RxSight at Stifel Forum: Navigating Market Challenges

On Tuesday, 27 May 2025, RxSight (NASDAQ:RXST) participated in the Stifel 2025 Virtual Ophthalmology Forum. The company discussed strategic approaches to counteract market volatility and competitive pressures while highlighting optimism for growth in the second half of the year. Despite facing macroeconomic headwinds, RxSight remains focused on leveraging its Light Adjustable Lens (LAL) technology to gain market share.

Key Takeaways

• RxSight’s market share increased from about 10% in Q4 to an estimated 11-12% in Q1.
• The company is optimistic about growth in the latter half of 2025, contingent on economic stability.
• New utilization programs aim to enhance performance across varying adoption levels.
• Competitive pressures persist, particularly from Alcon’s PanOptix Pro, but RxSight remains confident in its LAL offering.
• Macroeconomic factors impacted early Q2, but stabilization is expected.

Financial Results

• Market Share: RxSight ended Q4 with approximately 10% market share, increasing to 11-12% in Q1.
• LDD Sales: Strong LDD sales were reported in Q1, with expectations of year-over-year growth compared to 2024.

Operational Updates

• Utilization Programs: New initiatives focus on transferring best practices from high-performing sites to others, emphasizing clinical skills and marketing techniques.
• 2024 Surgeon Cohort: The 2024 class of surgeons has shown slower adaptation compared to previous years, affecting installation growth rates.

Future Outlook

• Guidance: Growth is anticipated in the second half of 2025, reliant on political and economic stability.
• Market Growth Drivers: The LAL remains the key driver in the premium IOL market, with toric IOLs contributing to a lesser extent.

Q&A Highlights

• Macro Impact: Economic factors have affected surgery volumes, but impacts are expected to moderate.
• Competitive Landscape: While acknowledging competition, RxSight believes its LAL technology offers distinct advantages.
• LDD Sales: The sales funnel for LDDs is stable, with a six-month payback period for doctors.

Readers interested in more detailed insights are encouraged to refer to the full transcript below.

Full transcript - Stifel 2025 Virtual Ophthalmology Forum:

Tom Steffen, Analyst, Stifel: Okay. Great. Good afternoon, everyone. Tom Steffen with Stifel. Excited to have RxSight here with us today.

Pleased to be joined by Ron Kurtz, president and CEO, and Shelley Thunin, CFO. I’m gonna dive right in, and I’m gonna start with trends. Shelley and Ron, I believe you’ve said for LAL volumes that April was better than March, and that late April trends specifically were what got better. And in our view, that coincided with, I’d say, relatively less macro noise compared to early April. But most importantly, the macro notably seems to be stabilizing even more so over the last, call it, four to six weeks.

So, I guess my question would be, are there any factors we should consider that would prohibit LAL volumes from increasing in May versus April? If we can start there, that’d be great.

Ron Kurtz, President and CEO, RxSight: Well, maybe I’ll start, Tom. The I would say that the, you know, the reason why we made that comment, was exactly to your point that, you know, while premium has historically been relatively resistant to macro trends, specifically things like, you know, recession fears or inflationary pressures, They you know, in this case, where there is almost a direct effect on equity markets, which disproportionately impacts the older demographic of cataract pay patients. We were, you know, impacted by that in q one and then again in early April. And we were making the analogy that you just made, which is that we saw as that improved, we saw some benefits in our procedural volumes in late April that were consistent with that. So at this point, that’s all that we’ve commented on, and I think that I you know, it’s great that the trends have continued, and, we would, you know, we would hope that they would continue to.

Tom Steffen, Analyst, Stifel: Okay. Got it. So when you say the the the trends have continued, is that sort of or, you know, aligning with the macro improvement? Or

Ron Kurtz, President and CEO, RxSight: No. I’m I I was just saying that we’re happy that the macro trends have have continued.

