PROCEPT Q4 2025 Results and 2026 Guidance Update: A Critical Test for HYDROS Momentum

What happened

PROCEPT BioRobotics released its unaudited fourth-quarter 2025 financial results on February 25, 2026, alongside an update to its 2026 revenue guidance, addressing key investor concerns highlighted in the DeepValue report. The results likely focused on HYDROS system placements, which needed to meet or exceed ~65 units to confirm demand and support the bullish thesis, as per prior expectations. Gross margin performance was under scrutiny due to previously flagged tariff headwinds of ~$2.0 million, potentially compressing profitability and delaying operational leverage. The updated 2026 revenue guidance, presumably within the $410-430 million range referenced in DeepValue, provides insight into management's growth outlook amid competitive pressures. This release sets the stage for the Investor Day on February 25, 2026, where detailed disclosures on HYDROS upgrades versus new placements will be critical for validating the recurring revenue model.

Implication

If Q4 placements meet the ~65 threshold, it could reinforce confidence in HYDROS demand and align with the base case valuation of $32, supporting a potential buy rating. However, a shortfall in placements or gross margin below 63% might trigger a shift toward the bear case of $18, indicating demand normalization rather than launch scaling. The updated 2026 guidance offers a revenue roadmap, but sustained handpiece growth outpacing system revenue is essential to prove utilization improvements and annuity economics. Cash burn remains a pressing issue, with the company still loss-making and reliant on liquidity, necessitating careful monitoring of operational efficiency to avoid future dilution. The Investor Day disclosures on upgrade cycles and tariff impacts will be pivotal, as lack of transparency could undermine market sentiment and the investment thesis.

Thesis delta

The investment thesis remains contingent on confirmed Q4 placements and gross margin data; any deviation from the implied ~65 systems or margin below 63% could weaken the 'POTENTIAL BUY' rating toward a more cautious stance. Key shifts depend on management's ability to quantify HYDROS upgrades versus new accounts and demonstrate tariff resilience, which will determine the sustainability of growth and recurring revenue. Investors should await detailed results and Investor Day insights before adjusting positions, as the narrative is at a critical juncture with binary outcomes.