RxSight, Inc. (NASDAQ:RXST) Q1 2025 Preliminary Results Conference Call April 3, 2025 8:00 AM ET Company Participants Oliver Moravcevic - VP, IR Dr. Ron Kurtz - Director, Co-President and CEO Shelley Thunen - Assistant Secretary, Co-President and CFO Conference Call Participants Ryan Zimmerman - BTIG Xuyang Li - Jefferies Robert Marcus - JPMorgan Steve Lichtman - Oppenheimer David Saxon - Needham Danielle Antalffy - UBS Operator Thank you for standing by, and welcome to the RxSight conference call. All line ...

Financial Data and Key Metrics Changes - Preliminary first quarter 2025 revenue was $37.9 million, up 28% year-over-year but down 6% sequentially from Q4 2024 [18] - Sold 73 LDDs, up 11% year-over-year but down 12% from Q4 2024 [18] - Sold 27,579 LALs, up 36% year-over-year but down 5% sequentially from Q4 2024 [19] - Revised revenue guidance for 2025 from $185 million to $197 million down to $160 million to $175 million, reducing implied growth from 32%-41% to 14%-25% [19] - Gross margin guidance remains unchanged at 71%-73% [20] Business Line Data and Key Metrics Changes - LDD installed base reached 1,044 units, up 43% year-over-year and 8% sequentially [18] - LALs per LDD per month saw a year-over-year drop, indicating a decline in same-store sales [10][11] Market Data and Key Metrics Changes - The premium IOL market has weakened, impacting LAL sales and leading to a decline in procedure volumes [10][14] - The overall premium IOL market has been less sensitive to macroeconomic trends compared to other procedures like LASIK [11][12] Company Strategy and Development Direction - The company is focusing on refining clinical education and practice adoption programs to address procedural declines [15] - Plans to support new customer business models that offer centralized third-party light treatment options [16] - European regulatory approval for LDD and LAL has been achieved, with a focus on building clinical expertise in Europe [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need to reset 2025 guidance due to macroeconomic headwinds and competitive product launches [17] - Confidence remains in the long-term opportunity to reshape the premium IOL market despite current challenges [17][22] Other Important Information - Customer satisfaction is at an all-time high of 97%, indicating strong support for the company's technology [22] - Noncash stock-based compensation expense is projected to increase due to higher-than-anticipated option grants [21] Q&A Session Summary Question: Guidance and underlying assumptions - Management indicated that the lack of significant increase in LAL procedures in March impacted guidance, reflecting a change in expected sales [26] Question: Components of the miss in Q1 - Management noted a confluence of factors including macroeconomic conditions and competitive product launches as contributors to the Q1 miss [32] Question: Utilization rates by cohort - Management confirmed that utilization rates have been consistent across cohorts, with no major disparities noted [38] Question: Product pipeline and competition - Management expressed confidence in their product pipeline, stating that no direct competition to LAL is anticipated [41] Question: Impact of competitor recall - Management acknowledged the potential for opportunity but noted uncertainty regarding the duration of the impact [70] Question: LDD demand and market conditions - Management expects LDD sales to increase in 2025 but acknowledges that overall demand may be affected by the premium IOL market's softness [76]

