ViewRay (VRAYQ) 8 May 222022 Q1 Earnings call transcript

Thank you for standing by. And welcome to the Q1 2022 ViewRay Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session.

As a reminder, today’s conference call is being recorded. to conference like host, to now Mr. would turn over the your I of Relations. Harrison, Investor Matt Director Sir, begin. you may

Thank you, Valerie. ViewRay’s first Good afternoon, everyone. conference And call. quarter welcome to

will Officer; our Joining Earlier Officer. call. issued and and Scott The today release ViewRay Stassen, Drake, press our broadcast for me presentation website. Today’s Chief Chief are today, our for or downloaded and live. can webcast from Executive be on presentation and a viewed live on Financial be Zach our A days. XX replay is website webcast being President available our today’s call

Before discussed call we over would will in recent filings the remind to SEC. could to conference statements. the forward-looking results you that company’s will call Factors most that begin, the I the now turn include cause to with this are discussion I materially during Scott. actual like differ

Thanks, context journey. Matt. will working Welcome quarterly I everyone. strategy our our performance as our our Today, call. is intended. on to QX Good a nutshell, afternoon, and exciting provide highlight In growth

added quarter which QX on million backlog believe seasonally increased million, the revenue $XXX cash our $XX clinical and fueling are is to cash on go industry-leading $XXX your strategy cash quarter flow to the and breakeven. breakeven. for growth demonstrate reminder, our we grew cash forward of answering innovation progress. I financial hand, finished depth pipelines on we into quarter. feeding versus We key questions. Zach highest as more to how seven and gets put used year our our a our then P&L and on us the look use drive up we path Cash with and leverage will orders revenue lens to million, In and will to Our will a XX% flow commercial XX%. QX, prior metrics was

as lot a us the to year. an into anticipated. results exciting then for first balance well like we of These ramp half expect set unfolding look As year of the the previously us back are and up XXXX position stated, the XXXX the half and XXXX. of Things for

a take we going. and are have we where at accomplished Let’s what look

four. to Turning slide

years, the number of number Over of three than and treated. the quadrupled we more last systems doubled patients MRIdian the

considerable During pipelines. that we our same commercial period, on innovation made clinical, and progress

systems, years why five rapid progress Slide this expect clear being those our trajectory backlog, MRIdian quadrupling installed, deliver quick continue and and doubling we confident We two a XXX of active sight line to our to we With to plus future years. in demonstrates active and over the about process programs. in current plus have growth. similar are and three next pretty of

industry. slide many commercial the and is and are fuel commercial accelerating On expect seen is unlike in that forthcoming We gaining in by the six, be leaders, will business have customers times number this our is clinical anything considerable three our the and our innovation generated According key data clinical pipeline. we opinion and pipeline. that to which momentum. have that our shared ever activity our augmented pipelines feed All

critical We pancreas. as cancers are such common in like local are in benefits. more and proving prostate, the demonstrating survival In control delivering customers of toughest-to-treat-cancers quality life

driving our are adoption research. and will patients Concurrently, their side and More therapy organically, ones virtually and using This enhancements front, top are and therapy is data loved The as write our and innovation decisions. purchasing compelling courses to benefits we the seven, the patients more slide and customer’s short about and ViewRay capabilities On they therapy proof delivers free story. actively drive driving available, product actively innovations awareness. happening will of movement the MRIdian are clinical learning patients are Once that ultimately aware awareness. the it. do On effective desire. demand they is we AXi clinical effect are of

am XX% educating impact. on of survival outlook can survival all cancer provided these PanCAN, patient say that and and informed was their be changing having We pancreatic each pancreatic the with team. life As with an country from across or lack and a only data to PanCAN. MRIdian. patients Dr. customers we group outstanding example, leveraged inoperable U.S. that to patient Unsatisfied pancreatic sought be their will efforts options, already advocacy MRIdian. engaged that have spent two-year prognosis that of treatment across dim. Chung’s receive These patients I are from their demonstrated pleased time guidance their patient services traveling were various Multiple was to cancer an the by

