Good day, and thank you for standing by. Welcome to the RxSight Q2 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alex Huang. Please go ahead. Thank you, operator. Presenting today are RxSight President and Chief Executive Officer, Dr. Ron Kurtz, and Chief Financial Officer, Shelley Thunen. Earlier today, RxSight released financial results for the three and six months ended June 30th, 2023. 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 views as of today, August 7, 2023, 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 these 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 website. With that, I will turn the call over to President and Chief Executive Officer, Dr. Ron Kurtz. Good afternoon, and thank you for joining us. Today, we report another strong quarterly performance for RxSight, representing our 10th consecutive period of quarter-over-quarter top-line growth and driven by higher key operating metrics. In addition, we have taken further steps to strengthen our financial position. I'll discuss the favorable trends underlying our business later in the call. First, Shelly will review our Q2 2023 financial performance and recent balance sheet transactions. Thank you, Ron. Good afternoon, everyone. RxSight generated Q2 2023 revenue of $20.8 million, up 83% compared to $11.4 million in the year ago quarter and up 19% compared to the $17.5 million in the Q1 of 2023. We sold 67 Light Delivery Devices in the Q2 of 2023, up 37% compared to 49 units in the year ago period, and up 20% compared to the 56 units in the Q1 of 2023. Q2 2023, LDD sales generated revenue of $7.7 million, up 36% and 19% versus the Q2 of 2022 and Q1 of 2023, respectively. As of June 30th, 2023, our LDD installed base increased to 523 units, up 78% and 15% versus the Q2 of 2022 and Q1 of 2023, respectively. We sold 12,622 LALs in the Q2 of 2023, up 134% and 20% compared to the 5,400 units and 10,523 units in the same year-ago quarter and Q1 of this year, respectively. Q2 2023 LAL unit sales generated $12.4 million in revenue, up 132% and 19% compared to the $5.3 million and $10.4 million in the Q2 of 2022 and the Q1 of 2023, respectively. LAL revenue represented 60% of total revenue in the Q2 of 2023, up from 47% and 59% in the Q2 of 2022 and Q1 of 2023, respectively. Gross margin in the Q2 of 2023 was 58%, compared to 42% in the same year ago quarter and 59% in the Q1 of 2023. Recall that the Q1 2023 gross margin was favorably impacted by LDD material price decreases, freight savings, and improvements in other costs included in LAL cost of sales, so the slight sequential change is consistent with our expectations. SG&A expenses in the Q2 of 2023 were $18.2 million, up 27% versus $14.4 million in the year ago quarter, reflecting increased expenses in sales and marketing, personnel costs and travel, and increased non-cash stock-based compensation in sales, marketing, and G&A. On a sequential basis, SG&A expenses were up 12%, due primarily to increased personnel costs from increased headcount and increased marketing costs. R&D expenses in the Q2 of 2023 rose 20% to $7.4 million, compared to $6.2 million in the same year ago quarter, and $7.2 million in the Q1 of 2023. The change versus the year ago quarter was primarily due to increased clinical study costs and increased headcount. We reported a GAAP net loss in the Q2 of 2023 of $13.8 million, or a loss of $0.40 per basic and diluted share, using weighted average shares outstanding of 34.5 million shares. This compares to a GAAP net loss of $16.7 million, or $0.61 per share on a basic and diluted basis in the same year ago quarter. Non-cash stock-based compensation and loss on extinguishment of debt in the Q2 of 2023 was $4 million and $362,000, respectively, resulting in a non-GAAP loss of $9.5 million or a loss of $0.28 per basic and diluted share. Please refer to the unaudited non-GAAP reconciliation and disclosure included in today's press release for more comparative information. We ended the Q2 of 2023 with cash, cash equivalents and short-term investments of $147.1 million, compared to $153.9 million at March 31st, 2023. The change in the cash balance includes proceeds from our at-the-market program, or ATM, stock option exercises, and Employee Stock Purchase Plan share issuances, less the paydown of $20 million in debt, plus termination fees and cash used in operations. Excluding the proceeds from financing and capital activities and use of capital for principal debt repayments, cash used in operating activities during the Q2 was $9.5 million. This compares to $16.5 million in cash used in operating activities in the Q1 of 2023, which included annual bonus payouts and higher increases in accounts receivable and inventory relative to the Q2 of 2023. On our last conference call, we indicated that we expect sequential quarterly reductions in cash used from operations in 2023. We may see a tick-up in the Q3 because our Q2 cash use from operations was lower than expected, due primarily to improvements in accounts receivable turns and higher accounts payable and accrued expenses. During the Q2 of 2023, we continued to implement our ATM program, designed to further strengthen our balance sheet, raising $19.4 million net of fees through the sale of common shares. We used these proceeds to reduce our term loan debt by half to $20 million. As noted in today's press release, we raised an additional $11.9 million net of fees in July under the ATM and paid off our remaining $20 million debt balance. Turning now to guidance. Based on the Q2 of 2023 performance, we