VRAY - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Q4 2017 ViewRay earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. And as a reminder, today's conference call is being recorded. turn Group. over to of Lee like Ruth The now the to conference Roth I'd

Lee Roth

And morning call. Candace. full-year Thanks, good XXXX fourth-quarter to financial and ViewRay's results conference to everyone. Welcome

Raanes, encourage available Joining the of viewray.com results. you Bansal, Financial quarter ViewRay call release This me Officer. A and on this call press the CEO, ViewRay section replay the We for days. on a document. broadcast its company at Relations company's Chris copy of Chief available review website issued from This XX morning, to www.viewray.com. is the announcing live of that and Investor over President are and the being also full-year be Ajay website is the and will Internet release fourth financial a XXXX

the this this of content as date time-sensitive subsequent only reports With undertakes my filed Chris? broadcast, circumstances this Furthermore, of update we CEO no like Before year and statements ViewRay's and reflect securities as conference results or projected report by factors material statements XXXX. the that management include heading call December after in date comments pleasure the numerous ViewRay statements call involve this listeners that laws. meaning made the statements of contains to Exchange caution with to under President forward-looking to the it's due the discussed for actual call those call. Securities of and XXXX federal including Raanes. our to and may Factors those March accurate obligation differ forward-looking as XX-K Commission. within said, otherwise the Form or XX, I'd in over during information, live to Chris These now uncertainties begin, any to XX, ViewRay's Risk turn from on revise of well any annual forward-looking could ended risks events the

Chris Raanes

about about ViewRay's to XXXX, radiation year a able have short, seen a what on announced as of making financial our MRIdian plan groundwork the commercial multi-leaf our We And received the fourth-quarter we advanced amazing It before Health to announced treating In we FDA recognized second with have we quarter, success. MRIdian a on a Welcome industry. on a XXXX, sharpest linear accelerator, were the to revenue – years clinicians transformation to the total cancerous for believe that conference said for to everyone. we that MRI call. we two Linac. morning, first MRIdian standard would patients Linac. collimator of progress. with of on real-time the third we Ford us way for we of new In good fundamental the our at clearance see first an oncology. a take a schedule. the for the the surrounding we the the seen And fourth systems. we is while XXXX, business. importantly, of linac. results you FDA the therapy XXXX our version were which at for laid develop of exciting creates images paving clearly physicians more system was in and In radiation of we you. world's received and linac-powered quarter have We XXXX executed by treated system. Systems future In But, linear tumors end ViewRay visualization Linac Henry X they XXXX, that Thank tissue year the never great for care clearance plan a world's beams quarter, quarter in a told shift In full-year that March accelerator, of we it In develop combine soft-tissue in the first since on MRIdian had

quote had Benjamin we put This the I MRIdian the for XX jaws few one As in completely September data presentations highlight the We increase I Ford pancreas. at Dr. survival. easily my highlight XXXX. strong transforms "This spend and oncology in thing to the entire a is with featured of remarkable for of clinical prostate, Movsas, have we data, colleagues' him, clinicians do most chair at patients. liver the My cancers, the variety reviewing that median what The like of dropped number to of exciting due and minutes data was including system presence of it, clearly radiation outcome ASTRO open. would on the a career." breast, Henry using a pancreatic the overall

the excited hear VUmc to pancreas the other and more at We're existing body. when guidance Louis their on treating a experience, software play the It saw from as we XX% Amsterdam Henry However, from These from them. not be this will behind range integrated X% our installations enabled believe and out process and nearly advantages toxicities that again of the to simply results themselves it prospective MRIdian's is pancreatic the In in symposium tracking. MRI VUmc. again, from and that Wisconsin, the Ford, fast will than story. clinicians hosting from presentations XXX a the in with MRI therapy drop is and customers to and many of capabilities St. by adaptive on-table which on-table MRIdian clinical simultaneously grade well in soft-tissue dramatic sites It the experiences Heidelberg University with the breakthrough using capabilities. to week, clinical toxicity to dose University to and target, the XX come are the uniquely will from we these about Friday disease of saw X University in clinicians from of tracking bringing as doubling adoptive Washington that the is system

