold 14 replacement systems during the quarter. We expect replacement activity to remain an important part of our commercial strategy. These upgrades can create modest near-term disruption as accounts transition between platforms. However, based on the utilization we are seeing from HYDROS accounts, we believe upgrading the legacy installed base will improve account productivity and support stronger, more durable procedure growth over time. Handpiece sales represented approximately 98% of procedures this quarter, and we continue to expect an approximate 1-to-1 ratio of handpieces to procedures for the full year. Regarding system sales, we saw strong system demand in the quarter, placing 65 HYDROS systems in total in the U.S. This included 50 greenfield systems, 14 replacement systems, and one HYDROS system placed under an operating lease. Approximately 40% of the HYDROS systems placed during the quarter were launched through our dedicated launch team, up from approximately 20% in the first quarter. We expect another meaningful increase in the third quarter. By year-end, we expect to have the capability to support the launch of all new HYDROS systems while maintaining the flexibility to prioritize dedicated launch resources where they can have the greatest impact. Early results remain encouraging, with newly launched accounts demonstrating shorter time to first case and stronger early utilization than we've historically observed. In addition, our increased focus on the replacement program has also been well received by customers and will enable us to retire legacy AquaBeam systems and relaunch them with HYDROS. Turning to pricing, as I mentioned, pricing discipline remains fundamental to our strategy. Our team executed with that discipline in this quarter. Our Q2 greenfield HYDROS ASP was the highest to date, reinforcing the value customers place on Aquablation therapy. Overall, our U.S. HYDROS system ASP was approximately $495,000, up from $485,000 we reported in the first quarter and $435,000 for the full year of 2025. Hospital capital investment of that magnitude validates the commitment to building and expanding a long-term Aquablation program. Strong system sales this quarter give us continued confidence in the value of our platform and our customers, as well as the outlook. Before I turn to guideline updates and our regulatory process, I would like to provide some additional context on our second quarter performance. While procedure growth did not accelerate to the degree I had expected, the shortfall was driven primarily by softer procedures across our legacy AquaBeam accounts. Despite these challenges with our legacy locked AquaBeam accounts, we made meaningful progress during the first half of the year. Most importantly, we demonstrated the durability of demand for the HYDROS platform through strong capital placements, accelerated system adoption within our replacement program, and meaningful improvements in average selling prices for both systems and handpieces. Operationally, we have completed several important initiatives that position the business for long-term success. We substantially completed the U.S. sales force realignment and optimized account coverage across the organization. As part of that effort, at the beginning of the second quarter, we promoted our former head of capital sales, Kyle Kelch, to lead our entire U.S. sales organization, providing greater leadership continuity and commercial focus. Beginning in June, procedure pace coverage transitioned to our clinical organization, allowing our sales representatives to spend their time in physicians' offices driving therapy adoption, referrals, and expanding utilization. We have also launched several direct-to-patient pilots. We are now active across 18 markets in the United States with television, radio, digital, and social media campaigns. We are actively gathering data to assess which channels and messages are most effective at engaging patients and motivating them to seek care. We're encouraged by the leading indicators we're seeing, including increased website traffic, stronger digital engagement, and greater interaction with our patient education resources. In summary, we believe the deliberate changes we have made establish the right foundation for durable, high-quality growth in the years ahead. It is also the right foundation for healthy growth margin expansion and our path to profitability. Today, we believe we are in a strong position to deliver our 2026 revenue and gross margin guidance, and we believe we are on track to deliver on our expectation for positive adjusted EBITDA in the fourth quarter. Now I'd like to highlight a few important clinical and regulatory milestones from the quarter. In May, the American Urological Association strengthened its recommendation for Aquablation therapy in its updated BPH treatment guidelines, further recognizing Aquablation as an important surgical treatment option for men with BPH. This follows the European Association of Urology's upgrade of Aquablation to a strong recommendation earlier this year and reflects the continued strength and maturity of our clinical evidence. Today, Aquablation is supported by approximately 250 peer-reviewed publications, making it one of the most extensively studied technologies in BPH. Turning to our cancer initiative, we reached an important milestone in the second quarter by completing enrollment in WATER IV, our first randomized clinical trial evaluating Aquablation therapy versus radical prostatectomy, with all 280 patients enrolled. WATER IV reflects our commitment to building the highest level of clinical evidence. With a prospective randomized trial, we remain on track to present the primary endpoint results at the AUA annual meeting in the spring of 2027. We also received FDA