RxSight (RXST) 8 Mar 222021 Q4 Earnings call transcript

Thank you for standing by, and welcome to RxSight Fourth Quarter 2021 Earnings Conference. [Operator Instructions] Now it's my pleasure to turn the conference over to Philip Taylor. The floor is yours.

Thank you, operator. Presenting today are RxSight's Chief President and Chief Executive Officer, Ron Kurtz; and Chief Financial Officer, Shelley Thunen.

financial XX, the XXXX. released full months RxSight December year today, results X for and Earlier A available website. on of the copy the company's press release is

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

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

non-GAAP website found We be and financial call available our the Events most replay can will page. measures this also discuss note release. comparable Calendar GAAP that the on our with for financial measures. including of Please be reconciliations measures, Relations on News conference regarding the the at press non-GAAP in rxsight.com Investor will these Disclosures Investor audio certain page on section

the turn to CEO, over I'll call that, With Ron Kurtz.

us. guidance, which the details an plans I'll for everyone, then our take by specifically for we will will questions. with through discussion of QX, followed joining afternoon, our progress call you XXXX. further for and financial begin a as up for for Shelley in the more in QX, Thunen growth Good open as well after XXXX us in and thank our overview XXXX of

U.S. with expanded to LAL's very like to or key unique Adjustable to and deliver have year for rapidly ability well vision in successful drive adoption was as premium accomplishments, precisely our RxSight expand surgery momentum completed accelerated practices, XXXX team. growth the the LAL, continued revenue ActivShield customized as XXXX. introduced for These product commercial substantial and We coupled cataract for created Lens, for advancements our of RxSight. productive patients a a Light IPO, doctors

surgery. growth staff, the LAL building select as primary is This Our Delivery or the sale of of LDDs both out cataract thereby to premium postoperative of patients more driver the well treatments. training enabling to infrastructure doctors LAL as Devices and practices, new new the involves Light for

LAL to sites quarter, network added XXXX LDDs In a end installed of representing in the XXXX. clinical the fourth of offering QX of the sold the base XX the from XXX XX and LDDs increase we postoperative treatments, to substantial bringing at

combination references by were and productivity believe a LDD strong driven from We ActivShield QX of sales RxSight factors, sales our LDD positive customers in existing process. favorable using expanding force our seasonality; our including of LAL;

ask willingness on to As technology important or colleague we customer a key the recommend we endorsements is very friend to our noted peer-to-peer are in and ophthalmology RxSight question before, annual survey. have

the LDDs they that a received to number purchase then of willingness in the XX% XXXX, in so QX patients. extremely their an more moment, could from to about new we to the recommend. performed we discuss advancement accounts LAL, current conversion just ActivShield QX in ActivShield RxSight recorded after but practices believe For positive the the to high LAL all survey I'll practices offer RxSight this technology of a reception very influenced

with equipment interactions volume was low, in-person in American annual returned an of attendance the doctors, event In within conference our Ophthalmology, a booth QX. U.S. QX, in at meeting of purchasing The benefited venues. year engagement also occurrence we the Though is of ophthalmic and the and capital from experienced favorable long-standing other of likely seasonality, high international Academy a which to largest excellent ophthalmic both we cycles.

these able were take LDD tax move and with With XXXX, purchases good to visibility capital end-of-the-year in their to advantage spending of ahead many savings. practices overall of

performance The QX. last from XX mature the sales the further their in will and penetrate driver discuss LDD team professionals has with the doctors deep in we increased funnel of experienced and continued to the July is expand end highly sales QX of X we the IPO which force, LDD our as at relationships time has at of regions to market. This

sales, jump is from impact represented We continuing introduction LAL the growth on for QX implanted major the QX, X,XXX established and a from base of suggesting during driver accounts the our use an While fourth across saw utilization. implanted during LAL both X,XXX increased LDD was LALs increased that to the quarter new have of installed significant to a ActivShield QX.

