Q2 2025 RxSight Inc Earnings Call
Welcome everyone. To the RX sight second quarter 2025 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.
If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to be drawn a question again,
Press the star 1, I would now like to turn the conference over to Oliver morav vice president of investor relations you may begin.
Thank you, operator, presenting today, rxi, president and chief executive officer, Dr. Ron Kurtz and Chief Financial Officer Shelley tuna earlier today. Rxi released its Financial results. For the 3 months, ending June 30th, 2025 and reiterated, its full year guidance.
A copy of the press release is available on the company's website.
Before we begin, I would like to inform you that comments and responses to questions during today's call reflect Management's view as of today. August 7th, 2025 and will include forward-looking and opinion statements, including predictions, estimates plans, expectations, and other information.
Actual results May differ materially from those expressed or implied as a result of certain risks and uncertainties. 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.
Investors are cautioned not to place undue, Reliance on forward-looking statements and we disclaim any obligation to update or revise. This forward looking statements, 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.
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. Rockers Rock.
Good afternoon, everyone, and thank you for joining us on today's call. We'll outline the actions we have taken to address recent LAL utilization trends and declining growth in both L and LDD sales.
Our top priority of course is to provide our customers with exceptional support that enables successful adoption and long-term growth with our technology.
To achieve this, we have unified our Lal sales and clinical support Personnel into a single customer success organization.
Using a standardized framework to both identify and close any gaps, that could limit Lal growth each Regional team is responsible for a defined group of doctors and practices managing the customer experience from onboarding through long-term utilization growth.
These teams leverage proven best practices derived from customers who have already demonstrated strong clinical and commercial success with our technology.
We have paired these changes with coordinated investments in clinical Affairs and education to accelerate feedback loops and support. The Mastery of post-operative vision optimization across the global Lal user base. This includes expanded engagement, not only with our excite Representatives but also via surgeon Optometric and clinical staff focused peer-to-peer programs.
By aligning and redeploying. Our existing field resources we have strengthened clinical and practice support for current customers directly, addressing challenges that arose during the rapid growth of our installed base.
These expanded in-person and point of care interactions make use of new, user-friendly education and marketing resources which were designed by leveraging our experience with more than 1,000 practices.
While our immediate focus is on driving adoption and maximizing utilization with an existing Lal practices. Our ldd sales, team remains focused on bringing new high potential accounts into the platform. Once on boarded these customers transition to our customer success organization which drives clinical execution, and support sustained growth across the entire account base,
With these coordinated efforts are more than 200 field. Facing. Employees are intensifying our excites commitment to execution combined, with the flexibility to expand specific programs as needed. We are confident, these changes will have a positive impact on adoption and unlock the long-term clinical and Commercial potential of the Lal platform.
Afternoon everyone. Consistent with our July 8th 2025 pre-announcement. Our site generated second quarter, 2025 revenue of 33.6 million down 4% compared to 34.9 million. In the year ago, quarter and down, 11% compared to 37.9 million. In the first quarter of 2025.
During the quarter, we sold 27,380 L's and generated $27 million in revenue, up 13% compared to the second quarter of 2024 and down 1% compared to the first quarter of 2025.
In the second quarter of this year, Lal Revenue represents 80% of total revenue and increase from 68% in the second quarter of 2024 and an increase from 72% in the first quarter of 2025,
during the second quarter of 2025, we sold 40 ldds down 49% from 78 units in the prior period and down. 45% from 73 units in the first quarter of 2025 during the quarter. Ldd sales, generated revenue of 5.1 million dollars down 50% compared to the second quarter of 2024 and down. 45% versus the first quarter of 2025.
As of June 30, 2025, our LDD install base totaled 1,084 units, representing a 34% increase year-over-year and a 4% increase quarter-over-quarter.
Gross margin in the second quarter of 2025 was 74.9%, compared to 69.5% in the year-ago period and 74.8% in the first quarter of 2025. The increase primarily reflects a shift in product mix, with higher-margin revenue rising to 80% of total revenue, up from 68% in the second quarter of 2024 and 72% in the first quarter of 2025.
Sgna expenses in the second quarter of 2025 were 29 million representing. An increase of 4.7 million or 19% versus 24.3 million in the year ago quarter.
This year-over-year increase was primarily due to an increase in Personnel costs elevated. Stock-based compensation expense and additional expenses related to post-market studies.
