Good day, and welcome to RxSight Q2 2022 earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star one one on your telephone. I would now like to hand the conference over to your speaker for today. Alex Huang, you may begin. Thank you. Operator. Presenting today are RxSight President and Chief Executive Officer, Ron Kurtz, and Chief Financial Officer, Shelley Thunen. Earlier today, RxSight released financial results for the three and six months ended June 30, 2022. 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 your questions during today's call reflect management's views as of today, August 8, 2022 only, and will include forward-looking statements 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 earlier today and in our filings with the Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these 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 website at rxsight.com on the investor calendar page of the News and Events section on our investor relations page. With that, I will turn the call over to President and CEO, Dr. Ron Kurtz. Good afternoon, and thank you all for joining us. RxSight continues to establish a track record of strong year-over-year and sequential growth with 2022 Q2 revenue of $11.4 million, up 132% versus the year ago quarter and up 27% versus the Q1 of this year. Growth in the quarter was broad-based, reflecting both accelerating utilization of our Light Adjustable Lens or LAL and vigorous demand for our Light Delivery Device, or LDD. Given this performance, we're raising our 2022 full year revenue guidance to a range of $44 -46 million, which implies a 95%-104% growth rate versus 2021. RxSight is focused exclusively on the attractive high growth premium IOL market, where our unique clinical approach is beginning to take hold and gain share. Our proprietary system delivers outstanding outcomes that consistently exceed the exacting expectations of private pay patients who want excellent vision without glasses or compromises. These outcomes, in turn, provide doctors the confidence and peace of mind to offer our LALs to an increasing number of their premium cataract patients. Leveraging these significant competitive advantages, we're building an efficient razor blade commercial model designed to drive sustained growth, expand margins, and create long term value for shareholders. Our Q2 performance underscores the strides we're making to execute this growth strategy, starting with driving LAL adoption. During the Q2 of 2022, doctors implanted 5,400 new LALs, representing an increase of 196% versus a year-ago quarter and 30% versus the Q1 of 2022. The momentum in LAL utilization reflects a number of powerful benefits doctors and patients derive when they choose our technology. First, our LAL allows surgeons to precisely adjust each patient's refractive correction to meet that person's individual lifestyle needs and visual preferences without increasing the risk of troubling side effects like glare halos or loss of contrast that are common with other premium IOLs. Second, all other premium IOLs require the doctor to select a lens type and power before surgery, committing the patient to a specific visual approach and uncertainty as to whether their goals will be met. Conversely, the LAL removes this high stakes preoperative guesswork by allowing patients to test drive their vision as the IOL power is adjusted after surgery. Third, the LAL addresses a broad based population. The ability to correct astigmatism and sphere in the same increments as glasses, or with about twice the precision of other premium IOLs, makes it attractive across the board, including to perfectionists, to those who are on the fence regarding premium IOLs, as well as to patients who are worried about side effects like glare and halo. Fourth, the LAL delivers clinical results that are superior to those reported for competitive products. In our FDA clinical trials, 70% of LAL patients achieve 20/20 or better uncorrected visual acuity without glasses, while in similar trials of other premium IOLs, only about 40% of patients met this performance level. Moreover, subsequent real world LAL data continues to reveal excellent, reliable outcomes, with a recent follow up reading of 51 patients demonstrating 82.4% achieving 20/20 or better vision without glasses. Each of these are important attributes that not only help doctors deliver optimal care to individual premium cataract patients, but also help them increase practice revenue and profitability. Our clinical, field, and customer service teams play a critical role in the adoption process by working closely with every new account to ensure that doctors, technicians, and staff members are fully trained, proficient providers who can offer the LAL to patients with confidence. Quarterbacked by our recently established 18-person LAL account managers, our team engages with practices on an ongoing basis to assist with patient awareness and education programs, development of efficient patient flow processes, data analysis on LAL outcomes, and other referral and traffic building initiatives. The continued expansion of our LDD install base is essential