patients ActivShield test provides LAL glasses. damage confidence the a lens, are not the of if patient's compliant positive optimize and UV an will extra with drive they doctors protection giving and confidence vision, creates the protective that with the level to of loop. ability additional fully layer UV their feedback surface on not Coupled they of this

an Importantly, in we data began RxSight also ongoing with to basis. practices collect collaboration real-world QX, a on clinical

data agreed patient clinical which information. useful of well and So includes to on have approximately as LDD, each captured other stored as far, refraction the XX final practices their share

under of AECOS that XXX additional analyzed In residual preliminary refractor very to-date treatments. snapshot completion light adjustment, IRB-approved was low had or than a X diopter of approximately indicating or protocol, after eyes all both sphere also to subset XX of final error months College of after less at than residual the more data began half sets these X A the of collect we to week, last European over of American Surgery, practices data an shared operating stigmatism. XX% Ophthalmic

both our included for standard reports which accuracy reported refractive Phase with considered complex par are for III patients, published of LASIK, These is and other to data are results, which procedure and and real-world IOLs the a on precision. superior premium number for any

both adjustment, patients, refractive data a validation for indicates also the to LDD eyes at to approximately make refraction vision. of target records period, goal we changed XX% vision previously the their patients collected the advantage the the a vision also ability the was the test adjustment during In binocular and each elected of half drive their their optimize of noted, taking Because observations patients than that more range in small to adjustments most of distances. have at were suggesting to customize

focus range eyes currently depth to glasses without underwent LAL depth focus of also marketed XXX IOLs. evaluation, vision an and similar extended extended of demonstrating Approximately of enhanced

residual these minimizes does not conventional the increase or IOLs, refractive reduce error relative IOL. LAL corrected or vision and or glare monofocal a unlike contrast to halo However, best

expanding the in are and Society planned this of as AAO Refractive Additional October. ASCRS Meeting or well set for American presentations of meeting as the Surgery, at in data Cataract May,

formed on that anticipate teams of of managers also will use clinical the the their help newly our and to educate We LAL. team and account their data this optimize benefits patients LAL results doctors

LDD, to cataract Because refractions collect a which data. patient's large-scale the we previously. lower to reported manufacture that our also only cost would LDD, on such I are are an have we update on provide like company stored easily can in the

our it a functionality the will device not and this driver. have as recall, may growth you performance and consider same LDD, current so As do we

margin. cost our is to However, of reduce our expected and sales introduction improve its gross

to approval in expect this this continue device We FDA year. to receive of for QX

LDD end However, been to for likely risks. ship we are in expect components we year the significant Since LDD procure industry-wide difficult we have more current least able chain at current to our during to our through supply of mitigate longer, the to them chain this be the period. supply believe

indoor at the labeling with of been ActivShield and anticipate labeling doctors change by this not on use to update also an we do spectacles LAL. functionality for our I patients, to related ActivShield UV request the provide growth this FDA's approved has approval these be and want Because additional basis being for changes for daily consider is LAL the already year. to on data, used changes a labeling not we Based also do driver. a request on

convert As results, and Superior better on practices we medicine data that drive to its collect to major more making before a will vision value allow established and business help XXXX catalyst doctors, RxSight better optimize momentum the be patients and higher already test procedures, of to thereby By growing building revenue patients a both and growth awareness driving increased to proposition. outcomes believe beyond, team including final decision. in we continue to their our real-world uniquely ability is can the clinical leveraging can superior look expanded to the sales XXXX. for access LAL LAL we

guidance. for Shelley the to on it on With XXXX and that, to like fourth turn I'd more quarter details over

XX% and an ended everyone. afternoon, was good and quarter compared the compared sequentially in fourth quarter quarter to increase a million, XX% Ron, revenue fourth you, of $X.X XXXX, XX, XXXX the of the XXXX. Thank to Total of increase September

Looking the product we of sales quarter in fourth million million sales the to compared XX LDDs sold sales. million XXXX, XX quarter of LDD at in driving in the for XXXX revenue LDDs in fourth systems of LDD in $X.X quarter line, by generating XX $X.X of third XXXX $X.X and

LALs million $X.X LDDs the XXXX, XXXX representing As LAL sales fourth mix, of expected, in of of XXXX. compared dominate fourth in of sales million of stage of in the quarter in in X,XXX the quarter X,XXX of driving LAL continue fourth our quarter our commercialization, sales for to X,XXX XXXX. LALs revenue sold of and early generating $X.X LALs third sales $X.X million XX% the the of We to quarter

million gross and gross or in of were compared profit sales revenue XXXX, profit a $X.X quarter quarter was of to $X.X XX% or revenue. profit XXXX to XX% primarily of The the due of million fourth of profit higher or quarter in a third gross sequential year-over-year of in increases volumes. Fourth $X.X and the million XX% gross revenue