During the second quarter of this year, R&D expenses Rose, 23% to 10.2 million compared to 8.3 million. In the second quarter of 2024. This year-over-year comparison primarily reflects an increase in salaries and stock-based compensation.
Sequentially, both sgma and R&D expenses were within 1% of the first quarter levels.
We reported a gaap, net loss. In the second quarter of 2025 of 11.8 million or a loss of 29 cents per basic and diluted share using weighted, average shares outstanding of 40.7 million shares.
This compares to gaap. Net loss is 6.1 million or 16 cents per share on a basic and diluted basis in the second quarter of 2024.
Note, the stock based compensation in the second quarter of 2025 was 8.5 million. Resulting, in a non-gaap loss of 3.2 million or a loss of 8 cents per basic and diluted share. Please refer to the UN audited, non-gaap reconciliation and disclosure included in today's press release for more comparative information.
We ended the second quarter of 2025 with cash cash equivalents and short-term Investments of 227.5 million. A decrease of approximately 1.8 million compared to 229.3 million as of March, 31st 2025
Moving on to our 2025 Outlook, we are reiterating our full year 2025 guidance. For Revenue. Gross margin operating expense that we provided on July 8th, as follows revenue of 120 to 130, million representing an applied decrease of 14 to 7% from 2024
Ldd sales, gross margin of 72 to 74%, red representing an applied increase of 130 to 330 basis. Points compared to 2024, despite gross margin in the first half approaching 75%. We are not adjusting our gross margin guidance higher because we expect lower gross margin in the second half of this year, due to higher costs and lower production volume. As we have right sides production quantities consistent with our lower Revenue guidance.
Operating expense of 145 to 155 million representing an applied increase of 7 to 14% over 2024, we remain disciplined in managing operating expenses as we realign resources and sales customer support and marketing to support long-term growth in Lal adoption and support the continued expansion of our ldd install base.
Also note that the operating expense estimate includes non-cash stock based compensation, expense, between 27 and 30 million.
And with that, I'll turn the call back to Ron.
Thank you, Shelley.
Our new commercial strategy focuses on maximizing utilization by enhancing every aspect of customer engagement including support training and team alignment to ensure that every Lal provider is fully prepared for Success. We are confident that this approach designed to strengthen the same store performance. While also adding new high, potential accounts will re accelerate our growth and positively impact the overall premium IBEW Market.
While we are initially realigning existing assets to ensure that we are fully resourced to support these efforts. We are also actively evaluating where more investment is required to accelerate success. Our strong balance sheet coupled with this pragmatic approach ensures that every investment is tied to measurable outcomes and long-term value creation.
While our top priority is delivering on our renewed commercial, execution. In the US, we are equally focused on enabling future growth through Innovation and Global expansion.
Regulatory approvals in key European. And Asian markets have opened new doors?
Building on our us experience, we are now applying a similar customer success Playbook to these geographies which represent a significant opportunity for discipline growth and modest Revenue contributions over the next year.
On the Innovation front, we continue to advance our R&D roadmap to further, enhance customer and patient experience expand, the Lal patient profile and Elevate the clinical value of our adjustable platform.
Our primary initiatives include refining the post-operative workflow and pursuing next-generation platform capabilities to facilitate easier adoption of post-operative adjustability, offer greater flexibility for physicians, and extend accessibility to an even broader group of patients.
As we shared earlier this week, we have also strengthened our strategic council with the appointment of Raymond Khan, to our board of directors. Ray brings Decades of experience building and scaling high growth Medtech. Companies and is insights have already proved invaluable as we execute across the next phase of growth.
In closing, our conviction in the long term, potential of the Lal platform has never been stronger with a refined, go to market strategy and a unified focus on customer success. We believe our site is, well, positioned to drive durable value of across clinical commercial, and shareholder dimensions.
With that, I'll ask the operator to open the call for questions.
Thank you.
Star 1 on your telephone keypad, to raise your hand and join the queue. If you would like, to enjoy your question, seemed to press star 1. Again, if you are called upon to ask your question and are listening via speaker phone in 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, we do request for today's session that you please leave it to 1 question and 1. Follow-up question. Thank you.
And our first question comes from the line of Larry biegelsen with Wells Fargo, your line is open.