to paradigm success the we SCIMITAR advocacy as have our utilize MIRAGE trials, with patient for Following cancer and will to begun clinically the and MRIdian playbook prostate differentiate of continue with we and change groups across new types, engage we care. cancer this

two therapy successful MRIdian the skyrocketing. On attracts which patients. often are our MRIdian about stimulates in program commercial They on demand. this is, quote-unquote, for on force creates slide We is pipeline. impact business impact most a our clinical ago. catalytic the question shared competition, of of that traveling weeks eight, Patients webinar the a competitively answered demand that data UCLA our asked for MRIdian

focused strategy more and efforts pipelines adoption. These The squarely more systems, dynamics markets. programs patient driving increasing more clinical, MRIdian incremental competitive on customers and and our target are accelerating include efforts commercial are yielding in therapy of awareness. Our market elements innovation buying foundational concentrating and our

Four Florida Take sites two across Turning Patients lines. these to have to example. traveling city, country an programs and state to nine. are more. slide successful led as MRIdian

this increasing We number markets. Seaboard, the examples are Northeast budding dynamic of of out an Italy all competitive in Florida, the are U.K. play California, markets. seeing and France, accelerating

driving competition is growth. and patient from To The system market revenue. more MRIdian systematically XX, a for with augmented that to seven-order are awareness, and significant granular economic and value it the cycle, future value, $XX take about value this represents chain, this leading sale Seven momentum. is make million other slide system by are We combined driving on we Think gaining powerful combination in and strategic quarter. a orders from order million $XX half another the million in future approximately revenue recurring recurring of half the in of each revenue. impact $XX and worth clinical revenue,

of have QX, revenue. of revenue. $XXX In four $XX we such, growth future we over about provided growth light excellent drives revenue million this in line prior business guidance million that in in of be we year. five quarters. with a the P&L $XX generated future the is in this in striking As generated did in million anticipated to about to what This We each kind quarters, $XXX likewise approach, million powerful of This leverage. past and

take we Let’s year are on look XX% XX. about a at up This full to the grow the XXXX on set year slide topline.

us XXXX. and strong commercial pipeline position very backlog Our in topline growth put a in for rapid

margin to expansion operating are down basis will drive in to to the significant see Moving up are an standpoint, points likewise, up XXXX. X,XXX XXX we set you for points gross set we in basis line, From improvement XXXX, expense and restraint. of

OpEx. XXXX, in with of nominal revenue rate growing times We expect OpEx a at the many increase

importantly, growth, detail. we the where through Markets have Day leverage, will to more sheet a gross results flow and We in expansion, very that cash over to provide get are the will our illustrate operating year, now later more our for Zach margin granularity balance to breakeven. this walk preparing turn we Capital revenue I need we call on to

million, by our and grew three versus found units cover financial revenue will I first reflecting revenue morning. continued results quarter in primarily touch can XX% Revenue Today, to the filing today’s by and XX-Q maturation of Scott. will be XX%, be $XX.X in release press million, and on installed revenue we period in the our our units Thanks, quarter driven last details Full business our the tomorrow roughly grew growth year. two primarily $XX same base. Service driven priorities.

order orders we million. quarter, the of approximately totaling received a $XX gross value During seven

customers continues traction. innovations year. Our to a increase and commercial Backlog as and product over million, at period market broader ended sets gain XX% same data last pipeline clinical the $XXX resonate our with build

quarter various be margins the solidly commercial anticipate current this in gives and sight XX XXXX was strength confidence we enhanced for our backlog the to our As MRIdians. plus and us base X%, approximately pipeline. installation Gross move work of factors positive. further Scott robust the by an We The more growth systems of size of line to give as of mentioned, XXX growth our to us combination gross current continue of in during stages and about installed profit beyond. XX revenue these will XXXX, strong of base

over and both improvement system performance delivering Our strides service our combination to front each us Furthermore, gives fruits to make drive the by for year the few growth, production continue the efforts, next of the of as expect cost margin in the several margin margin installations years. complemented next of leverage reduction year, more meaningful ramp. gross from in meaningful course in improvement confidence margin on we QX increased the A should years. significant gross revenue

in underway. the well the $XX the remainder moderate were to we to growth margins million in of OpEx standard path industry quarter expenses the Operating and year. Our is throughout expect

are driving focused on growth and margins. current investments enhancing Our

reducing as and Our at investments as improving in system. workflow innovation are the of use, squarely cost the targeted ease manufacturing of well

our structured have to and therapy pipeline. expand to We team program that orders additional adoption we our leads each front, drive commercial the MRIdian firmly successful On and believe programs.