Core Viewpoint - RxSight, Inc. has announced preliminary revenue results for Q1 2025 and revised its full-year guidance, indicating challenges in the premium IOL market and broader economic conditions affecting its operations [1][3][4]. Preliminary First Quarter 2025 Results - The preliminary revenue for Q1 2025 is expected to be approximately $37.9 million, reflecting a 28% increase compared to the same period last year, but a 6% decrease from Q4 2024 [8]. - The company sold 27,579 Light Adjustable Lenses (LAL™/LAL+®), marking a 36% increase in procedure volume year-over-year [8]. - The installed base of Light Delivery Devices (LDD™) has expanded to 1,044, a 43% increase from 732 LDDs at the end of Q1 2024 [8]. Revised 2025 Guidance - The company has lowered its full-year revenue guidance to a range of $160.0 million to $175.0 million, down from the previous range of $185.0 million to $197.0 million, indicating an implied growth of 14% to 25% compared to 2024 [9]. - Operating expenses are now projected to be between $150.0 million and $160.0 million, reduced from the previous guidance of $165.0 million to $170.0 million, representing an implied increase of 10% to 18% compared to 2024 [9]. - Non-cash stock-based compensation expense is now expected to be in the range of $27.0 million to $30.0 million, up from the previous range of $22.0 million to $25.0 million [9]. Company Overview - RxSight, Inc. specializes in ophthalmic medical devices, particularly focusing on providing customized vision solutions for patients post-cataract surgery [1][10]. - The RxSight® Light Adjustable Lens system is the first and only commercially available intraocular lens technology that can be adjusted after surgery, allowing for tailored vision correction [10].

Company Overview - RxSight, Inc. is an ophthalmic medical device company focused on providing high-quality customized vision for patients after cataract surgery [3] - The company offers the RxSight Light Adjustable Lens system, which includes the RxSight Light Adjustable Lens (LAL™/LAL+) and the RxSight Light Delivery Device (LDD™), the first and only intraocular lens technology that can be adjusted post-surgery [3] Upcoming Events - RxSight's management will participate in the 24th Annual Needham Virtual Healthcare Conference on April 8, 2025, at 9:45 a.m. Pacific Time / 12:45 p.m. Eastern Time [2] - A live and archived webcast of the presentation will be accessible on the company's investor relations website [2] Contact Information - Shelley B. Thunen serves as the Chief Financial Officer and can be contacted via email at sthunen@rxsight.com [4] - Oliver Moravcevic is the VP of Investor Relations and can be reached at omoravcevic@rxsight.com [4]

Financial Data and Key Metrics Changes - RxSight, Inc. reported Q4 2024 revenue of $40.2 million, up 41% year-over-year, driven by strong growth in LAL procedure volume and expansion of the installed base of LDDs [10][12] - LAL revenue reached $28.5 million in Q4 2024, a 60% increase compared to the same quarter in 2023, with LALs accounting for 71% of total revenue, up from 62% in Q4 2023 [11][13] - The gross margin expanded to 71.6% in Q4 2024, up from 61.8% in Q4 2023, reflecting a favorable revenue mix and lower manufacturing costs [13] - For the full year 2024, revenue grew 57% to $139.9 million, with a net loss of $27.5 million, an improvement from a net loss of $48.6 million in 2023 [16][17] Business Line Data and Key Metrics Changes - The company sold a record 29,069 LALs in Q4 2024, marking a 61% increase from Q4 2023 [11] - The installed base of LDDs increased to 971 units, up 46% from 666 units at the end of 2023 [12] - Full-year 2024 LAL revenue increased by 78%, while LDD revenue grew by 24% [16] Market Data and Key Metrics Changes - The company anticipates that revenue contribution outside of North America will remain nominal in 2025, with a more significant impact expected in 2026 and beyond [19] - The company estimates that adjustable premium IOLs accounted for nearly half of the overall growth of premium IOLs in the U.S. in 2024 [23] Company Strategy and Development Direction - RxSight, Inc. aims to expand access and accelerate adoption of its adjustable IOL technology, focusing on partnerships and clinical collaborations [29][30] - The company plans to continue investing in sales, marketing, and R&D to support projected revenue increases in 2025 and beyond [20][21] - The company is also pursuing regulatory approvals in key markets in Asia and Europe to expand its reach [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of LAL utilization as the technology becomes more widely recognized and adopted [22] - The company expects typical seasonality in revenue, with the first and third quarters being seasonally weaker [19][20] - Management highlighted the importance of high-margin private pay LAL procedures for the financial sustainability of eye care providers [24] Other Important Information - The company ended 2024 with no debt and $237.2 million in cash and short-term investments [18] - The company raised $107.5 million net from a public offering during 2024 [18] Q&A Session Summary Question: Trends in LAL utilization and growth expectations for 2025 - Management noted that LAL utilization is expected to grow, influenced by the installed base of LDDs and overall market growth [34][36] Question: Insights on aspheric IOL and market opportunities - Management clarified that both LAL and LAL plus are already aspheric lenses, with new functionalities enhancing customization for different patient needs [47] Question: Growth investments and focus areas - Management emphasized ongoing investments in clinical training, sales support, and education to drive adoption [61][64] Question: Guidance on top-line growth and seasonality - Management indicated that the first quarter is expected to be seasonally weaker, with a focus on absolute LAL implant numbers as a key metric [70][72] Question: Competitive landscape and impact on guidance - Management acknowledged potential impacts from competition but emphasized the unique advantages of their technology [76] Question: R&D spending and innovation opportunities - Management highlighted a focus on continuous innovation and upgrades to technology, benefiting customers over the long term [85] Question: Margin cadence and future expectations - Management expects consistent gross margin expansion, driven by a higher mix of LAL sales [92] Question: Business models and implementation across centers - Management noted increased interest in LDD-focused treatment centers, which could enhance access for doctors and patients [98]