IDE approval for a second randomized protocol, WATER IV AS, which will evaluate Aquablation against active surveillance in men with grade group 1 and 2 disease, and that will be up to 333 patients globally. Lastly, I'd like to highlight our international progress. We continue to take a disciplined approach to market expansion, prioritizing geographies with attractive reimbursement and capital dynamics. The U.K. remains our largest international market, where we continue to see strong capital pipeline and encouraging adoption. We also remain focused on the opportunity in Japan. With that, I will turn it over to Kevin to walk through our financial results and guidance in more detail. Thanks, Larry. Total revenue for the second quarter of 2026 was $94.5 million, representing 19% year-over-year growth. U.S. revenue totaled $83.4 million, an increase of 20% compared to the second quarter of 2025. Turning to U.S. procedures, we completed more than 13,100 U.S. procedures during the second quarter of 2026, representing approximately 21% year-over-year growth. Handpiece sales remain closely aligned with procedure volumes, with a handpiece-to-procedure ratio of approximately 98%, while handpiece average selling price increased to approximately $3,550. As a result, U.S. handpiece and other consumable revenue totaled $48.4 million, an increase of 12% compared to the second quarter of 2025. U.S. system revenue totaled $29.1 million in the second quarter, representing 32% year-over-year growth. During the quarter, we placed 65 HYDROS systems at an average selling price of approximately $495,000 for new U.S. system placements, reflecting continued strength in both demand and pricing. As Larry mentioned, the 65 systems included 14 replacement systems, demonstrating momentum in the early stages of what we expect to become a growing replacement cycle. International revenue in the second quarter of 2026 was $11.1 million, representing year-over-year growth of 15%. Moving down the income statement. Gross margin was 66% in the second quarter, compared to 65% in the prior year period. Gross margin benefited from a $2.9 million tariff recovery recognized during the quarter. Total operating expenses for the second quarter of 2026 were $89.8 million, compared to $73.9 million in the prior year period. The increase reflects continued investment in the business, including targeted initiatives to drive patient activation and market awareness, ongoing innovation across our BPH platform, and increased funding for our WATER IV prostate cancer trial. We believe these investments position us to drive long-term growth while strengthening our clinical and technology leadership. Net loss for the second quarter of 2026 was $26.9 million, compared to a net loss of $19.6 million in the second quarter of 2025. Adjusted EBITDA was a loss of $11.3 million, compared to a loss of $8 million in the prior year period. Cash, cash equivalents, and restricted cash totaled $231 million as of June 30th, 2026, providing us with a strong balance sheet to support our strategic priorities. Looking ahead, we continue to expect improvements in both cash usage and adjusted EBITDA in the second half of the year, driven by higher revenue, increased operating leverage, and continued improvements in working capital. Moving to our 2026 financial outlook. 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. We also continue to expect international revenue of $50 million-$51 million. Turning to procedure guidance. We now expect 2026 U.S. procedures to be in the range of 54,000 to 56,000, representing growth of approximately 25%-29% compared to the prior year. With respect to new U.S. system pricing, we expect average selling prices of approximately $480,000-$490,000 during the second half of the year. In addition, reflecting the strength of our replacement cycle, we now expect to complete approximately 40 replacement sales at the midpoint of our full year revenue guidance, with an average selling price of approximately $300,000-$325,000. Turning to gross margins. We continue to expect full year 2026 gross margin of approximately 65%. We now expect full year 2026 operating expenses to be in the range of $355 million-$360 million, reflecting a disciplined increase in commercial investments aligned with our objective of accelerating procedure growth. We now expect adjusted EBITDA loss to be in the range of $35 million-$30 million while continuing to expect positive adjusted EBITDA in the fourth quarter of 2026 across both the low and high end of our full year revenue guidance. With that, I will turn the call back to Larry for some closing remarks. Thanks, Kevin. To close, we remain confident in the trajectory of the business. HYDROS continues to perform well with a sequential improvement in utilization and accounting for the majority of our procedure volume for the first time this quarter. With our commercial reorganization behind us, our launch team model continuing to scale, and a replacement cycle gaining momentum, we believe the business has become stronger and more durable. Combined with record system pricing and a growing installed base, we are well positioned to drive sustainable long-term growth. We remain excited about where PROCEPT is headed, and I want to thank our team for their continued execution and our shareholders for their support. With that, I'd like to open it up for questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to 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. We will allow enough time for one question as well as one follow-up. Please stand by while we compile the Q&A roster. Our first question is from Matthew O'Brien of Piper Sandler. Your line is now open. Afternoon. Thanks for taking the questions. Either Larry or Kevin, on the system side of things for