Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you explain the impact of the saline shortage on your procedures and how you estimated the 2000 delayed or canceled procedures? A: Kevin Waters, CFO, explained that the impact was multifactorial. They conducted customer surveys and received direct feedback from reps who are present in every case. They also performed an internal quantitative analysis of Q4 ordering patterns. The shortage affected new accounts that couldn't start their aqua ablation programs, pushing many into Q1. October was normal, but November saw a significant drop, with some recovery in December. They expect a strong recovery in Q1, particularly in February and March.
Q: How are handpiece ASPs expected to trend in 2025, and what factors are influencing these trends? A: Kevin Waters, CFO, stated that the guidance for 2025 implies a $3200 ASP for handpieces, consistent with 2024. The apparent drop in ASP is due to other consumables, not the handpieces themselves. The majority of 2025 procedures will still use the Aquabeam system, which influences the ASP.
Q: What is the strategy for the Hydros launch, and how are different hospital volumes responding? A: Shamsha Black, CMO, noted that the Hydros launch exceeded expectations, with 95% of procedures using the new AI feature. Initially, they focused on high-volume BPH hospitals, but there's now surging demand from medium and low-volume hospitals. These hospitals are starting to acquire aqua ablation systems, indicating a shift in the market.
Q: How is the international market performing, and what are the next steps for expansion? A: Kevin Waters, CFO, highlighted strong demand in the UK, both in new systems and procedure growth. The focus for 2025 will be on expanding the install base in Japan, where they have established reimbursement. They are also building market development activities and KOL networks in other countries.
Q: What are the expectations for gross margin trends in 2025, and how do replacements impact this? A: Kevin Waters, CFO, explained that the gross margin guidance for 2025 is around 64.5%, with an exit velocity of 65-66% in Q4. The replacement opportunities are factored into this guidance, assuming about 10 replacements at a $300,000 ASP. The focus remains on leveraging overhead and maintaining high ASPs to drive profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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