PROCEPT BioRobotics Corporation (PRCT) Earnings Call Transcript & Summary

[Audio Gap] devices research team, and we are in the last session of the first morning of the 46th Annual TD Cowen Healthcare Conference. And we are fortunate to have executives from PROCEPT BioRobotics CEO, Larry Wood, to my right, your left; and CFO, Kevin Waters. Gentlemen, thanks for joining us today. It was a busy week last week for you guys at earnings and you had Investor Day, and you guys laid out a lot of -- gave provided a lot of intel on fourth quarter dynamics and 2026 guidance, which we thought was very helpful. And so I think the thrust of this conversation, I want to focus on the go-forward.

And I think some of the -- just maybe to start with some of the questions that we've gotten from investors just around 1Q guidance and then 2026 guidance and the back half weighting. And maybe to start on 1Q. Just on the procedure volume expectation, you kind of already run through this last week, but just to give it one more review. Maybe just talk about why the procedure volume guidance is the right place for Q1 and any intra-quarter trends you're willing to share so far?

Yes. Well, we're not going to talk a lot about stuff inter-quarter as I think you guys would expect. But we certainly expect the procedures to build through the course of the year. And we talked about in Q4 that -- or on the call rather, that we made a lot of changes to our sales force. We think these are just really foundational, no regrets decisions to make in terms of really getting a launch team focus, which meant we redirected some of our more tenured people on to launch teams. And we also reorganized where we have a region leader, over all the regions now and all the clinical resources and sales resources reported for that common leader. But it meant that people have new territories, they have new accounts that they're calling on. And so it just takes a little time for those relationships to build, and we have to backfill for our more tenured people. But the benefits to that are going to be -- we think we're going to drive a lot more effective launches. The pilots that we ran last year, we saw the pilots go -- or the launches go from the metric of PO to first 10 cases, that went in half. And so if we can make our new system placements more productive faster and pull all those forward, we think that's just a big benefit for us. The other thing is now the utilization team is only focused on their same-store sales, and they're only focused on their existing accounts and not distracted by launches. But that does create near-term headwinds, and we factored that all in the guidance, but we expect it to pay dividends for us in the back half of the year.

Great. And just on the handpiece inventory optimization that occurred in the fourth quarter and where you guys stand today, I think you were historically running around past couple of years around 115% on inventory versus procedure volumes, and are closer to 1:1 now. Any more details you can share just on where that stands in Q1? And my understanding is it's very close to 1:1 and then how that should be maintained over the course of the year? I know that's what you've guided to in the procedure volume forecast, but maybe just share with us some of the nuances of the dynamics as we move through the year on inventory versus procedure volumes.

Well, one of the things that we saw historically is because the incentives were all built into the last quarter of the month, people tend to drive their inventory very high and then they would consume it the first 2 months of the next quarter. So our sales were always softest in the first 2 months and then they would pick up again when people -- the stocking dynamic would play itself back out. What we've seen to date now is because of -- in fourth quarter, handpiece sales were only 77% of procedures. What we've seen in the first 2 months now is we're seeing handpiece sales and procedures flying much more closely in formation, which supports that we think people have kind of reached that inventory equilibrium and now they're just ordering to replace their supply. And there's no -- there's nothing in the system, no incentive to do anything other than just replenish your supply. But even with that, I think there's a lot of people like, what if there was some more destocking? What would that look like? But here's what everybody needs to remember is we're modeling at a 1:1. But we're still going to place 200-plus new systems into the installed base this year. And all of those systems are going to have to take inventory. So as people have really reached their inventory equilibrium and we add those 200 systems and they all come with inventory, then we'd have to be above the 1:1 ratio just to account for all that inventory. So the guidance that we provided would still allow for some additional destocking, but I think there's more upside to that revenue number right now than there is the downside.

Understood. And just on the topic of just inventory in the field that's remaining and procedure volume, I guess, tracking? I mean my understanding, correct me if I'm wrong, but every procedure that's done on a HYDROS or AquaBeam system that kind of gets registered, it's -- those data going up to the cloud and you have information on every single procedure. And then on the inventory side, I mean, is there some buffer? I mean, do you guys have kind of exact numbers on inventory at each account? Or how does that all work, the mechanics behind it?