starters, it looks like when you back out the replacements that you're about flat on the system side for 2026 versus 2025. Is that right? How quickly do you think you can get through this replacement cycle and get all your legacy Aquablation systems converted over as many as possible over to HYDROS? I do have a follow-up. Thanks, Matt. I'll start with your first question, then I'll pass the replacement question to Larry. Our system expectations are somewhere in the 210-220 range is what our guidance implies, which for greenfield systems is really unchanged from our thought process going into the full year. There's really been no change to our system guidance except updating the average selling prices now that we have two quarters under our belt. Thanks, Matt. As it relates to our replacement strategy, in Q1, we just launched our first pilot. I think one of the things that we said was 2026, we really wanted to refine the playbook, and it was just going to be sort of a build. I think we've been really pleased with the demand we've seen from customers and the attractiveness of the upgrade system or the upgrade process that we're running. Clearly, doing 14 in Q2 was above what we would've modeled at the beginning of the year. We think that's going to continue to remain attractive for customers. I think Kevin said at the midpoint of our guidance, that would imply about 40 systems for the full year. That's kind of where we're tracking. I think this is going to be a big part of 2027 as well, and I think as we think about procedures, the more that we can upgrade our systems from AquaBeam to HYDROS, and at the same time relaunch those under a launch team model, I think is going to be something that lifts utilization over time. Got it. Appreciate that. The follow-ups on the guide for the year, I'm fiddling with the model here as quickly as possible, you're taking out, what is it, $23 million-$24 million in hand piece revenue, offsetting it somewhat with replacement revenue. I'm having a hard time getting the model kind of to the mid to upper point of your range. I'm not sure if there's something I'm missing there, or I guess why not just take the full year total revenue guidance down somewhat, just given the procedure reduction that we've seen here? Thanks so much. If you look at pricing and the variables we've included, it will put total system revenue, Matt, somewhere in kind of the $115 million-$122 million range if you assume the midpoint of the replacement range and updating for system average selling prices. We also said that on a full year basis, we expect hand pieces sold to be at a 1-to-1 ratio to procedures, which would mean there is an expectation in the third and fourth quarter that hand pieces sold will probably be anywhere from 1%-3% of total procedures, which puts total hand piece revenue somewhere in the $200 million-$215 million range. When you look at international at $50 million-$51 million, that essentially gets you to the range of $390 million-$410 million. Thanks so much. Thank you. Thank you. Our next question comes from Brandon Vazquez of William Blair. Your line is now open. Hey, guys. Thanks for taking the question. Maybe first at a little bit of a high level, Larry, can you kind of reflect back a quarter ago on the prior guidance versus today? In the past three months, what has changed? What's been more difficult than you would have anticipated in terms of ramping utilization and getting to that full year procedure number? Just to kind of understand a little bit more of the moving pieces of what's going on in the business. Yeah. Thanks for the question, Brandon. Yeah. I think the biggest thing is that we've just seen more softness with our legacy AquaBeam accounts than what we anticipated. HYDROS continues to perform well and perform in line with expectations. It's pretty much there. I think that we've continued to drive the reorganization or realignment of our sales force. I think that is complete now, and that's largely overall behind us. We were able to get reps into more of a selling mode starting in June, where they're not doing daily case coverage anymore. They only do that on an exception basis. I think we've gotten those things completed. That might have taken a little bit longer than what we wanted, but we needed to make sure we had worked out the coverage model before we pulled our sales reps out of cases. I think it's those two things, but the primary thing is we've just seen a softening in our legacy AquaBeam accounts, and that's what's driven most of the change. Okay. Maybe as my follow-up on that last piece, historically when HYDROS first came out, this was of course a great upgrade, and there were a lot of features for it, but it was never really portrayed as like HYDROS was meaningfully doing more procedures. I know we maybe heard some anecdotals that the improved efficiencies would help people do a couple more procedures here or there. It kind of sounds like that's changing now, and I'm kind of curious if you can spend a little bit of time on why that might be the case, why the legacy AquaBeam system seems to be performing so much worse. Is it accounts, or is it the systems? Do you guys have a good sense of what that is as you go forward? Thanks, guys. Yeah. I don't know that we fully understand what's driving all those dynamics. I think there's been some speculation, and we've gotten some anecdotal feedback from the team. I think in some situations where we have doctors that practice at multiple hospitals, if they can move their patients over to HYDROS just because it's more efficient and the imaging is better and the AI is certainly better, that they'll preferentially do that. I don't think we've fully unpacked that yet. Previously AquaBeam had been pretty stable, the declines are fairly recent, so we're