the million million fourth and increase in the expenses the XX, SG&A third stock-based administrative public of the to ended December X XXXX and general XXXX marketing, $XX.X quarter compared XX, in and to to compared September sequential X operate were due ended same of and months XXXX sales the compensation. $X.X for headcount to of increase increased The an expenses company was in in primarily increased as for quarter year. months the a cost period $X.X in million prior XXXX Selling,

ended quarter compared XXXX testing ended Research materials months compared XX, The the consumable period and higher increase the fourth million and to as and X X development expense. for the development to for December research sequentially from were in $X.X for resulted and XX, XXXX. $X.X and million prior XXXX, expenses million the of expenses September months $X.X in prototype

depending can quarterly timing studies. of and development upon expenses of vary clinical research and development of stage Our products

also the provides or non-GAAP million comparative per stock-based of and diluted the $XX.X Our noncash warrants of the like expense share with in as with weighted the information. the stock press share net $X.XX average fair would change in fourth in a shares. loss was to disclosure I compensation common common million the it quarter value release and XXXX using of attributable to useful basic count highlight investors XX.X

in no the XXXX change compensation quarter, non-GAAP share million, value in fair $XX.X was resulting of was of quarter there per fourth and $X.XX. Stock-based and diluted loss the and a $X.X basic loss in in million a of warrants

sheet. cash, and Long-term million. fourth quarter to $XXX.X ended investments. of Moving million the of $XX.X the short-term with XXXX was balance debt equivalents cash We

proceeds and use, $XXX.X the $XX in was debt our During initial from XXXX, cash public million. our net proceeds excluding million offering of of $XX.X million

to Moving guidance.

for of full over year XXXX. to million, XXXX XXX% expect an and of be between We $XX $XX the million to XX% year the full revenue increase

off summer. the our and to revenue. We growth to between second as with the and expected which Gross is strongest of third IOL to margin and quarter XX% equipment, the is XX% continue doctors the generally took and quarters patients time for see in slower expect fourth capital XXXX in be seasonality LDD, during

our pressure expect chain higher higher-margin to In percentage LDD increasing revenue supply to cost by offset sales, produce XXXX, from LAL constraints. due of we as a

margin of throughout of LDD XXXX result the we a expansion Ron expect ship to manufacture as LDD. introduction gross lower plan noted, and cost to current in As our XXXX our

XX at from personnel of of of the XXXX, our as increases operating increased XXXX, LAL in expect expect to and be time is in at development we SG&A quarter between at the and $XX IPO sales the combined over July XX expenses be million operating and in XXXX expense end $XX LDD end We and majority research to XX, at of by of expect the we our million, to of while X 'XX the XXXX. December second we

In have Ron commenced are mentioned marketing. IV charged addition, sales we earlier, Phase which to clinical studies and

the SG&A of a million there and public G&A $X.X the approximately stock-based million in the is to over compensation months to cost versus than $XX company of XX in marketing, in expense for some is borne sales noncash in estimate We be months X most increase XXXX. While being rather XXXX. $XX million

Now Ron to I for back will turn closing the call remarks.

Shelley. look work exceeds another To remarks, forward cataract the in of our proud customers important expectations and patients. progress year premium our with you, XXXX conclude as momentum we're meets made new a establish XXXX, in Thank prepared higher that we to continued to or standard the progressively of

And the now open please call operator, questions. for

Fargo. Charles First Ellson Wells question with from Instructions] comes [Operator

Ron the and Shelley, first, congrats quarter. on strong

follow-up. quick First question, and -- just a

the a digging on bit in XXXX guidance. Just

in like where just growing that revenue dollar look OpEx the So Just -- guess, is curious And have should when that why going. first, it on you about why then is is -- how at the than bit I does follow-up. I amounts, But XXXX? spending we quick where you leverage faster talked beyond total -- look about think the based a a XXXX?

question. increasing year our marketing a is in this investment as marketing. it Good investments in much, sales and are part making team Charles. significant take and to we revenue, we Yes, than is significant because XX. very you This of year sales Thank faster

is In Phase and marketing addition, a SG&A. bearing IV sales in cost and driver of major our that's studies also the

total. is think we component SG&A, it the as of the marketing XX% Overall, sales about and of about