to driving robust LAL utilization and to executing our overall growth strategy. The LDD is used to administer brief in-office light treatments that induce the precise postoperative changes to the focusing power of the LAL. During the quarter, we sold 49 new LDDs to the network of clinical sites offering these postoperative LAL treatments. With these new Q2 placements, our installed base rose to 294 units, up 126% compared to the year ago quarter of 130 units and up 23% versus the Q1 of 2022. Importantly, the vast majority of LDD units sold in the Q2 were to new customers, signaling a continuation of favorable LAL adoption trends and the increasing productivity of our recently expanded 20-person LDD sales team. This team is focused primarily on the roughly 3,000 US cataract surgeons who perform approximately 70% of premium IOL procedures. You'll recall that we are planning to launch a lower cost to manufacture LDD, which will have the same functionality and performance as our current model. As we reported in June, the FDA requested some additional data be added to our submission, which we will provide. Consequently, we now anticipate approval in the H1 of 2023. We'd launch early in the H2 of next year. Since supply chain pressures continue, particularly for chips and other components, we will continue to bring in inventories to lower the cost to manufacture LDD when available from suppliers to ensure we have supply, since in this environment, suppliers will divert inventories on order to other customers if we do not take them when ready. In about 60 days, we head to Chicago for the American Academy of Ophthalmology annual meeting. We have numerous LAL awareness building programs planned and expect RxSight to be featured in a number of surgeon presentations. In addition, we will host a roundtable discussion on October first for members of the investment community attending AAO. The session will feature leading surgeons who will discuss their experience and insights regarding the LAL system. To summarize, we believe RxSight is well positioned to succeed in the high-growth private pay premium IOL market. Our Q2 performance reveals the solid inroads we're making to establish a durable LDD installed base and drive sustained utilization of the LAL. We expect these favorable trends to continue as our newly expanded commercial organization becomes even more cohesive and productive, and as an increasing number of doctors and patients recognize the significant advantages of our unique technology. With that, I'll turn the call over to Shelley for an overview of our Q2 2022 financial results and full year guidance. Thank you, Ron, and good afternoon, everyone. As Ron noted, total revenue in the Q2 was $11.4 million, increasing 132% compared to the Q2 of 2021 and 27% compared to the Q1 of 2022. By product line, the 49 LDDs in the Q2 of 2022 generated revenue of $5.7 million. This compares to 25 LDD unit sales for $3 million in revenue in the Q2 of 2021, representing growth of 96% in units and 92% growth in revenue. Compared to the Q1 of 2022, when we sold 40 LDDs for $4.6 million in revenue, our Q2 2022 LDD placements rose 23% and the corresponding revenue rose 24%. The LDD ASP was approximately $116,000 in the Q2 of 2022 versus approximately $119,000 in the year-ago period. There was a slight sequential increase in LDD ASP from approximately $114,000 in the Q1 of 2022, when we offered preferred pricing to several accounts purchasing multiple units. We sold 5,400 LALs in the Q2 of 2022, generating $5.3 million in revenue. This compares to 1,825 LAL unit sales for $1.8 million in revenue in the Q2 of 2021, representing year-over-year growth of 196% in units and 198% in revenue. In the Q1 of 2022, we sold 4,166 LALs for $4.1 million in revenue, representing quarterly sequential growth of 30% for both units and revenue. In the Q2 of 2022, LAL sales represented 47% of total revenue. In the Q2 of 2021, LAL sales represented 37% of total revenue. The favorable shift in revenue mix reflects rising utilization of the LAL. In the Q1 of 2022, LAL sales accounted for 46% of revenue, similar to the Q2. As Ron indicated, we believe multiple factors are driving strong LAL sales growth, including the recent expansion and increasing productivity of our commercial teams, the ongoing growth of our LDD install base, and the fundamental clinical benefit of our technology compared to competing premium IOLs. We believe COVID had less of an impact than in previous quarters, with minimal interruptions to our site practices surgery schedules, which are typically booked 1-3 months in advance. Q2 gross profit was $4.8 million or 42% of revenue, compared to a gross loss of $800,000 or 17% of revenue in the Q2 of 2021. Recall, in the Q2 of 2021, we recorded a $1.7 million inventory write-down in anticipation of the full rollout of ActivShield in the Q3 of 2021. The Q2 gross profit of $4.8 million or 42% of revenue was in line with the Q1 of 2022, with $3.8 million of gross profit and 42% of revenue. Selling, general, and administrative expenses in the Q2 of 2022 were $14.4 million, up 121% compared to the $6.5 million in