still digging into it. At the same time, HYDROS has been very resilient. It's been very robust, and we've been pleased with the utilization of HYDROS. I think we probably have also spent probably more time from a marketing standpoint and from a sales standpoint, focusing on the features and benefits of HYDROS, and I think that's one of the reasons that that system's doing well, and I think that's also reflected in the desire for people to upgrade their systems from our legacy systems to HYDROS, which a year ago we weren't really seeing that sort of pull-through and that sort of demand. I think it's a combination of our trading strategy, also really focusing on the features and benefits and the improvements that the HYDROS system offers that's driving that. Thank you. Our next question is from Nathan Treybeck of Wells Fargo. Your line is now open. Hi. Good evening. Thanks for taking the question. Larry, are you hearing anything from your commercial organization on any potential impact from the change in physician RVUs or the growth in competitive procedures like PAE? Certainly the RVU thing we did hear some feedback from our customers. I think whenever RVUs change or whenever there's things like that, you're always going to hear some noise on that. I don't think that's been a meaningful headwind for us. Again, if that was really the underlying issue, then I would expect to see that across both of our commercial platforms rather than just the AquaBeam platform. I don't really think that that's it. As it relates to PAE, I know there's been a lot made about the proposed CMS rules. If you look at the hospital outpatient facility fees, all of it sort of went up by similar amounts. That hasn't really changed a lot. We know that PAE has been growing, but I think a lot of that is pulling patients off the sidelines who aren't ready for a surgical procedure. We know that the procedure is just simply not very durable. I've spent time in the field, and I've talked to customers, and for a lot of folks, a significant part of their practice now is doing a second procedure after a failed PAE. We've also gotten that feedback from patients as well. I don't think it's a lingering headwind, and I don't think it's the same basic patient population. Certainly, there's some overlap there, but I don't think it's really the issue. I think we need to continue to execute on the clinical superiority of our procedure, especially compared to other surgical approaches, and continue to drive that, and that's where our biggest opportunity even lies. Okay, great. Thanks for that. Can you say what percent of your install base today is AquaBeam? I think it's fairly close to 50/50 right now. HYDROS is doing more cases, but I think it's fairly close to 50/50. Great. Thanks. Thank you. At this time, just as a reminder, if you would like to ask a question, to please just press star 11 on your telephone and wait for your name to be announced. Our next question is from Vijay Kumar of Evercore. Your line is now open. Hi, Larry. Thank you for taking my question. Hey, one on this procedure utilization. I know it's been a key metric for you, procedure growth. The comment you made on legacy versus new account dynamics, right? How much of this is a function of Salesforce reorg? Is there any comp metric changes that's driving this? How do you rectify this, right? I think related to that, the peer-to-peer utilization is coming down. Why are hospitals buying systems? You guys seem really bullish on systems, right? I'm hard-pressed to see hospitals paying half a million for new systems if they're not going to use these systems. Can you address this utilization peer debate, please? I don't think anybody's buying a half-million-dollar system to put it on the shelf and not use it. I think hospitals understand the importance of needing Aquablation in their facilities, and I think the case that we make for Hydros is a strong case, and I think we've seen that in both greenfield and in replacements. Again, the performance we're seeing out of Hydros is very much in line with our expectations. I think Aquabeam, it's an older system now. It doesn't offer all the features and benefits of Hydros, and I think, again, we don't fully understand why we've seen the decline there because it's been stable historically. That doesn't distract at all from how well the Hydros system is performing. I think it just really drives our strategy for encouraging replacements. If we were seeing a softness in capital, I think it'd be a different concern, but we're selling capital at levels that we're very, very pleased with, and we're doing at our highest-ever pricing. We also see very good pricing on our hand pieces, and I think that reflects the clinical value that we bring to the table. That's helpful, Larry. Kevin, one for you. I know the procedure guidance is updated. You've reiterated gross margins. When I look at the Analyst Day and the LRP you laid out, procedure was 25%-30%. Given FY 2026 is now 25%-29%. Are the LRP targets still intact both for procedures and gross margins? It feels that gross margins came down ex tariff refunds, and given the mix change, perhaps it's prudent for Street not to be modeling with your Analyst Day outlook. Let me take both of those. I'll bucket them the same. On this call, we've obviously reiterated our 2026 numbers. The ranges for 2027 revenue guidance are still in the ballpark. As we get closer to year-end, we'll formalize our 2027 guidance within our normal cadence. As I said earlier, I think what we put forth at Investor Day is still in the ballpark. Just regarding the other areas, whether it be procedures or profitability, we will update our 2027 guidance on our normal cadence. With that said, we do feel good about the underlying trends that supported our LRP, and there's