VRAY - Earnings call transcript Q1 2021

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Operator

Welcome to the Q1 2021 ViewRay Incorporated Earnings Conference Call. My name is Darryl and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I will now turn the call over to Ashley Kluth.

begin. may you Ashley,

Ashley Kluth

Good financial and results operator. first to quarter XXXX conference afternoon you, welcome everyone ViewRay's Thank call.

Officer. Stassen, Joining our me presentation viewed Chief for Zach can The release live President Drake, ViewRay Financial our be and Chief today's a today Executive Officer; and are press Earlier today, Scott presentation issued call. and webcast replay Today's on of our portion be events and call being our XX our is webinars website webcast a or days. downloaded from live broadcast on available and at will financial www.investors.viewray.com. and the for site

and would to to federal and management of forward-looking numerous differ could I due begin, we projected actual made may within comments statements listeners securities by laws. Before any results this include uncertainties call forward-looking those like statement risks from factors. caution These meaning that in statements the during material involve

ended update no on only to filings. call ViewRay its Scott. Annual For for updated content the I a call. time-sensitive see XX-Q, SEC Form the the XXXX. please description over today periodically revise turn events call undertakes circumstances to year this statements conference to May of date contains or X, ViewRay's the XX, uncertainties, of as as of with risks company's of this XX-K Form reports and reflect on accurate December other XXXX. Furthermore, Report information, otherwise or any these the fiscal obligation after will quarterly now And

Scott Drake

discuss then, and cover traction. are quarter share forward will you, questions. commercial our QX metrics, begin to answering your key call. look first our Good Zach financials Today results, and we'll will everyone, clinical with driving innovation to and welcome our Thank we we patient how pipelines Ashley. afternoon, our

I'll webcast, to on Investor presentation our on from referring Relations you're not site. slides the the be If

three. slide to Turning

treat to what others mission Our and is prove can't.

X,XXX XX% this patients. versus week energy, This with difference conventional reported growing stands patients one patients on on and hospital MRIdian expense versus disruption, about That The life patients were time, care. is average the difference paradigm MRIdian's XXX,XXX saved we is estimate, stark Consider days. treatment treated the five MRIdian, seven data overall contrast of The over therapy. the time to This body dramatic than US to patients In critical and SBRT. Slide XX%. We in number have efforts with experience. of XXXX, to about nearly the outcomes. on XX,XXX clinically provides treatment have treated five-fraction now patients. improve is on the with of about in SBRT only delivers and more our speaking, Generally market approximately clinical MRIdian patients of XX% four X,XXX treated surpassed Globally, This and in career patient customers. treated we change disruption to XX. growth. weeks to for value is context to takes This priceless profound. of slide and is back families That CAGR their since X,XXX normal a trips future believe at in given grown growth one. day quicker patients power for allows five, a to treated MRIdian to patients a XX% to MRIdian. On is have be precursor about and on the We business of return life. that

to successful one Our another. and program that MRIdian lead demonstrating are customers can increasingly does

Our adoption. clinical to drive and therapy commercial continue innovation pipelines

MRIdian received slide quarter, quarter Performance favorable to results six. prior year. versus in four quarter orders QX was our We the on seven same turn in in the in QX the XXXX. broadly to Let's the

$X cash over hand. used in X.X%. the Revenue gross about in was prior receivables year balance million. in perspective, payments are Cash by $XX a the this QX. we by or to margin now from basis grew about X% $XX.X XX% moved These million quarter, grew quarter a backlog of to Total million used X,XXX nearly impacted improved prior a at million, for points about of versus million. Our XX%. million coming $XX bringing reduction year, increase, that $XXX approximately And into $XX.X finally,