Yes. Well, we have a person in every case today. So -- and that won't be something we'll do forever, but it is something we have today. So because we have a person in every case, we have perfect metrics. Our HYDROS system does have connectivity capabilities to it. So as those get all connected to the cloud, then we'll be able to collect procedure volume that way. But we will, over time, move to more of a hybrid support model where we'll still support a number of cases. And certainly, if somebody would like us to be there for a difficult case, we want to provide great support and make sure patients get great outcomes. But we also want sites to be able to perform cases independently. If a case comes up on a random day and they want to be able to do it, we don't want them trying to track us down, or worse, flip the patient to some other procedure. So we'll do all those things. We generally have the -- we know how much inventory is at every account. And there was a time when we thought that inventory level was probably high, this whole discounting issue aside, completely separate issue. And on the Q3 call, we were like, hey, we want to establish par levels for our sites and maybe just sort of rightsize that inventory, and that's where that 1,000 unit came from that we talked about. And I still think directionally, that was right in terms of -- and we were trying to target people to around 12 weeks' worth of inventory. What we saw was centers' natural inventory equilibrium was much lower if there wasn't some incentive for them to carry more inventory, and that's the impact that we saw in Q4. But I think that's largely rightsized now, and I think it's supported by the first 2 months of this year, and that's what's built into our guidance.

Okay. And you mentioned the launch team structure that's been established last week and prior on the third quarter call and publicly. Maybe just review how much -- how many handpieces are typically bought with -- at the time of installation or in the relative period around purchase and installation of a HYDROS? And then the signals that -- you've shared some of the signals on -- positive signals about the launch team, as you mentioned earlier, just getting those first 10 cases and 50% reduction of the time it takes to get there. Anything just to share how is that been ongoing? And how has that evolved since you started the launch team? Has that metric improved on the course? And how confident are you that this launch team strategy is going to help reduce the dilution of [ Nuc placements ] to overall system utilization?

Yes. So the amount of handpiece that somebody takes a stocking order is highly variable. Some hospital systems take more, some hospital systems take less. And the capital purchase process is completely separate from the consumable purchase process. So we're dealing with two different groups. And so sometimes they can be pretty disconnected. One of the things, just one of the benefits we get from the launch team, the capital team has really good insight to when the PO is going to close. Because they'll be working on these deals for months at a time. So when we get where we're like 4 or 6 weeks away from the PO closing, that's when we can start working on the PO for the handpieces, however many they want to take. But it's also where we start working with whoever the surgeon is going to be, make sure there's a surgeon champion, somebody ready to take the instrument. Where is it going to go in the hospital? Where is it going to be stored? Where is it -- is the power right for the room? All those sort of logistical things to get done. But then let's make sure we have cases ready to go. Let's make sure we have patients screened. Let's make sure we get in a steady cadence. So we come and do the training, we engage the learning curve as quickly as possible. So those are all things that the launch team does. And I would say, in the early days of the company, when they were selling a robot, there was probably already a surgeon champion who was sitting there yelling at administration all the time, sign a PO, I want the robot. I can't wait to have it. And so the launches sort of took care of themselves, and it really wasn't much of a thing that we had to do. As the company has matured and you're going out into a different installed base, if you're working with a big IDN, they might just be sitting here saying, hey, you know what, we want 3 more robots. These are centers we want to offer the therapy to. So just go put it out there. But there may not even be a surgeon champion identified. And there were times that we would close a PO and we call the utilization team and they're like, we didn't even know a robot was coming. And it's -- that would be the start of the process to identify the champion and get a train. So we would -- I mean, there were times that robots would sit for a quarter, sometimes 2 quarters before they would even get installed and get utilized because there wasn't a playbook in place. And some of our systems launched great, but there wasn't a playbook and there wasn't a standardization to it. When I launched TAVR in the U.S., we ran a very standardized playbook. We screened 5 cases. We had a proctor teed up ready to go. We did 2 cases. We came back the next week. We did 2 cases. And we just got in that steady cadence. And my history was always, if you launch somebody well, and they started out well, they had great experience and they did that, they tended to stay well, and they tend to stay healthy. If somebody launched poorly, then at some point, you almost had to come back and do a reboot at a restart from scratch. And so I really prioritized the launch teams because I want to make sure every new system we place launches well, launches healthy, stays healthy. And then we can start going back and working on some of the systems that are underperforming and get those back up to speed.

Great. And is there anything left in this initiative to put a launch team in place, or just the commercial restructuring, I guess, of the strategy? And just -- has it all been like launched throughout every region in the United States? Or is there still more work to go? I guess the question really trying to get the gist of this, I think you implied that most of the work is done, or in Q1. You guys are kind of ramping with this new strategy, but just curious if there's more work to do.