really nothing to update right now, given the performance in the first two quarters here, where we felt we needed to make an adjustment. Thanks, Kevin. Thank you. Our next question is Michael Sarcone of Jefferies. Your line is now open. Michael, are you available? Okay, please stand by while I compile the next question. Thank you. The next question is from the line of Stephanie Elghazi of Bank of America. Your line is now open. Hi. Thanks for taking the question. I just wanted to follow up on the procedure guidance for the year, which I think you're lowering by about 7,000 at the midpoint. I was hoping if you could just explain a bit what the underlying assumptions are there in terms of what you're assuming for the AquaBeam softness that you saw in Q2, as well as HYDROS, and then also just from a commercial reorganization benefits ramping that you had expected as well as competition. Yeah. Thanks, Stephanie. I think the biggest thing is the guidance that we've laid out assumes no improvement in the AquaBeam sites. Frankly, at the lower end of the range, it doesn't assume any real improvement in the HYDROS performance as well. It keeps things pretty consistent. As we think about how the year or the cadence of the quarters go, we still expect to see an incremental pickup from Q2 to Q3, but we always see some seasonality in Q3 with vacations in the summer months. We typically have our strongest quarter in Q4, and all of those things are the things that are baked into the model. The lower end of our range is basically not seeing any improvement from how we're performing today. I think the higher end of our range says some of our things start to take hold and we start seeing that improvement, and that's how we came up with that range. I don't know, Kevin, anything to add on that? No, I think Larry was spot on there. Nothing to add. Thank you. Just on the EBITDA guidance, you're expecting more spend now than you were previously. What are the main drivers of that, and what are the increased areas of commercial investment that you mentioned? Yeah. We had mentioned it's primarily around our commercial organization. We did mention that we have launched a pilot now in 18 markets on DTC and patient activation. We're going to do this very thoughtfully. While we increased our OpEx guidance, we have looked at other areas in the organization where perhaps we don't need to spend as much, and we've made those decisions here internally, such that our Q4 guidance still suggests, even at the low end of revenue, that we will be EBITDA positive exiting the year. Thank you. Our next question is from Richard Newitter of Truist Securities. Your line is now open. Hi. Thanks for taking the questions. Maybe the first one on the procedure comment, Larry, that you just made. I guess you said that there's seasonality in the third quarter, but you expect a sequential uptick in procedures. I guess that puts a little less burden on the 4Q, but there's still an implied step-up in utilization on some level in the back half. One, just calibrate us on exactly how we should model procedures between 3Q and 4Q. And then the second part of that question really is what's driving that improvement if legacy AquaBeam doesn't improve? Is it just that you're no longer seeing the disruption from the sales rep changes and those are actually going to start yielding the hoped-for utilization kind of performance improvement fruit? What's ultimately going to drive the improvement as we move through the year if you don't hit the low end of your guidance? Thanks. Well, a couple things. I think, first of all, we continue to launch new systems, and in Q1, about 20% of our systems were launched under the launch team, and we got that up to about 40% in Q2, and we expect to see a solid step-up in Q3 as we scale the launch team. I think as we launch those new systems and we do that in a launch team model, those things are certainly going to contribute to us. I think some of the leading indicators from our direct innovation programs we're very encouraged by, and I think that that's going to help drive patients into the system, which I think is a positive. As we replace legacy systems, I think that's something that can give us a boost as well. Again, at the low end of the range, it assumes very little improvement, and at the high end of the range, that's where some of these things start to play in. As I think about the quarter, the step up from Q2 to Q3, I think is going to be pretty modest, just again to the seasonality. I think we expect to see a significant step up in Q4, which is a historical pattern that we've seen before. Okay. If I could just ask one more on the DTC step up or the increased spending related to activation of patients. Are you reliant on that as you head into 2027 to drive incremental adoption into the opportunity? Or is that something, to get to the same place that you were thinking about when you laid out your LRP and the growth objectives there, or do you still have enough runway as it is today with people in the channel? Well, our number one opportunity is converting competitive surgical cases, and that is our immediate near-term focus, and that's what we have the team really fixated on. I think that as we laid out during our Investor Day in February, there's a lot of patients sitting on the sideline that have failed drug therapy and other things that are frankly looking for a better solution but don't know what it is. I think there's an opportunity to activate these patients, but that's a longer-term play. From an expense standpoint, we're very focused on how do we make these investments in direct-to-patient things, but also still hit all of our bottom-line financial goals. I think as we look across the organization, in most of our functions, I think we've reached a critical