Earnings call transcript Q1 2023

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Operator

Welcome to the RxSight First Quarter 2023 Earnings Conference Call. Please be advised that today's conference is being recorded.

I would now like to hand it over to Alex Huang, Associate Director, Investor Relations. Please go ahead.

Alex Huang

Thank you, operator.

President Executive RxSight Dr. are today and Officer, Chief Presenting Thunen. Financial Ron Chief Shelley Kurtz; and Officer, Earlier financial RxSight XX, today, released XXXX. ended X March months results for the website. is A on press of release copy the the company's available

Actual comments differ those and a These and more from Before we may in result begin, today, with management's Securities of press to statements, risks are would our as results statements like or implied and May reflect the predictions, other our and materially expressed X, uncertainties during issued call in plans, certain uncertainties. as will including fully and include and Exchange today filings you today's SEC. forward-looking release to questions Commission, view responses risks inform described and I information. that or expectations of XXXX, estimates, and opinion

our disclaim be Investors and reliance can we filings are SEC statements. these to not forward-looking found on to cautioned website. Our or undue any or update place on the revise SEC's statements, obligation forward-looking website

will note will audio financial on in regarding press including our Please website. financial measures, be conference this most measures. with for measures the non-GAAP also the discuss non-GAAP reconciliations found comparable release. Disclosures be GAAP We available call that certain can Investor replay

call With to that, Officer, President will Kurtz. turn over Dr. I the and Ron Chief Executive

Ron Kurtz

and for us. joining you afternoon, thank Alex. Good Thank you,

customizes XXXX overview first which preferences. a needs minutes. leveraging doctors distinct of that are in financial our discuss RxSight Shelley surgery that record an our a and The of with system, premium adjustable solid the few broad consistently quarter across how our light high-quality lens first delivers after XXXX only range vision I'll is performance. first, quarter provide cataract results a of advantages will system's individual track But increasing superior and team extended and outcomes unique its underscore patient's growth the adoption solution utilization of

Shelley Thunen

everyone. good and Ron, afternoon, you, Thank

XXXX, XXXX X% revenue in of quarter XX% first up to in generated $X.X million, year We down in sold to the XXXX. units and to XX up the quarter LDDs XX% XX compared compared X% quarter in quarter compared fourth million XX of compared year the RxSight and up $XX.X quarter of the $XX.X ago units first to the quarter million XXXX. ago in of fourth

LDD The quarter $X.X First down and XX% of where X% LDDs approval LDD of fourth generated fourth the include received first first Canada, and revenue million, and first respectively. of the quarter and another the XXXX XXXX LDD sales we versus in quarters of up XXXX. X sales our sold XXXX, quarter in

capital U.S. for quarter XX% in for Canada. these, LDD seasonality sales first of quarter U.S. the XXXX XXXX, is respectively. coupled the significant ophthalmology fourth consistent and XX% with The and was and sequential Excluding first in shift were quarter typical with of equipment interest

March our LDD stood of XXXX, of the XXXX, first versus fourth units, respectively. quarters XX, up at XX% As XX% XXX and and installed base

XX% noncash first costs expenses sequential and marketing costs sales quarters stock-based increased XX% SG&A On in the compensation personnel SG&A up marketing first expense a and in expense, million XXXX, the increase in $XX.X in sold We reflecting XX% in and marketing the and X% ago noncash versus compensation G&A. XX% up XXXX, respectively. of quarter and million, first fourth LAL the first increased and in and for quarter travel compared basis, an stock-based and increased personnel and sales were to year of up due revenue first expenses and the sales, quarter, $XX.X of primarily up travel. of were to revenue LALs in expenses XX% of quarter respectively. in XXXX, XX,XXX million from quarters $XX.X fourth total XXX% the represented XXXX, of XXXX

of R&D $X.X change to first of million fourth the in and both timing of quarter quarters fluctuations primarily X% expenses the reflects compared and studies. XXXX rose million $X.X The experienced material utilization XXXX. clinical in to we usual in first the

quarter. GAAP of loss XXXX in quarter compares loss a on weighted of of a a using the diluted shares. per basic comparative Note diluted million average reconciliations per Please million million, in outstanding press release quarter information. to basic and first ago or XXXX more reported $XX.X or the loss included share. GAAP disclosure a and the same for $XX.X refer and share of basis basic or per in We a the a of XX.X resulting was in shares compensation $X.X first and of share loss million that net loss million diluted $X.XX $X.X to $X.XX non-GAAP net in This of year non-GAAP $X.XX stock-based of unaudited today's