are increasing our 2023 guidance range to $81 million-$86 million, up from our prior guidance of $79 million-$84 million. Our new guidance implies a year-over-year growth rate of 65%-75% and assumes a typical cataract seasonality pattern, with the Q3 lighter due to summer vacation schedules. We are also revising our 2023 guidance range for gross margin to 58%-60% versus prior guidance of 56%-58%. The increase reflects continuing favorable revenue mix of LAL sales, along with improved gross margin from our reconfigured LDD, which we expect to begin shipping this year with a gross margin benefit largely in the Q4. We are increasing our 2023 operating expense guidance to $106 million-$109 million, an increase of $1 million at the top and bottom of the range. The increase reflects consulting fees, additional headcount, and expanded auditor fees relating to the implementation of Sarbanes-Oxley. With the increase in our market cap in the Q2, we became subject to Section 404(b) of the Sarbanes-Oxley Act, effective with our December 31, 2023 fiscal year-end and 10-K to be filed in February 2024. The 2023 OpEx guidance represents a 25%-29% rise over 2022 and primarily reflects our continued investments to build a large, durable, postoperative light treatment infrastructure to support sustained long-term LAL procedure growth. It also includes non-cash stock-based compensation expense of $15 million-$16 million. Since late 2022, we have raised $102.5 million net of fees through our confidentially marketed public offering and ATM program, paid off $40 million in term loan debt and reduced our annual interest expense by approximately $5.6 million. We believe our cash and short-term investment balances, combined with no outstanding debt, strengthens our balance sheet and leaves us well-positioned to achieve profitability from operations with a healthy balance sheet. With that, I'll turn the call back to Ron. Thank you, Shelly. Last week, we marked the 2nd anniversary of our IPO, and I'd like to use my time today to highlight the progress we've made to position RxSight for long-term success. First, we substantially increased the size and scope of our commercial organization, which has done a remarkable job, as evidenced by the 2-year growth trends in our business. Compared to the 2Q 2021, revenue is up 325%, and quarterly LDD unit sales are up by more than 160%. Our installed base is roughly 3 times the size it was 2 years ago and now extends into Canada. Over this same period, LAL unit sales are up almost 600% and currently accounts for the majority of our total revenue. As Shelley just summarized, we have also continued to strengthen our balance sheet and investor base, which we believe provides a strong foundation for continued execution of our growth strategy and sets us on a path for future operating profit. At the same time, we've added new institutional shareholders to our ownership base and experienced a fivefold increase in the average daily trading volume of our stock, which, along with the rise in market capitalization, has substantially increased the universe of institutions that can consider a meaningful RxSight position. Driving our success since the IPO has been the outstanding performance of our Light Adjustable Lens across a wide range of patient types and preferences. We focused our efforts these past 2 years on continually refining the LAL technology and the critical knowledge base to enable doctors to deliver the best possible experience and results for patients. The LAL stands apart from every other premium IOL in the market today because postoperative adjustability allows patients to achieve precise, high-quality vision that they can test, drive, and customize to arrive at their unique desired visual outcome. The growing body of real-world clinical data collected over the past 2 years underscores the LAL's ability to deliver superior, uncorrected, binocular visual acuity, with the vast majority of patients achieving excellent vision over a range of distances, without increases in visual side effects such as glare and halos or reductions in contrast sensitivity. A combination of outcomes that are increasingly being prioritized by doctors and patients, but are difficult to achieve consistently with competing fixed-power lenses. By appealing to a wide variety of standard and premium IOL patients, the LAL enables practices to achieve a rapid return on investment for the LDD and establish an important ongoing premium revenue stream that can be further leveraged as additional practitioners tap into an existing light treatment infrastructure. We believe this will continue to be an important factor in growing LAL utilization, which has been rising steadily over the past two years. In closing, we are pleased with the strides that the RxSight team has made in collaborating with our customers and investors as a public company. While we are still in the early stages of adoption, the LAL is beginning to change the premium IOL landscape and fuel expansion of this high-growth market. Through a continued focus on customer needs and the thoughtful execution of our growth strategy, we believe the LAL can ultimately occupy a leading position in the premium cataract market, delivering sustained long-term value to all stakeholders. With that, I'll ask the operator to open the call for questions. Thank you. We will now conduct the question-and-answer session. