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  "documentTitle": "PROCEPT BioRobotics Corporation (PRCT)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2025-01-16 00:00:00",
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  "notes": "Includes a table comparing peer gross margin expansion to Procept's projected expansion.",
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      "text": "Our review of peer company gross margin expansion during their approximate growth from $200 to $400 million of revenue showed that none achieved such expansion, and the median was a gain of just 85 bps.",
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      "text": "We believe Procept's handpiece largely consists of a metal tube, injection-molded plastic, a hinged arm, and a circuit board with some very basic control logic. Handpiece ASPs have been ~$3,200 in 2024. Our conversations with both former Procept sales reps and users suggests handpieces are relatively simple and likely have very high gross margins, suggesting little upside remains. With current procedure reimbursement at ~$8,950, the $3,200 handpiece ASP seems ripe for negotiation.",
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      "text": "Gross Margin Expansion (bps): 521",
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      "text": "We believe that Street consensus modeling an over 500 basis point increase in gross margins from 2024 to 2026 is overly optimistic. We see little differentiated or unique content in Procept handpieces and an ASP that compares unfavorably to procedure reimbursement. Our review of peer company gross margin expansion during their approximate growth from $200 to $400 million of revenue showed that none achieved such expansion, and the median was a gain of just 85 bps.",
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      "text": "Oh, 100%. I mean, all hospitals are trying to cut costs right now. It's interesting because hospitals right now don't even look at reimbursement... They only look at the cost....",
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      "text": "It's about the size of your arm from your elbow to your fingers. Half of it is just a metal stick with the scope part. The other part is molded plastic with a tiny chip on it, so it's probably double-digit dollars to make. So, the margin is infinite. It's a huge margin.",
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      "text": "\"It's about the size of your arm from your elbow to your fingers. Half of it is just a metal stick with the scope part. The other part is molded plastic with a tiny chip on it, so it's probably double-digit dollars to make. So, the margin is infinite. It's a huge margin.\" — Major Hospital Urologist, Nov 2024",
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      "text": "Source: S&P Capital IQ, Procept October 2024 investor presentation, Spruce Point research",
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      "text": "Company, Period, Gross Margin Expansion (bps); TNDM, 2018-2019, 475; ICUI, 2014-2016, 383; PODD, 2014-2016, 256; ATRC, 2018-2023, 227; DXCM, 2014-2015, 124; STAA, 2021-2023, 85; PEN, 2015-2018, (92); INSP, 2021-2022, (195); NARI, 2021-2023, (303); IRTC, 2019-2022, (700); GKOS, 2018-2023, (1,018); Median, 85; PRCT, 2024-2026E, 521",
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      "text": "We Are Highly Skeptical Of Street Consensus Estimates Assuming Material Gross Margin Expansion",
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