Well, strategically, we lined up on the strategy and that part is done. We rolled out the new org structures and all the new roles and responsibilities at the sales meeting in January. So all of that work is done. We couldn't go from having no launch teams to launching 200 systems all at the same time. And so I think our goal this year is that half, or a little more than half launch under our launch team model for this year. But by the end of the year, we're fully capable that everything on a go forward would be under launch team. Now that's what we've modeled. I will say we're putting a lot of pressure on the launch teams to figure out how to accelerate this. We think it's such a value driver for us. Part of it is just having enough tenured people that can do this. And if we don't have good experienced people doing the launches, then we're just going to get more of the same that we had before. So it really is about launch excellence, but we are building out and expanding those capabilities as we go. But we just started launching them last month. And so far, I'm super impressed with the launch team. I'm really impressed with how far that's gone. And I think we're all committed that this is the right structure on a go forward.

And can you talk -- I think you referenced this and maybe given details on it, but just the changes to the incentive plans for the capital and clinical teams, how that you think is going to help just have increase the intensity of focus on procedure volume growth as we move through '26 and get into the out years?

Yes. I think the capital team, other than the launch aspect of it, the capital team is -- it hasn't changed all that much. And I think our capital process was pretty well refined actually. I think that's not where we had our biggest challenges. Our bigger challenge is on the utilization team. And part of it was, they were responsible for trying to drive same-store sales, but they were also responsible for the new launches. And one of the things that we dissected out of that is, if you got a couple of new systems launched in your territory, you could just live off the growth of those systems and you didn't really have to grow your existing base, and you could hit your quota and you could hit your plan. Now by moving those out and moving them to the launch team, the only way that the core procedure team can make their numbers is by growing same-store sales and driving that. The other thing is we cleaned up the comp plan. There were just some things in there that were more behavioral-based stacking cases, making us more efficient in doing that. And we just sort of simplified it and ripped all that out. And it's just now based on productivity, not behaviors. And so are you driving the number that you need to do? And if you are, then you're going to get paid. And if you don't, then you won't. And I think that simplification will drive the level of performance that we want.

And how has the internal feedback been from the sales team? Just are they enthusiastic about these changes? Are they on board? Has there been any disruption? I think you've already stated last week that the attrition levels have been really stable, but love to get an update there, too.

Yes. We haven't seen a lot of attrition. I will say, look, at the sales meeting, there was a tremendous amount of enthusiasm. I think the idea of having a regional director that has all the resources reported, it just solves a lot of organizational disconnects and it solves a lot of problems. But it's everybody -- it's easy for her to be excited at the sales meeting, but now we have to go execute. And we are asking people to do different things. There were people in our team that they pretty much what they did was focused on being in the OR, supporting cases and spending their time with the clinician. We're now asking them build a relationship with the scheduler. Make sure you know what patients are coming into the funnel. What other surgeons are doing procedures at this hospital, and should they need to be trained on the system? And these are just a lot of different skill sets. And we're going to coach people up, and we're going to do everything we can to make sure that they have the tools and the things that they need. But there's always some people that don't want to come to the new world. And if they don't want to come to the new world, then that's fine. But they can't stay. And that's not our goal, but we're going to have a very high accountability culture, and that's just the way. So, so far, everybody has been really excited. We haven't seen any attrition, but now we have to execute and people have to deliver.

And can you share some of the feedback from your high-volume centers that were relying, or you're just taking advantage of the end of quarter bulk discounts? I mean it sounds like they're all relatively content at least with just the sale price going away, and they've already -- they've always digested the ASP that is now fully in play. But has there been any friction at all? Or is it just -- there's some level of friction, but it sounds like it's just been minor to date?

Yes. I mean here's the dynamic. We didn't raise anybody's price. Everybody had a contracted price. And if their price was $3,500 in their contract, that's what they're expected to pay. That's what's built in their budget. That's our contracted price. So what we were doing is going in where they were coming to us and saying, hey, if I bought 30 handpieces, can I get 7% off? Can I get a deal? And somebody would say, yes, sure. And I think a little bit of the mindset was if they're taking all these procedures, maybe they're planning on utilization spiking. And so like let's put these things in here, if we do that at a discount. I mean, volume-based discounts are something that exists in every business at one level or another. I think if it would have been driving procedure growth, then we probably wouldn't have discontinued the practice. But I don't think it was driving procedure growth. I think it was driving inventory patterns, and that's not going to drive the overall health of our business. So we eliminated that, but nobody is paying a higher price. They're just not getting a discount. So they're just back to their contracted price. We didn't have to go renegotiate anybody's contract. We didn't have to redo anything. We're just holding people accountable to the price that they agreed to pay in the first place. So that's very different than you know me well from Edwards, but when we launched our S3UR platform, we put a $1,500 price increase out there. We had to go recontract everybody. We had to sell them on the value of the system. We had to do all that. We didn't do any of that in this case. People are just back to their contracted price.