Our balance sheet strong. is

have of we cash and We $XXX multiyear our on will anticipate trend cash use. hand of reducing million continue

but ablative Moving confirmatory clinical is very tight no they our pipeline predominantly over margins, to investigator effort The dose, led. data. fewer customers MRIdian implants, trials. five success. one breadth deliver XX also thing our SMART no clinical goals Phase II are and utilization or of with mentioned, clinical grade which Phase belongs of two, desire progresses They and become meaningful intended, input slide depth flows and customers MRIdian developing how curiosity. Other represents fractions clinical work than No one, signal have from ViewRay. critical is Phase and the result trials. work SMART are clinical three of or to been process view We slide meets an Pancreas X. evidence want hubris that reflects toxicity. expand value. seven. define to On the trial our and in that about Customer definitive our The When number the criteria the clinical body number twofold: has clear represent meaningful this to conducting to clinical They to an everything required, begins feasibility leads eight, extraordinary only elements pipeline the frontline low longitudinally. interesting I therapy. as can of shaped These to with higher that our III. work these Currently

translates they long nine. These strategic in used evaluating that MRIdian more period form value value. realize even propositions MRIdian They or of for XX of treatment. value system purchasing slide Penn AUMC, three of and patients Ford distances GenesisCare patients effective time and MRIdian demand for desire This than in-network couldn't value. value travel translates On clinical therapy anticipated. We patients net into there's the clinical be our they wouldn't its and a strategic by into customers due from to economic the short in to new clinical who value we that This increase buy consistently attracting courses and Turning system, treated see incremental hear are many customers' shorter other customers slide any Henry other patients an on value systems. State, why referrals. or

technology move Our continuum the IMRT SBRT from allows MRIdian SMART. clinicians to along to to

in ONE single exploratory and adrenal in pancreas, with now in opens both located SMART fraction Our MRIdian liver, The primary for customers kidney, therapy. work fraction are lung, leading and this trial enrollment year oligomets tumors us single lymph nodes. therapy

XX. slide to Turning

to traction. commercial in innovation accrue Our pipelines clinical

toward a innovation driving sub XX-minute MRI we treatment access. the treatment front, and our remote and goal can increase are dosing, In workflow you of and times imaging, package brain enhanced the future, expect improving On automation.

driving concurrently efficiencies improve are We margin to over cost time.

the is We to pipelines. to underway. turn I'll With of our have solid review Zach care our of that, it financials. traction Changing paradigm three in each over

Zach Stassen

Thank you, Scott.

Turning to slide XX.

of and was the XX% MRIdian this X%. service in We is brings. $XXX XXXX. same increase. of last received by a the X% XX% a seven Compared will the in A margin revenue or We system quarter million, or the ended a in $XX.X the to in period. X% million. clinical with We XX% the $XX.X period to driver increased XX% increase. a basis the positive strategic that the some $XX.X period meaningful in orders The totaling Service a positive units. was million same $XX saw solid key the margin was discuss quarter represents economic We versus XX% year increase revenue an This quarter MRIdian and year, Revenue increase backlog primarily financial order total this impacted sequential negative reflection million. improvement our a million basis, for growth highlights. quarter. onetime year. same value during represents On on for a over from a quarter margin QX two over year-over-year a of represented to ASP some the is value last costs in last Gross order the from key quarter improvement period

the average our service of value service breakeven. would onetime service, seen we been margin have costs, impact annual the to positive contracts. of the Related in Excluding our have movement

systems As warranty up anniversary customers service their for offerings. grows and respective signing periods, our our we see higher-end base installed

efforts period $XX.X continue on driving focus in in loss implemented primarily to for last year. to an $XX.X These in efficiencies expenses, decrease Net the operating as over pandemic. We efficiencies maintaining focused travel programs we same personnel born resulted the XX% cost remain in of initiatives. and and operating decreased We during on our cash spend. was form quarter saving the the maximizing the million million, compared

cash to use. Turning

the during Excluding used equity is highest financing of the an our to compared net quarter. million represents QX we million our decrease $X in QX use cash $XX This January, quarter. XXXX. seasonally from proceeds

time. of we Due uncertainty, those We issuing on items, lingering with the saw this on In of $X balance $XXX have addition finished seasonal all guidance to approximately and shift to quarter liquidity QX position million collected be the receivables a we into payments. at now we strong in the some sheet. million will pandemic-related not

for are are we activity the remainder encouraged seeing the the by of We year.