marketed XXXX. cash We the at-the-market cash, and million from at XX, for in XXXX, pay quarter proceeds with $XX.X normal the ended quarter accrued XXXX which included first net The compared in million the XXXX, offering annual of first reflects of confidentially quarter the from million cash activities operations change for business equivalents of used public $XX.X December of million expenses short-term to $XXX.X operating incentive our in to compensation. and investments minus $XXX.X and

up of our and of quarterly with growth USDXX potential XXXX to million revenue are XX% to and quarter. margin expense USDXX We implying the assuming to guidance previous as revenue sequential seasonality our follows: guidance operating year-over-year gross of growth reiterating XX% million, from USDXX continued million third and USDXX in million, guidance increasing

to is XX%. LDD revenue in contribution as and other we've we some included savings XXXX related of year delivering margin Gross by half in to The well price margin The full achieve able cost for of and of XX.X% LAL gross contribution expect of an to our cost material increasing to second the margin guidance LDD, XX% new driven in which from the range from to guidance improvement the our been guidance relative current primarily and XX%, higher-margin guidance costs start our XXXX. to up reflects freight increase manufacture gross margin lower from of LAL in previous to sales. prior XXXX to decreases compares XX% as

gross throughout quarter. depending While revenue margin the between we one on and to may in mix any improve they LDD vary the LAL expect year,

million Operating million, expenses and estimates between noncash of rise infrastructure compensation sustained growth. XX% USDXX postoperative to to representing operating procedure build durable stock-based that light large, LAL a our USDXXX expense investments include Note expense USDXX USDXXX reflecting for ongoing to XXXX, million. treatment million support XX% a over

marketable the XXXX fourth offset equity our XXXX. of the and from first in quarter levels our Our given quarter by income XXXX cash, raises during largely expense of interest higher interest be equivalents should and cash of securities

do from anticipate cash from operations. not we of Finally, used additional additional anticipate decreasing for the raise or XXXX. to need debt in reach incur Moreover, the we capital remainder order profit operations to

I'll to Ron. the turn that, back call With

Ron Kurtz

customers. with opportunities San I'd be Annual wrapped Thank overall adjustable begin a of back to of yesterday Diego Refractive attendance productive to the of very of interact growth you, with and prospective pre-pandemic positive and or levels. recap Society current system continued to ASCRS, reported The meeting light and our Meeting up team for like many the with which American for lens was awareness Shelley. to and RxSight with in the Surgery Cataract

their for talks ASCRS In the program, the addition methods from with a they the XX who IOLs. focused position LAL of discussed users RxSight more than series practices booth their LAL to relative outcomes, into to LAL in nonadjustable main and integrating featured it how presentations patients

XX% XX% seeing and font. distance of better RxSight how XX% presentation documented Dr. LAL distance or About the of or and XX/XX chose One was JX of in vision able over better XX% RxSight John sites. customer X-point jX used for cohort, X/X to Vukich of chose X-point vision eye patients which implanted from read to these intermediate eyes a distance patients this still able at the read vision or both XX highlights near font. approximately by to at optimize XXX to XX/XX maximize and In bilaterally achieving ASCRS in patients patients one for or was with XX% LAL with

about elected JX font. and or at group to both vision Finally, intermediate seeing X-point XX% of patients, better able and read for smaller a XX/XX optimize near over X% with still or XX% to eyes distance

X/X precision and both the able to process, refractive test their during adjustment subjects adjustability changed being postoperative drive light their of vision for goals of customization. Importantly, after reinforcing approximately the value

consistently superior with loss about ability variety uncorrected IOLs. halos While were commonly a of there our these more previous corneal XXX have patients who across patients premium experience the increased procedures no had for the of glare, This significant deliver LASIK spotlights no competing relative that acuity this or with contrast conditions. history is excellent or other with technology ocular patients candidates prior may a group undergone nonadjustable X/X nonadjustable rates to in of IOLs like corneal patients results have procedure patient-driven sensitivity seen refractive the goals, surgery. of also laser benefits of corneal core visual good difficult not multifocal X/X to LASIK, be differences It without of binocular namely, surgery. wide to cataract of in following are the real-world compared to undergone outcome touch-up IOLs, And achieve the refractive