Core Viewpoint - RxSight, Inc. reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.10 per share, representing a significant earnings surprise of -70% [1] - The company posted revenues of $40.21 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 0.07% and showing a year-over-year increase from $28.58 million [2] Financial Performance - The earnings report indicates a loss of $0.26 per share a year ago, highlighting an improvement in earnings despite missing estimates [1] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - RxSight shares have declined approximately 14.8% since the beginning of the year, contrasting with the S&P 500's gain of 1.7% [3] - The current Zacks Rank for RxSight is 4 (Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $40.64 million, while the estimate for the current fiscal year is $0.27 on revenues of $190.95 million [7] - The outlook for the Medical - Instruments industry is favorable, ranking in the top 32% of over 250 Zacks industries, which may positively influence stock performance [8]

Product Overview - The RxSight system is the first and only commercially available premium cataract technology that allows customization of visual acuity post-surgery [23]. - The RxSight system demonstrated that 70% of LAL patients achieved 20/20 or better uncorrected visual acuity without glasses, compared to only about 40% for other premium IOLs [28]. - The observed rate of eyes achieving 20/20 or better uncorrected distance visual acuity with the RxSight Light Adjustable Lens (LAL) was 70.1%, significantly higher than Alcon's Acrysof Toric (38.4%) and J&J's Tecnis Toric (43.6%) in pivotal studies [56]. - The RxSight system allows for adjustments in spherical and cylindrical refraction in 0.25 diopter increments, similar to adjustments used in glasses prescriptions and LASIK procedures [52]. - The proprietary RxSight technology allows for post-operative adjustability of the lens, addressing key limitations of existing premium IOL technologies [46]. - The RxSight system achieved a 70.1% rate of subjects with monocular uncorrected distance visual acuity of 20/20 or better, compared to 36.3% for the monofocal control IOL [61]. - Approximately 82.5% of LAL eyes achieved monocular uncorrected distance visual acuity of 20/25 or better, compared to 50.6% of control eyes [62]. - Since late 2021, all LALs have included ActivShield technology, providing an extra layer of UV protection and reducing dependence on patient compliance with protective glasses [55]. Market Dynamics - In the U.S., premium cataract procedures accounted for approximately 20% of all cataract surgeries in 2024, generating around $810 million in revenue, projected to grow at a 12.0% CAGR by 2029 [26]. - The global premium IOL revenue was approximately $2.8 billion in 2024, expected to grow at a CAGR of 11.0% through 2029 [39]. - The U.S. premium IOL market is the largest globally, with premium IOL procedures representing about 20% of cataract surgeries in the U.S. in 2024 [39]. - Approximately 32 million cataract surgeries were performed globally in 2024, with projections to exceed 37 million by 2029, growing at a CAGR of 3.4% [39]. - The global cataract IOL market is dominated by premium IOLs, with Alcon and Johnson & Johnson estimated to hold a combined revenue share of approximately 68% in 2024 [91]. - The U.S. cataract surgery market is highly concentrated, with Alcon and Johnson & Johnson accounting for approximately 75% of the total U.S. premium cataract surgery market [89]. Company Performance and Strategy - The company has established an installed base of 971 LDDs in ophthalmology practices and over 195,000 LALs implanted since inception through December 31, 2024 [29]. - The company aims to expand its LDD installed base and increase LAL utilization through heightened awareness of superior clinical outcomes [30]. - The company focuses on improving clinical outcomes and customer experience through ongoing research and development initiatives [30]. - The company plans to expand its marketing efforts to increase adoption of its products and expects to incur significant sales and marketing, research