mass on those, and those are things that are going to drive leverage as we go forward, as we make these incremental investments on the commercial side. I'll turn it over to Kevin to provide more detail on that. I think we feel good overall about our long-term financial health. Rich, thanks for the question. We do believe that 2027, and without getting in too far ahead of ourselves with guidance, is the year, though, where we could demonstrate greater operating leverage than we did in 2026, even with increased investments around patient activation. I'll just say that today. If you look at our R&D spend as a percent of sales, we've been very transparent that that is going to come down over time. The big bolus of spend in R&D was primarily related to WATER IV over the last 18 months, and we'll start to see those expenses come down along with some other internal efficiencies in G&A that we're working on today. We will be able to demonstrate greater operating leverage moving forward such that that pathway to profitability is maintained even with increased patient activation. This is a game of trade-offs. It's not incremental spend of the business. Thanks. Thank you. Our next question is from Mason Carrico of Stephens. Your line is now open. Good afternoon. This is Ben on for Mason. Thanks for taking the question. I'll probably just keep it to one here. Could you characterize the mix of Q2 placements between single site deals and any multi-system IDN orders? How should we think about IDN orders, those bulk orders relative to the full year guide? Is there a certain level of multi-system contribution baked into that number, or would any incremental IDN activity represent upside from here? Yeah. Q2, I would suggest the characterization is very similar to Q1, where we were not reliant on any large multi-system IDN deal. At the same time, we did have multiple deals with hospitals affiliated with IDNs, but nothing that I would consider a bulk purchase. Our guide for the remainder of the year is not reliant on any type of bulk purchase. However, we did give a range for average selling prices that would reflect a downside if we were to get any large IDN orders. In normal course of business, our guidance does not assume we're reliant on any one large hospital network executing a large order. Thank you. Our next question is from David Rescott of Baird. Your line is now open. All right. Thanks for taking the questions here. I appreciate the comments you provided so far around the HYDROS utilization. Wanted to ask more about, or if you could provide some more color on how you're proactively accelerating that changeover there. Maybe what's contemplated in the guide with that for 2026, and how we should think about that as you exit the year. I think you touched on some gross margin commentary as well, but can you remind us, I guess, of the moving pieces around how the updated guide accounts for some of the moving pieces here? Thank you. Well, I think it's a few things. One, if you look at our HYDROS system, we're continually upgrading those systems with software and with capabilities and advancing the AI. I think that keeps the system very fresh and up to date in the eyes of the customer. I think that's part of it. I think also, we continue to drive a replacement strategy, and as we do that, I think that that's going to be a lift. The last thing is the launch teams. As our base grows to more and more systems that were launched under a launch team model, we think those systems are going to come with a durable increase in utilization. The more of those we have in our install base, the more that's going to improve our utilization. I'll turn it over to Kevin on the gross margin front. Yeah. Just to remind you that the standard cost of both disposables and capital, it does vary quarter-to-quarter given the variability of cost, given the production levels of inventory. On the whole, for the full year, we feel very comfortable right now with our guide of 65%. Even with a lower ASP on these replacement sales, which is somewhat offsetting to our normal standard margin, but we think that is made up over time by the increase in procedures that we expect those HYDROS systems to produce compared to AquaBeam. We remain confident in the guide on margins, again, I think even with the increase in investments and with the increase in EBITDA, we're still committed to the fourth quarter EBITDA positive as we head into 2027. Thank you. Our next question is from Mike Kratky of Leerink Partners. Your line is now open. Hi, everyone. Thanks for taking our question. Just maybe one follow-up on the nice comments on HYDROS's utilization trends that you're seeing. In terms of that kind of factoring in a way that turns overall utilization growth positive in the U.S., is that something that we should expect to see in the fourth quarter of this year, at some point 2027, or how do you think about the full year 2027 at this point? I think directionally at the higher end of our guidance would model in some modest improvement in utilization. I think at the low end of the guidance, it stays largely the same. It's a continued area of focus for us, and again, as we replace systems and upgrade people to HYDROS, we think that's a lift as the installed base increases from systems launched under our launch team. I think that helps us, the longer-term things are direct-to-patient activation models, which brings more patients into the system and should increase treatment rates. Those are all sort of the factors that we're focused on. Understood, maybe just a follow-up, in terms of the difference in utilization you're seeing for HYDROS systems placed under the sales team versus not, can you help kind of quantify what that difference looks like and what seems to be driving that success? When you say