Looked like exiting, uh, Q2 and thus far, um, into Q3. Um, you know, I, I think on the prior call, you had made a comment, uh, around, you know, June not seeing the usual volume acceleration, um, which had informed the guy down. So maybe just, um, help us understand how those Trends continued, um, into the quarter. Um, and then for the second part of the question there, you know, for the people who have updated their models, since the Q2 pre-announcement, I'm seeing around um 26 million for for Q3, so our models properly calibrated now
Um so thank you for your questions. Um, they're good questions but generally we don't get that specific in terms of guidance at all. I think that we are still early into the third quarter.
But we are also cognizant of the trends that we saw in the second quarter as well as the typical seasonality, we see in the third quarter. So I think that, um,
I don't think I have anything to comment different than that. Um, as we are in the third quarter right now in the beginning of the third quarter. Um, and I would say while I don't comment on models, I think that we were clear you know in the second half of the year that Revenue would be down significantly from the first half of the Year and that third and fourth quarters would be lower than the second quarter. So I think that overall if I look at the um consensus for folks who have updated their models, we got it on the top line between 120 and 130 million dollars in consensus. Right now is sitting you know mid of that guidance.
Our next question comes from the line of Robbie Marcus with JP Morgan. Your line is open.
Great. Uh,
thanks for taking the questions, uh, 2 from me. Um,
First Ron, you you you said at the end of your closing remarks you're in a great spot to take advantage of the premium iol uh segment of the market.
How do you get confidence that the Slowdown you're seeing is Market related and not just reaching a ceiling in penetration. Um, you know, you've you've had a couple quarters where the estimates or where the results came in a little bit below the estimates.
Um, you have a large installed base now of LTDs. How do you get comfort? It's.
the market and not RX site.
Well, I don't think Robbie that, I've, that we've laid this on the market. Uh, you know, we think that the market generally, um, is, uh, you know, the Market's going to do what the market is going to do. It's generally been, uh, uh, good. Uh, the premium iol Market is, uh, a part, an area where doctors are focused. Uh, as you know, the Cataract reimbursement rates were, uh, for standard cataract surgery, where further reduced, uh, uh, recently by anywhere, from 11 to 13%, uh, and the other patient paid procedures that, uh, ophthalmologists have relied on such a basic, uh, are much more sensitive to uh, macro Trends. So we think that overall the premium iwell Market uh over the long term is going to be a positive market. And uh, because we have
Have now a very large base, uh, uh, installed base. We see that we can, uh, uh, with some of the changes that we've outlined here. We can really leverage that install base, uh, for uh, uh, for growth. Uh, again, we don't have to only depend on uh, uh, uh, continued, uh, penetration of the market, which we uh, also believe, uh, is is uh, uh, is that we have confidence that we'll be able to do but we also have a large base of customers who uh, we feel are uh, you know, just based on the distribution uh, that they can continue to grow their utilization of Lal and that's where we're really focused, uh, with some of the changes that we've talked about.
Great. Uh, maybe a quick follow-up. Um, Shelley. Um, with the reduction in in sales.
Are you thinking about the current Pathway to cash flow break, even and cash flow generation?
Um, and at the current run rate, do you think that's still possible? Thanks a lot.
Yeah. Well, we hadn't previously given um guidance on, when we would hit um cash flow break even. Um, we did see that in the second quarter of last year and um, even at, you know, a little bit lower gross margins we got there. So I think that that's kind of a good proxy for when we could get to um cash flow Break Even, but I think we've got some rebuilding to do before that. I think that you know our most recent stall out and reduction in Revenue, certainly pushes it out. Um I haven't quite said so much for yet because we're trying to see how the changes that we're making in our sales and customer support organizations.
Uh, help us, uh, recover and get back to high-end growth. But you are correct. I think that, you know, we've got such a nice high gross margin product.
You know, that, that it's, you know, it could come pretty quickly once we get back into that kind of level range of of Revenue.
Perfect. Thanks a lot.
Next question comes from the line of Palms, Stefan, with Stifel. Your line is open.
Great. Hey guys. Good afternoon. Um, I'll start with International, actually. And, uh, Ron or Shelley, can you just talk a bit about the path forward? Oh, U.S., maybe specifically, give us a sense for potential timelines, approvals, and launches. And then, Ron, I know you mentioned maybe modest revenue contribution over the next year. But, you know, when do we think about revenue in the U.S. starting to pick up in a more meaningful way? Is that later 2026? Is that 2027? If you can kind of just talk about the U.S. path forward.