and development, and regulatory expenses [160]. - The company reported operating losses of $36.9 million and $50.1 million for the years ended December 31, 2024 and 2023, respectively, resulting in an accumulated deficit of $622.1 million as of December 31, 2024 [160]. - As of December 31, 2024, the company had $237.2 million in cash, cash equivalents, and short-term investments, which it believes will be sufficient for at least 12 months [166]. Regulatory Environment - The FDA regulates product design, development, clinical testing, manufacturing, and marketing to ensure safety and effectiveness of medical products [92]. - Medical devices are classified into three classes by the FDA based on risk: Class I, Class II, and Class III, with Class III devices requiring the most stringent approval process [94][97]. - The 510(k) clearance process allows manufacturers to demonstrate that a new device is "substantially equivalent" to a legally marketed predicate device, with a typical review goal of 90 days, although actual clearance often takes longer [107]. - The PMA approval process generally takes between one to three years, with the FDA having 180 days to review a filed application, but delays are common [110][111]. - The FDA may conduct inspections of clinical trial data and manufacturing facilities prior to PMA approval, which can further extend the review timeline [111]. - The company is subject to periodic inspections by the FDA and European Notified Bodies to ensure compliance with regulatory requirements [125]. Competitive Landscape - The company faces intense competition in the surgical ophthalmology market, with competitors having greater financial and marketing resources [89]. - The company faces significant competition from well-capitalized companies like Alcon and Johnson & Johnson, which may hinder market penetration [183]. - Adoption of the RxSight system requires significant up-front investment from doctors, potentially leading to lengthy sales cycles [177]. Financial Risks and Challenges - The company expects to continue incurring net losses and negative cash flows from operations in the future [163]. - The company may seek to raise additional capital to support operations and growth, which may not be available on acceptable terms [162]. - Changes in U.S. healthcare policy, including potential reforms to the Affordable Care Act (ACA), could increase costs and reduce revenues from product sales [130]. - The overall reimbursement available for cataract and refractive condition treatments may remain at current levels or decrease in the future, impacting financial performance [215]. Intellectual Property and Legal Risks - The company's patent estate includes various aspects of LAL and LDD technology, with patents expiring between 2025 and 2044 [85]. - The company is actively seeking to protect its intellectual property through patents and trade secrets, but faces challenges in enforcement and protection [87]. - Product liability lawsuits pose a risk of substantial liabilities, potentially requiring the company to limit or halt product marketing and sales [217]. Operational Risks - The company relies on third-party suppliers for manufacturing components of the RxSight system, making it vulnerable to supply disruptions [155]. - The company operates in a single manufacturing facility, and any damage to this facility could significantly impact production capabilities [187]. - The current leases on the company's facilities expire on January 31, 2031, and failure to renew could lead to significant operational disruptions [188]. Cybersecurity and Data Privacy - The company faces cybersecurity risks as medical devices become increasingly connected, which may lead to unauthorized access and potential risks to users [195]. - A recent cybersecurity incident involved unauthorized access to an employee's cloud-based work account, but it did not materially impact operations or financial condition [197]. - The company relies on its information technology infrastructure, which is vulnerable to cyber threats, and any breaches could adversely affect business operations and financial results [199].