the year ago quarter, and up 5.6% compared to the $13.6 million in the Q1 of 2022. The quarter-over-quarter increase was primarily due to increased headcount, sales and marketing as we built our sales force from six at the time of our IPO in July of 2021 to 38 today, increased cost to operate as a public company, and an increase in stock-based compensation. The sequential increase of 5.6% from the Q1 of this year was related primarily to increased travel and headcount in sales and marketing. Research and development expenses for the Q2 of 2022 were $6.2 million, down 5.6% compared to $6.6 million in the year-ago quarter, and down 7.8% compared to $6.7 million in the Q1 of 2022. As noted in previous calls, research and development costs, which include clinical and regulatory, can fluctuate quarter to quarter based on the timing of utilizing research and development materials and clinical studies. The half a million dollar decrease sequentially was primarily due to reduced testing materials. We reported a net loss in the Q2 of $16.7 million, or a loss of $0.61 per basic and diluted shares using weighted average shares outstanding of 27.6 million shares. In the Q2 of 2021, our net loss was $13.5 million or $0.328 and $0.353 per share on a basic and diluted basis, respectively. I would also like to highlight the non-GAAP disclosure in the press release for the non-cash stock-based compensation expense as it provides investors with useful comparative information. Stock-based compensation in the Q2 of 2022 was $2.9 million, resulting in a non-GAAP loss of $13.8 million, or a loss of $0.50 per basic and diluted share. Moving to the balance sheet, we ended the Q2 of 2022 with $128.6 million of cash equivalents and short-term investments. Long-term debt was $39.9 million. Today, we filed an S-3 registration statement, commonly called a shelf registration with the SEC to register shares with a value of up to $200 million. The filing included an at the market or ATM that allows us, through our broker, to offer and sell from time to time shares of our common stock up to an aggregate offering price of $50 million. We believe it is prudent to have the S-3 and ATM in place for future use to fund our growth initiatives for several years. While we have not made any determination regarding the timing and amount of any sales, we will continue to monitor our capital needs and market conditions. The ATM will be effective for a period of three years. Turning now to guidance. As Ron indicated, we increased our 2022 revenue guidance to a range of $44 -46 million. Our updated revenue range implies year-over-year growth of 95%-104% and compares to prior guidance of $41.5 -45.5 million. We expect the usual seasonality patterns in 2022, with the second and Q4s generally the strongest for capital equipment or LDD and for softer LAL procedure volumes in the Q3 as doctors and patients take time off during the summer. We are also increasing our gross margin guidance to a range of 37%-38% of revenue versus the prior guidance range of 35%-36% of revenue. While our gross margin for the H1 of 2022 was 42% of revenue, we expect higher LDD material costs in the H2 of the year as compared to the H1 of 2022 as supply chain constraints continue to increase our material costs. While we've been able to procure the necessary materials to manufacture the LDD and meet growing customer demand, we continue to face supply chain constraints and inflationary pressures exacerbated by the latest COVID-related shutdowns in China and the war in Ukraine. Our operations team has navigated this situation successfully thus far, and we continue to monitor our supplier channels and work closely with our suppliers to mitigate disruptions whenever possible. Moving on. We are narrowing our operating expense guidance range to $88-90 million compared to a prior guidance range of $86 -90 million. While R&D spending will rise in 2022 versus 2021, our largest spending increases will be in SG&A related to increased headcount in our sales and marketing and commercial organizations, growing customer demand to participate in Phase IV studies, and full year costs associated with operating as a public company. We maintain our estimate for non-cash stock-based compensation in the range of $12 -13 million for 2022 compared to $7.6 million in 2021. Now I will turn the call back to Ron for closing remarks. Thank you, Shelley. Just over a week ago, we marked the one-year anniversary of RxSight's initial public offering. It's been an exciting and eventful year for the organization as we navigated our way as a newly public company, a process made even more interesting by an often volatile stock market, a protracted global pandemic, global supply chain shortages, and persistent macroeconomic headwinds. I'm very proud of the RxSight team and the significant progress that we have made together with our customers to advance our technology and build a strong and vibrant company. Over the last four quarters, we have grown our LDD installed base by 164 units or 126%. We guided dramatic growth in LAL adoption with over 14,500 new LAL implantations, representing an increase