size $XXX received financial making new Turning QX, We over EMEA million the totaling force. September market. in interest XXXX growing This the following Linac $XX.X for million our included competitive take now sales saw to to XX MRIdian MRIdian tender our US our Denmark our bringing this both for and December at against and in one seeing systems wins win to on demonstrating receipt year in Elekta million clearance year of full With sales, and off a Switzerland, for the we in orders we're to US FDA their in compete in XXXX backyard. Mark the States and To capitalize doubled it time. for interest XXXX. $XXX.X United we of field first of total have CE the our ability our behind in now accelerate our of us, results, backlog in

receive Asia, and National the Shonin in made good to member therapy. patients around starting our we of a this Japan, pleased hope cooperative of global the tank, discussions MRIdian to founding middle Labor application think is clinical year. Cancer decision with very progress on adaptive with Welfare with the Center treating We're in Japan, on of our also Linac that Moving the we've Ministry and a Health, now

of we're China first in of last a yet shipped systems of we clinical forecast strategy a in not clinical fourth in to to Moving and, validation year. on a while our validation have distributor, to the timing the our together Chinese formulated with fact, quarter China, FDA decision, position we

Looking execution on ahead, continue as our we we as to achievements the XXXX. XXXX see year of in build

in Linac MRIdian that year MRIdian primarily full range Overall, already help year. systems. has the from data system XX continue see sites of the the in MRIdian will revenue This'll For $XX to of the on XXXX, XX the years expect prestigious to Linac to us center build million, we receiving names X the $XX academic million clinical this you generated.

more community in expect segment. hospital traction also We the

to achieve, we As that passed am give system. the MRIdian quarter you in for tell XXth we landmark, I first we to the expect new of on you order XXXX, know, that orders a taking our but don't proud guidance

lead, University, enable in system recently, during previously, can you a to us treated had have with who treat cancer. using radiation. like gold link our clinicians time, to to in top a decode medal. previously run area genome and seen a patient the first with to cancer standard expand Mentel, imaging MRIdian followed their and Olympics all achievements in is The of especially to and South St. moment MRI-guided cancer of continue a to starting you Louis Bibian will helping is and new the our Washington aim won who recently, in lifeblood you of ads more the Olympics today, I care patients the to and from Paralympics fight first patient; to Those a Innovation on congratulate cancer therapy to of discussed expect first technology. showcasing the just innovation cancer four list most another I'd Korea; spend the a smoking; cancer the Our

Before to I'd medical two with that like seek the Daniel them initiatives. companies deep and I will that, near for some am Ajay patients to recently to to call life longer-term the Board financials. we appointment the note strategic comments both leaders turning that MRIdian to the to forward with Dan and call of Directors. over of around our we bring Scott of as experience experienced Huennekens to turn the to companies like I advance to sciences invaluable Moore device announced – with And over operational fast-growing benefits systems working Ajay, of Linac Scott's the be our I'd world. look on confident and the And

Ajay Bansal

December compared was for same million $XX.X year. everyone. morning, Total million ended to good last And year to was XXXX full revenue for fourth Chris. you, million XXXX for revenue million XX, $XX.X period XXXX. $XX for quarter the Thank compared Total the $XX.X

Our of backlog compares This XX, $XXX.X at as XXXX. December million. XXXX was to million $XXX.X December XX,

financing to cash remarks. call of position position, this we of the million. a $XX equity let total equivalents terms Chris supplemented closing that, cash With and for our Earlier XXXX with month, me In cash we with cash through Fosun. back turn million our $XX.X ended

Chris Raanes

was year for faster we growth. the In Thank XXXX you, Ajay. built summary, in which a transformation springboard have

that, I'd of the bringing look patients the to MRI-guided to have in of backlog and world. raised, our like well to and up placed for that Linac drive shipments to And the the that we growth capital technology We with forward we clinicians we Operator? benefits Q&A. MRIdian more open our and With that are system. orders call around new in revolutionary the believe orders continued we

Operator

comes [Operator And question first Difei you. Thank Yang Instructions]. of Mizuho. our from

is Your line now open.