Tom Steffen, Analyst, Stifel: Got it. Okay. Appreciate that. And so, you know, with the macro continuing to stabilize, maybe just step away from LAL and and as as we try to think about premium IOLs more broadly. You know, as those macro trends have have, I’d say, gotten better, you know, how is the premium IOL market here in The US more broadly looked, and in your view, you know, trended in the quarter separate from LAL, the broader market?

Ron Kurtz, President and CEO, RxSight: Well, I I can’t comment, obviously, on the current quarter, but I think that we can learn a lot by looking back. You know, now the major companies have all reported, for q one. We’ve got the data from, you know, in into the second half of twenty twenty four. So I think that, you know, what we had talked about in on our q one call, I think, has been largely validated that the the, you know, that that the the kind of shocks to the system in q one with that occurred, you know, in the equity markets, but also more broadly in the overall US environment were impacted not just premium, but cataract surgery volumes as well. And that that those, you know, improved some as those and we would hope that that improvement would continue as, you know, the equity markets recover, but also as people, I would say, acclimate to new environment that we’re in and that we are are adapting as and as well as the some probably some moderation going on in that on that side as well.

I but I think overall, premium, you have to you have to look at the premium over the last several years. And if you look at premium over the last several years, you see that it’s largely been flat, except for the growth of LAL. And I and that makes sense to us, because if you look at where the patients for the LAL come from, a large fraction of them are coming from monofocal IOL patients, you know, somewhere in our in our previous surveys, 40 to 45%. So when you look at the at the at the growth and health of the premium l IOL market, it’s largely been driven by the LAL and to a lesser extent by toric IOLs.

Tom Steffen, Analyst, Stifel: Got it. That’s that’s helpful. And and so, Ron, you said, appreciate your point on kind of the thoughts you conveyed on on the market, sort of being validated, you know, since since the one q call. And I would imagine, you know, thinking back since your your early April preannouncement, there’s just been more and more learnings as the weeks and months have gone by. I guess, is it becoming maybe more apparent as we sit here today that we’ll call it the one q shock was a shock, and in other words, something more temporary as opposed to, kinda durable headwinds in the market.

Maybe if you can touch on, you know, kind of that sort of dynamic with, the headwinds to premium IOLs in The US being potentially more more temporary as opposed to, durable or or sustainable.

Ron Kurtz, President and CEO, RxSight: Well, I don’t know that I commented on durability or sustainability. What I but I certainly, commented on their association with the macro effects that we just talked about. And those were different than what had been going on previously, and certainly the reduction in overall cataract and premium were consistent with, you know, that discontinuity in q one. Now what’s the the question that you’re asking is, you know, what is that how do you predict the future? Well, it depends on, to some extent, on what’s going on with those, you know, with that with those effects going forward and how quickly.

My own view, and I think it is that it’s shared by some, is that, you know, the that we’ll see moderating impacts of those primarily in the second half of the year. I think there are a lot of reasons for that, some of which are probably more psychological, some of them are are political. But the but the but the overall trends in premium that have been going on for several years, and even you can go back further than that, where there’s been a movement to quality of vision over quantity of vision is a trend that I think will continue. It’s been going on for, really, since, for more than twenty years, but has been, I think, highlighted with since the introduction of the LAL, over the last four years. So, we believe that that is, going to be a a primary or the primary driver of growth in the market.

Mhmm. And and and that’ll be you know, that’s our job is to continue to make the LAL more and more accessible to a larger fraction of the market in The US as well as globally.

Tom Steffen, Analyst, Stifel: Got it. That’s great. And pivoting to competition, small handful of questions here, but to kick things off, PanOptix Pro from Alcon has started to roll out. Talk about what you’re seeing in these early days from that lens in terms of trialing, sampling, how your customers are reacting, etcetera, and and then I’ll have a follow-up.

Ron Kurtz, President and CEO, RxSight: So I you know, obviously, we don’t have any specific knowledge about how Panaptics Pro is doing or, I think that, you know, what I would comment is, that generally, I think there are, now for the first time in several years competitive products in the presbyopia correcting IOL space. And are there any significant differences between these products? I don’t see it. And if you look at the path, for most of the products, which has been, FDA supplements, which some of them even manufacturing supplements where, it’s specifically required to say that you’re you aren’t changing the clinical characteristics of the product. I think that the the likelihood that we’re gonna see any significant clinical difference in these products is small.

