Release Date: May 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RxSight Inc (RXST, Financial) reported a significant revenue increase of 69% year-over-year, reaching $29.5 million in Q1 2024.
- The company's gross margin improved substantially to 70% in Q1 2024, up from 59% in the same quarter the previous year, reflecting a favorable shift in product mix and reduced manufacturing costs.
- RxSight Inc (RXST) saw a 92% increase in LAL revenue and a 61% increase in its installed base of units, indicating strong market adoption and expansion.
- The company successfully launched LL. plus, enhancing its light adjustable lens platform, which was well-received at the American Society of Cataract and Refractive Surgery Meeting.
- RxSight Inc (RXST) raised its full-year 2024 revenue and gross margin guidance, reflecting confidence in continued growth and operational efficiency.
Negative Points
- Despite strong revenue growth, RxSight Inc (RXST) reported a GAAP net loss of $9.1 million in Q1 2024, although this was an improvement from a $13.2 million loss in Q1 2023.
- SG&A expenses increased by 44% year-over-year to $23.3 million, driven by higher personnel costs and marketing expenses, which could pressure profitability if not managed.
- The company experienced a 14% sequential decline in LDD units sold in Q1 2024, reflecting typical first quarter seasonality but highlighting potential volatility in capital equipment sales.
- RxSight Inc (RXST) faces intense competition in the premium IOL market, with significant market share gains potentially provoking competitive responses that could impact growth.
- While international expansion is a key strategy for future growth, regulatory and market entry challenges in Europe and other regions could delay potential revenue contributions from these markets.
Q & A Highlights
Q: Can you discuss the adoption trends and pricing discipline for LAL and LDT?
A: Ron Kurtz, President and CEO of RxSight, noted that adoption trends remain positive, driven by clinical outcomes and a focus on the premium IOL market. Shelley Thunen, CFO, added that pricing has been robust, supported by a 10% price increase on the newer LDE and disciplined pricing by the sales force.
Q: What are you seeing in terms of competitive response as you increase market share in the premium IOL market?
A: Ron Kurtz explained that a significant percentage of LAL cases come from patients who would not have chosen a premium IOL otherwise, which may not provoke strong competitive reactions. He emphasized the unique benefits of the light adjustable lens, distinguishing it from competitors' offerings.
Q: How is the service revenue evolving with the growing install base of LDD units?
A: Shelley Thunen mentioned that service revenue is expected to grow as the installed base increases. About 80% of customers opt for a service contract post-warranty, contributing to the growth of the service line.
Q: Can you provide insights into the gross margin trends and expectations for the rest of the year?
A: Shelley Thunen discussed that the primary driver for quarterly gross margin variations is the mix of LAL and LDD sales. She noted that LDD has a lower gross margin compared to LAL, and mix shifts could influence overall margins.
Q: What is the strategy for international market expansions, particularly in Europe and Asia?
A: Ron Kurtz stated that while the focus remains on the U.S. market, they are pursuing regulatory filings in attractive international markets. Shelley Thunen added that regulatory cycles, especially in Europe, are longer than anticipated, with minimal expected revenue from international markets outside of Canada in 2024.
Q: How is the utilization of LAL per LDD tracking, and what are the expectations for the rest of the year?
A: Shelley Thunen clarified their method of calculating LAL utilization per LDD, indicating steady growth in utilization rates. She expects this trend to continue, reflecting effective penetration and usage among installed bases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
