Q4 2024 RxSight Inc Earnings Call
Thank you very much. Thank you.
Nazarina: Ladies and gentlemen, thank you for standing by. My name is Nazarina. I will be your conference operator today. At this time, I would like to welcome everyone to RxSite's fourth quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
Nazarina: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.
Speaker Change: If you would like to withdraw your question again, press the star 1. I would now like to turn the conference over to Oliver Moravcevic, Vice President, Investor Relations. You may begin.
Speaker Change: Thank you, Operator. Presenting today are RxSite President and Chief Executive Officer, Dr. Ron Kurtz and Chief Financial Officer, Shelley Thunen.
Speaker Change: Earlier today, RxSight released financial results for the three months ended December 31st, 2024. A copy of the press release is available on the company's website.
Speaker Change: Before we begin, I would like to inform you that comments and responses to questions during today's call reflect management's views as of today, February 25th, 2025, and will include forward-looking and opinion statements, including predictions, estimates, plans, expectations, and other information.
Speaker Change: Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties.
Speaker Change: These risks and uncertainties are more fully described in our press release issued today and in our filings with the Securities and Exchange Commission, or SEC. Our SEC filings can be found on our website or the SEC's website.
Speaker Change: Investors are cautioned not to place undue reliance on forward-looking statements and we disclaim any obligation to update or revise these forward-looking statements except as may be required by law.
Speaker Change: We will also discuss certain non-GAAP financial measures. Disclosures regarding non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, can be found in the press release.
Speaker Change: Please note that this conference call will be available for audio replay on our Investor Relations website. With that, I will turn the call over to our President and Chief Executive Officer, Dr. Ron Kurtz. Ron?
Speaker Change: Good afternoon and thank you for joining us. In a moment, Shelley will review the fourth quarter and full year 2024 financial results, highlighting the key drivers of our performance.
Speaker Change: Following Shelley's review, I'll provide an update on the continued success of the RxSite system, our role in shaping the premium cataract market, and the major developments that are setting the stage for our next phase of growth.
With that, I'll turn the call over to Shelley.
Shelley Thunen: Thank you, Ron, and good afternoon everyone. Consistent with our January pre-announcement, RxSite reported fourth quarter 2024 revenue of $40.2 million, up 41% compared to the year ago quarter.
Shelley Thunen: Growth was broad-based driven by strong growth in LAL procedure volume and the continued expansion of our installed base of LEDs.
Shelley Thunen: The positive momentum we saw throughout 2024 remains fueled by surgeons' increasing appreciation of the clinical advantage.
Shelley Thunen: and economic value of the RxSite system, particularly the benefits of post-operative adjustability.
Shelley Thunen: LAL sales maintained strong growth in the fourth quarter of 2024, reflecting the increased preference among surgeons and patients for the enhanced clinical outcomes offered by our adjustable IOLs.
Shelley Thunen: We sold a record of 29,069 LALs in the period, up 61% from the fourth quarter of 2023.
Shelley Thunen: These procedure volumes translated into LAL revenue of $28.5 million in the fourth quarter of 2024, up 60% compared to the year ago quarter.
Shelley Thunen: In the fourth quarter of 2024, we sold 83 LDDs and generated $10.7 million in LDD revenue.
Shelley Thunen: We ended 2024 with an LDD installed base of 971 units up 46% compared to the 666 units installed at the end of 2023.
Shelley Thunen: This shift and mix combined with LED cells with a lower manufacturing cost
Shelley Thunen: and higher average selling price expanded our gross margin to 71.6% in the fourth quarter of 2024 up from 61.8% in the fourth quarter of 2023.
Shelley Thunen: Fourth quarter 2024 SG&A expenses were $28.2 million, up 33% versus the prior year period.
Shelley Thunen: This year-over-year increase in SG&A was primarily associated with increased expenses in sales and clinical personnel costs to support our growing installed base.
Shelley Thunen: On a sequential basis, SG&A was up 10% primarily due to increases in headcount and expenses related to higher sales volumes achieved in the fourth quarter.
Shelley Thunen: Research and development expenses for the fourth quarter of 2024 were 9.2 million dollars representing an increase of 25 percent.