sight before notably However, most revenue conversion providing Middle Asia to need of East guidance. in better geographies and we line Europe, several

The line a next systems and binary pipelines With the open the we the front of sheet combination one our innovation coupled has to us commercial will strength of capitalize well our or on the nature results. two of opportunity that, material fortified operator balance on clinical Given early business, in with positions XXXX us. impact even now questions. shifting our into for of year our

Operator

a [Operator like ahead. Thank it from have Marie, go looks Marie And Instructions] All question you. Thibault. right. we

Marie Thibault

evening for order and is sort hear guess result. there this and things can change order question on Yes. taking the environment certain, that some start love is drove general on on thoughts I'd quarter-to-quarter from I'd very to the Hi. what the at order just of but not like you your I I strength of always timing to this on hear strong thoughts the your this how thoughts sustainable and a quarter. and point? Thank strength know congrats

Scott Drake

Yeah. Marie. Thanks so much,

think regarding quarter. couple things I of out that there's a I would in orders point the

our eyes. is unfold you're of first before kind our seeing strategy really The

innovation our pipelines pipeline focused forward pipeline commercial our looking are been business three past to customers X.X, for. now traction. clinical years two prospective targeted the exactly have And on those on current at We what our nearly accruing and our driving for

really been we in They So a very I off executed that nimble travel-constrained seeing them. to as team way. us And think unfold thing second you're quite commercial simply the hats environment. in has pandemic My have the I say before our is speak. terrific during a would

credit to in work creativity, Fortunately, team how certain that's they've lifting and is speak. a the that we their doing. But markets really they're nimble been that as

would one sustainability ago. of things company and of you As with is, Because completely share the we that them. three be years this it, frequency relates X, is forward. the to that in would we're But like to with both that again next it of unrecognizable it team X different years that our going have anticipate what productivity. the X, that each of today X we at which in evidenced or I I the tell And the you, activity I I unrecognizable we'll shared we feels company X, with level my were that already pipelines I've and traction mentioned the have a perspective

our here. solid cancer that I and So patients of can frankly have near on has I I'm the we love that generated team excited around the long-term in about put think quarter the more the prospects we've business this but impact the a world. term up

Marie Thibault

can what regions recognition different us a and And I detailed maybe It bit that sounds installation right like are little like looking the about you're Hey more little side trends. visibility for Maybe can guys, of a talk the EMEA looking now. start. revenue ask you thanks in other then on some for to clarity. the

you And that taking the thanks questions. happening over can dynamics are there? for talk the maybe of through some So

Scott Drake

want we US Yes. market Absolutely. a as spotty here. around why the you It's bit pretty little cautious And be move which We're very to freely able would to imagine. thank you. is

do parts the starting the that our that United travel, work. in are we're moment. And are here certainly only There to from having East Europe We not an continued at Asia parts challenges of the getting standpoint and installation to installation quite visas States. challenging are of Middle travel for but commercially the

and and careful really as our the we Zach in very risks So account very when be guidance and with nature pandemic when associated want we the binary we uncertainties terms the of to for of also provide mentioned do timing to prudent business. be the

Marie Thibault

Thank you.

Scott Drake

you. Thank

Operator

next Bednar. our ahead, Jason. And from Go Jason comes question

Jason Bednar

first share here my customers. I afternoon from in orders guys. on had bookings know in the some order repeat Scott, good the you've booking congrats here success I'll Hey, quarter.

today. are talk mentioned orders those about going But of this willing are to just You quarter, into seven that some versus of those out how you're customers? new backlog here repeat of MRIdian wondering many just the if

Scott Drake

second Yes. Jason, Penn this in quarter State system. for is their

very is not MRIdian order. the most or quite just one were bring buying gratifying. interested of high. It that And it's activity a But and marketable is want those number incremental repeat system. you, system. technology customers of that an would that the proportion this you up substantial a that's obviously were If customers So the front that on need that we're probably would I in MRIdian are things and is our an incremental tell

The academic centers. the chains certainly and productivity our beyond community activity level we for that of freestanding in look pipeline the that market signals other we at and But hospitals include commercial profit like there.