of 122%. Enhanced the LAL's ease of use with the addition of ActivShield technology. Established a formidable collaboration with more than 80 RxSight practices to collect and share a wealth of useful clinical data stored on practice LDDs. Expanded the size and scope of our commercial team to effectively target premium IOL surgeons while helping existing customers take full advantage of our unique technology and deliver triple-digit growth in quarterly revenue while managing expenses in line with expectations and building a healthy balance sheet. I want to acknowledge the dedication, professionalism, and hard work of our growing RxSight team for these and other accomplishments over the last year. Looking forward, I've never been more confident in our ability to expand and lead the fast-growing premium IOL market with our unique clinical system, capable of providing every patient with the highest quality vision. Now, operator, please open the call for questions. Thank you. As a reminder, to ask the questions, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ryan Zimmerman with BTIG. Your line is open. Good afternoon. Thanks for taking our questions, and congrats on all the progress. Maybe to start, you know, the LDD numbers were certainly strong. You know, Ron, I'd appreciate your commentary just about kind of the install base and, you know, what you'd say is kind of the changing characteristics or the changing nature of the customer today versus maybe 12 months ago when, you know, we thought of them as early adopters and kinda how you're seeing the technology kinda, you know, permeate the broader premium segment. Thank you, Ryan. You know, I think we're still in the early phase, earlier phases of adoption. We're still, you know, even with the numbers that we have. However, you know, we do see continued development of the installed base with, you know, customers that may not be the early innovators or early adopters, but those a little bit later on that early phase, perhaps early majority. You know, the characteristics of those are typically more focused on making the technology work effectively from a business practice standpoint. I think generally we see that many of these practices are, perhaps, you know, more prepared to implement the technology. Of course, we continue to get better at helping them so that they can start faster out of the gate. Shelley, do you have anything? And- Go ahead, Ryan. No, that's very helpful, Ron, and I appreciate the commentary. I guess to dovetail off of that question, I mean, the units per site as we think about kind of the productivity metrics of the installed base continue to go up, right? We're starting to see it hitting a new high this quarter. You know, I'm curious kind of as you move into the early majority segment, you know, how you think about productivity, and not just in the context of the installed base, but, you know, I'd love to get your thoughts about the sales force. Because you've added more on the capital equipment side than, say, you know, the account managers on the LAL side. As install base grows, do you need to add more on the LAL side to manage and help shepherd, you know, customers to maintain some of these higher utilization rates? Thanks for taking my questions. Yeah. In terms of the sales force, you know, our LDD sales force is 20 individuals. Our LAL account managers is 18. They're fairly closely related, and they work closely together. You know, if you could just repeat that first part of your question, I'm sorry. Sure. No problem. I guess my question is just how do you maintain the utilization going forward? Do you have to kind of grow the LAL sales force? And just, you know, your comments about kind of where the utilization you think can go over time, you know, irrespective of, you know, sales force dynamics. Yeah. I think one thing that you need to consider is that, you know, that while that number is, LALs per LDD is readily accessible, it really is a more complex picture, because it reflects, you know, not only our adoption, but it reflects just things about the practices. How many premium IOLs they're doing, how many overall cataracts they're doing. Our goal is really focused on penetrating the entire market, whether that's, you know, obviously, we try to focus on those people who are doing more premium, but we wanna really penetrate the entire market and allow customers to offer this to as many patients as possible. So that number has some complexity to it. You know, we certainly believe that our LAL account managers have and will continue to have an important impact on that number along with our clinical trainers. We're building this infrastructure that didn't exist before for postoperative light treatments in order to deliver these, you know, clinical results that also didn't exist before. That is an investment that we're making. It's an investment that our customers are making, and we anticipate that that'll continue to pay off over time. Yeah. Can I add something, Ron? You know, so the way we look at the LAL volume is there's kind of three primary ways we grow LAL volume. If you wanna talk about whether you're