They do give an opportunity for companies to, you know, advance their marketing efforts, and we’ve we’ve talked how some of the companies have, you know, used incentivization programs, which were heavily used, especially, in the back half of twenty four and the first quarter of this year. But, those are and that’s been something that’s been done over the last twenty years, but they those also are transient. You you know, it’s it’s they’re not sustainable. And at the end of the day, they’re gonna mostly impact other presbyopia correcting IOLs. It doesn’t mean that we’re immune to it.

You know, we get somewhere between twenty five and thirty percent of our patients from, patients who would have gotten a presbyopia correcting IOLs, so obviously we are impacted by it, but to a much lesser extent. And if you know, I think that when when people look at the at the share movements, what they’re gonna see is that most of that has been amongst the people the the companies that are focused in that market. Got it. That’s great.

Tom Steffen, Analyst, Stifel: And and handful of those points, Ron, probably will will answer my next question. But, you know, you’ve talked about confidence in these trialing headwinds starting to abate in the third quarter of this year, I believe. I guess what underpins that confidence around more specific timing, I guess? Why in the back half of this year, especially with PanOptix Pro starting to ramp up, do you believe the trialing headwinds towards LAL are gonna start to abate?

Ron Kurtz, President and CEO, RxSight: Well, again, we, you know, we don’t know what other people are going to do, but, you know, historically, Alcon, which makes the PanOptix Pro, has been fairly price disciplined. And I think that, you know, they’ve made comments similar to that over time. I I think that that’s a a strategy that’s worked for them. They will you know, again, we’ll have to see what happens in the marketplace, but, generally, it’s just not sustainable to continue these programs.

Tom Steffen, Analyst, Stifel: Got it. That makes sense. And then pivoting to utilization, Ron and Shelley, you talked on the recent call about new programs you’re you’re instituting to help with same store sales or or utilization. Can you elaborate a bit more on what this entails more specifically? What what are the new programs?

And then what was the impetus of this given macro seemingly has been the main driver of the recent deceleration in in utilization? Well,

Ron Kurtz, President and CEO, RxSight: I think that I while we’ve definitely ascribed impact from the macro headwinds that we’ve talked about as well as the the competitive. Our opportunity as we’ve continued to dry to expand our installed base is not just to expand continue to expand that installed base, but it’s also to drive utilization at our at our current customers. And that’s a lever that we have that can you know, that becomes more and more significant over time. So it’s not that this was not an effort of the company beforehand, but, it’s something that can, definitely help counterweight, when there are other headwinds in the marketplace. Mhmm.

And so, it’s certainly something that’s under our control. And, what, you know, what we’ve learned both here as well as, you know, our previous efforts in ophthalmology is that whenever you introduce a new technology, there’s a a learning curve that goes along with it. It’s not just a there’s a a set of clinical, skills and facts that have to be developed by surgeons, by staff in the clinic, and there’s also, practice learnings, that relate to, efficiencies as well as marketing techniques. And we’ve the way that you accelerate your adoption in the marketplace, or one of the ways that you accelerate that, is you take the learnings from your higher adopting sites, and you bring them to your lower adopting because everybody has different skill sets, in in their practice. And so that’s the function of, our, you know, clinical trainers and account managing team, but we can we can always do that in a a more concerted and effective way.

And those are the programs that we’ve specifically emphasized as we try to leverage our installed base to continue to drive growth.

Tom Steffen, Analyst, Stifel: Got it. So it’s bringing best practices from your higher volume centers, trying to kinda translate those to to the remaining installed base. You know, when do we think about these benefits starting to show up in LAL volumes or or starting to contribute, and why? Is is there anything that’s low hanging fruit, or is this more of a kind of intermediate to longer term type of effort?