of investment revenue, existing XX% would from non-premium from premium to otherwise robust as quarter their LAL have lower-priced LAL's the patient patients, volume them does patients from practices IOL, cataract other selected while our strong only but that for These trends, a increasing helps and have best relative the Toricmonofocal practice procedure LAL deciding fall. this into it doctor come patients comes become their growth premium a not otherwise are that premium something outcomes patients pool an possible have broaden and services is behind incorporate another more that as their indicates the of expectations IOL they numbers that can and the of are their believe from meet favorable choices. adoption visual LAL first We increasingly would pay willing who principal drivers who LAL's income profitable will XX% implanters superior a important selected their number that Feedback roughly and statistics IOL allow other to to our IOL. are continued visual likely outcomes confidence indicate practice generator explain to their indicate offerings, to offer also a

our that on success system. our of the of device maximize workflow also month. to practices LDD benefits integrate patients per upgrading maximize X LAL key months based base, and delivery best the from by with the LAL closely into on disseminating our an revenue LALs of installed return works about provides to rapid X for customers new a To investment help additional with factors The the efficiencies growing and existing field the and team clinic implanted productivity light average

ongoing ensure and to provide enthusiastic staff members are practice throughout clinical also marketing informed strategic doctors We the providers. support well and and that LAL

better Accelerator impact a most Research growth likely to with procedures wrap that allow the on distinct leverage that presented supports U.S. the to focus lens by XXX X customer care. conducted make IOL to light the to practices. from and up new It to next that to over private ASCRS most were we increase ophthalmologists saying anticipated [Helio] to thesis. positive practice the and by found the pay survey successful premium plan to ophthalmic responses believed offers advantages patients technology over I'll years meeting patient and with adjustable this be franchise meaningful doctors our A at establish continue and

that early still favorable rewards a in will confident business coupled us also build and these help are we our shareholders. durable and the trends demographic that benefits, process, I'm economic high-margin While with employees

for operator call the ask that, With I'll questions. open the to

Operator

session. Instructions] At Thank time, [Operator Q&A comes JP from from Morgan. you. question first Robbie we conduct this Our Marcus the will

Allen Gong

to the for on few quick Allen is ones. good just quarter on This start had the year. I Robbie. Congratulations a off

it were when trend continued what brought the And Just stores from new to to on adoption how came with same itself, quarter is docs board? utilization for versus starting the stores? you you've seeing that

Shelley Thunen

course, of And QX very what year, of we the fourth was we X.X Street LALs the per and similar. that but your of because looks to were the X.X And last the month, the one jump. was between is fourth LDD metrics expected run volume typically for quarter quarter per went and is way your the quarter And QX third the we during number which a from right? this quarter big at, And business question. not highest Allen, you, of quarter. Thank

So right we in to the happy see about of this very first same the number were that year. quarter sustained

Allen Gong

demand kind second with rates, And continuing LDDs of for in strength what seeing seeing then the What that so are seeing quarter? interest are a you the quick far you in in capital you and follow-up. environment rising are

Ron Kurtz

our capital is thing to range. in the $XXX,XXX recall one equipment is So that

some Overall, not said, high device of high enables that's as may very more hospital-based for into capital it more as equipments so effectively. be as that light trends. by delivery And we quick. ROI profit And the a those tap market practices premium is affected that to the

So we strong the would see anticipate and demand continue. continue LDD to that to for we

Operator

comes Craig from of America. next question Our from Bijou Bank

Craig Bijou

the provide how strong year comments LDDs and one, start on some throughout a wanted should on wondering that some to in more the for the then thinking LALs. little a the start. I on obviously, QX bit on maybe if Congrats your with seasonality, also there. has about, of the you could be recognizing seasonality color utilization But we cadence

Shelley Thunen

the typically, see industry the strongest that quarter getting weakest to first the second fourth people within and just Craig. be budgets very you LDD quarters. the first already quarters and in side, we're kind what for capital but of year. And for driven that Thank their see quarter, Okay. the third and we seasonality. U.S.-based together course, LDD a And really fact is on the making bit the the decisions quarter, that's in little then you the in it, by Yes, of intermediate are the of and much,

market we quarter, as strong us. our both a in in well quarter, have as this However, Canada, the U.S. the which really is sales new from from first results for

decisions just pop before little up we've unusual, be tends for doctors seen that weaker of third to And are and LDD. as the the not are in In that but much little it fourth a the the than quarter, vacation because that's on fact a quarter. a so making

Now aware we overall, these dynamics, have of it. certainly but right, we're largely grown through

again, we're ways. procedure in Then on really side, procedures X the growing

increase customers having each So the in our looking first practices. of we're of one new that and LDDs the helps then and also in absolute to And all, the adding mix number. productivity