And so SG&A. the on heavy very

we grow in million to of as $XX $XX we revenue. investment of in continue XXXX, million year guidance a it's gave So to

we want able and that ourselves So set leverage be to as for XXXX to well. up

And just right. then All question a cadence. quick on

a a like and term, typical heavier. start the close is that spot QX other that down Is just a to that looks and of 'XX of about QX, down kind of year. QX was different? little -- mentioned amount? are prior start think Or to last So from near or similar it that QX -- a puts any last QX? make what about little that might year, step bit bit QX also XX% guess a like looking you a there be seasonality So the fair the takes the I at might in

Yes.

are the think following. takes and I puts the

right? you important 'XX quarter is can First LAL of all, we into think going have So way the as that I exit a and higher generate because that installed base us, first sales. 'XX, more that's for we --

and The Looks we'll from year. second COVID thing is, first in we this saw very see. little the of impact it's ended, the end like of XXXX quarter

quarter And down. see would so that that to I we think not expect and of level this step is different,

Your from Marcus next with comes JPMorgan. question Robbie

us how shifting give on versus then Maybe And mix if about throughout the Is LDD you should a XXXX? thoughts I think all? placements at follow-up. have LAL we

little bit. mix The a is shifting

should revenue. significantly year. And relatively little all It remain For the a then you the capital deeper down coming into bit, come entire new equipment go the about sales ASP see the customer base. the LDD year down XX% to of of And represent tends it as we does, during XXXX, LDD don't stable.

growth, it XXX% about I But will If at think XX% it's pretty in our to more. shift guidance. heavy the

but that for not did last as growth, obviously, shift LDD expect during both and LAL, higher not the see much revenue by still and exceed I LAL in You'll as will year. the we'll revenue some see LDD it much, but in year. LAL

come think time materially And that in was starting LDD the over Shelley, price XXXX. originally, I the expectation could down

down? why Just How pricing? it's we future about happened not think there, to remind what should coming us

remained look and it of at the XXXX, well. of as the second, in third being 'XX stable good quarter Yes. fourth this first is we that No, in that news and relatively stable quarters it I think

haven't the to We down had bring price.

we which I our practices the our customers, allowed profitable, think pickup have than makes that existing to more in some originally strong volume, references ActivShield, better from much of thought. the maintain us more terms price -- obviously

margin somewhat just for FX, puts et inflation, walk the is last we hoping than were in for How then And much XXXX. gross Great. Shelley, there? guidance the takes cetera? me, and Maybe us through lower was different

Yes.

I think X things.

our Of by one FDA LDD we this expect continue year. is of to end course, to lower-cost for the second approval receive the that

Ron in risky environment supply for are supply us as chain mentioned, chain rather is to that an However, it as difficult and we the source product more are on in increasingly chips newer while less already that, than yet available. might have components not order,

our in quarter, from brings quarter approach sheet metal. I -- some while primarily anticipating risky first less the that and and took second and down and but And viewpoint, I fourth in am the cost our we So revenue components increase, know costs third margin. the chips, a

so you the has the higher years a the LAL part fact as that much certainly and LDDs. by volume course, it's but not XX% is in we And to And at XX%, that that this offset of margin than XX% recall, volume, in to level, future our somewhere be year. faster growing LAL expect in

consistent. remains The LAL price

Our our for cost sell And a $X,XXX we add as as to level-loaded LAL very remains our customers. build stable new and the our then -- build to -- ASCs we of ASPs both remains new throughout sales the stable. requirements overall, year fulfill are as stocking well it we plan very that as

would Ron, that? add you to So anything

No, I think you it hit all.

from comes BTIG. Zimmerman Ryan Your next question with

a think of expecting. Congrats you count on about what the view guidance on a It's learned those around love the of little that your we on expectations just and And talk better get sales you ahead in line I that's your to bit XXXX. end sight And maybe line of you could how Ron of 'XX come XXXX, then as Shelley, Street was for a of sales the the some to I look top than kind LDD year. can have to confidence LDD follow-up. strong kind I'd that that relative and gives together your moment. you for

you, Ryan. Thank

people's So volumes backdrop in. as the think is surgery for of as cataract I have demands practices the as think on in one population also about doctors increase IOLs visual cataract are continues course, we're increase. know, drives and market you the more of reimbursements the thing operating And dropped. ages also the market focused to conventional that and to market. And that premium That