So you those forward. gratified posted what on and we we'll keep to MRIdian as we're incremental orders go we're continue by seeing

Jason Bednar

in excellent Great. to to I'll well. you Scott the Zach, margin side gross just Great. That's on right. way or And free as your All feel hear. in weigh throw

are progress. guys nice some You making obviously

about margin I are should I'm margin pulls guess positive line and gross sure the know that we mean and thinking of we was margin in be But quarter. kind pushes plenty go -- here of it in on gross in line here. on had factors, remain You there's territory? what product the positive I the that particular as can I forward?

Scott Drake

Yes I then things any a perspective share with a I'll Zach and to make. would that to Jason of couple you make from he'd invite comments macro like

margin getting any I'll of and is we It's to given take is gross the here going in see said profile to perspective. repeat to norms of And we industry it from us installations that a -- of kind sensitive highly sight our quarter. have gross We time. number to line a margin do little

a you're there. as So like I able really install and pandemic our we then our and pace complement the that like, higher we at team price that post of think system. is backlog we're going would commercial and customers travel to the cost to the job that offering. with doing I improvement better builds to And out we're would and see that take our work increasingly, doing think And better selling service

invite some macro So chime comments to and I'll Zach in.

Zach Stassen

Yes.

industry I profile think system we do see our way margin to gross the on side. the

demand lumpy. our at is stage little think a I this bit

that bounce So work going absorption just margin forward. I standpoint. to margin, overhead keep think bit our from an little going Jason to But will system hard positive we're around a

So...

Jason Bednar

-- that about didn't And it. talk other more lot a I just items as had I all theoretical I the with platform? share any in new you decision-making But orders? the the at specifically they MX about Got if some you Have pipeline. one can you on in here is of here. squeeze talked trigger know regarding influencing MX? discussions And Scott customers regarding lot hear that here can specific of a commercial the pull update you

Scott Drake

of a one Jason that in the of a NDA and to to system. given space a norms with under is relationship share the the customer XX-year pipeline a you Yes. have bit

treatment the publicly very are our clinical to hand targeting are customers do system innovation that shared what at and things package treatment other We're what a there. a shape how have be think hand And and current in noncommercial that and give on peak we're do investors about the pipeline. we pipeline remote one think I a us. we the XX-minute to targeted that So customers I customary from we careful going our time and things of believe the do access brain those for on it both looking into But bit with sub our we to fashion. are prospective it's directly

Jason Bednar

Great. Thanks so much guys.

Scott Drake

Thanks,

Operator

comes ahead Go Andrew. question D'Silva. Andrew next Our from

Unidentified Analyst

question. on afternoon. thanks And is for Andy. Hey good Cal taking This for our

So us. just a couple from

MRIdian used to in these studies. be III these indications started for obviously invest And can Phase You've already.

studies? guess outcomes many I with how help for expect need broadly types? before the us to can III you run understand types ability So trials commercial And these across cancer you'll is II or MRIdian's accepted Phase to you conducting strategy think Phase you cancer all applicable improve

Scott Drake

Yes. this Thank in from of number they're that device strategically desire recipe in of And approach share pretty you tell And would medical clear and a important data. meaningful data zoom for The let particular. tried our leading we're just exactly bit clinical the a they door me also time But and second. the out to It's about what it's entered we that believe leading the pursuing. I how clinical technology believe let's question, lead And customers a kind success. Cal. you that a ViewRay, thing clinical critically space is first with one we that unique define clinical we at in that's the true very space. is data. for

ablative no mentioned implants or very higher tight fewer I Grade III or margins, to fractions five and toxicity. dose no As low