Shelley Thunen: The change versus a year ago period was primarily due to increased facility costs and associated increases in salaries and stock-based compensation.
Shelley Thunen: On a sequential basis, R&D expense remained relatively stable with a 4% increase compared to the third quarter of 2024.
Shelley Thunen: We reported a net loss in the fourth quarter of 2024 of 5.9 million dollars or a loss of 15 cents per basic and diluted share using weighted average shares outstanding of 40.4 million shares.
Shelley Thunen: In the year-ago quarter, our net loss was $9.2 million, or $0.26 per share, on a basic and diluted basis, using a weighted average of 36 million shares.
Shelley Thunen: Note also that stock-based compensation in the fourth quarter of 2024 was $7.3 million, resulting in an adjusted net income of $1.3 million, or $0.03 per basic and diluted share.
Shelley Thunen: In the interest of time, I'll provide a brief recap of full year 2024 results.
Shelley Thunen: During the year, revenue grew 57% to $139.9 million, driven by a 78% increase in LAL revenue and a 24% increase in LDD revenue.
Shelley Thunen: Total operating expenses were $135.8 million in 2024, an increase of 31% compared to 2023.
Shelley Thunen: For the full year 2024, we reported a net loss of $27.5 million, or $0.71, versus a net loss of $48.6 million, or $1.41 per share, on a basic and diluted basis in 2023.
Shelley Thunen: excluding the 24.6 million dollars in stock-based compensation expense, our net loss in 2024 was 2.8 million dollars or seven cents per basic and diluted share.
Shelley Thunen: Moving to the balance sheet, we ended the year with no debt and $237.2 million in cash, cash equivalents, and short-term investments.
Shelley Thunen: During 2024, we raised $107.5 million net of fees and expenses from our confidentially marketed public offering.
Turning to 2025 Guidance.
Shelley Thunen: We are reaffirming the guidance we provided in January, as we continue to expect 2025 full-year revenue to range between $185 million and $225 million.
Shelley Thunen: Throughout the year we expect typical seasonality with the first and third quarters seasonally weaker while the second and fourth quarters are expected to be seasonally stronger.
Shelley Thunen: Revenue contribution outside of North America is expected to remain nominal in 2025 with a more meaningful impact anticipated in 2026 and beyond.
Shelley Thunen: We expect our full year 2025 gross margin to be in the range of 71% to 73%, reflecting a continued increase in revenue mix from the higher margin LAL procedure volume.
Shelley Thunen: We continue to expect operating expenses to be between $165 million and $170 million.
Shelley Thunen: which represents an increase of 22% to 25% over the prior year and reflects ongoing investments in sales and marketing, research and development to achieve projected revenue increases in 2025 and the years beyond.
Shelley Thunen: headcount increases in our commercial team, which now numbers a bit over 200 with the focus on sales, education, installation, training, and clinical support.
Ron Kurtz: included in our costs primarily in operating expenses is non-cash stock based compensation expense of approximately 22 million dollars to 25 million dollars. With that I'll turn the call back to Ron.
Ron Kurtz: Thank you, Shelley. We believe that RxSite's strong 2024 performance underscores the growing impact our proprietary adjustable IOL technology has had on the U.S. premium IOL market during the last several years.
Ron Kurtz: As indicated in our 2025 guidance, we believe RxSite can durably grow as the power of adjustability becomes more widely recognized and accessible to doctors and patients through traditional and innovative adoption models, both in the U.S. and other key established premium Iowa markets.
Ron Kurtz: Since RxSite went public and began scaling its U.S. commercial team in Q3 2021, the new adjustable premium IOL category we created has grown to approximately 10% of the overall U.S. premium IOL market on a procedure volume basis through Q4 2024, with an even greater impact in revenue terms.
Ron Kurtz: In fact, in 2024, we believe that adjustable premium iowells accounted for nearly half of the overall growth of premium iowells in the U.S., which may help explain the perceived stagnation in some legacy non-adjustable premium iowells at the industry level.
Ron Kurtz: Our 2024 customer survey reinforced previous findings and KOL commentaries that approximately three-quarters of LAL cases come from the conversion of monofocal and toric IOL patients.