Okay. I wanted to touch on some reimbursement dynamics. But, I mean, firstly, I think on one of the slides in your Investor Day referenced this reimbursement support as part of the new commercial strategy. I mean you guys have had reimbursement support in play historically. But is there anything new that you guys are offering? And just -- and on top of that, just with the Category 1 code now in place and just, I guess, removing any concerns around denied reimbursement, or just improved confidence. Is that part of the -- is there any part of that, that's been incorporated into the reimbursement strategy support strategy, excuse me?

It's not anything new, Josh, but we've always supported our customers with reimbursement. But the big event this year was moving from Category 3 to Category 1. And with that, we just want to make sure that coding is being done properly. We want to make sure that the reimbursement that our physicians are expecting, they're getting. So it's more in that vein. The blocking and tackling though, has been handled. I mean, in terms of now having a Category 1 code, our APC level went up another 5% this year. So really no issues there. But it's just making sure that customers are doing things appropriately to avoid any issues on the back end.

Okay. I would love to touch on just some capital trends. Guys, capital revenue, system revenue, $95 million to $100 million for 2026. It's record quarter in system placements in Q4. Just help us review what's baked in some of the assumptions to get you to this range? And kind of flattish system placements, I mean -- I think you reviewed this last week, but just to help us fully understand.

We modeled system placements to be about the same in '26 as they were in '25 for our greenfield placements. And we think that's a right number for us to land on. We think pricing is going to be in line, or maybe a little bit up from what we had in 2025. The other two things that we're laying on this is the first one is we're going to start a process for developing a replacement strategy. And I think historically, the company thought that customers would just reach a natural replacement time point where they want to upgrade to the new system, and they'd want to do those things. And we didn't really see that happen organically. So I think we're going to have to be much more purposeful about it. And this is where I think we can offer customers trade-in credits for their existing system. We can upgrade them to HYDROS. It's our latest technology. It's much more feature-rich. And I think it also gives them a much cleaner pathway to kind of this hybrid support model where we don't have to be in every case. So we're going to start that. I don't think it's going to be a lot of systems, but there will be some systems to be placed under this model. And I think the revenue that we get from those will probably be, with the trading credit, probably about 70% of the revenue we get for a greenfield placement. So we'll model that out. I don't think that's going to be a big part of our '26 story. But I think as you get to '27 and '28, we do need to have a strategy to upgrade all of the AquaBeam systems to HYDROS because at some point, we're going to have to sunset support over the AquaBeam system. So if I take these in and trade and I can use them for spares, I can do some refurbishment stuff with them, but -- so we can get some value out of them as well. But that's really the plan. And then the third element is we are going to explore some operational leases. And I don't think it's going to be a big part of our plan in '26, but we really want to get this process played out to where we can work out financial arrangements for a hospital that can't make the capital purchase, or doesn't want to make the capital purchase, but wants the system and wants the technology available. How do we create a lease structure that financially works for them, but more importantly, financially works for us. And then we can pull that volume through at places that maybe otherwise wouldn't have the technology available. So those are things we're going to explore. Again, these are things that are -- this is largely a build year for us this year, building some of these capabilities, but I think there are going to be things that are going to be much more important to us in '27 and '28. But we don't want to wait until those things are critical. We want to be able to pilot them now and get them right, so that when they do become more important that we have a well-run system for doing it.

I mean is there a time line just in terms of the AquaBeam system lifespan? I mean, when could it fully become dysfunctional, or there's any, maybe, technology kind of obsolescence on your side, or parts or service where you just don't -- you can't service them anymore. Can they last out to 10 years? Or is it more this 5- to 7-year typical capital lifespan?

They definitely have a useful life that could go greater than the 5 years that we would forecast with an account. And ultimately, we will have an end-of-life strategy for AquaBeam, but that's not in the near term. If you look at the installed base of AquaBeam, there are about 200 systems out there at the end of 2022. When we run pro formas with our hospital customers, they're thinking of that system somewhere in the 5-year useful life. And that is, when Larry alludes to '27 and '28, it really does line up nicely with when we had a bolus of AquaBeams being installed. And '26 is all about building that muscle so we could capitalize in '27 and '28.