Difei Yang

Hi. Good a for congratulations very productive morning. XXXX. And

waiting can have are there for, gating the et on very factors capacity? for about you're talk XXXX capacities, many And if installation, grow So, if installation, renting to Chris, in you and how what key you cetera? that installation plan teams with quickly, you parts along are that out

Chris Raanes

the questions. way drive Thanks, the we our Installation yes, discussed online. and as that and and the as our Great Look, Difei. coming That's And, about grow I will drive down installation have that that to the through works distributors to external where more. how how I've qualified. supply year, year think I'd install three will chain The matures internal teams external this are ability we through more it. two before, is, think as from capacity remains, other times bring teams we model as teams distributors.

Difei Yang

thank Okay, you.

So, on many now? How Chris, machine installation comment current time? per the you could what's days

Chris Raanes

Sure.

to ones now, through expect in drive the look continuously and that like talk about to year. XX-day range me to they're be the doing down that right XX going we which Let we're

Difei Yang

Very you. Thank helpful.

Chris Raanes

thank you. Okay,

Operator

Fitzgerald. our And question you. of Cantor from comes Thank Craig Bijou next

now Your is open. line

Craig Bijou

the seeing any Hi, comments interest the Just the your am to the on guess and interest more I where out some I – you taking color I in are market about linac. maybe what to I guys. customers? maybe you more can – you Are Thanks And, hospitals you're Chris, more start, in that of specifically, about with question. prospective seeing interest are that maybe expand reaching guess, for there serious MRI seeing? are you? wanted

Chris Raanes

a People knew Maybe introduction the that, one number highlight accelerator. adaptive making that's and that a tied really boon system of XXXX, the been I like seeing soft-tissue People the tracking clinical therapy the with the Sure, right? I linear is of the we highlighted selling linac. sure. think to are MRIdian and thing as data, are difference. the was the Look,

are And give big maybe and interest. you some the generating those what's those are So, let color. me deals

and of what say symposiums on success. I asking of were one some like? on hold these can You you hold regular We a of – sort give ideas site XX you it's with is up if And symposiums basis. a big you end a people these I sort at it would coming,

of this over the the to room. and and such. the to XXX symposium at large And We You've people customers, really for around in VUmc. room. over – leveraged Amsterdam, but from the just your people at go organization And are had European. we're the to the the get European, that's flying are larger primarily We majority hosting kind these that. interest. We're the to XXX We've registered had not all resources worth attendees location a got but world prospective it's the in they're of given Friday rearrange

So, I kind give of we're you out that think to the seeing that a for ought energy there. feel

Craig Bijou

clinical talked helpful. you, Great. Chris, I very That's about the obviously, If could follow-up, data.

mentioned You had it different couple of a times.

can throughout we the the data expect clinical see presentations And we what was maybe some generated ASTRO can maybe data else clinical or to then, at expect, or see when anything that year. linac. by MRI to wanted just So,

Chris Raanes

think point. from more I ongoing course, data good linac there ASTRO. live. they see XX to on will of more were follow-on those. And all we will would and all outcomes them I Like throughout with of the center on studies. see be further expect continue And, year, Look, we'll as updates presented I Yeah, mentioned, the at go

will tune areas what the some we've from interest with in think pancreas, at, or we'll market I be think got also the I ongoing studies people call you mainstream. looking will in but more see to broad start obviously, the

total of hospital, patients institution single to the drive breast are the like body have in to you data know, mainstream you reducing of down in And that patients. at If are amount volumes great as the radiation look through shows advantages community XX% something already some there reducing we what radiation a patients six XX%. by from hospital, week time some weeks treatment and one

studies I see mature. some those of think you'll

good a treatment single The hospital coming the far, I been second think most again, and institution, to in the for most data prostate. And, utilized see there's community in just some year. breast. popular It's or is behind continue you'll so that

Craig Bijou

for Great. taking Thanks the questions.

Chris Raanes

Thank you.

Operator

next Riley. Thank of B. you. comes our Andrew And from [Operator Instructions]. D'Silva question

Your open. line now is

Andrew D'Silva

my Thanks good questions. Hey, morning. for taking

if I China breakup a calling right little Mainland from I'm sorry bit. now. And

Chris Raanes

for Thanks calling.

Andrew D'Silva

Thank you.