sales team, are you referring to HYDROS placed under the launch team? Is that the genesis of your question? Sorry. Yeah. Exactly. We're not going to be specific. What we have said, though, is we definitely see more surgeons being trained on the system. We see a shorter time from system sold to first PO, and we see a higher number of cases initially. All of these metrics are why we've invested in this team such that when we get to the end of the year, if you go through Larry's prepared remarks, we expect to be able to launch 100% of our accounts under the launch team. To contrast that, we were still somewhere in the 40% range exiting the second quarter. We still have half of our systems that we want to get under the launch team by the end of the year, which we think will be a driver to overall procedure growth, not just in 2026 but in 2027. Yeah, I think that's the big thing. I think our installed base, if we look at where we're going to finish the rest of this year for things that are under the launch team, and then all of next year, we expect virtually all of our systems to be launched under our launch team, and that includes greenfield along with replacements. We think those are things that, again, provide durable upticks in utilization over time. Understood. Thanks very much. Thank you. Our next question comes from Suraj Kalia of Oppenheimer. Your line is now open. Hi, Larry, Kevin. Can you hear me all right? Yeah. Perfect. Larry, Kevin, for either one of you. Obviously, the procedures for this year have been lowered. As you look at your base, I'm just trying to look at it as a mathematical problem. You have the bell curve for procedures. You have an area under the curve. Do you sense the curve is skewing a bit more, or do you think it is flattening a bit more? Hopefully, you get the drift. I'm trying to understand what is going on within these centers, and how should we think about the emerging bell curve here? Well, we've always, I think, tried to explain that there's a lot of variability between our sites, and that's true within AquaBeam and our HYDROS sites. The procedure trends are very clear with what we're seeing between those two platforms when you look at it on a macro level. I think that we still have opportunity to accelerate procedures, and that's why we're investing in the programs the way we are. I think for us, increasing the percentage of the installed base to HYDROS over AquaBeam, I think is an important part of our strategy, which is why we focused on that. I think the launch teams play a role in that. Looking at the historical trends is interesting at some level, our focus is how do we improve those historical levels of performance. Got it. Larry, I know utilization is, in the past you have said, measure us on all the sales changes being done by utilization. So far, I think utilization seems to be trending a bit off. Is this still the metric you would advise us to gauge or measure all the initiatives, the changes that are being implemented? You would say, "You know what? I'm going to be able to hybridize it to utilization and/or something else." Thank you for taking my questions. To be really frank about it, I'm focused on sequential growth quarter-over-quarter. I'm looking at how much we're growing procedures, how much we're driving utilization, and how much we're penetrating the current existing surgical market. Longer term, it's going to be about how many patients are we able to get off the sideline, because we know that there's a large opportunity there. I'm more focused on sequential growth than I am looking at instrument utilization, because I think these are things that we can action more definitively than trying to get every system to do a half a more procedure a quarter. Got it. Thank you. Thank you. Our next question is from Josh Jennings of TD Cowen. Your line is now open. Hi. Good afternoon. Thanks for taking the questions. I hope I'm not asking a repeat. Just on the direct-to-patient pilot programs, you commented on, Larry, in the 18 markets, encouraged by leading indicators. How should we be thinking about the assessment of the success of the DTC and effort, make sure we'd be seeing some benefits as we move into 2027 or any precedent scenarios or experience you can share in terms of the kind of return on these DTC investments and timing, when we should expect to see not just leading indicators, but a translation into higher volumes? Sure. Thanks, Josh. Yeah, the first thing you get to see, these pilots are fairly recent for us, and the reason we're running these pilots is to find out which program is resonating the most and which gives us the biggest bang for our $ as we look at these programs. What we can say is we're active now with television, we're active with radio, we're active with digital, and we do have patients calling in, asking for additional information. We have patients showing up at accounts. We have much more digital engagement with our website. People are staying on there longer, they're clicking through, they're engaging with our clinical resources. We've already seen a lot of impact for those forward-looking indicators. Now, to transition that to a meaningful increase in procedures, even if you activate a patient today, there's waiting lists at all of these hospitals, and it might take somebody two, three, four months to be able to get on the schedule and be able to get their procedure, just because of the natural constraints that exist within the system. It's a no regrets move to activate these patients, but now we have to get the centers, once they see this steady flow of patients, to figure out how they're going to treat these people. We're very pleased with the leading indicators that we have. We feel good about the investments that we're making. As Kevin said, this isn't just