RxSight, Inc. (RXST) July 2026 Conference Transcript

Hello and thank you for standing by. My name is John and I will be your conference operator today. At this time, I would like to welcome everyone to the RxSight Preliminary Second Quarter Financial Results and Product Pipeline Update following collaboration agreements. All lines have been placed and muted 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 one on your telephone keypad. And to withdraw your question, simply press star one again. I would now like to turn the conference over to Oliver Morochevich, VP of Investor Relations. Please go ahead.

Thank you, Operator. With me on the call this morning is RxSight President and Chief Executive Officer, Dr. Ron Kurtz, and Chief Financial Officer, Mark Wilterdy. Yesterday, RxSight released a pair of press releases, one reporting on a new collaboration agreement with Alcon, and the second reporting preliminary revenue results for the three months ending June 30, 2026. updated product pipeline, and revised full-year guidance. Copies of both press releases and corresponding 8Ks are 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, July 7, 2026, 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 yesterday and in our filings with the Securities and Exchange Commission, or SEC. Investors are cautioned not to place undue reliance on forward-looking statements and will disclaim any obligation to update or revise these forward-looking statements, except as may be required by law. During today's call, we will discuss certain non-GAAP financial measures. I would also like to remind you that the preliminary results discussed on our call today are estimates and that our complete unaudited financial results for the second quarter of 2026, which are subject to the review of our independent auditor, are expected to be announced on Wednesday, August 5, 2026. Please note that this conference call will be available for audio replay on our Investor Relations website. With that, I'll turn the call over to Ron.

Good morning, and thank you for joining us. Over the last several years, the RxSight team has been developing proprietary hybrid IOL materials for next-generation light-adjustable technology that can support a full suite of adjustable lenses across all premium categories. Designed to enable expanded patient choice and customization, along with a reduction in required post-operative treatments, these developments are being pursued both via our standalone product pipeline and through our collaboration with Alcon. RxCite's next-generation adjustable IOLs will build upon the quality of vision that has been a key attraction for LAL patients for many years. Our partnership with Alcon aims to leverage each company's expertise to develop adjustable presbyopia-correcting IOLs that, for the first time, will enable doctors to refine visual outcomes noninvasively after surgery for patients who choose a PCIOL. Taken together, these technology-driven strategic initiatives solidify RxCite's position as the leader in post-operative adjustability, create a platform for high-margin future growth, and accelerate expansion across a wider base of patients. While we believe these strategic developments will be key multi-year growth drivers for RxCite, last night's announcement also detailed the near-term challenges we experienced in the second quarter after several quarters of relatively stable utilization trends. Although we do not yet have Q2 data from other premium aisle wells, we believe this retrenchment is linked to widespread competitive trialing activity associated with new product launches. While the LAL value proposition remains highly differentiated, these trial programs provide a significant short-term incentive to an already strained practice environment. While the effects of competitive trialing tend to wane as doctors determine the true value of a new offering based on their own clinical experience, we expect the heightened competitive environment to remain active through the end of the year. We also note that consumer sentiment remained under pressure, which we believe could have contributed to more deliberate patient decision-making and softer overall procedure activity. While cataract surgery typically cannot be deferred indefinitely, unusual declines in overall cataract volumes were observed in Q1, with patient confidence and the broader economic backdrop being two potential factors. We believe we can overcome these challenges by accelerating customer re-engagement efforts that have shown success in targeted rollouts, and we are excited to be making additional investments in our U.S. LAL sales force to expand our depth of penetration within accounts. Coupled with our technology's unparalleled clinical outcomes, we remain confident in our team's ability to navigate these headwinds successfully. I'll now turn it over to Mark to provide select financial metrics related to our second quarter performance and updated thoughts on our full year 2026 outlook.