Just a couple follow-ups. of quick

ASP showed from gross just up factors could in had there sequential good that margins the to as current range, of it growth, going that or dynamics, scale? the you Any XX percent range what far me As gross margin from increases been past? move going economies help just would Is talked be to but about are to color understand be the useful. very the current which

Ajay Bansal

here. Andy. is Hi, This Ajay

You're right.

We are there we'll We the XXXX. in targeting XXs. industry-standard get gross think margins low in

And lower we As pricing, installation. our to first-in-market which a you initial XX% just to noted, this was tend $X was standard, margin year, the or bit charge. so. some little And by around gross than last that million be driven $X.X million normally

Over margins up the in time, and the drive to Some being installed. costs, components, and expect small units installations to we as initial XX%, low as get we margins, as typically down are industry gross well more longer small XXXX. expensive scale

we gross margins For XX%. expect reaching XXXX, would significantly XXXX, than better about

Andrew D'Silva

That's of was great. looking for. actually I ahead Okay, what

and So, any they $XX year about to that's prices now equipment. next due the the Is $X $X.X only higher where to have expect right seeing $X or could likely prices million to you size pretty Are have in construction market there the that Are much so? in million of you go mark? positive to upward? talking prices this million of million, would at costs the ability year sense hear. their you between any move competitor is satisfied the to Obviously, would

Ajay Bansal

primarily view competition. Elekta don't as a we Andy, now, Right Yeah.

as $X Our linacs with taking much out, anywhere know, priced, so. which standard to or the is small, competition you million are from million $X.X

penetration getting flexibility believe we pricing our And right on believe, current long-term, upper not on about now, to that flexibility." we is the all while So, there. right out $X will that of limits market "test we trying spot. price right $X.X to now, million more have units end, It's million the more we're of

Andrew D'Silva

sense your you on and time MRI-guided last there how and can compares the that is if now that linacs now my me feedback can what standard average right from hearing right just And question, a provide far you color linacs for great. any as treatment timing give Okay, patient is the to of a as and the differences? one your on marketplace

Chris Raanes

share that this work have that are or We want are are data button the don't overall up you one go of beam-on from with some got I couch. indicative you. something studies kinds holding gave to We we've of X live, early that. that to when like sure great oiled minutes the a I times as up. get in you order can they thing exactly to the should. with doing and some X it both we right? make deal of the sites of they when like off all That's people times, of The the It's push to

add a you to time So, that. little setup

where the right know hear And time. that. of be guys standard lot. linacs want get all that being are in terms you in want We over We to will I we just better think to

there. So, on, that studies sure of we those working get from as early I'll data we are it soon the some make comes as out

Andrew D'Silva

very luck much forward and you Thank this year. good going

Chris Raanes

All very right. Thanks much.

Operator

next Thank Northland comes you. question from of Suraj And Securities. Kalia our

now Your line is open.

Suraj Kalia

Thank folks. taking my you morning, for Good questions.

Chris Raanes

Hi, Suraj.

Suraj Kalia

four Chris, questions. So,

of say pancreatic, in kind too improve prostate, outcomes. you the there is to ask From guess idea require a or adaptation whether that the it reconfig is we breast, the a what fostering? or one do an game? what someone anecdotal Are X%, questions of XX% Linac of about to beams I'll little early on-table earlier. trying yet piggyback have of differently. me it's asked whatever, Let it's evidence, I'm reconfig MRIdian I in is

Chris Raanes

Interesting.

really site every all, on every And varies and does of adaptive First requires not depend disease it disease from Not site next. to site. a the tracking. one the disease requires

some that of on both. entirely based exciting so the we've fact, requires almost most work breast not there. of pancreas tracking seen In lot far adaptive The is the ability, soft-tissue a

just to flow body Amsterdam folks to different where I VUmc that is cancers had, done be it at And see a breath anyone might to in soft, us the we probably – have we but, and it the a have right toxicity. where now, on holding difference squishy more adaptive the of in you data So, data early be. going of making little and kinds middle, depends matters, in sort the both say But than where time. over the summary too making really tell outcomes parts the in to it of is a difference. the and the flow in it's to my think it expect in else out use and The adaptive and I'm clearly, kind that will

Suraj Kalia

it. Got

follow-up, In And fair year. given I I that? terms assuming you was guys an heard median also be at. Chris, Am of to the will the are this sometime I updated cancer going presume give what update out study pancreatic numbers survival in