So the we train individual ability as doctors train accounts train infrastructure, their field in them we with practice. the LDD, on as in a But them you have the practice personnel what the this the account bit quarter, which managers high our for of quarter clinical up were into a and in productivity call bit got work little then that on fourth the use pop-up. to new integrate well within to a a then, do And of we we we maintain the more seasonality very were some And certainly, third and pop a in pleased than see by. the first numbers, that course, which usual. high quarter able to is in

Craig Bijou

margin missed played side? Got that's very improvement that And And QX, guidance, the kind but the raised the gross think margin, we strong it your guess, the it. on gross of was range? I it, But apologies Shelley, for that. you given QX ahead why if could coming mix then going higher but margin obviously, be as I right performance? strong thanks lower-cost with helpful. into of in LDD the year, LDD gross on, rest recognizing the the the on there And is

Shelley Thunen

that Yes. Thank we XX% And that LDD. much. at existing the push material guidance to get was performance quarter on some and we you course, were XX% QX cost of unusually inventory savings moves results. increased we well. XX%, to to very based our The very did on able strong quickly. as through first And our

that our in on then, to At But the of as some as that course, labor benefit primarily LAL by expect really third first well in some period usually and our costs the us lower obviously, of fact first both the was generated it getting additional from well manufacture margin, the the improvement, existing LDD we're cost first into are for the and overabsorption costs the important quarter. to were So and in mix. period of the second even LDD. as and LDD that quarter we

not to up guidance for balance the that for So moving the entire level we're year. the

Craig Bijou

sense. Makes Okay.

Operator

next Saxon David Needham question from Our comes Co. & from

Joseph Conway

on Joseph is for This David.

got if this know that the got to general guys wanted just year? you the takeaways I any maybe you you feedback Friday? customer ASCRS from event one, just And hosted First from

Ron Kurtz

We had ASCRS Joseph. strong throughout you, Thank feedback the show.

attendance the a offers in and of booth as think that very lens between strong very talks attend are generally, it as by light attending who benefits just both the they both in then to and people aware high show and adjustable I well that event those. and are having that And practices. evening our the the booth patients number steady in expressed

us very was and I excellent indicative a technology. the for interest overall, meeting the good meeting So think of in

Joseph Conway

to touching margin long maybe, then I on Sure. term. the And just great LAL, hear. guess, It's on gross

the how there? still that you in guys talked longer about if think number? the scale. past, Do going should in next term XX% that we've get you the have think Is about few or just growth at seen? feel to XX% confident And to in be to time I years the here do, given you we that

Shelley Thunen

Yes.

and and always have could overhead of majority LAL molding really amount the because and that material. is your margin it's what the clean a right, all in product volume XX% cost plus amount modest be LAL of chemistry small for of a range. that. But the overhead, of for facilities a rooms at and said fixed We the your the determines is pretty vast labor and your high that gross But

just see would in term. expectation given year. yet grow that be. We're to don't an to the and that each every haven't short when of We but it continuing I

Operator

Zimmerman Our from from next comes BTIG. question Ryan

Ryan Zimmerman

of at ASCRS. a I want questions. guys couple you missed Sorry, I ask to

seeing IOL that. get thoughts just I not competitors Some guys you called weakness. market are have Ron, why view IOL mean, think have follow-up. today, that your is you what And a in that in the space today? on the clearly, kind curious, then market of out PC And is? of results the the do And I but PCL your to broader of

Ron Kurtz

premium Ryan. being for PC remind that it's of course, and IOLs, is IOLs. procedures one well. the the IOLs associated correcting aren't with other premium those the segments IOL space of that often Thank And adjustable are And now, to good other Yes. as of always I for who think familiar as there are you, in presbyopia And stands toric that IOLs.

we So the we've to I be into IOL that sideways segment flat And have a think or that that might heard bit. commentary that put presbyopia-correcting before. seen context,

entrants As you large that movement reducing then oftentimes, a then toric segment new now quality with of a is realize loss or when to IOLs movement that over became year effects glare, in all seeing where course, of have people you'll similar us. XXXX available of vision. period that presbyopia of X, IOLs, into quality IOLs not multifocal will And effect think We gone XXXX, And lot to And numbers, from or see toric some side PC of have we things come away. which, the of and of and promise with I for correcting contrast. saw a you're associated a are these that a first IOLs. the patients a moving in towards halo, saw multifocal in good to vision, are doctors