use. during Turning million We $XX approximately to the used cash quarter.

quarter, our quarters. cash historical moderate tends of in burn to you to aware, to we seasonal higher many QX years, with are subsequent trends. consistent burn be As cash Similar a expect prior

projects cash ultimately effects We than lingering impacted payment. pandemic expected that this delayed by had several quarter higher impacted was Our receivables. by slightly of the burn

construction most are payments. seeing We have these and of since delays normalize now the collected

the progress as access encouraged sites to improved and be to continue with commentary year, by the through Consistent year. our for the the at installation of improve sales expect access We both continue activity. customer we beginning to we to

areas Asia lockdown, exposure do back have gone of into being parts disrupted. have we any While not to currently

business indicated the risk. in nature of our have payment us exposes to we timing the As intra-quarter past,

reach strong However, cash with guidance. sufficient believe $XXX quarter in million cash to in our the stated and achieving balance cash previously we approximately is confident remain liquidity this full breakeven. finished flow We a position year on sheet in the

discuss and that slide in confidence XX. commercial success. factors how highlight accrue to growth give I future flow clinical take a and to to a innovation and cash want our our often to breakeven. We efforts Turning few us moment path

currently have the growth. this to expect larger place Firstly, year. and our support leveraging infrastructure in start topline business scale accelerating a revenue We to

our gives industry our of leading in As strength previously the growth. and pipeline mentioned, the achieving commercial line confidence of backlog revenue sight from us

or sold our fixed accelerating goods Given revenue margins. of will portion costs, a meaningful factor major a enhancing growth in of cost play

expect starting We see and and year beyond. to improvements this into XXXX progressing

Secondly, cost product down measures. specific

that product pursue We a continue to a already front the on our to manufacturing identify enhancing and the these the of opportunities. of and opportunities implemented user lower of cost We continue will ultimately systems, additional experience. few both list projects while select process

capital management, extremely investments. with allocation incremental remain expense responsible we capital operating cautious and Finally, and working any

with focused along growth return the with We margins. are on enhancing items and the and greatest fastest driving

On promises past our current nature the us to we The XXXX to innovation, achieving pay previous over our fueling are efforts are ViewRay visibility in of starting initiatives growth. despite so. future. confidence the of commercial goals, two these and inflationary be off. out the The our working efforts and capital year significantly efficiently give combination front, give an more for inventory the us environment. combination and The our of focused into good clinical future leaned exciting in investments on margin data even years, This year our

now delivering We that, are path firmly With on to up to the feel Q&A. and we will the doing that call open for focused on so. are shareholders I

Our comes Sandler. from Instructions] question [Operator Bednar first with Piper Jason

Your open. line is

I on on dynamic hospital another feels Good Hey, could. now. here. of CapEx pretty environment, quarter guys. nice if Like afternoon. the start right It Congrats new to orders

that. are rates moving higher, we see Your all

of love to out are pointed But equipment. tenor order capital have status funnel more seeing players being equipment? so recent big at with would softening of ticket a are equipment like and things hospitals all to capital demand you for whether conversations cautious seem it maybe other to spending continues ViewRay. Some in But I’d the on capital quo just hear there bit the build, book for your

Hey, time. when bit also the the question environment Jason. of I at say the overall and little a compliment. the Thanks would you is context for of for thanks it look improving with

years, recent, three in, we two is Over things the environment battled course years chain have issues, more the is a say, lockdown, little the we I inflation bit and overall, last pandemic, would battled a of have us all to multiyear improving. for supply

do with mixed to to installations, kind there. has procedures, mitigate meet better. of gotten recognize, other ability customers, Our to there’s companies customers, that to do ability prospective live bag bit to customers’ to out access And a from elective current of a our all any been and disruption commentary of point, your of little I

Some the saying is environment strong.

