PROCEPT BioRobotics CorpPRCT
PROCEPT BioRobotics Corp Revenue Disclosure
Revenue Recognition
Revenue is derived primarily from the sales of the AquaBeam Robotic Systems and HYDROS Robotic Systems, along with handpieces that are for one-time use during each surgery using the Company’s robotic systems. Included in the term “sales”, the Company includes sales-type leases accounted for in accordance with ASC 842 described above. The Company’s robotic systems contain both software and non-software components that are delivered together as a single product and generally contain a one-year warranty.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies the performance obligations. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determined those that are performance obligations and assess whether each promised good or service is distinct based on the contract.
The contracts are typically in the form of an agreement and an ordering document from the customer. The Company’s HYDROS Robotic System and AquaBeam Robotic System sales generally contain multiple products and services and can include a combination of the following performance obligations: robotic system, handpieces and consumables, and service.
The Company determines the transaction price it expects to be entitled to in exchange for transferring the promised product to the customer, which is based on the invoiced price for the products. All prices are at fixed amounts per the contract with the customer.
For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services. If a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, and type of customer. The Company regularly reviews standalone selling prices and updates these estimates as necessary.
The Company has determined that certain promises in the multiple-element arrangements, such as installation, training and certain ancillary products, are immaterial, and do not represent separate performance obligations for which transaction price is allocated.
The Company’s typical payment terms are between 30 to 90 days. All shipping and handling costs are expensed as incurred, and are recorded in cost of sales as a fulfillment activity. In those cases where shipping and handling costs are billed to customers, the Company classifies the amounts billed as a component of revenue. Taxes collected from customers and remitted to governmental authorities are excluded from revenue.
Robotic system arrangements generally do not provide a right of return, however, the Company has granted a right of return on a case-by-case basis. The Company estimates returns at contract inception based on historical return amounts. Return estimates are recorded as a reduction to revenue. Returns have not been material for periods presented.
The Company has granted rebates on a limited basis. Rebates are recorded as a reduction to revenue at time of sale. Rebates have not been material for periods presented.
Given the release of the next generation robotic system, the HYDROS Robotic System, for a limited period and on a case by case basis, the Company has entered into arrangements with existing customers to sell a HYDROS Robotic System with an exchange of a previously purchased AquaBeam Robotic System for additional consideration. Exchanges have not been material for periods presented.
Sales commissions are considered incremental and recoverable costs of acquiring customer contracts. These costs are deferred and amortized over a straight-line basis when the estimated benefit period is greater than one year. The Company applies the practical expedient to expense costs to obtain a contract as incurred when the amortization period would have been one year or less. The amortization expense is reported in selling, general and administrative expense in the statements of operations and comprehensive loss.
The Company utilizes the practical expedient under ASC 606 and does not disclose unsatisfied performance obligations for service contracts as these contracts generally have an original duration of less than one year. For those contracts with an original duration exceeding one year, the aggregate amount of transaction price allocated to the performance obligations unsatisfied at December 31, 2025 was not material.
The Company recognizes revenue as the performance obligations are satisfied by transferring control of the product or service to a customer. The Company generally recognizes revenue for the performance obligations as follows:
AquaBeam Robotic Systems and HYDROS Robotic Systems
End user sales - For systems (including robotic system components and robotic system accessories) sold directly to end users, revenue is recognized when the Company transfers control to the end user, in accordance with agreed upon shipping terms. The Company has determined in these type of arrangements the end user is the Company’s customer.
Intermediary sales - For systems sold to distributors or to leasing companies (intermediary), revenue is recognized when the Company transfers control to the intermediary, in accordance with agreed upon shipping terms. The Company has determined in these type of arrangements the intermediary is the Company’s customer.
Hand-pieces and other consumables
Revenue from sales of handpieces and other consumables is recognized when the Company transfers control to the customer, in accordance with agreed upon shipping terms.
Service
Service revenue, inclusive of the amounts associated with the AquaBeam Robotic System and HYDROS Robotic System warranties or extended service agreements, is recognized over the term of the service period, as the customer benefits from the services throughout the service period.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.