Ron Kurtz: As a result, practices that adopted our technology are estimated to have increased overall U.S. practice-level premium revenue by approximately 10 percent, with even larger potential impact on their individual practices.
Ron Kurtz: Doctors and practices increasingly recognize the importance of this expanding and durable revenue source as they face the dual challenges of demographically driven reimbursement declines and cyclically sensitive patient pay procedures like LASIK.
Ron Kurtz: In this environment, the growth of high-margin, private-pay LAL procedures that appeal to a more financially secure demographic will likely become even more critical to the financial sustainability of eye care providers in coming years.
Ron Kurtz: With about 1,500 of the approximately 10,000 U.S. cataract surgeons trained on our technology, we anticipate a long runway for continued LDD placements in offices serving cataract patients.
Ron Kurtz: Additionally, the growth of novel business models offering alternative approaches to deliver post-operative light treatments is expected to further expand access to adjustability for both surgeons and their patients.
Ron Kurtz: Delivering consistent high-quality outcomes across doctors, practices, and geographies is essential for long-term adoption and growth. We believe RxSite's expanding set of clinical data validates the unique ability of our technology to meet this standard.
Ron Kurtz: For example, our recently completed FDA post-approval study, which utilized the latest iteration of RxSight technology.
Ron Kurtz: demonstrated that the odds of achieving very low levels of both residual sphere and cylinder with the LAL were more than 14 times that of a monofocal IOL in eyes with modest preoperative corneal astigmatism.
Ron Kurtz: This level of refractive precision also translated into more than a four times increase in the odds of achieving uncorrected distance vision of 20-20 or better in LALIs.
Ron Kurtz: These FDA study results further validate observations from real-world registry data showing that both LAL and LAL plus patients achieved similarly excellent refractive and visual outcomes.
Ron Kurtz: thereby enabling doctors to customize their patients binocular vision to meet and exceed their specific visual goals.
Ron Kurtz: As we progress towards regulatory approvals in key markets in Asia and Europe, demonstrating that local doctors can replicate these outcomes is essential.
Ron Kurtz: A recent publication documenting LAL clinical results in a cohort of Japanese patients, which was also highly consistent with U.S. data, exemplifies the efforts we will continue to pursue as we expand into new markets.
Ron Kurtz: Additionally, our previously announced approval of an extended range of diopter powers for the LAL+, will likely have crossover relevance for the growing population of cataract patients in multiple countries with high degrees of myopia, including many who have previously undergone corneal refractive procedures.
Ron Kurtz: We are also pleased to announce that we received FDA approval for an additional LDD functionality that builds on our clinical experience with aspheric optics.
Ron Kurtz: Scheduled for release in the second half of 2025, this enhancement will allow doctors to customize the asphericity of the LAL, something previously only possible through preoperative selection of a specific fixed IOL.
Ron Kurtz: While relatively modest in its initial capabilities, we believe this advancement opens the door for even higher levels of customization in cataract surgery.
Ron Kurtz: similar to advances seen in corneal refractive surgery over the past 20 years.
Ron Kurtz: In summary, we believe that RxSight's adjustable technology has already reshaped the premium cataract surgery market, offering the only IOL that allows post-operative vision customization.
Ron Kurtz: With this strong foundation in place, we are now focused on expanding access, accelerating adoption, and driving new innovations.
Ron Kurtz: This next phase of growth will be fueled by the continued partnership between the dedicated RxSight team and our insightful clinical partners worldwide.
Ron Kurtz: With momentum on our side, a clear strategic roadmap, and a growing community of passionate adopters, we believe RxSite is well-positioned for continued success.
Ron Kurtz: We look forward to updating you on our progress throughout the year. And with that, I'll ask our operator to open the call for questions.
Thank you for joining us.
Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.
Ron Kurtz: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue.
Thank you. Thank you.
Thank you.
Speaker Change: And we'll take our first question, comes from the line of Robbie Marcus with JP Morgan. Your line is open.
Speaker Change: Hi, this is Lily on Ferravi. Thanks so much for taking the question.