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Thank you. Our first question is from Craig Bijou of BofA Securities. Please proceed with your question. One moment for our next question. Thank you. Our next question comes from Robbie Marcus of J.P. Morgan. Please proceed with your question. Oh, great. Thanks for taking the question, and congrats on a nice quarter. Thank you, Robbie. Maybe to start, you know, this is the Q3 in a row, by my math, where we're seeing a really nice tick-up in utilization in lens per LDD in the quarter. You know, I, I think starting in Q4 and now first and second, it's a, it's a pretty significant step up. Maybe just speak to some of the trends you're seeing. How broad-based is this across the portfolio? Is it driven by, you know, a, a top percentage, or is it more wholesome from top to bottom across users? I'll throw my second question in as well. You've had another quarter of really nice LDD placement. The installed base is now over 500. How are you thinking about where you stand in terms of penetration of LDDs versus the broader, you know, potential base? Is future growth gonna be coming more from LAL uptake or LDD placements? Thanks a lot. Thank you, Robbie. I'll start, and Shelly can add in anything. With respect to utilization, you know, generally, we think the, the increase in utilization has been broad-based. Some of that is attributable to, you know, existing customers who've continued to increase their utilization as, as, you know, they've seen the benefits of the technology as more doctors in the practice have access to the infrastructure that has already been established in those practices. Also with new customers, you know, both because the characteristics of the Light Adjustable Lens are more broadly known, doctors are more confident in starting with, you know, a more of a commitment to the technology, starting with larger volumes. Then, of course, our team, which consists, both of, our sales team as well as our clinical trainers, as we have, you know, learned over the last several years how to give practices the information for them to start more efficiently and to expand more efficiently. I think all of those have been factors in the in the growth of LAL utilization, and we would anticipate that those factors would continue. Anything to add there, Shelley? No. With respect to LDD penetration, as you noted, we're above 500 now. We still think that's a fraction of the overall possibility. You know, in the U.S., there are several thousand practices that do cataract surgery, and, you know, we're still in a minority of those. So we still see room for growth on the LDD side as well. Mm-hmm. Yeah, I would just add to clarify a little bit. You know, one of the things that's been nice about our LDD sales as well, is that we've had good discipline in terms of pricing, that the pricing and ASP for the LDD has remained, changes are very narrow. And then just to clarify on what Ron said in terms of penetration, there are about 10,000 surgeons in the US today who do cataract surgery. We believe, you know, a few thousand, 2,000-3,000 do the majority, maybe 70% of the total number. We don't believe our total market is limited to those high-volume practices. In fact, you know, as we get more mature, obviously today we're, you know, fishing where the fish are. It also offers an opportunity for other surgeons to provide, you know, premium IOL, specifically the LAL, to their patients with superior results and allow them to get in the market. Anything else, Ron? No. Any follow-up, Robbie? No, you, you answered it all. Appreciate taking the questions. Thanks a lot. Thank you. One moment for our next question. Thank you. Our next question comes from Steve Lichtman of Oppenheimer and Co., Inc. Please proceed with your question. Thank you. Evening, everyone. you know, beyond, you know, top line, the other standout looked to be on the gross margin side. Couple of questions there. One, what's driving the underlying gross margin benefit? Is it, is it just mix, or is there, is there, something else afoot? Secondly, Shelley, can you level set us on where you think, you know, we should be exiting the Q4 with the lower cost LDD system in, in place? Okay. Thank you, Steve. Yeah, the gross margin has really been driven by a few things. One is, of course, mix, right? With the LALs substantially more profitable at the margin level than the LDD, that is something we see as a continuing trend. Costs have also gone down as we have, as we've increased the amount of production we have in the LAL as well. We do expect to see some nice margin expansion in the Q4, but not much in the third, you know, relative to what we achieved in the first and Q2, due to the fact that our reconfigured LDD will bear a higher gross margin, we think that will have benefit. We should see some differential between the third and the Q4s based upon, not only mix, but as well as the introduction of our reconfigured LDD. Great, thanks. Then just my follow-up, I guess, on the LDD number, real nice sequential increase here, and above our expectations. Can you talk to ASCRS and how coming out of that, any tailwinds that you saw coming out of that conference where you did have, you know, a, a pretty big presence, and, you know, is that part of what we're seeing here in this LDD number? Thanks. I agree. We had a very strong ASCRS. Certainly that has helped us in Q2. I think it's, you know, generally consistent with increasing awareness about the Light Adjustable Lens. You know, that awareness drives interest on the parts of practices. You know, we see that as a trend that has, you know, grown sequentially, and we would hope that would continue to