a little it’s saying Some weaker. bit

As kind either And what generally it kind even stem to market tend replacement tend of relates our gets are fit of accelerate us, capital, strategic we strategic want to our if that very into for gains losses, customers. fit position, And see capital specifically, tend any like to before in their strategic competitive that I strategic help good to spend said, to into And or customers they capital. capital for share improve that. we profit share position to pushed with we bucket. is you to to them budgets a

So things we months, XX months, feel are as XX than comfortable specifically, months. from macro past it have say to would been things the a with relates over they where six capital, better are. I And perspective,

you over will in this That’s you whether Scott. also next process on backlog install to All prep, we quarter the site year. and your out go think for As maybe not sight just XX installed and your two, this construction Can forward map at right. layer advance be. how of have a the Thanks, how then side play are qualitatively all I level commercial timelines you with, in as timelines thinking that its talk might of record next over Maybe can But that year might deeper are have to really it those months firming schedules seeing but toward visibility the process, at your where that helpful. months? beyond to ahead installation? then and am here. the look out one XX or whatever about confidence talk on you be backlog projects going line or you hospitals here

follow very touch That it up, don’t I I say, and question. your on Yeah. begin commercial will funnel. Jason, is I means, if building the But completely here would by all very, nicely. let’s answer with

diversity funnel continues had have the have increase. never continues customers we that think and to build number, that of clarity just commercial We now the to the quality, within I that on our and our also front

line As up it clear XXXX relates of to have firming XXXX, sight here installations, is we in nicely. and very very

with to customers conversations point and customers, to a our little the back with want faster. in get of are We systems getting are we bit where ground forth these the having that

of to It’s for and XXXX. XXXX of install competition very capacity to strong So end a there’s things a bit in is for into very little I position to systems, nice see. our which said, like the really us putting up, line on

installation very as feel are where we the well. we good on front about So

And I a on not maybe you for is you all? to that said, is right. installability past. But point, the as you follow-up above is you have Scott, at teams that confirm Perfect. or slots competitiveness then, mean, execute, whether there? a you I have way frame against to guidance on the think have that not, a install the given your be can I just there or out think you that it that, in that just the just this bottleneck if addressed installs, bottleneck All

No.

You Jason. right, are exactly

capacity be to the have in in do XXXX, in capacity later visibility with forward and shape may in We -- We the for same in as expand installations, to have to ability we have. will got that are it good in we relates XXXX. position. we our year and XXXX very, very the But

kind another have a buying of that to ground it and dynamic We in as for for the helpful a But to that’s us time very get really one position beneficial horse terms customers plenty are capacity. to slot build in trading as quickly our company. possible of systems of help as we is as

here. It’s to guys. back All be Yeah. in will right. I Thanks, got in. hop

Jason. Thanks,

Frank question from next Our Pinal comes Jefferies. with

open. Your line is

strong Congrats there. really quarter guys. on Hey, a

XX% Just mean, interestingly. quick the assumptions just have I some XX%, which just years sort math, a on sort that? doing relates in XXX you you delta. few to about in an the call, building a on some picking there years understandable of before even, few there, follow-up thinking executing But point It there of guess, out, to sort was up as so I consensus that there. to same I the I you is years And of are the versus installs. any around math are revenues in how internally out, wondering of the and of outer terms on upside a be sort that then see I am it what of a could risks of

Frank. do Absolutely. and elite very to in you, of tech for think Yeah. the strong We we position are Thank foreseeable med question. growth the level Appreciate industry even kind future. leading have a

We profile have in a strong very XXXX. here growth

P&L in on as position not and growth though a revenue XXXX on Day I on have beyond strong in and that gross to we to are XXXX we of And there. to in comments in said are a treat therapy of we am as tell anticipate line good creation that of going and side and desire. good this our value shareholder guidance off relates XXXX, to hold three we new commentary that the will over Markets things. of the in it any to forward make guidance. drives to sight ultimately, the patients in in leverage, this provided really a year. drive the cash gets Capital I very really the attractively very, would both to our have as that and two we with real I deserve we are kind any the margin doubling in remarks, operating expansion, that out position XXXX well next so business years good the cash quadrupling you utilization and we patients years, for for and very optimistic years, we flow think We breakeven of and we and position us just feel But they prepared are QX like in