And I'm assuming part of the strategy of, kind of, catalyzing that replacement cycle kicking in just trumpeting the merits of HYDROS over AquaBeam, and the advancements and enhancements.

No that's a big part of the replacement strategy, though, in addition to the revenue that we get from that, but it is upgrading people, but it gives us an opportunity to relaunch all of these accounts. And so by '27, we're launching everything under our launch model, it gives us a chance to take a much more feature-rich system in, but do it under the launch model. And we think that that's going to pay dividends for us as well.

And just thinking about HYDROS, have you seen increased utilization per system with HYDROS versus AquaBeam? And what's driving that? I think some of the procedural efficiencies are baked in preoperative planning, et cetera?

Yes. We do see higher utilization on HYDROS than we do with our legacy AquaBeam systems. And utilization is -- there's a wide spectrum of utilization there. But if you just average it all out, we do see higher utilization with HYDROS. And I think it's just such an easier system to use. It's an all integrated system. And so I just think it just drives more procedures.

We heard about -- during the IPO process from the management team prior to your tenure, Larry, about this opportunity to bring patients off the sidelines or patients that are failing meds, or just suffering in silence. It sounds like you have some renewed enthusiasm -- or I mean it's not renewed, but you have some enthusiasm around ultimately allowing patients to access a BPH intervention that's safe and durable, a great safety profile and durability. But maybe just, how are you thinking about it? You discussed this again last week, but how should we think about the time lines in terms of PROCEPT's efforts to really see that impact BPH procedure volumes?

Sure. Well, first of all, the #1 thing that we're focused on is converting competitive procedures to our procedure in the space. We're -- there's about 400,000 patients a year that get a procedure, and we're only about 10% penetrated in that in 2025. So we -- the first thing we need to do is convert all those other procedures over to our procedures. And that's what's going to drive our growth over the next couple of years. But there's -- ahead of that 400,000 funnel, there's 8 million men that are taking drug therapy for BPH and about 1.1 million men a year stop taking their drug therapy because it's not effective or they don't like the side effects. And so those are patients that we think would be ripe for having a procedure done because they've obviously stopped therapy. And so that's -- the next tranche of patients to go after would be that 1.1 million who stopped taking their drug medication. And I think those are people that we should be able to get into the procedure. But the problem that we have right now is just perception of men of what having a procedure on their prostate means. Most men go immediately to, if I have this procedure, it's going to mess with my erectile function? It's going to mess with my incontinence, and I don't want to lose urinary control. I certainly don't want to lose spectral function. And we're not talking about people who are elderly. We're talking about men in their 50s and 60s, and these are obviously critically important to them. I think we have so much work to do from a marketing side, and this is for all the segments, that says we can offer you a procedure with virtually no incontinence rate and very low ED rates. And incredibly low, better than any other procedure that you can have done, and we can give you complete relief of your symptoms that will be durable. And so the first order of business that we have to do is making sure men with this condition understand what their true options are. And right now, if you look their choice is have a resective procedure that will solve my symptoms, but it's going to leave me with very high rates of side effects and complications I don't want. Or I can have a procedure that will preserve those things, but it doesn't work very well. I'll need another procedure in a year, 2 years, 3 years. And that's just not a very attractive option for patients. And so we need to make our case for that, but it really is in all the segments. It's not just getting people off the sidelines.

Understood. Understood. I wanted to touch on indication expansion in localized prostate cancer, the 001 trial. You showed 3- and 6-month results for the majority of the patients enrolled. Looks compelling to us. And when can we see full results? And could that be as early as this year?