Speaker Change: Maybe we could start with LAL utilization and some of the trends that you've been seeing there lately. How do you think about utilization continuing to grow in 2025, now that we're sort of beyond the early adopter phase? And how would you say that utilization varies at some of your mature accounts versus your newer ones?
Okay.
Speaker Change: Good. Yeah, that's always been a subject of conversation as it's an output of two numbers the installed base of LDDs at the end of the previous quarter and then the number of LALs implanted in the current quarter.
and that results in a number of LALs per LDD.
Speaker Change: It was 11 LALs per LDD in the third quarter. It was down a bit around 8.7 and then back up again at 10.9 in the fourth quarter.
Speaker Change: So it's somewhat affected by the amount of newer LEDs we have in.
Speaker Change: So it is a measure that overall we expect to grow, but it can fluctuate, you know, it can fluctuate on seasonality, it can fluctuate a little bit if we have a very, very strong quarter, the previous quarter for LDD sales.
Speaker Change: 2021 and prior, 22 and 23. 24 is a little too early to look at because it takes about a year for
Speaker Change: an account to get to roughly the same number that the previous cohorts get in aggregate.
What we've always seen is that that
Speaker Change: is continued to grow, right, and so all of the cohorts end up in just about the same place of number of LALs per LDD, and that's been very consistent.
Speaker Change: as we've been looking at this for the last couple of years. Of course, the class of 23 got to those same numbers a little faster, obviously, than the classes of 21 and 22.
Speaker Change: That being said, however, the distribution of how accounts act individually is obviously different. Sometimes we have very small accounts that don't do a lot of premium, but
Speaker Change: you know, they use the LAL for the vast majority of their premium IOL cases.
Speaker Change: Other times were relatively new in account and they're still ramping up their LAL volume.
Speaker Change: a ceiling in a cohort? And we sometimes get that question. They all seem to be growing as well. And we would expect the number to continue to grow, but it might be variable quarter by quarter.
Would you add anything, Ron?
Speaker Change: No, I would just reiterate that that's an output. It's, you know, not a key focus.
Our key focus is obviously driving more
Speaker Change: LALs and that can be accomplished obviously through driving more LDDs but also increasing adoption within the in the account. Thank you.
Got it.
Ryan Zimmerman: And our next question comes from the line of Ryan Zimmerman with BTIG. Your line is open.
Thank you. Thanks for taking the questions.
Ryan Zimmerman: Congrats on your progress this year. I guess, Ron, I was struck by the comments about the Aspheric IOL. It's very interesting to hear about, obviously, you know, new information.
Speaker Change: You know, as I think about those that may have an aspheric IOL need, would you say that those are younger, potentially myopic patients? I'm just curious kind of how to think about the initial sizing of that opportunity, you know, and when it may come to fruition.
Speaker Change: actively modify that level of asphericity and there are clinical situations where that's advantageous, different patient populations that may have more or less need for asphericity or benefit from asphericity and that's really up to the physician.
Okay.
Speaker Change: You know, on the pre-announcement, you had called this out. I think you called it out today, too, that 15% of the, you know, potential physician base is trained right now on LDD.
Speaker Change: And I think you make that point just to, you know, show that there's sufficient runway ahead. But I'm wondering if you'd kind of reflect on who the buyers are today versus a year ago and kind of the pace at which you would expect that adoption to continue to grow in 2025 and beyond.
Speaker Change: Well, you know, I think they're probably more alike than different, you know, people, ophthalmologists and practices have different reasons for adopting at different times.
and, you know, really...
Speaker Change: I think that we have a broad spectrum of practices that have our technology now and we have a broad spectrum of practices that are still not yet adopted but hopefully will soon.
Speaker Change: So, I don't necessarily think that we've, you know, that it's a particular...
type of practice. We really see a cross section.
and it becomes, you know, it comes down to...
you know, does the, does...
Speaker Change: want to adopt the technology, and that decision can be based on a lot of different factors. It can be based on, you know, technology advancements like we've had recently with LAL+, and the low diopter powers, and now with the aspheric functionality, and that's an important
Speaker Change: way that we continue to drive adoption is to give the next group of doctors and practices a reason to adopt, also a reason for our teams to interact with practices that may already have our technology and may be considering
Speaker Change: how they want to expand their use of our technology in their in their practices.
