RxSight(RXST) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the reporting period Item 1. Financial Statements (Unaudited) Unaudited financial statements for H1 2025 show decreased assets, increased net loss to $20.0 million, and stable operating cash usage Condensed Consolidated Balance Sheets Total assets decreased to $309.0 million by June 30, 2025, primarily due to reduced short-term investments, while liabilities and equity also declined Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $40,355 | $16,706 | | Short-term investments | $187,136 | $220,517 | | Total current assets | $283,874 | $293,823 | | Total assets | $309,009 | $318,563 | | Liabilities & Equity | | | | Total current liabilities | $20,383 | $25,876 | | Total liabilities | $30,997 | $37,325 | | Accumulated deficit | $(642,071) | $(622,095) | | Total stockholders' equity | $278,012 | $281,238 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q2 2025 sales declined 3.6% with increased operating loss, while H1 2025 sales grew 11.1% but net loss widened to $20.0 million Quarterly Financial Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $33,637 | $34,887 | (3.6)% | | Gross Profit | $25,190 | $24,250 | 3.9% | | Loss from Operations | $(14,003) | $(8,333) | 68.0% | | Net Loss | $(11,786) | $(6,079) | 93.9% | | Net Loss Per Share | $(0.29) | $(0.16) | 81.3% | Six-Month Financial Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $71,531 | $64,399 | 11.1% | | Gross Profit | $53,518 | $44,935 | 19.1% | | Loss from Operations | $(24,677) | $(19,003) | 29.9% | | Net Loss | $(19,976) | $(15,179) | 31.6% | | Net Loss Per Share | $(0.49) | $(0.40) | 22.5% | Condensed Consolidated Statements of Cash Flows H1 2025 saw stable operating cash usage at $13.2 million, a shift to $35.5 million cash provided by investing, and reduced financing cash flow Six-Month Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,208) | $(13,336) | | Net cash provided by (used in) investing activities | $35,507 | $(91,371) | | Net cash provided by financing activities | $1,330 | $119,465 | | Net increase in cash, cash equivalents and restricted cash | $23,649 | $14,754 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the single operating segment, recurring losses, sufficient liquidity for 12 months, product revenue shifts, and a new securities class action lawsuit - The company operates in a single reportable segment: the research, development, manufacture, and sale of light adjustable lenses and related capital equipment[30] - The company has experienced recurring net losses and negative cash flows from operations since inception and expects to continue incurring net operating losses for the foreseeable future[31] - Management believes existing cash resources are sufficient to fund operations for at least the next 12 months[32] Revenue by Product (in thousands) | Product | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | LDD (including training) | $14,524 | $18,902 | | LAL | $54,192 | $43,745 | | Service and accessories | $2,815 | $1,752 | | Total sales | $71,531 | $64,399 | - A putative securities class action complaint was filed on July 22, 2025, alleging materially false and misleading statements regarding product demand and financial guidance[91] - The company denies the allegations and intends to defend the case vigorously[92] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 revenue decline due to LDD sales, H1 2025 widened operating losses, and strategic realignment, while affirming sufficient liquidity for 12 months Key Business Metrics Q2 2025 saw a significant decrease in LDD unit sales to 40, while LAL unit sales increased to 27,380, driven by the growing installed base Quarterly Unit Sales Performance | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | LDDs Sold | 40 | 78 | -38 units | | LALs Sold | 27,380 | 24,214 | +3,166 units | - The decrease in LDD sales is attributed to slower adoption of the RxSight technology by practices and doctors, while the increase in LAL sales is due to the growing LDD installed base[105] Results of Operations Q2 2025 sales decreased 3.6% due to LDD decline, while gross margin improved; H1 2025 sales grew 11.1% but operating loss widened to $24.7 million - Q2 2025 sales decreased by $1.3 million year-over-year, primarily due to a 49% reduction in LDD unit sales, attributed to slower LAL growth, economic uncertainty, and sales organization realignment[123] - Q2 2025 gross margin increased to 74.9% from 69.5% in Q2 2024, driven by improved operating leverage and a higher percentage of revenue from LAL sales[124] - Q2 2025 SG&A expenses increased by $4.7 million (19.3%) year-over-year, mainly due to a $4.3 million increase in selling and marketing costs from higher headcount, stock-based compensation, and post-market studies[125] - Q2 2025 R&D expenses increased by $1.9 million (23.2%) year-over-year, driven by higher overhead, stock-based compensation, and personnel costs[126] Liquidity and Capital Resources As of June 30, 2025, the company held $227.5 million in cash and investments, with management affirming sufficient liquidity for 12 months despite ongoing operating losses - The company had cash, cash equivalents, and short-term investments of $227.5 million as of June 30, 2025[136] - The company has a history of significant operating losses, with a loss from operations of $24.7 million for the six months ended June 30, 2025, and an accumulated deficit of $642.1 million[136] - Management believes current cash resources are sufficient to fund operations for at least the next 12 months and does not anticipate needing to raise additional capital to reach profitability[138] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risk is interest rate fluctuation on short-term investments, deemed immaterial due to their nature, with foreign currency risk considered de minimis - The company's primary market risk is interest rate fluctuation, but it is not considered material due to the short-term nature of its cash equivalents and investments[156] - Foreign currency exchange risk is considered de minimis as of June 30, 2025[157] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[158] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[159] PART II. OTHER INFORMATION Part II details legal proceedings, comprehensive risk factors, equity security information, other disclosures, and a list of exhibits Item 1. Legal Proceedings A securities class action lawsuit was filed on July 22, 2025, alleging false and misleading statements regarding product demand and financial guidance - A securities class action complaint was filed on July 22, 2025, alleging false and misleading statements about product demand and financial guidance[163] - The company denies the allegations and intends to defend the case vigorously, but notes that an unfavorable resolution could have a material adverse effect on its business and financial condition[164] Item 1A. Risk Factors Key risks include limited operating history, recurring losses, intense competition, regulatory compliance, supply chain dependencies, and ongoing litigation - Business Risks: The company has a limited operating history, a history of net losses ($642.1 million accumulated deficit), and its success depends largely on the market adoption of its RxSight system[169][175][189] - Competition: The company faces significant competition from large, well-capitalized companies such as Alcon, Johnson & Johnson, and Bausch + Lomb, which have greater resources for development and marketing[202] - Regulatory Risks: Failure to obtain and maintain necessary regulatory clearances (e.g., FDA, EU MDR) for products and indications could harm commercial operations[333][370] - The company must also comply with the FDA's Quality System Regulation (QSR), with a transition to the new Quality Management System Regulation (QMSR) required by February 2026[392] - Supply Chain Risks: The company depends on third-party, including single and sole source suppliers, for components and raw materials, making it vulnerable to supply disruptions and price fluctuations[428] - Litigation Risks: A putative securities class action lawsuit was filed in July 2025, which could result in substantial costs and divert management's attention[170][478] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or issuer purchases during the reporting period - There were no unregistered sales of equity securities or issuer purchases of equity securities during the reporting period[484] Item 5. Other Information Director Robert Warner terminated his Rule 10b5-1 trading arrangement on June 6, 2025 - A Rule 10b5-1 trading plan for director Robert Warner, dated August 30, 2024, was terminated on June 6, 2025[485] Item 6. Exhibits The report includes standard exhibits, such as CEO and CFO certifications and Inline XBRL data files - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files[488]