Sight Sciences, Inc. Q1 FY2022 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the Sight Sciences First Quarter 2022 Earnings Results Call. At this time, all participants are in a listen-only mode. Following the speakers' presentation, there will be a question-and-answer session. I would now like to turn the call over to your host, Philip Taylor, Investor Relations. You may begin.

Thank you for participating in today's call. Presenting today are Sight Sciences' Co-Founder and Chief Executive Officer, Paul Badawi; Chief Financial Officer, Jesse Selnick; and Chief Commercial Officer, Shawn O'Neil. Earlier today, Sight Sciences released financial results for the three months ended March 31, 2022. A copy of the press release is available on the company's website. I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements within the meaning of the federal securities laws. Those include statements related to Sight Sciences' anticipated financial performance and operating results, market opportunity, the future impact of COVID-19 on operations, business strategy, and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements. A description of some of the risks and uncertainties that could cause the actual results to differ materially from those indicated by the forward-looking statements on this call can be found in the Risk Factors section of the annual report on Form 10-K filed March 24, 2022, and other filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. For more information, please refer to the forward-looking statements, notices, and Risk Factors in the recent SEC filings. I will now turn the call over to Paul.

Thanks, everyone, for joining us. Our first quarter 2022 revenue increased to $14.9 million, representing 72% growth compared to the prior year period and 1% sequential growth compared to the fourth quarter of 2021. A strong continued pace of new customer wins and extremely high customer retention resulted in surgical glaucoma revenue of $13.9 million, in line with the prior quarter's revenue and exceeding our internal expectations given Omicron, seasonality, and competitive trials. Surgical glaucoma year-over-year revenue growth accelerated to 70% in the quarter, compared to 60% in the fourth quarter of 2021. As a point of comparison, our surgical glaucoma revenue sequentially declined 7% from the fourth quarter of 2020 to the first quarter of 2021, yet we still grew surgical glaucoma revenue by 79% for the year. Our dry eye revenues for the first quarter were $1 million, up over 100% year-over-year, and 33% sequentially from the fourth quarter of 2021. We are very pleased with the fundamental progress and the leading indicators we use to monitor each business. Before delving into details on our quarterly performance, I want to take a step back and comment on the broader market environment. There are a handful of new instruments that are being marketed to perform clinically unproven procedures. Launches of any new products from companies with established commercial relationships will naturally generate initial surgeon interest and stimulate trials. This results in transient shifts in case mix and operating room schedule allocation as these products are evaluated. We experienced this in the first quarter and expect these dynamics to continue through the second quarter as well, with the impact on our business manifesting in an extension in the adoption ramp for newer OMNI facilities, and pockets of reduced ordering in certain accounts that we believe will be short-term in nature. In our experience, these trialing periods can take anywhere from two to six months. Over this time, surgeons and facilities typically gain a more complete understanding of the clinical outcomes and reimbursement characteristics of the new procedures. What we have seen in Q1 and into the current quarter is that despite ongoing trialing, we are achieving extremely strong customer retention and new customer wins, both of which are as solid as ever. Simply put, OMNI is extraordinarily sticky and its growth funnel remains robust. As the year progresses, we are confident that OMNI's clear and differentiated benefits will become even more apparent to surgeons. Our confidence stems from the fact that we are experiencing a full cycle play out in some accounts where trialing impacts have proven to be short-term in nature. Four simple concepts can explain why OMNI will continue to win: efficacy, indication, reimbursement, and usability. We designed OMNI to safely and effectively treat the conventional outflow pathway with a minimally invasive procedure. Our growing body of clinical and real-world evidence supports OMNI's superior performance, as does OMNI's best-in-class indication to reduce intraocular pressure in all adults with primary open-angle glaucoma. Our customers bill OMNI using a well-established Category 1 CPT code that reimburses at competitive rates and was revalued just last year. These revaluations for Category 1 CPT codes typically last for five years or more, so we expect payment rates to be stable for several years, although the facility payment could increase if the canaloplasty code is granted device-intensive status. We have spent many years innovating and improving OMNI's functionality and usability, resulting in a product surgeons love to use. Our continuing and highly proprietary innovation and enhancements to OMNI keep us ahead of the competition. OMNI's mastery of these four simple concepts drives our confidence in its ability to succeed in the mixed market. Moreover, with $238 million of cash on our balance sheet, we have more than enough capital to execute our financial plan, and we are fortunate to have the financial flexibility to make smart, long-term value-maximizing decisions and maintain a resolute long-term approach. Let's move on now to an update on our three primary strategic growth initiatives, which are: number one, increasing the adoption and utilization of OMNI and the established combination cataract MIGS segment; number two, pioneering the $5 billion U.S. market for standalone MIGS interventions; and number three, developing the market for reimbursed dry eye treatment procedures. We continue to deepen our penetration into the established combination cataract segment by training more surgeons, winning new accounts, and retaining existing ones. Jesse will provide more color on these KPIs in his remarks but