Speaker Change: So again, I think we're at such early innings that there's a lot of different types of practices that we're still reaching into.
All right, very helpful. Thank you for taking the questions.
Thank you, Ryan.
Speaker Change: And our next question comes from the line of Steve Lichtman with Oppenheimer
Steve Lichtman: Thank you. Good evening, guys. Just wanted to piggyback on the LDD enhancement, Ron. You mentioned opening the door to even more customization. Can you expand on that? What further advancements could we see as a result of this with the platform as you look out over the next few years?
Steve Lichtman: Well, I would maybe not comment directly on that, but I think you can, you know, the folks in the ophthalmic community can.
look to corneal repractive surgery as an analogy.
where, you know, initially when
Steve Lichtman: so-called lower-order optical aberrations of sphere and cylinder, and over time that expanded to other corrections. Now, of course, the sphere and cylinder are always the primary focus because they're the largest.
Steve Lichtman: But there are, you know, discrete needs and benefits to being able to address other, the lower orders, the higher orders as well. And that's a, there's always, you know, that's a...
Steve Lichtman: There may be additional requirements but this is again a first step in that direction in cataract surgery that I'm aware of.
Speaker Change: Okay, great. Thanks, Ron. And then just on terms of the growth investments you're making this year on the OPEX side, you know, can you give us an update on where the main areas of focus are as it relates to the commercial organization, marketing, you know, some of the optometrists work?
Do you want to start there, Ron?
Speaker Change: Sure, I would just comment that it's all of the above.
Speaker Change: clinical training and support and overall field support. So we continue to add that as our customer base grows.
Speaker Change: As we've talked about before, a key element of expanding our adoption is education, not only within our practices, but also to the wider
community of eye care providers, which obviously includes
Speaker Change: as a big part is optometry and we have expanded our efforts in that space both by attending both national but also regional meetings and providing additional support.
Speaker Change: for our practices to be able to educate their local optometrists.
Shelley Thunen: So, I think those all are important. I don't know if you want to add anything, Shelley. I would just add something else. If you look at SG&A, the sales and marketing portion, of course, is primarily people and travel.
but as well existing customers.
Speaker Change: and the great part about the R&D roadmap that Ron lays out
Shelley Thunen: is that when our clinical people go in and our account managers go in, they usually have something new to offer.
Shelley Thunen: might be a software upgrade, it might be additional training, and so each of those are value-added, and that adds up to our goal to get more fully penetrated.
Shelley Thunen: in each one of those accounts, and of course, you know, our goal remains to become 50% or greater of the total premium Iowa oil market, first in the U.S. and then globally.
Great. Thanks for the call.
Thank you, Stu.
Speaker Change: Next question comes from the line of David Saxon with NIDA. Your line is open.
Speaker Change: Thank you for watching. Please like, share, and subscribe. See you next time.
David Saxon: Good afternoon, Ron and Shelley. Thanks for taking my questions and congrats on the quarter.
I wanted to ask about...
David Saxon: top-line guidance and specifically about the cadence. Shelley, I heard kind of the comments about first and
David Saxon: I wanted to kind of drill down on the first quarter sequential trends. You know, last year you grew sequentially in the first quarter. Obviously, you've been seeing more of an impact with seasonality. So, you know, given we're kind of
David Saxon: A little over halfway through the quarter, you know, high level expectations for sequential growth or, you know, decline in the first quarter relative to the fourth quarter.
David Saxon: Yeah, it's always such a good question and last year's seasonality kind of surprised us and it's the first time in
David Saxon: At least in my 30-plus years selling, you know, being a CFO for a razor razor blade company, that the first half was seasonally stronger than the second half. And in particular, last year we had a very strong seasonal Q1 and Q2 coming on top of that.
Speaker Change: I guess an N of 1 doesn't yet convince me that normal seasonality will prevail which means that, you know, we're a bit larger it's
Speaker Change: much, much harder to grow, you know, sequentially each and every quarter as our numbers have gotten larger, and of course we had a great fourth quarter as well.