Thanks. And Thanks, wondering to question, helpful. it’s a going MRIdian Scott. a more the one are am this launch of very a if simpler not That’s of I at seems around -- you that next am part about half how you catalyst. a thinking here, few say, like second standpoint. I yet to have sort years. just timing launch, point, big timing really AXi, over there? from it for a it the on committed story you, or, the XH be Have sure

today, Yeah. Team celebrated that Frank.

question timely. is Your very

AXi We the are this of week. end here beginning first installation at of the

AXi out XXXX, our all seven here capabilities but rapidly. we in in We give that excited we Mayo beta will we Cinco what the will the launch to keep take, We that comfortable then you nailed globe back how about really on AXi with and delivering it system. apprised a it are de have enhancements into we Once customers celebration. into going. the are seek are going very completely roll project celebrated more that XXXX put and today improvements half capabilities, those, the is customers it, that’s the are we across once or have we new and four of we are comfortable it to terms new we exactly in And of

question. the for thanks So

Thanks, it. That’s guys. great. Congratulations. Appreciate

Thank you.

you. Thank

Walsh comes Our with B. Securities. from next question Riley Justin

open. is line Your

there the installed if in can for your U.S. if markets market wondering are Thanks key in you different there. challenges the the optimize particular outreach I world. efforts clarify you little talk face Hi. versus we markets how know to question. working are prospects in could around MRIdian and you a about that the other potential and geographies? Maybe growth taking was I bit different

Justin. to, primarily. U.S., would and starting at the highest our level, say, the Happy Yeah. markets include I Japan today Europe target

Japan. had to lack as see Europe. liked be there is a And us have well recently for here will anticipate too not pandemic in nice academic Australia in China, future. in We I are we going in and more we that We us. to you got work very That focusing XXXX are get move country Japan of market to two-plus and a on the that leading well. The the really distant very way the I to are anticipate And we I and activity over Frankly, think order we U.S., XXXX needle have of and here important doing we important out in hope center that Canada in in us going our ability in the a past would really years. from the hurt market. do

hopefully, a context. bit little So, gives of you that

see out obviously I can globe. having important we Middle decent Japan. you We grow the think then other us expand and us there. win in East Europe in success the from are to and important it’s think critically United will That’s But critically around a States, for of the areas we in amount to and

for quarter. Thanks the Congrats on taking my question. Great.

Thank you, Justin.

Thibault from Marie BTIG. with comes question next Our

Your line is open.

Hey. Thanks questions. Good taking Marie. for for on Sam afternoon. This the is Eiber

Hi, Sam.

Hi, Sam.

the mentioned so about driving some more and SCIMITAR with I that? ask to mean those conversations from customer institutions? wondering data MIRAGE. funnel, was the readouts Is the nonacademic that wanted are diversifying I type maybe you if just driving data of I

what able deliver prostate the but toughest-to-treat to for data much patients. and conversation because to striking clinical centers such Yeah. We the the weeks therapy both them UCLA in the hear today of couple we demand that MRIdian quote-unquote, changed have, conversation really very happy the that pancreas, data as kind about with we the said our was of impact for And customers on are webinar of cancers skyrocketing. ago. their Absolutely, in common of like hear on is, say just cancers also to It were a has Sam. what more

you as what If you find as differentiate space. a that It conversations obviously outcomes, highly conversation talked available, contrast more many ago, was on competition we was will about that one would declared, little story. therapy. with you patient couple markets, a of like and the pond, will is that effective in we XX,XXX this of in to demand opposed Once efforts, years the And to virtually treated, unfolding clinical historically patients side short much because technology for them we as ViewRay. ago taking now would awareness and have occasions, years half and courses you within write augmenting aware, patients patient lead patient are what’s aware now, that that plus with of three data you ViewRay are a hold clinical and we if will and with that effect very a awareness every pebble is and is the they free driving therapy