Ron Kurtz, President and CEO, RxSight: I, you know, I think that generally, you know, things are you know, anything we do is gonna be in the time frame that we’ve talked about that if we’re gonna you know, when we when we see you know, in terms of our guidance, we we said that we we were expected to see more of an impact in the back half of the year, and, you know, I think that’s consistent. And then and then beyond that, of course, the efforts that we’re that we’re describing are not short term efforts. Therefore, you know, therefore, the long term growth of, LAL volume, you know, for many years to come, we’re you know, we we believe that the that the primary growth driver for, premium has been, the high quality, and range of vision that you’re able to deliver with the LAL, and and we think that that, should continue to grow, over time and help grow the premium market, which is the only area in ophthalmology, really, where ophthalmologists and ophthalmic practices have an opportunity to grow their revenue when their revenue is being cut by cuts in reimbursement.

Tom Steffen, Analyst, Stifel: Right.

Ron Kurtz, President and CEO, RxSight: It you know, this is we we think we have the right tool for the right time.

Tom Steffen, Analyst, Stifel: Got it. That’s great. And then sticking with utilization, Shelley, maybe this one’s for you, but, you’ve talked about how, parts of the 2024 class of surgeons haven’t come up to speed as quickly as other recent classes. And, you know, maybe there is potentially a weaker end market at play. But what are your latest observations of that 2024 surgeon cohort?

We’re now, you know, five, six months into 2025. You know, what fundamentally are you seeing with with that more recent surgeon class?

Shelley Thunin, CFO, RxSight: Yeah. So, you know, I look at that number of LALs per LDD for each of our classes, you know, quarterly. We don’t necessarily look at it monthly. And so when we look at our overall classes of installs in ’21 and prior, ’22 and ’23, they all end up about the same number of LALs per LAD. They’re very close together in terms of their numbers.

The distribution is very close. And so what we did see is in ’23 is that class of customers got to the same point in time, in each point in time, faster than the ’21 and prior and ’22 classes. What we haven’t seen is that yet in the ’24 class, and I’ve only looked at installs in the first half. Right. And, you know, really, it becomes more relevant after people have been installed about a year.

But, certainly, if I look at, where they are right now, particularly in the first, you know, quarter of twenty five, which is the installs in the first and second quarter of last year, they’ve grown at a lower rate of increase than the ’23, than the twenty twenty twenty four class 2023 class. I’m sorry. Okay. And, it’s not inconsistent with what we saw in the overall numbers in, the first quarter. So I wanna kinda leave that in front of us.

I don’t think I’ll look at the people installed in the third quarter until we get through the third quarter, so they’re pretty, you know, close to

Ron Kurtz, President and CEO, RxSight: Mhmm.

Shelley Thunin, CFO, RxSight: Nine to twelve months installed. But let’s see how the overall market reacts. I suspect that they are very affected by that as well.

Tom Steffen, Analyst, Stifel: Okay. Got it. That’s helpful. And and then maybe last one on, utilization. We look at street estimates, and they currently imply flattish to slightly down utilization in 02/2025 versus 01/2025.

But April was better than March. The macro for May has has improved, which may bode well for for end markets and for LAL. And then when we look back at two q twenty four utilization, it increased high single digits versus one q. Mhmm. And then 02/2023 grew mid single digits versus one q 20 three.

So are there any incremental dynamics we should be aware of this year that wouldn’t allow for a sequential increase in utilization in 02/2025 versus one q twenty five? Maybe talk to us about talk to us about any fundamental factors that, you know, maybe wouldn’t allow normal quarter to quarter growth, this year in two q for utilization.

Shelley Thunin, CFO, RxSight: Yeah. And and, you know, we think that metric is relevant, but we certainly don’t guide or run the business on that metric. I think what is more important for us is, one, market share, you know, now that we’ve gotten a little bit larger, and Ron talked about earlier, you know, it that if you pull out the LAL from the quantity volume in The US, the market has been flat to down, whereas the growth in overall premium in The US has come from the LAL. So I think that that’s an important factor. You know, we ended the fourth quarter at about 10%.