talking about number of LALs per LDD, because that is readily accessible. As we go into the accounts, our first goal with new customers is to get them to take up quickly, do more cases in the first couple of weeks, you know, get going on their sales and the marketing. What we are finding with our new sales forces, both the LDD and LAL, our newer customers are very well prepared to launch, and I think that's important. With existing customers, we continue to go back to them because if we're not, you know, holding 100% of their premium volume, which we don't, we wanna give them an opportunity and tools to make sure that they can increase their LAL penetration because it is the best clinical outcome for their patients. We go into practices that have multiple doctors. They have the infrastructure set up, and it might be one or two doctors that are really driving volume, and this gives their partners an opportunity to start doing premium if they're not doing premium or to increase their premium. Thank you both for the answers. Appreciate it. Thank you. Please stand by for our next question. Our next question comes from the line of Robbie Marcus with JPMorgan. Your line is open. Oh, great. Thanks for taking the questions, and congrats on a good quarter. Maybe to start, you know, you beat sell-side consensus by $600,000. You raised the midpoint of the range by $1.5 million. Just maybe speak to where you're seeing the most confidence to raise numbers more than the beat. You know, are you comfortable with the spread of Q3 versus Q4 that the Street's currently modeling? Okay, that's kind of a multi-part question, so I'll answer your first question first. You know, while we feel very confident on both our LDD and LAL numbers, what we have seen is the LALs have increased pretty rapidly, and we've gotten good penetration in the last couple of quarters. I think we are confident in the spread. You know, it's not that big. It's only $2 million between our low end and our high end of guidance. But I think that we, you know, continue to think that we'll see some seasonality in the Q3, and that the Q4 will be, you know, probably our strongest quarter for both, you know, LDD revenue and potentially, obviously, for the Q4 for LAL as well because we'll be adding to our customer base. Great. Shelley, you know, you did the $50 million ATM today. Do you think that's all we'll see in terms of capital raises in the near to midterm? Should that be enough to get you to break even? Thanks a lot. You know, I think that, of course, some of this is good housekeeping. Obviously, 1 year after we went public, we can file for an S-3 registration statement. The ATM is good for 3 years. We currently have, you know, a nice cash balance with $128 million in cash and, you know, just under $40 million in debt. Of course, we wouldn't pay back our debt until, you know, we got profitable or, you know, got closer to profitability. And I think really using the ATM will be at this point in time opportunistic. It really depends on how the market performs and whether it's the right timing to do so as well. I wouldn't necessarily say we're gonna do it tomorrow, but I wouldn't say we wouldn't either if the timing was good. you know, we have not yet commented on, you know, when we would hit breakeven, but this gives us potentially in addition to the $20 million line of credit that we can draw on next year in 2023, you know, the ability to add $70 million to our balance sheet, you know, based on hopefully, you know, investor interest in investing in the company. Great. Thanks a lot. Thank you. Please stand by for our next question. Our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Hi, this is Leigh calling in for Larry Biegelsen. Thanks for taking my questions. Can we talk about the gross margin for a minute? Shelley Thunen, you talked about the gross margin stepping down from 42% in the H1 to we're getting to kind of the low 30% in the H2. Any color you can provide as far as the cadence from Q3 to Q4, and if there are any implications for gross margin, you know, beyond 2022. I know you mentioned higher input costs for LDD. Is that something you can pass along to the customers? I have a follow-up. Thanks. Okay, great. I'll kind of start at the end of your question. Is it something that we're planning on passing on to customers? No. You know, capital equipment, it's pretty rare to raise your capital costs over time, particularly as you get deeper in. We certainly wouldn't sacrifice, you know, new accounts to improve our margin ever so slightly on the capital, right? The most important thing is to get that installed so that we can in turn, you know, sell our more profitable line, which is the LAL, and that has, you know, much better gross margins as well. We wouldn't increase prices. I do think that if we look at the margin mix between quarters, it really depends. We had very high mix of LALs in the H1 of this year. You know, we initially had guided that we would have, you know, somewhere between 50%-60% LDD, and it's been a little stronger on the LAL side, and so that's driven the margin up. As well as the fact you have first