Yes. No, the big trial for us is the randomized trial, WATER IV. And WATER IV will complete enrollment about the middle of this year, has a 6-month endpoint. And so we would expect that data to be presented at AUA, I think it's in May next year. And so that will be the place we see the data. But I don't want to get people focused on prostate cancer because I think whenever we talk about it, we run the risk that people think we're only focused on that because the BPH train has ended in. And that's not even close to true. We're only 10% penetrated. But the reason the cancer opportunity is so exciting is for what it can do for patients. The data that was presented, we talked about it at our Analyst Day, but men who undergo a radical prostectomy for prostate cancer have -- it's almost assured you're going to have severe ED, but it's also about a 25% to 30% chance you're going to have incontinence. And so the fastest-growing segment of prostate cancer treatment is watchful waiting. It's just men who have been diagnosed. They have cancer in their system, and they just would rather do nothing than live with those complications. And their view is, I just pray every day that I'm a slow progressor, which many men are slow progressors, and so that will be okay, but there's men who are not as well. I think if men had a chance to get a procedure that had a zero rate of incontinence and erectile dysfunction actually numerically in the feasibility trial improved, and they could get the cancer out of their body, I think that's a hugely compelling case. I think the other thing that's very rare in our space is it's rare to have an opportunity that's as significant as prostate cancer that 100% leverage is exactly what we have. It uses the same exact robot. It uses the same exact handpiece, and uses our same channel to an overwhelmingly large degree, probably 95%. We might have to add some oncology practices we don't call on today. But you never get that kind of opportunity with this kind of leverage. It's very rare. And so that's another thing that just makes it really attractive to us.

Outside of the prostate cancer indication, going back to resective BPH and just the penetration -- surgeon penetration so far, I believe there's roughly 1,300 Aquablation urologists out there, maybe 10% penetrated just in terms of urologists, not all urologists do resective BPH. But how do you -- what's the plan to -- I think you do have a plan, but maybe some more details around it to just increase awareness of the clinical data, the durability, the safety event profile to the urologists that are non-adopters today?

Yes. Well, there's the non-adopters, but there's even the people that have it available. And I think there's a hierarchy that a lot of clinicians have in their mind, which is least invasive to per se more invasive. And so they'll start with, okay, I'll start with drugs. And I think we all get that. I'd take a pill before I go have a surgical procedure. So I think everybody gets that. But then it's like, okay, the medicines aren't working, so now I need to have a procedure. And they're like, well, a non-resective procedure is less invasive in my mind than a resective procedure. So maybe I'll start with a UroLift, or I'll start with one of these other procedures or maybe even they'll do a second UroLift. And if that doesn't work and the patient comes back after a year, 2 years, 3 years, then maybe then I'll move to an Aquablation, or I'll do something like this. And it makes perfect sense to a doctor that I might do 4 or 5 procedures in this patient, and that's fine. It makes no sense to a patient. And when we do the patient-centric research, patients -- the #1 thing is they want to maintain their urinary control. The #2 thing is they want a one-and-done procedure. They want to minimize the risk of having another procedure and then it's preserving their sexual function and then it's recovery time and doing all those sorts of things. And those are sort of the 4 things on their hierarchy. And it's less invasive, more invasive thing. Once a 24 French device go through urethra, tell me how one procedure feels less invasive than another procedure when you're doing the same access? And so it just doesn't make any sense from a patient lens. And when we presented that, we had a meeting with all of our -- a lot of our key opinion leaders. They were shocked by the patient-centered research. They've never seen it before. They just assumed what they were doing was in line with what a patient wanted. But I think the number of times that anybody should have a 24 French device go through their urethra is zero to 1. And if you're going to have it done, you need to know that, that's going to be a durable procedure and you don't have to have anything else done again. And that's just not the lens that patients are getting treated through today, and we need to make our case for that. But from a marketing standpoint, all the success that the company has had, and they had tremendous success before I got here. But all the success they had was just putting instruments in places and having physicians adopt it into their practice and driving procedures. That's what's driven all of this. There was no marketing program. We survey patients with BPH and between 1% and 2% of patients had ever heard of Aquablation. So patients aren't coming into hospitals. They're not asking for this by name. They're not doing any of these sorts of things. And in the early days of TAVR, we struggled with this. Patients would show up at a hospital and they'd say and the doctor would just say, let me tell you about open heart surgery, and they would just go and they didn't even know the TAVR even existed. Even today, there's a lot of patients that don't know that it exists as an option for them, and they don't pursue therapy because they don't want to have a sternotomy. So I think there's a huge opportunity for us to do just patient awareness and education for patients that are already committed to having a procedure. Remember, we're only 10% penetrated in 400,000 patients that are already committed to having a procedure that are willing to undergo a surgical intervention. That's the first place we got to go and convert people to what's going to be ultimately a much better procedure for them.

Well, it sounds like it's going to be an exciting year. We're looking forward to tracking along and procedure growth trends are going to be a main focus. And it sounds like you guys are on track to deliver. So thank you guys for spending time with us today. Good luck on the rest of your meetings this afternoon, and great to see you.

Thank you.