Ryan Zimmerman

certainly this pure reported the helpful, play with largest No, what of aligns Ron. just evening. And it Yes. kind that's

sales scale. now it is are force installed And question ask forward, maybe us your pushing now service reaching consumable XXX set be does to help you pretty What just growing the units, or this take, about base I size in just some base? on sufficient second at of it your The installed kind is going capital view, us plans want to and level because

Ron Kurtz

field bit have XX between LDD soon So little in about equivalent as sales or people well. customers. we And little ago. installed good working or equipment has years a of time. The the force accounts we're force, sales covering after to we that the X feel to new grows, you course, onboard in currently LAL clinical And know, U.S. a longer LDD And nearly been is sales drive IPO function but side. adoption they're market came started Ryan, our and closely capital and training for in place LAL force the with our that We we their the period and staff, at about later. growing with procedure other also our that feel bit of quite as roughly existing divided side the base

installed as local that to And we'll so appropriate. their base add as grows, number

Operator

next Our Steven Lichtman from comes Oppenheimer. question from

Steven Lichtman

to I X wanted ask questions. LDD

Wondering higher maybe and in you weekend type of pipeline. getting ahead, of even here U.S. interest, could talk continuing accounts which in that as noted, the First, focus potential to of on recently bodes conference coming Shelley, you are broader docs? you're Are you if to volume, from targeting well. the are the came more customers. Or off this a premium-focused particularly you array past that

Just of out qualitatively, customers seeing terms the there what targeting? you're of type you are in

Ron Kurtz

of for higher pretty the interest Steve. sites, Well, work volume the can course, from see strong thanks which, easily. calculations question, we ROI continued Really, make those

those are because show practice if a are smaller doing so of space of those fraction who larger customers also premium customers. our may the they to of the been practices some not represent and in the see significant much customers involved best IOL way lion's or haven't But with that. of still prior typically to will we premium our as premium IOL have been interest their And new our continue we share

we a both to So it's offer mix those we have groups. something of but think to

Steven Lichtman

And maybe then Can other of the about how then thinking you're numbers potentially more relatively outside regions And LDD, Canada broadly, talk you out you Canada expansion? as just for what of you the opportunity notable. to expand Great. other side obviously but on see small the there? in U.S. still the

Ron Kurtz

commonalities U.S. obviously, in of XX patterns cataract people. Well, population, significant got proximity, the It's lot of a of because a with it's good Canada, terms Yes. its market, practice very million a similar,

us. So it's natural for a extension

very distributor Canada market who as well. in knows excellent We that well an have

strong to for be, as think shown be already area we so a it's to that's itself growth. going And

in Asia, although Beyond will frame. bit that, continuing later terms we're like and in primarily of those opportunities look that, little a to at Europe be time

Operator

Our next comes Wells Lawrence question from Fargo. from Biegelsen

Lawrence Biegelsen

congrats you are What's year next future A couple for like a the product look X? on thinking or And how nice me. the enhancements? about quarter. pipeline Ron, over

Ron Kurtz

Thank you, Larry.

to that what think do going to we're we've done. continue I So

you As know, as think to forward, had approvals. be supplements to we approval. our about our things market can we've since functionality. PMA to improvements tend to evolutionary we'll move product XX improve market share bring These continue and FDA address that they invest the that in those and initial continue get And we those,

Lawrence Biegelsen

to But focused areas nothing call that out, Ron, you're on?

Ron Kurtz

Nothing specific time. this at

in that about benefits think view long to Fair run, in our gain was over like of premium to math, I it is differentiating adjustable Well, is, But own going share XXXX. IOLs do if your be the all, by feature. I looks is my is time? eventually, could don't math guess you IOLs for adjustability not you be where question about think do ultimate that first will quarter similar. know premium need AT-IOLs, to that of here? How my penetration your Okay. the enough. factor and the if that And the of a X% go most,

generally our market that means start, to XX% to is standard we have head the and at so drive continuing development, market. goal and IOLs, least for And we're we're our both share which become of premium product nice a the

our tomorrow. Now the long But that's goal. term, happen over that doesn't

Operator

call no remarks. am I for questions. will turn showing Kurtz you. closing to further Dr. I over the now Thank

Ron Kurtz

Well, future look today. updating thank you your you and in appreciate We time progress forward attention quarters. on to for and our all interest we in your RxSight, Goodbye.

Operator

in conclude today's does program. for you the This your participation Thank conference.

now may disconnect. You

RxSight (RXST) 9 May 232023 Q1 Earnings call transcript