Thank you, Ron. As outlined in our pre-announcement press release last night, second quarter total company revenue is expected to be approximately $32 to $34 million, including $5 to $7 million related to the RxSite-Alcon Strategic Collaboration Agreement. The final amount of revenue from the agreement that we will recognize in Q2 remains subject to the completion of our quarter-end closed procedures and accounting assessment. We expect these actions to be finalized prior to reporting second quarter results in August. Preliminary total company sales, excluding revenue related to the agreement, were approximately $27 million in Q2, down 20% versus the year-ago period. During the quarter, we sold 24,917 LAL units, down 10% year-over-year, reflecting the headwinds that Ron outlined earlier. The company sold 11 LDDs and placed one LDD rental unit, growing our installed base to 1,166 units. Based on revenue implications from the collaboration agreement and preliminary second quarter sales, we are revising our full year 2026 outlook. We now anticipate 2026 full year revenue of $140 to $160 million. This range reflects RxSight sales of $110 to $120 million and revenue recognized from the RxSight Alcon Strategic Collaboration of $30 to $40 million. Our RxSight sales guidance assumes the continuation of headwinds experienced in the second quarter. Collaboration agreement revenue is subject to the terms and conditions described in the 8K we filed with the SEC last night. Based on the favorable mix of LALs versus LDBs sold in the second quarter, and our belief that this trend will persist for the remainder of 2026, we now expect full-year gross margin in the range of 73% to 75% versus previous guidance of 70% to 72%. Despite the accelerating investments in our LAL sales force that Ron mentioned earlier, and significant expenses related to the recently announced collaboration agreement, we continue to anticipate operating expenses at the high end of the $150 to $160 million dollars in line with previous guidance. We ended the quarter with cash, cash equivalents, and short-term investments of approximately $209 million. And with that, I'll turn the call back to Ron.

Thank you, Mark. Before taking questions, I want to thank my RxCite colleagues and our many partners in clinical practice who are improving cataract surgery outcomes every day by empowering patients to optimize and personalize their vision after surgery. Today's announcements highlight two ways we are continuing to advance that mission. In the near term, by redoubling our commercial and clinical re-engagement efforts so more patients can achieve the high-quality, precise, customized clinical outcomes that have now been documented in multiple real-world and clinical study settings using current-generation LAL technology. In the intermediate to longer term by continuing to innovate adjustability, which has been a long-standing focus for our team. In addition to next-generation LAL and LAL+, we are also working on LAL Toric, a new lens designed to combine built-in torque correction with post-operative refinement of residual sphere and cylinder. Each of these IOLs is designed to maintain the highest levels of visual quality and adjustability, while also providing for improved workflow and fewer required postoperative treatments. Our collaboration with Alcon opens up a new path for innovation in the PCI well space, offering doctors and patients a higher level of precision and confidence. While there are both near-term and long-term financial benefits associated with the agreement, we believe this collaboration also represents additional validation of our technology platform and intellectual property, as well as the broader opportunity for adjustability in cataract surgery. Taken together, these development initiatives demonstrate our continued commitment to doctors and practices. By developing a family of adjustable premium IOLs that can be tailored to the needs of patients, our customers can leverage both the knowledge investments that they have made to become experts in post-operative adjustability, as well as their capital investments in the light delivery device, or LDD. RxCite entered the cataract market with a fundamentally different approach and a truly novel technology. In a relatively short period of time, we established the clinical value of adjustability and a strong presence in the premium cataract market. Building on that base, these next-generation developments in adjustability represent significant opportunities for further growth. And with that, I'll ask our operator to open the call for questions.

Thank you. And ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad. In the interest of time, we kindly ask everyone to limit themselves to one question and one follow-up. Our first question comes from the line of Larry Biggiglson with Wells Fargo. Please go ahead.

Good morning. Thanks for taking the question. Can you hear me okay, Ron?

Yes.

Great. I wanted to ask just two on the technology, the new technology, one on Alcon and one on the internal products you talked about. So starting with Alcon, it sounds like you're basically marrying your light-adjustable technology to their trifocal and eat-off lenses. So my question is, you know, what are the technology challenges with that? In other words, what needs to be done to accomplish that? And what will the benefits be? What do you see the benefits being in any color on the timelines at one follow-up?

So, you know, let's start with the benefits. That's the reason why we both feel that this is a good idea. I think if you look at reasons for why outcomes or patients may be dissatisfied after PCI wells, at the top of the list is residual refractive error. So the ability to optimize visual acuity after surgery with a non-invasive light treatment we believe will be a significant add to PCI well technology. In terms of the time frame, we haven't laid that out other than to say that we believe it's within our planning period. you know, which is, you know, typically in that five-year period. You know, there are a number of technical and regulatory efforts that will be part of this collaboration. Those, you know, obviously we've done some pre-work to get us to this stage, and we feel good about our ability to deliver on the promise of this collaborative effort.