Speaker Change: So, while I don't give specifics in the first quarter, I expect that that will be, you know, a seasonally weaker quarter, and third quarter, again, due to vacations, and second and fourth the strongest quarters during the year.
Speaker Change: Okay, very clear. Appreciate that color. And then, you know, in the script you talked about, I think 75% of LAL patients can make from monofocal and toric.
Ryan Zimmerman: Acknowledging that's a large number, I wanted to ask on some of these premium competitive launches, a couple recent, one upcoming,
Ryan Zimmerman: have you seen any impact from you know competitive trialing and then with one coming up in a couple of months kind of expectations there and you know anything material baked into guidance. Thanks so much.
Maybe I'll take that at a high level, David.
Ryan Zimmerman: even if it's not direct competition directed towards us. So I wouldn't be surprised if there's some impact, but I think it's gonna be predominantly
Ryan Zimmerman: focused on, you know, other similar technologies in the, you know, presbyopia correcting space.
Anything to add there? Great, thank you.
Thank you.
Thank you for watching!
Speaker Change: Next question comes from the line of Larry Beagleson with Wells Fargo. Your line is open.
Speaker Change: Hi, thanks. It's Leigh calling in for Larry. Thanks for taking the question.
I want to start with the 25 guidance.
Speaker Change: As you think about the year, you just talked about the revenue cadence and the seasonality. How should we think about cadence for gross margin, spending, and then LDD versus LAL mix? Anything you can think about?
and I have a follow-up.
Speaker Change: Okay, great. Thank you very much, Leigh. You know, we have said when asked directly and we said it publicly, you know, do we expect LDD?
number sold
Speaker Change: to be higher than 2024? We've said yes, and while we don't, you know, break out our revenue guidance by the two components of our product, AL, like last year and the year before, is expected to grow faster and continue to become a more predominant portion.
Speaker Change: of our revenue. Of course, we never hold back LDP sales to manage gross margin, but naturally through that, you're going to have margin expansion and mix will determine the margin in each quarter.
Speaker Change: as well. And I think last year we got a lot of cost savings out of the LDD. This year it's primarily driven by MIPS and more minor kind of cost savings, both at the LDD, quite minor, as well as on the LAL.
Thank you for watching. Bye. Bye.
Speaker Change: Great, that's helpful. And then my follow-up is just on R&D. So we estimate that you'll spend about 40 million or so on R&D this year. Can you just talk a little bit more about where are you allocating those dollars? That is, where do you see opportunities for further innovation? Thank you.
Well, I would just say that, you know, as we're.
Speaker Change: Early innings in the commercial launch, you know, in the U.S., incipient outside the U.S., I believe the same is true on the R&D pipeline.
We're in early innings for this technology.
you know many many years of advancements that will
Speaker Change: continue to benefit our customers and we have the unique ability
Speaker Change: to continue to upgrade our technology in the field to provide really many years of benefits from their investments.
Speaker Change: both in terms of the cost of the LDD but also their intellectual investments in the technology.
Speaker Change: So, I wouldn't, you know, I don't think that there's any one thing that I would call out, but we're, you know, we're focused on continuing to drive innovation in this technology for many years to come.
Speaker Change: And we have another question from Daniel Antalfi with UBS. Your line is open.
Daniel Antalfi: Hey, good afternoon guys. Thanks so much for taking the questions.
Speaker Change: Shelley, this is probably a question for you. Just thinking about the margin cadence here, gross margin cadence, as we go through, specifically 2025, but also, you know, in the out years, as much as you can.
Daniel Antalfi: helped put out guideposts for us, you know, as the LAL becomes a bigger piece of the mix here, how do we think of, how should we think about margin cadence and the upside opportunity there? And then I have one quick follow-up.
Okay.
Great, you know, you've seen tremendous, you know,
Daniel Antalfi: Margin Expansion in the last year in 2024. It was 100 basis points, so pretty terrific as well. You won't see that kind of big jump, you know, that came in 2024.
Daniel Antalfi: Gross Margin Expansion might vary a little in a quarter, depending on the number of LDDs we sell as a percent. If you had a very strong LDD quarter, it might be a little lower than it would have been otherwise.