pretty center a freestanding when how installation they what, equipment. forward I do And MRIdian. share forward of They hey, decided on can is. apologized today, that would that linac. you a I other the how had of and different that he need a to first driving that Zach. first think an time treated are and patient these I or said and decision interesting, they having MRIdian, he the to area to position radiation our he one effect MRIdian patient on buy a need said, And then, after wrong oncologist made the know to by you team And wouldn’t after CEO some striking treating was in system. Fast second do just example. order will came forward. technology expensive three any conventional their treated a with weeks who things think I that that to of patients two hired don’t that are had that We place with he aorta, ago. was really something the ago, we conversations with turned you is I their everything And our you on customers, the All do go give I and because tumor taking the about for

right in have we how forward. about good you arrows set So move are we pointing the got and things direction up the as of feel all really

taking Really the Thanks encouraging to for hear. question.

you, Sam. Thank

Our next question Oppenheimer. comes with from Mike Ott

Your open. is line

afternoon, Congrats am and Suraj. you and questions. taking thank Zach. Scott Good I our for for on

you. Thank

Mike. Hi,

bet. You

to like this you macro Curious of I’d the laundry inflation some from of on from impact currencies. issues, start factors. having any or foreign supply if are some impact any maybe FX list, chain weaker So cost

say, would a the on know I earlier. referenced I Yeah. environment, this overall question I Mike,

that, considered think, well for overall vendors of of any environment overwhelms absolutely issues The you of out think the have improving. us certainly happening and actually our are about company emerged. changing vendors, us we But pandemic the I where of growth seen are things beginning since When supply effects. things all I kinds and chain. battling supply is those like with of are renegotiating There you talk things challenges like inflation, there the operate, that those very any chain appropriate.

maybe expansion glove, another is gross again basis XXX continue be tier margin that top growth grow. in as basis that driving points, and on will this year we we go forward X,XXX will and that this are So with continue hand points to

So overall say, are XX There it better or I for I but months us months ago. would say, six challenges, than is environment say improving. the ago was, would

for know have you And that think talked some in hear, RO APM proposed I start from TBA. to impact XXXX or RO your APM, That’s the we of in you early but the date, Scott. great April, in future January about delaying is to past do CMS then, there any customers?

Yeah.

To tailwind for your on to for anything it us. a it times. it And we the with that simply would Mike. front, into couple were environment, effect, the it not delayed in a are of incredibly We think about baking they if reimbursement is is think point, well-positioned. We way be us, go have MRIdian current

the bottom able again. wouldn’t they But couldn’t have and of fractions patients. that that in fewer story make distances patients. are time line MRIdian the good five are there’s able be referrals increase are long local one on and money that heard they patients They or utilize know they our new and topline, customers are tell system or for treating attract net they treat on our to every traveling them I single any for you to customers, well. efficient Our with when therapy an other us as system. Patients very on

provides the current up AXi customers. reimbursement and us think us speeds serves I further a scheme So even greater well. for our return

well into the going are one thing, if that clear, been to effect, and is march But you over APM were time for treatment to to that’s I of is happening -- would currently backward. the RO think shorter a tailwind courses Mike, I shorter very positioned a it’s it’s and steady with us. go we not share just So the go

We are tissue reduction. a the without that driver with margin of toxicity or do We to and mitigation do see we call customers able we you healthy fewer and it deliver. what of aggressive are our five fractions implanted it fiducials any

and So going are in I are things incredibly we think well-positioned where reimbursement environment the clinically.

be data last set then, guess, on That’s next question, I great the to advise for? that my what’s would you hear. lookout investors clinical to And the

SMART that we one the next the is out pancreas about really this coming are summer excited data. think I

we anything be from it sharing will a spoil We standpoint. to want out. podium presentation comes So that when don’t

see are of here But excited that what that. be will very terms share we how this comes in with set summer. data judicious to So we we

Scott. Thanks, soon. you See Great.

Mike. Thanks,

to session. turn I’d the the This Scott call closing you. like Drake Thank concludes to for over back remarks. any question-and-answer

afternoon. Mayo to everybody, and Have a Operator, forward Thanks, thanks, again joining XX it good for days. us. Happy doing de in and Cinco look we

concludes program. This the

a great have Everyone day. disconnect. now may You