That's helpful. And then, Ron, your internal products that you talked about, what's the timeline for the next generation LALs, and what does improved workflow and fewer required post-op treatments mean specifically? Like, how much do you think you can reduce the post-op treatments? thanks for taking the questions.

Thank you, Larry. So what we've, you know, the way we've positioned this is that we would expect these developments to occur in the mid-range of our planning period. So, you know, that's, that will continue to refine that over time. And there'll be individual timelines obviously associated with with each of the efforts and in and I'm sorry your second question was well how much what what is improved workflow and fewer required post-operative treatments mean you know how how how much could you reduce the post-op treatments so I you know if we look at the number of treatments that are currently, that are currently used, on average there's about one and a half to a little bit more adjustments, and on average about two lock-in treatments. You know, by, we believe that, you know, by providing the potential for single lock-in. We obviously would have a significant reduction in required treatments. In addition, the times that we require more adjustments often are associated with higher levels of astigmatism, and so being able to provide some built-in astigmatism potentially also reduces that. So we think there can be a very significant reduction in the number of required treatments.

All right. Thanks for taking the questions, guys.

Our next question comes from the line of Ryan Zimmerman with BTIG. Please go ahead.

Good morning, Ron, Mark, Oliver. Thanks for taking our questions. I want to follow up a couple on Larry's questions just on the technology, but, you know, when you think about this lens and the collaboration with Alcon, you know, our excite went through a PMA. There was clinical trials associated. Do you anticipate needing that with their current batch of lenses in order to bring a technology to market that would combine both years and their technologies?

You know, we haven't commented on the specific regulatory path that we'll be taking. Obviously, we'll be collaborating with Alcon on that. And again, you know, we think that there's, you know, a good history of both technologies. And, you know, obviously, we would plan to leverage that strong background as well.

Okay. The other question, Ron, is, and again, maybe putting the cart before the horse here, but pricing in the PCIOL space. I mean, if I think about the price points right now to physicians of Panoptix, and I think about the price point of the LAL today, they're at the upper bound of kind of where PCIOLs can go. So if you marry those two technologies, I would imagine that, you know, you would maybe break the ceiling, if you will, on pricing. And so I'm just curious kind of your thoughts on, you know, if that's feasible, what, you know, combined technology would be from a value standpoint and how you think about preliminary pricing relative to, you know, kind of the price points in the PCI oil market today.

Well, obviously, those are great questions. I think they're questions for the future and, you know, primarily for Alcon, but the, you know, I'll concentrate on what the value proposition would be, which will be that the, you know, we would be presenting to patients, you know, top of the line optical designs with the ability to refine refractive error postoperatively. non-invasively. That's, you know, really a level of confidence that doesn't exist today. What is the value of that to both doctors and patients? I think that's something that the market will determine, but it's, you know, it's usually listed as the number one topic for PCI wells is residual refractive air.

Yeah. Thanks, Ron. Appreciate it.

Our next question comes from Delana Stephanie Al Ghazi with Bank of America. Please go ahead.

Hi. Thanks for taking the question. Just wanted to ask on, you know, how you decided that a strategic collaboration agreement was the best approach versus other strategic options, like selling, and maybe just how you think about the partnership opening the door for additional collaboration with Alcon or a potential acquisition?

Well, we think that, you know, this is a great way for us to build value in our excite, you know, right now, leveraging not only, you know, our technology for our own pipeline, but also leveraging it for an area that we don't currently participate in, namely the PCI well space, and doing that with, you know, a market leader and without a, you know, doing it well, we're able to continue to have a very positive balance sheet. So these are all, I think, positives for the collaboration. Obviously, we need to execute on all these efforts, you know, and with the collaboration with Alcon, but we feel confident in our ability to do that, and also in building our core LAL business as well.

Got it. Thank you. And then I just wanted to follow up on the preliminary Q2 results. I think you had expected sub-level of competitive trialing, so what are you seeing from the trialing that made the headwinds maybe worse than expected, and then just what's factored into the guide overall from the competitive trialing and some of the other factors you mentioned, like consumer sentiment? Thank you.