Yeah, so just for background, you know, the O us premium Market, um, represents about 80% of the overall premium market. So it uh, while the US is the largest single Market, uh, the US primarily Asia and Europe are very large markets. Uh, We've focused over the last couple of years on regulatory approvals, uh, in Europe that has meant going through the, uh, the new MDR, uh, uh, certification, which we completed, uh, uh, at the end of q1. Uh, and as as we previously said, we've we've
Started to, um, uh, uh, started to build out our European team. Uh, you know, taking some of the lessons that we've learned in the US, uh, to, uh, uh, provide those customers, uh, with the support that they need. Uh, similarly in Asia, uh, We've uh, pursued, uh, regulatory approval in the major countries of Asia. Uh, we, uh, received approval in South Korea and launched in the quarter, uh, in Q2, uh, that, uh, has gone well and we, we see that market, which is traditionally, been a strong, uh, uh, uh, private Pay Market both, uh, in, uh, refractive as well as, uh, CA premium, cataract surgery, and, and, and we, and, and we see a strong Market potential there, as well as, um, some of the countries in Southeast Asia. Most recently, Singapore, uh, the large
large countries.
Japan uh China. Uh they have longer regulatory Cycles where uh in those regulatory cycles and will certainly update uh uh folks as we get additional information, uh, but those are uh, you know, traditionally longer term plays. Um, so, you know, overall we're we're, uh, quite excited about the OU opportunity but we're also realistic uh that that that that that will take time and uh, hence the
You know, relatively conservative.
Language with respect to revenues. Do you want to add anything? Yeah, I think in the press release, obviously we talked about the fact that, you know, uh, cases were starting in, uh, South Korea as well as Singapore quite recently. Um, and those are nice accounts for us. And um, we think that, you know, in particular the the South Korean market is an excellent 1. Um, but as Ron says, it takes time to to develop
Number to Korea a couple times. Ron it, you know, we we we're the Korean, uh,
Optim. Optim logic.
Practice is very sophisticated. Uh it's very much directed to uh Advanced Technologies and private pay. Uh We've we've had a nice uh reception there to date. Uh but again um you know the first step in all of these markets uh after regulatory is kol development, generation of in-country data, just like we did in the US. Uh, where that we're able to establish uh, the combination of high-quality Vision that can be customized for that individual patient, which is a unique and, uh, disruptive, uh, uh, uh, product offering, uh, in that market. Uh, and we need, uh, and and again, uh, we've learned a lot. Just as we have in the US on the, uh, the different facets, uh, of, uh, of of gaining that expertise.
With post-operative adjustment. And certainly we are Translating that, uh, to our uh, uh, commercialization efforts outside the US.
Thank you.
Got it, that's great, super helpful and then a quick follow-up, just to Pivot. The guidance, I think back half uh Revenue implies around 10 million um, somewhere wide range but but but but understandable. Um, Ron or Shelley C? Can you just give us a sense for
Sort of the assumptions or uh what the drivers would be. That would either kind of take you to the low end of that 2 H implied guide uh as well as I guess more importantly the high-end you know and what direction are we kind of trending in uh within that range. Just based on what you've seen so far uh in the quarter. Thanks.
Yeah, I I assume when you're talking about 10 million and you're talking about ldd Revenue, um, and when you said about 10 million in the second half, I assume you're talking about ldj Revenue. Um, and and that's total total rep to total revenue. Total revenue.
Sorry, total revenue, 120 to 130. Oh, I I'm misunderstood you. Okay, I'm sorry the 120 to 130. Yeah, I, you know, I think most people are sitting at the, um, Mid of the guidance. I think that, you know, where we could have down, you know, at the lower end at 120, it could be primarily driven by lower ldd sales.
Um, rather than hire, um, in terms of the mix at the high end of guidance at 1:30, I think it would be um probably fourth quarter um seasonality driving Lal sales so you know, it's pretty tight guidance. But I think those would be the 2 factors that might play into low and high end.
That's great. Thanks Shelley. Thanks Ron.
Thank you.
And again, if you would like to ask a question, press star, then the number 1 on your telephone keypad,
There are no further questions at this time. I would like to turn the call back over to our CEO, Ronald Kurtz, for closing remarks.
Well, thank you all for your time and attention today. We appreciate your interest in our excite and we look forward to updating you on our progress. In future calls, goodbye.
ladies and gentlemen, that concludes today's call, thank you all for joining and you may now disconnect