Rxsight Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Iseult McMahon - BTIG - Analyst : Hi, Ron and Shelly, this is Izzy on for Ryan. I was hoping to start out discussing the pace and scale of your redoubled commercial efforts. I was curious when we might start to see contributions from these start to pay off.

Question: Iseult McMahon - BTIG - Analyst : Understood. And as we think about the broader macro environment, I understand that the focus is still on the US, but I was curious how you're thinking about the pacing or the timing with which you want to expand internationally.

Question: Young Li - Jefferies - Analyst : I guess, I wanted to ask a little bit about the comments you made on April. It sounded like early April trends were still pretty choppy and rough, but it got better later on. Can you maybe talk a little bit more about what you're seeing sort of in more recent periods?

Question: Young Li - Jefferies - Analyst : Great. That's very helpful. I guess, I wanted to ask a little bit about the guidance. There's a lot of moving parts here with competitive trialing and 2Q dynamics versus second half. Is there any incremental color you can provide just on the quarterly cadence for the rest of the year?

Question: Patrick Wood - Morgan Stanley - Analyst : Two quick ones. First, I'd love to dig in a little bit more on the workload challenges that you mentioned. Is -- because I would have thought like the premium IOL side dropping a little bit might have freed up a little bit of consultation time. So like what is it that's eating up the time for the customers so much that you're speaking to? What's kind of blowing out that time that's making things hard at the moment?

Question: Patrick Wood - Morgan Stanley - Analyst : Yes.

Question: Patrick Wood - Morgan Stanley - Analyst : Got you. That's handy. And then just as a quick follow-up. For the H2 macro factors getting better, I mean, what was the sort of thought process in embedding that within the guide? I mean, is it more that you can engage with the customers more so you can pull things around that side? Why -- not to sound sort of provocative, but why would we expect that sort of 70-year-old cohort to feel much better about the world in the second half relative to the first?

Question: Steven Lichtman - Oppenheimer & Co. - Analyst : Ron, you mentioned workflow and wanting to support your customers through education and other marketing initiatives. Can you talk a little bit more about sort of what that entails? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 8:30PM, RXST.OQ - Q1 2025 Rxsight Inc Earnings Call

Question: Steven Lichtman - Oppenheimer & Co. - Analyst : Got it. That's helpful. And then just as a follow-up, the strong gross margin for the year and understanding the cadence, Shelley, but for the year as well as the balance sheet suggests you got some flexibility on OpEx reinvestment. So any thought about adding more sort of feet on the street or anything else in terms of being even more aggressive, especially in light of sort of the competitive trialing environment?

Question: Adam Maeder - Piper Sandler - Analyst : Two for me. Just one quick one on international. And just wondering if there's any update, Ron or Shelley, in terms of the commercial strategy for those geographies? Will you be going direct or partnering with the distributor? And then I had a follow-up.

Question: Adam Maeder - Piper Sandler - Analyst : Okay. That's helpful, Ron. I appreciate the color. And then for the follow-up, I'm admittedly newer to the story, but I just wanted to level set on the freestanding LDD treatment center initiative that you guys have. When did the initiative start? How far along are you in terms of number of sites or customers that use the option, volumes that come from those freestanding sites? And just how you think about some of those metrics trending going forward?

Question: Robert Marcus - JPMorgan - Analyst : Two for me. First, Shelley, I just want to make sure I heard you right. I think you said second quarter will be below the low end of the range. Does that mean we're looking at something less than $38 million in sales in 2Q?

Question: Robert Marcus - JPMorgan - Analyst : Great. I appreciate the clarification. And maybe just to continue on that thought, what makes you think that trialing will abate in third quarter and sales will -- and the macro will pick up? Just simply, you have Bausch + Lomb, who's reentering the market after a pause. I imagine they'll sample for a while. Alcon is launching. Why wouldn't it continue for a long time? And given the lower guidance, do you think it's prudent to assume a stoppage in third quarter?

Question: Larry Biegelsen - Wells Fargo - Analyst : I think, Ron and Shelley, I think what a lot of people are trying to understand is how derisked the updated guidance is. So for my question, you did 28% growth in Q1. You talked about on your Q4 call was in late February. So March, it seems like it really deteriorated. And you said April actually worsened before it stabilized. So are you willing to give us any color on how March and April were relative to, call it, the guidance range or the midpoint of the Q2 to Q4 guidance, which is 17% or so implied. Any color on where March and April were relative to the updated guidance range? And I had one follow-up.

Question: Craig Bijou - Bank of America - Analyst : Just one from me. And I appreciate the comments on the LDDs and you still expect LDD growth or LDD placements to be above [24%] in '25. But I wanted to get a sense for have you heard or have you had discussions with some of the practices that are in your funnel thinking about purchasing an LDD? And if they have any concerns on a softer premium IOL market and whether that could have some impact on the timing or maybe the deferral of purchasing an LDD until they see that pick up?

Question: Thomas Stephan - Stifel Financial Corp. - Analyst : I'll start with a big picture question. I know there's obviously a lot of macro and competitive factors, but the main kind of investor concern we hear right now is if the US could be, I guess, nearing or approaching some sort of saturation point. Ron or Shelley, your reaction to that or thoughts to that, maybe notably given, Shelley, I think you've said the class of 2024's adoption curve has been a little slower than prior classes. Maybe if you can talk about that.

Question: Thomas Stephan - Stifel Financial Corp. - Analyst : Correct. LAL either on a per surgeon basis or adoption kind of within the context of the 10,000 cataract surgeons in the U.S. either/or kind of just big picture.

Question: Thomas Stephan - Stifel Financial Corp. - Analyst : That's helpful. Thanks, Ron. Appreciate that. And then pivoting to the pipeline. I know you keep it pretty close to the vest, but I just want to ask what your view is on both a multifocal LAL and an accommodative LAL. I guess my question is, are these feasible technologies to begin with when considering, I guess, the BEs adjustability technology with LAL?

Question: Angela Kumirai - UBS - Analyst : I'm on for Danielle. So mine is just a follow-up on Larry's question. You said historically March represents about 45% of the quarter's revenue, and that is usually a good proxy of the ramp to 2Q, but that is not something that you saw this quarter. So I was just wondering, appreciating your comment on signs of improving stability in April, what level of visibility do you have into customer case schedules? Just want to get a sense of your confidence in being able to reach your renewed guidance. And then I have one follow-up.

Question: Angela Kumirai - UBS - Analyst : Yes. 2Q numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 8:30PM, RXST.OQ - Q1 2025 Rxsight Inc Earnings Call

Question: Angela Kumirai - UBS - Analyst : Oh, yes. That is helpful. And then my second follow-up is just also a follow-up on Pat's question on workload challenges. What types of practices are making these comments? And what are you doing to release capacity there? Because our checks have sometimes showed doctors looking at the postoperative adjustment as a barrier to do more LALs. So any color on the practice profile for those making workload challenge comments would be helpful for us.