Well, I'll start maybe at a higher level, and then, Mark, feel free to comment, but But I think that there has been a level of competitive trialing programs that we may not have fully anticipated. Some of that may be linked to the fact that now we have a second large company that has offerings in both the trifocal and EDOF space, and that can raise overall competition in the space, and we expect that to continue for the rest of the year. At the end of the day, the differentiating factor of the LAL is that we can fine-tune the vision to optimize binocular vision in patients in a way that just is not possible with these other technologies. And we think that in the end, that is going to be a significant differentiator and key to our success.

And Stephanie, with respect to guidance for the remainder of the year, Ron alluded to it just now, but I think our expectation is for that heightened competitive environment to remain active through the end of the year. And so that's what we factored into the guidance that we provided today.

Our next question comes from the line of David Saxon with Needham. Please go ahead.

Great. Good morning, Ron and Mark. Thanks for taking my questions. Maybe just a follow-up on guidance specifically around LDD expectations. I think previously you were thinking, you know, 25 per quarter, came in at 12. So, and hear the comments around competitive trialing. But, you know, what are you seeing around the LDD pipeline? Anything meaningfully change in May and June on that front?

So in the short term, I think that competitive trialing can and probably has impacted LDD. just in that when a practice is given the opportunity to utilize a number of lenses, that may not be something that they may not be as focused as incorporating a new technology like an LGD. That may delay that decision. We still see a lot of interest in acquiring the technology, but we think that there was, you know, some impact from that. And then, you know, we did note in our report that we did have one rental of an LDD. That's the first time that we've done that. And we think that that can be an effective way to introduce the technology, especially outside the U.S., that, of course, delays revenue recognition, but can be a way that we can further drive our O.U.S. opportunity.

Okay, thanks for that. And then just on the commercial pivot or, you know, strategy there, maybe just give an update on that, you know, with this heightened competitive trialing, is there anything you need to change to that initiative? And then the commercial investments you talked about in the script, I mean, is that just adding headcount or is there anything else you're doing there? Thanks so much.

Well, there's certainly combined efforts of both having additional resources so that we can go deeper with our large installed base, but also fine-tuning the techniques that that team utilizes. So it's a combination of factors. And we were, you know, again, we, despite the challenges that we had in Q2, our team remains very confident in their ability to overcome those. And, you know, we're looking forward to that in future quarters.

Our next question comes from the line of Steve Lichtman with William Blair. Please go ahead.

Thank you. Good morning, guys. Ron, I think in the past you've talked that LAL patients have come pretty evenly between people who would have received the monofocal toric or multifocal lens. So how would you think about positioning of an Alcon collaborative lens versus the blended vision you can provide today for presbyopia correction? I'm just wondering how additive versus cannibalizing an adjustable PCIOL could be long-term if it's approved.

So I would just maybe clarify a bit, Steve. Our data has shown that the vast majority of LAL patients come from either monofocal or monofocal toric, with less than a quarter coming from the PCIOL, and that's the combination of both EDOP and Trifocal. So there's relatively a small amount of overlap. It's an area that we have not participated in, and we think that by offering a differentiated product with Alcon in that space that we can not only gain access to a large number of patients that we weren't serving before with adjustability, but potentially grow that market as well. Similar to what the experience that we've had in the monofocal and monofocal toric area, you know, where we brought new people into the premium space.

Okay, that's helpful. And then just a follow-up from the prior question, I know you guys are, you know, obviously not going to talk about 2027 numbers, but what gives you confidence from the commercial initiatives that you have been putting in place, you know, that can help improve growth next year? And how leverageable is this increased sales force intensity?

Well, as we've talked about previously, we've done some targeted programs. We've seen some, you know, early results of those. And that's, you know, part of what we're expanding with this, with the expansion of our sales force. So it's based on our experience and on the, you know, on the, also the experience of our team and the assessment of our team at the individual account level. So again, you know, we'll be focused on this, you know, throughout this year and into 27, but, you know, we feel that at the end of the day, the clinical results that our technology delivers, which are, you know, I would just note increasingly have been validated in peer-reviewed journals. We have several publications, several publications in recent issues of the major cataract journal, Journal of Cataract and Refractive Surgery. And this, you know, just continues to grow the story of quality of vision and customization of vision for LAL.

