PROCEPT BioRobotics (<a href="https://seekingalpha.com/symbol/PRCT" title="PROCEPT BioRobotics Corporation" target="_blank">PRCT</a>) just reported another stellar quarter, blowing past revenue expectations and solidifying their position as a leader in the burgeoning BPH surgical market. While analysts are focusing on the impressive system sales and utilization growth, there's a hidden gem buried within the transcript that hints at a potentially explosive growth driver: the quiet emergence of Aquablation therapy in ambulatory surgery centers (ASCs).

While the company downplayed the significance of their pilot program in ASCs, emphasizing their focus on high-volume hospitals, a closer look reveals the strategic brilliance behind this seemingly minor development. The transcript reveals that the ASC placement was initiated by a highly experienced Aquablation surgeon, indicating a strong "pull" from the physician community. This suggests that Aquablation, previously confined to hospital settings, is now viewed as safe and efficient enough for the ASC environment.

This shift in perception is significant for several reasons. Firstly, it points to a growing confidence in Aquablation's safety and efficacy, especially regarding concerns about bleeding risk – a factor traditionally hindering the adoption of procedures in ASCs. Secondly, it opens up a vast, untapped market of patients who prefer the convenience and cost-effectiveness of ASCs. While data on ASC penetration for resective procedures is limited, estimates suggest it could range from 15% to 30%, representing a significant portion of the overall market.

PROCEPT's pilot program, coupled with a growing body of clinical evidence supporting Aquablation in ASCs, could be the catalyst for a seismic shift in the BPH surgical landscape. Imagine a world where Aquablation becomes the preferred treatment option for not just high-volume hospitals, but also a multitude of ASCs across the country. This scenario, while not explicitly factored into PROCEPT's current guidance, presents a tantalizing glimpse into the company's future growth potential.

Here's where the numbers get truly exciting. If just 10% of the estimated 300,000 annual resective procedures currently performed in hospitals were to shift to ASCs, it would represent an incremental market of 30,000 procedures. With established Medicare reimbursement of approximately $6,200 per Aquablation procedure in ASCs, this translates to a potential revenue opportunity of $186 million annually. This figure doesn't even account for the market expansion potential that ASCs offer, attracting patients currently on medication or those deterred by hospital procedures.

PROCEPT's deliberate approach to ASCs, focusing on pilot programs and gathering clinical data, is a testament to their long-term vision. They are strategically laying the groundwork for a future where Aquablation dominates the BPH surgical market, regardless of setting. This patient-centric approach, coupled with Aquablation's compelling clinical and economic benefits, could make PROCEPT a household name in urology, potentially rivaling established players like Intuitive Surgical.

While the street is fixated on PROCEPT's impressive system sales and utilization growth, the under-the-radar ASC strategy could be the secret weapon that propels them to even greater heights. This is a company worth watching closely, as they quietly but confidently position themselves to revolutionize BPH treatment and become a true force in the global urology market.

Hypothesis: ASC Impact on Procept's Future

These are just initial projections, and the actual impact could be even more significant as PROCEPT refines its ASC strategy and gathers more clinical data. The company's focus on innovation, coupled with a growing demand for minimally invasive procedures in convenient settings, suggests that Aquablation in ASCs could be the game-changer that investors have been waiting for.

Procept's Growing Revenue and Expanding Gross Margins

The chart below highlights PROCEPT's revenue growth from 2021 to 2024 (projected) based on company guidance and illustrates the anticipated gross margin expansion.

This expansion demonstrates the company's increasing profitability and the scalability of its business model.

"Fun Fact: The global surgical robotics market size was valued at USD 8.3 billion in 2022 and is projected to grow at a CAGR of 12.1% from 2023 to 2030. With its innovative Aquablation technology and strategic expansion into ASCs, PROCEPT BioRobotics is well-positioned to capitalize on this booming market."