Looking at the numbers through the first quarter, we might be about 11 or 12%, and that’s just a function of the market. We continue to grow when the overall market did not. And so I think that’s the important part for us to look at. Going back into the first half of twenty twenty four, that was extraordinarily strong. Right?

And it was a little weaker in the second half, but still very good. It just wasn’t as high as growth. So, we have guided that the number of LDDs, would be higher than ’24 and ’25, not specific numbers. And so we had a really strong, LDD sales, number in, in the first quarter. So you always kinda have to take in those factors as well.

But what we’re looking for is absolute growth in numbers and absolute growth in in market share. And then I think that’s relative to the overall market, and we won’t know that, you know, until probably after well after we report, you know, four to six weeks after we report our second quarter results.

Tom Steffen, Analyst, Stifel: Okay. Got it. Really helpful color. And and and, Shelley, you mentioned LDDs. Wanted to ask a couple questions there.

But to your point, LDD placement growth was solid again in January. But pre premium IOL end markets seemingly maybe softened a a bit, or have softened of late. So as you look at your pipeline and your sales funnel, as we sit here today, are you sensing or seeing any sort of increased capital equipment purchasing hesitancy or trepidation? Maybe if you can talk to, you know, real time observations in the funnel.

Shelley Thunin, CFO, RxSight: Yeah. I think, you know, when we look at overall funnel for LDDs, it remains relatively stable. And remember, of course, LDD sales tend to happen like all capital at the end of the quarter. That’s just the way industry has trained people to behave, you know, doctors and and others. So nothing looks different to us this quarter than it has in in previous quarters.

That’s always been, you know, the way the operation goes. And, you know, the thing to keep in mind, for us is the payback for an average doctor is about six months. That’s very quick, as well. And the the impetus to buy is really about, you know, patient care, better results for patients, and, also, they’re making more money with the LAL. Right?

Because about seventy five percent of the patient population that’s treated with an LAL is is coming from people who would have otherwise gotten a monofocal or a lower payment to the doctor with the toric. And so I think that they have to just be ready to take advantage of being able to grow their practice. John, do you add anything? I think we’re out

Tom Steffen, Analyst, Stifel: of time.

Ron Kurtz, President and CEO, RxSight: Thank you so much, Tom.

Tom Steffen, Analyst, Stifel: That’s great. If I can squeeze in one more question, just on guidance. You know, for overall 2025 sales guidance, you talked about LDDs being up year over year versus 2024. I think the low end of guidance assumed utilization rest of year was flat versus one q twenty five. But then the high end, you’ll hopefully see consumer stabilization, competitive trialing start to abate.

So I guess my question is, has your confidence in achieving the high end of 2025 guidance increased over the last several weeks and months with at least a more stable stable macro today relative to even the time of your your one q call. Maybe you can talk about kind of confidence in the high end of that guidance as we think about the macro improvement.

Shelley Thunin, CFO, RxSight: Yeah. I think, you know, first of all, I I don’t wanna imply that it is, utilization, LALs per LDD. Right? Because that can be a variable number. What I typically try and talk about is absolute volume, you know, quantity as well.

And I think that, you know, where we have guided is that we would expect the second half, to to be the growth half of the year, right, rather than this first half. And that really requires kind of two things. One is is that we have some stability politically and in the economy and particularly the stock market. Right? So, people act when they feel confident that the macroeconomics are not gonna affect them.

So I think we still got some time in that as well. We also believe that the trialing, has to end at a certain point. As Ron said, it’s not economically viable for the competitors. And those would be the two things that would drive us into the higher end of our guidance.

Tom Steffen, Analyst, Stifel: Got it. That’s perfect. Great note to end on, Ron, Shelley. Thank you guys so much. Great seeing you.

Shelley Thunin, CFO, RxSight: Thank you.

Ron Kurtz, President and CEO, RxSight: Thank you.

Tom Steffen, Analyst, Stifel: Alright. Take care. Bye.

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