Core Insights - RxSight, Inc. reported strong financial results for Q4 and full-year 2024, highlighting significant revenue growth and improvements in gross profit margins [4][9][10] - The company emphasizes the transformative potential of its adjustable lens technology in the premium cataract market and plans to expand its global adoption [3][17] Quarterly Financial Results - Total revenue for Q4 2024 was $40.2 million, a 41% increase from $28.6 million in Q4 2023, driven by a 60% increase in Light Adjustable Lens (LAL) revenue and a 7% increase in Light Delivery Device (LDD) revenue [4][11] - Gross profit for Q4 2024 was $28.8 million, representing 71.6% of revenue, up from $17.7 million or 61.8% of revenue in Q4 2023 [5] - Operating expenses for Q4 2024 were $37.4 million, a 31% increase from $28.5 million in Q4 2023, reflecting ongoing investments to support growth [6] Annual Financial Results - Full-year 2024 total revenue reached $139.9 million, a 57% increase compared to 2023, with LAL revenue up 78% and LDD revenue up 24% [9] - Gross profit for the full year was $98.9 million, or 70.7% of revenue, compared to $53.8 million or 60.4% in 2023 [10] - The company reported a net loss of $(27.5) million for 2024, an improvement from a net loss of $(48.6) million in 2023 [13] Operational Highlights - In Q4 2024, RxSight sold 29,069 LALs, a 61% increase in procedure volume compared to Q4 2023, and expanded its LDD installed base to 971 units, a 46% increase [11] - The company’s cash, cash equivalents, and short-term investments totaled $237.2 million as of December 31, 2024 [8] 2025 Guidance - The company projects full-year 2025 revenue in the range of $185.0 million to $197.0 million, indicating growth of approximately 32% to 41% compared to 2024 [17] - Gross margin is expected to be between 71% and 73%, while operating expenses are projected to be between $165.0 million and $170.0 million [17]

Core Insights - RxSight, Inc. will report its financial results for Q4 2024 on February 25, 2025, after market close [1] - A conference call to discuss the results will take place at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time [1] Company Overview - RxSight, Inc. specializes in ophthalmic medical devices aimed at providing customized vision for patients post-cataract surgery [3] - The company offers the RxSight® Light Adjustable Lens system, which is the first and only intraocular lens technology that can be adjusted after surgery [3] - This technology allows doctors to tailor and enhance the quality of vision for patients following cataract procedures [3]

Core Insights - RxSight, Inc. reported record highs in Light Delivery Device (LDD) sales and Light Adjustable Lens (LAL) procedures during Q4 2024, significantly exceeding initial revenue guidance for the year [3][4] - The company serves approximately 15% of cataract surgeons in North America, with LAL procedures representing over 10% of the premium intraocular lens (IOL) market in the region [3] - RxSight plans to expand into international markets in Asia and Europe while continuing to innovate its RxSight system [3] Preliminary Financial Results - Preliminary unaudited revenue for Q4 2024 is expected to be around $40.2 million, reflecting a 41% increase year-over-year, driven by the sale of 29,069 LALs, a 61% increase in procedure volume compared to Q4 2023, and 83 LDDs sold, bringing the total installed base to 971 [7] - For the full year 2024, preliminary revenue is projected at approximately $139.9 million, a 57% increase from the previous year, supported by the sale of 98,055 LALs, a 79% increase in procedure volume, and 305 LDDs sold [7] 2025 Guidance - The company anticipates full-year 2025 revenue between $185.0 million and $197.0 million, indicating growth of approximately 32% to 41% over 2024 [4] - Expected gross profit margin for 2025 is projected to be in the range of 71% to 73% [4] - Operating expenses for 2025 are estimated to be between $165.0 million and $170.0 million, which includes non-cash stock-based compensation expenses of $22.0 million to $25.0 million [4]