all incremental stuff. We are looking at things that we can trade off at the corporate level, at the G&A level, so that we can create capacity for spending here because we're committed to our bottom-line performance, not just by the end of this year, but certainly for 2027 as well. Thanks for that. Just one follow-up. It's a little bit associated with the prior, just on driving more awareness in the urology community. TURP just seems so vulnerable, but seems to be hanging in there better than we'd have thought, not just in terms of the competitive dynamics with the Aquablation procedure, but other resective options as well. Maybe just help us better understand any of the dynamics that are helping TURP volumes kind of not fall off more dramatically and just what PROCEPT can do on the physician side in terms of increasing awareness in the urology community and just getting more adopters flowing. Thanks for taking the questions. I think TURP volume has been resilient. It's been a resilient procedure in the space, and you can see a number of other technologies have actually been declining, but TURP's been pretty resilient. I think it just reflects people have been doing it for a long time. They're very comfortable doing it, and they generally, I think, believe that they can deliver pretty good results with it. I think we offer significant advantages compared to TURP in terms of patient outcomes and in terms of efficiency for the system, especially as you get into larger size glands, and so I think we need to make our case with that. I think it's also about educating the patients. I think as patients come in and they ask for Aquablation by name, I think those are things that are going to drive a change in physician behavior. Understood. Thanks for the answers. Thank you. Our last question will be from Ryan Zimmerman of BTIG. Your line is now open. Thank you. U.S. Bank Corp BTIG, actually. Just a question on systems, Kevin and Larry. When I think about that system number, the 210, the 220, if you look at the first half new systems, and I could be incorrect in including maybe a replacement here or there, but it does imply, I think, a lower new system composition or proportion of new systems in the back half of the year. Kevin, when you think about those 51 units that were sold this quarter, was there any pull forward there? Historically, I think we've thought about new systems being higher in the second half. I could be wrong in that assessment. I think what you're probably missing, Ryan, is you might be including the 14 replacements. We sold 97 greenfield systems in the first half of the year. The 210 to 220 does not include the 40 replacement. You would still see the normal step-up in Q3 and Q4. Historically, what you see is a slight increase in Q3 from Q2, then the fourth quarter tends to be our largest quarter, given capital budgets, and our guidance this year reflects that as well. The second half greenfield sales to get to 210 are definitely higher in the back half than the first half of 97. Okay. Just to add to that. Go ahead, Larry. Sorry. Yeah, just to add that we don't pull systems forward. I think the days of people buying multiple systems and then installing them over a longer period of time to get a discount, we want to make sure that every system we sell has a home and that it's going to launch within a reasonable period of time. I think that's what you see reflected in our system ASP, which has been a very healthy improvement year-over-year, is that we're being very disciplined about the systems we sell. We want to make sure that when we sell a system, it gets installed within a few months, and it starts providing procedures for us. We're much more disciplined about that process than we probably were historically. My follow-up to that is just when you think about the potential customers that are out there, historically, we've thought about kind of the high volume, medium volume, low volume customer sites. What's your sense, Larry, of kind of who you sold into this quarter on a greenfield basis and what you think the runway ahead is in terms of that characterization? Because obviously, we're all trying to understand the utilization dynamics that are occurring. While I appreciate that HYDROS is ramping faster, the implied procedure per system guide based on the new procedures still implies a decline on a per procedure basis into 3Q and so on. What I'm trying to understand is if you're selling into lower volume sites, are they dragging down your utilization as a result of those dynamics as well? No, I don't think that's the case. I think, actually, in some ways, a medium volume center might be a great target for us because maybe they don't have a super active TURP program or a super active BPH program, and this can be a new program for them that generates a lot of interest and a lot of focus. I don't think that that's a headwind for us. I will say, I think the biggest change that we see in utilization is when we launch under our launch team, and we do that properly, and we do it with clinical excellence, and we have people stacking cases and doing multiple cases in a day at a much higher frequency than maybe what our historical base does. I think that's the biggest impact, and I think that's agnostic of center size. I don't think in our launch team we're seeing a dramatic difference in a larger center versus a smaller center when launched under the launch team model, and I think that just reflects the potential of the therapy. We just need to do a good job launching them the proper way with the right amount of energy and creating the right footprint and cadence for cases from the very beginning. Okay. Well, good luck. Thank you. Thank you. This now concludes our question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Goodbye