out to clinical to XX So our we studies floor that to on there over important are understand our pipeline. that think think And it's of strategy the cancers it's those foot in prove are to critically important value investigator-led really studies. also also we keep that cancers. I MRIdian's are those to going SMART prove toughest The trial. the value trial one treat sponsoring ubiquitous our the more And is is in and on

that's and broader right So those to criteria reported me studies many customers patients consistent clinically five adoption, with our that it's to say how but state run I Having X,XXX faster to is would we outcomes difficult compelling. believe line with I exactly underway. in very for drive think need

to in it's So customer in you difficult take to actually down Florida you But tell pancreas as have we would certain tell cancer hold. really a going when such types I that year prior treating on MRIdian. to with cancer is radiation XXX therapy. believe a one MRIdian patients pancreatic patients over was treating now And very that few customer I pancreatic cancer

if you curiosity. types would due their central central that So cancer various clinical you cancer work a that lung, But other is targets. ultra believe in standpoint, believe in and possible quite from customers pancreatic our it's in that by from lung ongoing led a to that

of and forward So we bedrock to just wood looking its what it's we're doing. effect that to continuing I absolutely chop having the think think it's And we're on front.

Unidentified Analyst

follow-up And the the next the it to facilities period payer still or covers That's helpful. update number any Okay. APM in the of still the total the on set APM have there? a to Is as relates implemented have patients then year? And then as and expected types is -- alternative be models based of episode it and the cancer there the is percentage that same? that test timing

Scott Drake

year the XX% of private beneficiaries. XX% believe continue Advantage, That Medicaid going who's in And date of fee-for-service et represents Yes. look included terms cetera. Medicare you statistics all The start about of to XXXX. we January be all Medicare, give is to patients it's Medicare to of you of when next at cancer payer,

very And pretty on well is we we clinical it have we value that strategic So that of value. believe we to because the firm accrues point. that compete think

value they and MRIdian. how about able had bottom-line strategic translates a both the that because they're with patients into the attract top dozen You and we've over new webinars customers all of that to net on that that from our talk -- economic hear value

majority and there. consider patients we treatment to five that model. are about even Shorter model then favorably the in I of the competition that MRIdian easy patients APM that driving in SBRT If the you throughput that on fact with of greater think think frankly fraction would courses for treated compete increases more the vast and it's

and So going the more the of something more to strategic are value system that becomes seek. customers

Unidentified Analyst

taking Thanks the Great. Okay. for question.

Scott Drake

you. Thank

Operator

Anthony Go from ahead, next our comes Petrone. Anthony. And question

Anthony Petrone

appetite to just to seemingly ahead installations, right? congratulations to I flow sort numerous actually past capital couple here. And looks So on, best better the quarter I way there to the it capital to of than robust in our budgets pandemic sense is year. matched through On hospital Thanks out the there Scott weeks, like start good well. for quarter other order out fared put guess as calls a the it. of, is expectation, that actually doing orders there. hope this Maybe getting the is of seven and everyone environment we're a relates feared an

bit hearing. little the environment about So you're purchases, maybe just talk capital what a hospital,

On struggle. be the could a installations flip side still

And installation on will Europe is what when is so clearly I'm have geographies at look to when get lead sort you follow-up. -- Thanks. have And still ViewRay of the visibility then sort of just time it better pressured. that the will But I'll one cycles?

Scott Drake

Anthony you and agree and would Thank also. well you, are with your you. Yes. hope I team

bad think customer feared. improving environment is from some as the a not have may I standpoint as been

we're want be an up and think relates with and that I very able that for to East in installations, careful do, therefore, and your emphasize I be want going that's visas activity going time very open to want customers on frame. cautious revenue also we about to that accurate and to for parts installation us XXXX customers level to when our when comment on would of And the and work we that. know it and Very, to just difficult uncertainty Europe be the are we reflect to do point the us able as agree to and would to our with Middle be front. clear the to

going not we're communicating our we we possible give behind. rush that's going and the can we to meaningful investors with because to So going to going we're point guidance want that forward how number date. on on earliest stand to a that be be But of at view believe we're