Chris Raanes

right. I think Yeah, that's

we'll that to patients. continue from we have will the published So, follow continue to hear those institutions and already

to of mature. are. enrollment time I an on hear anticipate year. We study the You my probably set and a to update data happen that's new year expectations here, are will then, about would news the other to doing throughout some in for And But they ones the That's that. get that going this where need lot right? you'll how not

next hear throughout you'll to ones other year it follow-up and the about year. going the hear You're on

Suraj Kalia

US. the get versus you so a I'm FY split percent to it. I there? MRIdian installation XX-day will XX could revenues what are there's of guidance, sense between guess Got out XXXX provide US distributors? to a Any the color Linac X trying is somewhere you time is recognize XX Chris, what in guys immediately the versus XX, distributors,

Chris Raanes

them. in be would be I by ones here installed we'll will the where a first be helping region actually international the large of us, will some of say majority them a on even

Suraj Kalia

Mark great. it's And, – you know XX, in – least approval all I'm effect? talking obviously, fair do queue. And about the when be then Unity, to end it. to is and finished at back right, to testing component is question you ask questions. of by linac, what But, final this color system-wide look, And don't then from testing the has Got a some Thank I'll were triangulate, June. testing had and about we how color, how on hop when can now trying trying to CE there Chris, has months were they – are Elekta for understand in say into advance give component just – six the by I Chris, you and you finished Unity. go would what did roughly maybe at guess, we looking I and we I you component May not is, taking any – know, my us to approval, guys testing let's be

Chris Raanes

Sure. a they're call. Sure. and of about gave their there. qualified are just doing. follow had talk Elekta we'll to progress out They more we dates how They're Look, than just number a

your You're because audited got got then Mark say. And to just sure it data FDA, rule by it's absolutely CE you or thumb your data do different And for different Whether you've is packages, third-party submit but and after, of all different first. I and And be or have need lot for it. can't To it in before how data of you've a have you people requires companies there a to to standards, to ways. put general right. clearances testing. long are it's got I'm

Suraj Kalia

you. Thank

Chris Raanes

Sure.

Operator

B. D'Silva, Andrew from comes question Riley. next our And you. Thank

is now line Your open.

Andrew D'Silva

the for again. follow-up thanks Hey,

items or the flow me could you and be if would that quarter year activities, if full and helpful. you depreciation stock-based Cash from fourth CapEx amortization, flow really either for could. give cash the operating compensation, Just

Ajay Bansal

Yeah.

flow see well. table So, in Andy, you our of cash as would, the course, XX-K

Note of we activities, of that So, inventory. million was cash. year, $XX for about that $XX million about used for building in the operating

a are as bit we you're we ramping of as up, quite spending are inventory. building So, in money growing,

all with Of course, we the and projects are that alongside other people hiring carrying on.

$X.X full the our in comp year, as our was XX-K the said, you I details will for as that depreciation So, million million, well. $X about find was of and, stock-based

Andrew D'Silva

last CapEx. the was And one just

Ajay Bansal

Yeah. CapEx a was modest $X million.

Andrew D'Silva

much. me. everything fantastic. Okay, you Thank very for That's

Chris Raanes

you. All right, thank

Operator

concludes Thank remarks. for session any that turn like management question-and-answer over for you. conference today. I'd our And back to closing the to

Chris Raanes

All right. move the a you Well, year you, everyone. and was thank to forward all look all transformation. up Again, to as it year XXXX forward was that for we of Take here looking I keeping summary We're journey. a that date of on execution in very XXXX care. within to much. Thanks

Operator

the participating gentlemen, in you thank This program. and Ladies conclude does today's conference. for

all You may disconnect.

Lee Roth	Investor Relations, The Ruth Group
Chris Raanes	President and Chief Executive Officer
Ajay Bansal	Chief Financial Officer
Difei Yang	Mizuho Securities
Travis Steed	Cantor Fitzgerald
Craig Bijou	Cantor Fitzgerald
Andrew D'Silva	B. Riley
Suraj Kalia	Northland Securities

ViewRay (VRAYQ) 12 Mar 182017 Q4 Earnings call transcript