I'll summarize by saying we are extremely pleased with the trends we are seeing. To provide additional context on our business performance, we recently began a proprietary analysis of historical billing claims projections from a well-respected advanced analytics provider. While the results we have seen thus far appear to track with what we have observed historically, the analysis relies on a projection of overall U.S. claims based on the subset of claims accessible to our analytics provider, and the availability of the data lags our reporting period by about a quarter. We urge caution in citing or relying on the data to guide business or investment decisions due to the inherent limitations of the analysis and would like to point out that the underlying data tracks procedure costs and not usage of any particular device, including OMNI. All that being said, we have gained insights into OMNI's impact on the MIGS market, and we intend to share our analysis with you. Importantly, the analysis validates MIGS as a large and growing market. U.S. combination cataract claims grew at a healthy 17% CAGR from 2018 to 2021. CPT code 66174 is the canaloplasty code used to bill OMNI procedures. The increasing prevalence of 66174 usage in claims that also include the CPT code for routine cataract surgery, 66984, demonstrates OMNI's expanding presence in the combination cataract segment. Claims that included cataract surgery and canaloplasty grew at an 81% CAGR from 2018 to 2021 compared to the 17% CAGR for all combination cataract claims. In the fourth quarter of 2021, there were over 18,000 projected claims using both 66174 and 66984, which represented over 19% of projected claims using the 66984 cataract code and all MIGS procedures combined. While true share is complex to calculate, given all the permutations and combinations of devices and codes using combination cataract procedures, we believe these figures show a significant penetration of OMNI's code, 66174. We can further parse out OMNI's share of the canaloplasty code by comparing claims to OMNI shipments. Total canaloplasty claims had a very healthy 71% CAGR from 2018 to 2021, while OMNI shipments grew 122%. It is clear to us that the launch of OMNI in 2018 has propelled the growth of canaloplasty claims. This leads us to our second strategic initiative, expanding adoption of OMNI as a standalone intervention to treat primary open-angle glaucoma earlier. Currently, if a POAG patient does not require cataract surgery, the treatment algorithm relies on increasing use of topical eye drop medications to slow the progression of the disease with the goal of delaying conventional surgical procedures for as long as possible. We believe OMNI alone, due to its indication for use, safety, and consistent efficacy, has the ideal product-market fit for earlier standalone interventions in mild to moderate POAG patients. Our clinical studies have demonstrated that OMNI can safely and reliably reduce intraocular pressure and medication burden with or without concomitant cataract surgery. Our market research on standalone MIGS indicates that there is strong interest in OMNI; 85% of glaucoma patients would likely choose a standalone intervention using OMNI if it were recommended by their doctor. We also analyzed claims data for the standalone segment, which we define as claims with common glaucoma surgery CPT codes that did not include cataract surgery CPT codes. This category includes both mild to moderate surgical glaucoma options like canaloplasty, CPT-66174, and goniotomy, CPT-65820, as well as advanced surgical glaucoma options like ab interno or ab externo trabeculectomy. Due to the smaller current size of the standalone segment compared to the combination cataract segment, the limitations of the analytics data I mentioned previously could be even more pronounced, but we believe they serve as a very interesting and exciting leading indicator of what we are building right now in the $5 billion standalone segment. Of the four common standalone glaucoma surgery CPT codes, canaloplasty is the only one that is growing. The number of claims using the three other codes shrank 12% in 2021, while standalone canaloplasty claims grew 29%, more than doubling since the introduction of OMNI in 2018. This point is worth emphasizing. Based on our claims analysis, canaloplasty is the only standalone glaucoma surgery that is growing. This insight highlights the compelling product market fit between OMNI and standalone surgical glaucoma. Canaloplasty also appears to have propelled the overall level of claims in the standalone MIGS segment. In the second half of 2021, projected standalone canaloplasty claims were included in almost half of all projected standalone MIGS claims. We expect these organically generated standalone OMNI growth trends, which prove for us that the OMNI standalone market is very real, to accelerate as the impacts of our 2022 standalone investments are realized in this significant and lightly penetrated $5 billion market segment. Overall use of 66174 grew 66% last year, by far the fastest-growing segment in all of surgical glaucoma. The current estimated mix of combo cataract 66174 versus standalone 66174 is approximately 90-10, though we believe the mix for OMNI is more heavily weighted towards standalone. We have the unique perspective of viewing combination cataract and standalone as a single market and are very pleased with the overall growth of 66174 driven by OMNI and we will measure our success based on our ability to increase the overall adoption of OMNI and grow the exciting standalone opportunity. To propel standalone usage, we are focused on educating the glaucoma community that an earlier intervention performed by a local OMNI-trained surgeon could be an effective alternative to prescribing a second or third eye drop. We are approaching this strategy through both manpower and non-manpower initiatives. From a non-manpower perspective, we are continuing to drive education and awareness of the mild to moderate standalone opportunity through standalone clinical studies such as TRIDENT and TREY, events such as the OMNI symposium at ASCRS and our 'Don't Wait for Too Late' marketing campaign. We recently submitted a paper for publication in a peer-review journal based on data from TREY, which studied OMNI standalone procedures in patients who had previously had a combination cataract stent