Anthony Petrone

head-to-head UCLA mistaken on just investigator-initiated data my And Phase prostate you in X study look the if be follow-up update of I And falls category when I'm an in standard prostate, the the study. the maybe not programs sort helpful. UCLA That's at would that initiatives trials. think prostate

year? should data you the in resonate prostate increase And data this Thanks be clearly do that big data you where maybe later be will expecting there after it's an we when category. and released? Scott, out you How So again talk a statistics is get still is about well. procedures think after

Scott Drake

you of data Thank in to some UCLA excited XXXX. enrolled. out see going is we're -- here That Anthony. the wood knock really Yes, SCIMITAR study that. study We're about we fully

XXXX point some post MRIdian's think studies your even of capability head-to-head and Anthony, studies and The see you these the retrospective other data that clinical we so two then when at there, the data aggregate there's frame look prostatectomy are are XXXX. large interesting, in analysis we at There's studies out XXXX. and anticipate bunch could a effect, that in of the And we more anticipate that in individual in to readouts when interesting. pancreas And from one multi-center that as may time currently in you data well. see individual one XXXX but in look again whole we the ligaments I

the treat effect going I well. is true that's the tough to think think I aggregate And even greater. cancers as in really to be

things cancer patients like a as we're product move and we're and hopeful So pipeline from we forward. feel the doing right perspective commercial we clinical for here

Anthony Petrone

Thank you.

Scott Drake

Thank you.

Operator

Mike comes question next Ott. Mike. Go from Our ahead,

Mike Ott

is now a believe especially on questions on closed couple I I the congrats competes competition, start nice other for Good dynamics taking how afternoon and on quarter. with at Siemens on since Varian of Healthineers providing are hand with the Scott Varian, Zach. you? questions a Thanks having play guess, the collaboration Siemens split and magnet Have my and to

Scott Drake

you. Yes, Mike, thank

with that there. long-standing have Siemens partnership very the collaboration is Our we very strong. and gratified We're with

on regular the on process basis what that was Our strengthen teams contact we very to were actual deal and close we Through able in agreement. strong feel partnership are pretty front. a good a already

feel partnership we And Siemens our with ahead. that. about see lie good good that we things So

Mike Ott

That's the would Elekta's to latest or today? get out field are Thanks, and great in on thoughts Scott. love playing competitive differences perceived platform to how your any hear. Unity real And also

Scott Drake

Mike, Yes. little shy one from going away a I'm bit. to that

us I one. from I little linear leaders think accelerators MR radiation maturing back bit what that stages a their early industry guided XxX the from moving years may opinion new is conventional they CT advancement to paradigm of language care call X-rays about conventional therapy we're hindsight took dozen clear in important be the now an is linear to look go will an as believe MRIdian a been benefit the a shift have to will I accelerators. and cone-beam MR-guided with that believe Key to to. that very MR-guided in of therapy. we we It

for comparisons choose into really MRIdian future get the I There both So to We'll are they speak itself. have want customers We any performance want don't the see of Unity what and speak our that to do there. to system. for and that itself. system with purchases we'll let

Mike Ott

of a Okay. lot Thanks sense. much. so That makes

Scott Drake

question. Last Thanks Mike.

Operator

Folkes. comes ahead, Brandon. question from Brandon next Go our And

Scott Drake

you there? Brandon, are

Operator

open. any line is your Do have is the from speakers maybe the your That final away Brandon, last he All the line question we open. Brandon, stepped have. is comments? right phone.

Scott Drake

and to again our we to quarter. thank this us look doing Thanks in to thank so today you like Operator, I'd I'd everybody call for a who much. joined forward about and like

Operator

today's and concludes conference. Thank you participating. you. Thank for this Ladies gentlemen,

You may now disconnect.

ViewRay (VRAYQ) 9 May 212021 Q1 Earnings call transcript