premium. of for lot focus the market a there's So in

our And outstanding. in that's revenue. happy we've information, our that practices. passed it considering certainly patients, greater results, also And but that's clinical that peer-to-peer drives sales with helped our drives results practices team. expansion of the along build our course, to RxSight, and are something that And is And our funnel seen of adopting

just with add want establishment it's accounts. you growing new new Shelley, something? confidence do So of added placement the of to to our LDDs and

would first we quarter growth exited thing quarter I the goals had LALs, to because also is is well. Yes. continue helps LAL that XXXX COVID the to and as momentum like of has talk the us one in We into And as impact increase been our about continued one first think has went as into we that well. the of fourth quarter XXXX nominal. the that

we're that. on And focused so very

from in hopefully, new well. in of LAL we'll generation some we they're still of as our the the those in think, in X months their XX think of course, XXXX, I added people I half year productivity second But training. see sales so force,

you think Or the on now come there. base any And 'XX? beyond LDD as LDD could point? group of color I you we volume was about Are first on that the moved focus all the think pricing the adoption just you any kind XXX have down about we the seeing thought that side, premium beyond up for in to then think higher about when in capacity? that is something company, potentially when Thanks the should practices. this at initially installed

Thanks, Ryan.

premium So there -- on of are we've -- lower-volume always percentage although some practices, a range think premium. had obviously, practices also we it's a -- are practices. I focused, high would to do higher-volume of There I

volume, And with certainly consider And expanding lower sometimes cataract early more their so the volumes premium high-volume are a to in of are our practices the, premium. of premium early they Adjustable way looking innovators with majority. practices Light which group what that build group. there that beyond we've to But higher that common a of they're I into volume And number the would we're higher without that having range Lens in adopters had is practices. offer a penetration can as surgery LASIK, conventional and

Leerink. SBV Next question is from Danielle Antalffy with

will This these is typical color if was I could some just curve guys guess, for to year. up the take placements you it about new just ramped Erin customers. placed? contribute for speed, to Does get an adoption in maybe of these How revenue of trying some to LDD XX kind on think after I provide the these to Danielle. long of maybe practices hoping how on throughout new the is quarter

said I a I Clearly, point. And focused managers to that as highest it's there's certainly Yes. think Again, excited focus. our that especially that, really level are LAL on in is as the are practices and more at quickly earlier, lot possible. with this at It new adopt, dependent as have is primary account more their practice-to-practice variability. our we of interest

They'll then few their see range. want to practices feet with a are expand. more start we and there a And patients But conservative. wet can can month, out get some be a

will have be get will that they've practices more the gotten gate. that some and more of similar -- aggressive will -- the from And we'll on technology base go already the out information it practices

were it's say, we're So pace they generally, they a than quicker slightly than I but adopted previously. still range, a practices would otherwise seeing

may be of due some And to also ActivShield. that

patients where a Okay, be you from? otherwise other primarily wondering some Or can up gotten touch on are that may -- not IOLs? also people Is I IOL? great. choosing And premium you guys over you're that are of premium it just then LALs share are if gaining would you picking maybe was who some have

gotten were coming we implants from. from looked at X/X gotten about were patients or time, X/X looked and like And presbyopia monofocal X/X would it IOL, a did who a coming have otherwise toric survey where otherwise patients gotten IOL, about would would last have that about We a where IOL. at who LALs' patients from stigmatism-correcting who Yes. a correcting have year from

a that that We see that would anything a get repeated different. of multifocal haven't IOL. suggest the candidates to a quality get opportunity that data who good great This yet, but contrast it's would that. survey otherwise does great or in for not with use them be We been get the reduced offers we don't and vision reduce might sensitive lot to not I spectacle vision of anecdotal patients vision that for have eyes more

For correct patients also might we IOL we stigmatism and toric getting stigmatism-correcting broader about twice about and toric as the might have -- a correct who a sphere otherwise range rate or at IOL, of offer vision. just a be thought the getting standard

So that's advantage. competitive a

to sure under then be And who want to vision able obviously, want conditions, really they're night. compromise be of for excellent versus quality it's vision, to to on who that all don't multifocal maintain at IOLs, patients going including

previously it's so it's we've think -- stated. still that And in percentages the roughly I

any sir. in showing queue, the questions not further I'm

everyone. Great. Well, for the day. you of I the thank you best wish your very rest much,

conclude program participation, for ladies you our today. And may and that, and you Thank with disconnect. now for gentlemen, we your