in, first out on material, and so as we've continued to buy, it's become more expensive. I think that what we're gonna see between the third and Q4 is really just based on mix. But we will have higher LDD costs as we go in. As we move into 2023, as Ron mentioned, we will continue selling all through probably the H1 of 2023. Recall, of course, that you know, it's the same functionality. It's just that we designed a new LDD to lower the cost and normalize our margins. Got it. That's helpful. If I can ask on the new LDD, can you share anything as far as what information you have to give to the FDA, and also what gives you the confidence that you'll have that information in time for a H1 2023 approval? If I can just tack on there, any other R&D priorities you would highlight for the next 12 months? Thank you. Yeah, thank you. We don't disclose our interactions with FDA. The amount of information that's been asked is relatively limited, and we feel confident that we'll be able to address that shortly. The FDA, of course, has 180 days to respond, and so that's really what drives the timeline. Great. Thank you. Please stand by for our next question. Our next question comes from the line. One moment. David Saxon with Needham & Company, your line is open. Hello, this is Joseph on for David Saxon. I guess maybe first just trying to get a little bit more of a clear sense of the adoption curve. We'd love to hear maybe what portion of the higher volume practices you're initially or, you know, were initially targeting that you've been able to engage with. I guess, like, what's the sell-through rate or of the doctors that you guys consider prospects, what percent, you know, end up getting an LDD? Yeah. You know, overall, the Market Scope numbers suggest that there are about 3,000 surgeons who are doing the vast majority, 70% or so, of the premium IOL procedures in the U.S., and that is our primary market currently. You know, it's difficult to get individual numbers about how many premium cases each one and their penetration of premium. Obviously our focus is on those practices that do more premium, and that's where those are the ones that can have, you know, by adopting our technology, can have very quick ROI. We also appeal to customers who are trying to get into the premium game, and who may have been not unable to do so either because they didn't believe in the previous technologies, such as with multifocal lenses, or because they didn't have access to excimer lasers and LASIK for which they could, you know, touch up patients that were unhappy with their clinical results. Okay, that's helpful. Maybe just adding on to that a little bit more. Do you have a sense on, you know, from the higher volume accounts, whether you're taking share in the premium IOL category or if it's, you know, more just increasing premium penetration overall? I have one more after that, if possible. Yeah, it's a good question. You know, we did a survey. It's now about a year old, but it looked at where LAL patients were coming from. About a third of them were patients that would have otherwise received a monofocal conventional IOL. About a third would have received a toric or astigmatism correcting IOL, and about a third would have gotten a presbyopia correcting IOL. You know, with typical pricing, two-thirds of those customers are customers who either would have provided no additional revenue to the practice or significantly lower revenue beyond Medicare payments to the practice. We see, you know, really a mixture. We believe that we're growing the market by being able to offer high quality vision to a broad spectrum of patients, but also obviously taking some market share from other technologies. Okay, great. That's very helpful. I guess maybe just talking on the AAO conference coming up, I wanted to know if you guys maybe saw an uptick in LDD placements following any previous conferences like ASCRS earlier this year. I guess if so, if you expect to see a benefit in the Q4 following that conference. You know, I would say that the conferences, of course, over the last few years, the conferences have been impacted considerably by COVID. We're starting to see you know numbers come back to what we're used to in terms of attendance. They still remain an excellent opportunity for us to educate doctors and for doctors to educate them their peers and interact with their peers and learn about our technology. That's really the biggest factor is just peer-to-peer interactions that lead to increased awareness not only of the clinical results, but also of the economic potential for the technology. You know, of course, that leads ultimately to more sales. The timing of that depends a lot on when the meeting is in the quarter and a lot of other factors. Okay, great. That makes sense. Thank you very much, and congrats on the quarter. Thank you. Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Ron Kurtz for closing remarks. Great. Thank you, operator, and thank you all for your time and attention today and for continuing your interest in RxSight. Have a great day. Conference call. Thank you for your participation. You may now disconnect.