Thank you, Ron.

Thank you. Our next question comes from the line of Yongli with Jeffries. Please go ahead.

All right, great. Thanks for taking the question. I guess just kind of curious, in terms of the ASP trends in 2Q, are there any changes to call out on the LDD side or LAL side? And is there any changes that you're assuming going forward for the rest of the year?

Hey, Young, it's Mark. No real changes in the second quarter from an ASP perspective to either LDDs or LALs. And the expectation is for LALs to remain very consistent. LDDs, as we talked about last quarter, the assumption is that that ASC could come down a little bit over time, as you typically see with capital equipment and with the inclusion of some OUS sales and rentals over time as well.

Okay, got it. Very helpful.

And then I guess one on the piano. I guess the op-ex guidance didn't change overall, but just kind of curious, just given the collaboration in terms of the R&D percentage, how much will that have to expand or change from here?

You know, we're going to work closely with our partners at Alcon over the course of the next several months, quarters, years to get to the bottom of exactly what that looks like. But so I don't have perfect visibility into it at this point. This is a multi-year collaboration agreement, obviously, to develop a really truly unique product that doesn't yet exist.

So there will be a significant amount of investment that goes into that, but tough for me to quantify it at this point in the uh in the agreement i got it thank you thank you our next question comes from the light of tom stefan with stifle please go ahead great hey guys thanks for taking the questions um first one just on competitive trialing you know i feel like it's becoming more of a recurring theme um and we have more obviously more u.s innovation on the horizon with with galaxy vividy pro likely coming in the next 12 months, certainly additional lenses beyond that. So, Ron, maybe for you, is there anything RxCite can do or is there anything specific you're exploring to, I guess, perhaps manage these trialing headwinds moving forward?

Well, you know, obviously it's not a long-term strategy for the people who are pursuing it. It does, it's not a sustainable strategy at least. So I think it is at some point self-limited. However, I think that the things that we can do is just make the strongest possible case based on data with our practices, with our doctors, and with potential patients about the benefits of having and the confidence that comes with adjustability. you know there's each if you look historically at the trends in the industry they've generally moved to less what I call less multifocality because of the side effect profiles and so you you've got you've seen that both in the trifocal space and in the eat-off space the flip side of that is that that results in less near vision. And so the way that, you know, that we're able to balance vision in both eyes, that doctors can balance vision in both eyes using our technology in ways that are really custom to that specific patient's daily activities, to their, you know, to their neurological system and optical system is quite unique. And so over time, we think that that differentiation is our strongest lever in addressing, you know, what are otherwise, you know, I think less critical factors that are involved with these trylings.

Got it. Makes sense. And then to pivot a bit to the Alcon collaboration, you know, I guess I get that a non-invasive correction of residual refractive error with a PCIOL certainly has value. But I do think LASIK touch-ups are relatively common with fixed multifocals. So, Ron, can you describe, I guess, surgeons' desire for an alternative to what I think is a pretty well-established approach with multifocals and subsequent laser treatment? Thanks.

Well, I would just say that people are always satisfied with the status quo until there's an alternative. And so the, you know, LASIK is a second surgical procedure. There's a whole host of, you know, complications and risks that can go along with that, including dry eye, which is, you know, particularly potentially bothersome in this patient population, older patient population. So I think, you know, given a choice, patients and doctors would choose a non-invasive approach, especially one that allows them to intervene at a much lower level of residual refractive error because of that lower risk profile or lower level of invasiveness. So I think that it provides flexibility. And then, as I mentioned earlier, with the trends in PCIOL technologies where the level of multifocality is reduced, oftentimes what you see, particularly on the EDOF side, is that those are combined with different refractive corrections in each eye. But for a fixed IOL, that has to be predetermined by the surgeon with a adjustable PCIOL that can be experienced by the patient postoperatively and optimized with the patient. It's a very different process and we think potential outcome that will be of significant value.

Thanks, Ron.

Thank you. And that concludes our Q&A session. I will now turn the call back over to the management team for closing remarks.

Thank you, Operator. We look forward to providing further updates at our regularly scheduled second quarter 2026 conference call in early August. Goodbye.

This concludes today's conference call. You may now disconnect. Have a great day.