grow. Thanks, Ron. Thanks, Shelley. Thank you. One moment for our next question. Thank you. Our next question comes from Ryan Zimmerman of BTIG. Please proceed with your question. Hey, good afternoon, and congrats on a nice quarter. Wanna ask just a couple questions, Ron. More of a big picture question first, but, you know, as you've seen the uptake in, in the market here, I think, you know, when we talked earlier this quarter, it, it almost feels like your aspirations are expanding, your, your aperture is widening. Just as you see, you know, such good adoption, does it change kind of how you view your commercial strategy in terms of not just the US market, but I guess the question kind of hints at, you know, aspirations beyond the US, Canada, maybe Mexico, where some of the clinical trial cases were done, and what the opportunity may be internationally and if and when we could see that? You know, as you know, Ryan, ophthalmology is really an international field. The US traditionally has, led in terms of, especially in terms of the private pay markets. So we're focused, on, you know, fully developing the US market, initially. We're, you know, that is our primary focus, but we do see, significant opportunities outside the US as well. You know, we'll, as, as we have started in Canada, we'll, continue to, develop those, with time. Okay. I think we might, Ron, specifically to US, 'cause of the CE mark and kind of their, you know, the disarray relative to approvals, and so that does push off any kind of European opportunity for us, but we don't think that that's something we would have pulled the trigger on anyway, given the opportunity in the US. Oh, okay. I appreciate that incremental color, Shelley. Then the second question, you know, one of the large tiers in the ophthalmic market reported earlier this earnings season, they said the health of the premium market has been weak. This is the Q2 in a row they've said that, yet you continue to put up kind of, you know, I think, really good results. I'm, I'm curious if what your view is of the health of cataract market, given some of the, that commentary we've seen from some of your larger competitors? Well, you know, the overall, the cataract market continues to grow, driven by demographics. Within the overall cataract market, the premium market is still the main opportunity for practices to grow their revenue relative to, you know, continued reductions in reimbursement that they receive for cataract surgery and other, other reimbursed services. We see the premium market as being, you know, a primary engine for growth in ophthalmology. As, as you noted, you know, we, we, we have seen our numbers continue to grow. Okay. I'll leave it there. Thanks. One moment for our next question. Thank you. Our next question comes from Larry Biegelsen of Wells Fargo. Please proceed with your question. Hi, this is Charles on for Larry. Can you hear me okay? Yes. Hi, Charles. Hi. First, congrats on the nice quarter. I wanted to follow up a little bit. On your newer, lower cost LDD, so that was approved at the start of the year. Can you just refresh us, maybe give an update where you guys are at, preparing for the launch and building inventory? Last term, it sounded like second half, second half launch. Is that gonna be a phased approach, and is there gonna be any kind of limit by inventory availability there to talk about? Thanks. Thank you, Charles. You know, as you noted, the reconfigured LDD was approved earlier in the year. It has the same functionality as our current LDD, primarily will have its impact, you know, on the margin. As Shelley noted, we're anticipating that to be primarily towards the end of the year. That has really, you know, been our plan for the year, and I don't see many changes there. To your question on supply chain, you know, supply chain is still tough, but it's continuing to improve. You know, one of our strategy is, you know, not to introduce the reconfigured LDD until we're, you know, certain that we have the finished goods in stock, as well as the supply chain has stabilized. So that is part of our strategy and ensuring that we have, you know, full availability for our customers. Okay, great. Thank you. One moment for our next question. Thank you. Our next question comes from Craig Bijou of BofA Securities. Please proceed with your question. Good afternoon. Sorry about earlier. I, I guess I missed my initial slot, but thanks for putting me on. I, I guess, you know, I, I had two questions on, on competition, and, you know, I wanted to kind of see what you're seeing on, you know, the field level or the ground level and what you're hearing from docs anecdotally. I, I believe, and it's a bit of a follow-up on a question that was asked before, but is it, is it truly patient awareness? Is it the patient satisfaction, the results that the doctor's seeing? Is it the ability to potentially price at a premium to, to other competitive IOL, premium IOLs? Then the second competition question is just, you know, anything that you guys know of or have heard or kind of worries you about, you know, some of the bigger players and the development of new lenses there? You know, I think all the things that you mentioned, Craig, are in play. Certainly the awareness of the quality of the results that patients and doctors can obtain with the Light Adjustable Lens is an important factor. Once the system becomes available to doctors, then that allows them to offer it to more patients, more doctors in the practice. I think all of these things are in play. The ability to, you know, have a