Daniel Antalfi: But I think you'll see consistent cadence in margin improvements. As I look at the company going way, way out, right, you know, the
Daniel Antalfi: The LAL would be dominant, but we've still got a pretty big world to conquer on LDD sales and growing LAL sales.
Daniel Antalfi: So, you know, the company could be an 80% plus gross margin company, and I think that we'll continue to advance through that.
Daniel Antalfi: year-over-year, but I would never want to hold back sales of LDDs, but you know at real maturity I could see at 80% plus.
Speaker Change: Gotcha. Okay, that's helpful. And then I wanted to follow up on a comment, Ron, that you made in the prepared remarks around, you know, the centers that are figuring out business models or ways to, you know, unique ways to work this into their workflow.
Speaker Change: in a way that's efficient and what have you. So I guess the question here is, how much are you seeing that be replicated and are you seeing other centers implement that? Is there something unique about those centers that enables them to implement those models?
Speaker Change: or is that something that you expect to ultimately be replicated and implemented across your centers? Thanks so much.
Speaker Change: Yeah, I think that I just to clarify, it's not necessarily a new phenomenon. We've had
Speaker Change: LDD focused treatment centers whether they're informal based on an individual practitioner or more formal but you know we do see more interest in that space
Speaker Change: with ambulatory surgery centers and with LASIK centers. And, you know, it's not surprising that this would occur as adjustability becomes a bigger part of, you know,
Speaker Change: the premium cataract space and net-net it's a we think it's a positive in that it can give additional access to both doctors and patients.
Thank you so much.
Thank you.
Thomas Stefan: And our last question comes from the line of Thomas Stefan with Stifel. Your line is open.
Thomas Stefan: Great, hey guys, thanks for the questions. I'll start with the pipeline and I guess Ron, just thinking specifically about LAL advancements, can you kind of elaborate on what this entails in terms of, I guess I'll call it the nature of the advancements. I know you mentioned early innings and upgrading technology in the field.
Speaker Change: I mean, should we think about this as sort of improvements and upgrades, like ActiveShield, for example, or do we maybe think about new lenses on the horizon altogether, like LAL+, as an example? And then I have a follow-up.
Ron Kurtz: Yeah, I would say it's all of the above, you know, we've, what, if you look back at the advancements that we've done, some of them are to the optics, some of them are to other functionality of the lens, and some of them are, you know, functionality or, you know, usability characteristics of the ancillary
Ron Kurtz: products like the light delivery device or our injector tools. So it's really all the above and we try to respond
Ron Kurtz: collaborate with them to bring them those things that are going to be beneficial.
Ron Kurtz: maybe not to a large number of patients, but to, you know, beneficial enough that it's a reason for them to continue to expand their offerings of the LAL or some derivative.
Speaker Change: That's great color. Thanks, Ron. Appreciate that. And then Shelley, my second question, maybe for you, just on guidance.
Ron Kurtz: You know, I think it may very roughly imply that LAO utilization
remains in the high single-digit range which is
Ron Kurtz: I think where you exited in the fourth quarter of 24, although that was a bit of a deceleration from 3Q24 year-over-year growth. So, I guess my question is, what gives you the confidence
Ron Kurtz: that utilization can at least hold steady in this high single-digit year-over-year percent growth range? And then maybe what's your level of conviction that utilization actually could re-accelerate throughout 2025? Thanks.
Ron Kurtz: Well I think the most important metric for us is the absolute number of LALs that are implanted and I think that's the number one metric, right.
Ron Kurtz: And certainly, we think as an outgrowth of that, that number of LALs per LDD is
Ron Kurtz: something that will continue to grow, although it might be variable quarter to quarter.
Ron Kurtz: And if we think about going back in the past, when you're very small, you know, it's just the law of larger and small numbers, right? And so as long as we continue to have steady growth, consistent with our expectation of revenue, I think we're quite happy.
Super helpful. Thanks, Shelley.
Thank you.
Ron Kurtz: That concludes the question and answer session. I would like to turn the call back over to our CEO, Ron Kurtz, for closing remarks.
Ron Kurtz: Great, well thank you all for your interest in RxSite and we look forward to updating you on our progress in the future. Goodbye.
Ron Kurtz: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
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