really strong ROI is obviously a factor as well. You know, the doctors are pricing the technology at a level commensurate with its the quality of the results that it produces. All of those are important to growth. With respect to competition, you know, again, the only, you know, we have the same visibility to competition that everybody else does. As far as we can tell, we, we don't see anything on the horizon in, even in the near midterm. There are some, you know, projects out there, but, this is, it, it's, it's not an easy task, to make a technology, that delivers, all the aspects of the Light Adjustable Lens. You know, it remains to be seen, whether, whether and when somebody's gonna be able to do that. Then, you know, even, even when somebody enters, if they do, you know, they'll be entering at a point when we'll already have introduced a whole slew of improvements to the technology in response to market requirements. I think it's gonna be a tough, a tough road for somebody to follow. Got it. That's helpful. Thanks, Ron. Maybe a quick follow-up for Shelley. On the, you know, the new LDD, and I guess, it's part of longer term peak margins, but I guess my question is about, you know, how should we think about where you can bring peak gross margin and, you know, how long does it take you to get to that level? I think you're asking not specifically about the reconfigured LDD, or are you talking about overall margins in the long run for the company? Yeah, more overall margins. Shelley, I know you, you, you have been reluctant to provide some detail, so if you're willing to give detail, I'd love to hear it, but, just overall margins- Yeah. for the company. Yeah. You know, with the reconfigured LDD, and I think I've said this before, we expect to be able to stabilize that margin in the 20%-30% range, and we've been lower than that, and hopefully more toward the high end as we, you know, because we've got good volume in that product as well. Overall, really, if we think out long term, you know, there's a big market for LDD sales, but typical of razor, razor blade companies, in the long run, we would expect probably 90% of our revenue to come from the LAL, and that is very price stable, has been so far because of the value it offers. I would expect long range will be in the mid 80% gross margin level, maybe even as high as 90%, but that remains to be seen. Great, thanks, congrats on a strong quarter. Thank you. One moment for our next question. Thank you. Our next question comes from David Saxon of Needham & Co. Please proceed with your question. Yeah. Hi, Ron. Hi, Shelley. Thanks for taking my questions, and congrats on the quarter. Maybe to follow up to one of Craig's questions, you know, it's been 2 years since you've been public. You've been a little farther along in the launch. I wanted to ask, are you seeing, hearing the same areas of pushback from prospective docs as you were a few years ago? Has the awareness and interest been established, and it's just more of a question of getting out and engaging with the docs and, and placing LDDs? And, and also, any color on kind of how the sales cycle has changed? Yeah, thank you, David. I think, you know, the same general interactions are going on. I think we have, obviously, a, you know, a larger and more experienced commercial team, and we have more experience that we can point to, and that we can refer new practices or practices looking at our technology to, so that they can get, you know, information not only from us, but by, from other customers that, that might be like, more like them. You know, it, so for example, you know, unlike other intraocular lenses, we have a piece of capital equipment, and that obviously, has a cost to it. You know, over the last several years, we've established that the ROI for that piece of capital is, is pretty quick, you know, in the six to nine month on average, and can be quite faster. That makes new practices coming on board more comfortable, and, but they still need to go through, you know, their own financial analysis. It's, you know, both Shelley and I have been in similar business models before, and I would say it never gets easy, but, you know, we've seen, I, I think we have more, more answers for potential customers. Got it. Thanks for that, Ron. Maybe a, a follow-up for, for Shelley, just on the operating expense guidance. I think it implies around 33% growth in the back half versus 20% growth we saw in the first half. You know, what's, what's driving that? What investments are you, are you making? Anything there would be helpful, and thanks so much. Thank you so much. Of course, I did mention the SOX expenses as well as, you know, the audit fees associated with SOX. You get most of that, you know, right at the end of the year. Also, for the back end year, you know, we add clinical applications, personnel, and pace with our LDD sales. We, you know, we add a few account managers and other people as we need, expand our marketing. Of course, by the third and Q4, you get that full impact of those additions as well during the year. That's what really drives the OpEx up as you exit the year. Great. Thank you. I am showing no further questions at this time, and I would now like to turn the conference back to Ron Kurtz for closing remarks. Well, thank you all for your time and attention today. As always, we appreciate your interest in RxSight, and look forward to updating you on our progress in future quarters. Goodbye. Bye. This concludes today's conference call. Thank you for participating. You may now disconnect.