procedure. We're very excited about TREY and plan to expand on its findings. From a manpower perspective, our newly trained team of 20 glaucoma clinical consultants will articulate this alternative treatment path to the tens of thousands of office-based primary eye care providers who first diagnose and treat POAG patients. We have strategically placed our GCCs in territories that have multiple qualified OMNI-trained surgeons with strong comprehensive practices or established practitioner networks, and seek to improve communications and ultimately referral patterns within this network. If successful, we hope to create a POAG analog to the efficient cataract ecosystem. We expect to see the benefits from our GCC team begin to materialize in the second half of the year. Our third strategic growth initiative is to improve patient access to effective dry eye treatment procedures, supported by results from our OLYMPIA RCT. Late last year, our TearCare system received FDA clearance for the application of localized heat therapy in adult patients with evaporative dry eye disease due to Meibomian gland dysfunction when used in conjunction with manual expression of the Meibomian glands. This expanded label allows our commercial team to communicate the benefits of TearCare more effectively. Our reps have already reported increased customer receptivity in the field and are achieving increasingly strong results. Compelling clinical evidence is a pillar for all of our commercial efforts. Our dry eye market access initiative is underpinned by our SAHARA RCT, which we expect to complete enrolling later this year. As a reminder, SAHARA aims to demonstrate the superiority of TearCare treatments compared to the market-leading prescription eye drop for stasis at six months. We hope to be able to report back on the key superiority endpoint by the second half of next year. Our other clinical trials are progressing nicely, and we look forward to sharing more news with you in the coming quarters. The deep relationships we have formed with the eye care community have never been more evident than the engagement and positive feedback we received at the ASCRS Annual Meeting at the end of April. We are proud to report that the abstract presented by Dr. Mark Piper on reduced fluctuation of intraocular pressure and POAG patients who had canaloplasty followed by trabeculotomy using OMNI won best paper at its session. We are also very pleased with our efforts to commercialize OMNI internationally. Our U.K. market, in particular, has performed quite well since we established a direct presence last year. We look forward to updating you as we make progress entering additional markets. Our mission, to improve the lives of patients with glaucoma and dry eye disease, drives our continued pursuit of innovation. As we discussed in our last call, we are developing a broad product portfolio that aims to offer market-leading treatment options along every step of the patient's journey for living with these incurable lifelong diseases. I will now turn the call over to Jesse to discuss our first quarter financial results and more detail on our outlook for 2022.

Thanks, Paul. I'll start with a discussion of the first quarter results, and then I'll move on to our 2022 guidance. Our total revenue for the three months ended March 31, 2022, was $14.9 million, a 72% increase from $8.6 million in the same period of 2021 and up 1% versus the fourth quarter of 2021, despite Q1 seasonality typically representing the lowest quarterly portion of our annual revenue. Our surgical glaucoma segment revenues for the fourth quarter were $13.9 million, up 70% from $8.1 million in the first quarter of 2021 and sequentially flat compared to the fourth quarter of 2021. Underlying fundamental business trends, including utilization and ordering facilities improved in the second half of the quarter as business disruption due to the surge in the Omicron variant subsided. Our surgical glaucoma growth drivers remain very strong. Two key leading indicators for our growth funnel are trained surgeons and new ordering facilities. In the first quarter of 2022, we trained 118 new surgeons. This compares to an average of 90 surgeons trained per quarter in 2021 and 96 trained in the first quarter of 2021, illustrating continuing robust surgeon interest. We believe growth in trained surgeons will continue to increase as product awareness of OMNI, and our library of differentiated clinical data in both combo cataract and standalone grows. While we are making great progress, we still have a long runway. At the end of the first quarter, we had trained nearly 1,600 surgeons on OMNI. Market Scope estimates that over 5,600 surgeons currently perform MIGS procedures in the U.S. We have made a significant investment in our internal training team and overall technical field capabilities to achieve our twin goals, providing an outstanding initial user experience and creating long-term customers. Our investment continues to yield strong results for us as 105 new facilities ordered OMNI in the first quarter of 2022. This compares to a quarterly average of 99 new facilities in 2021, which included 98 new ordering facilities in the fourth quarter and 67% in the comparable first quarter. Our commercial success can also be measured by our consistently growing and extraordinarily sticky embedded ordering base. Because ordering patterns can vary widely among facilities, we believe the appropriate period to measure order activity is over a trailing three-month period, and we consider any customer that has ordered in the past three months to be active. In the first quarter of 2022, 811 facilities ordered OMNI, an increase of 51 from the fourth quarter of 2021. By comparison, our ordering facility base grew by only 18, to 548 in the first quarter of 2021. We feel great about how the base continues to grow. Customer retention is obviously another important metric. We calculate developed customer retention using the ratio of net inactive accounts to ordering accounts relative to the number of active customers that placed their first order at least nine months prior. We use nine months as a proxy for customers that, on average, will have completed training and progressed to our developed account base. Throughout 2021 and thus far in 2022, approximately two-thirds of our active customer base has this level of experience with OMNI. Over the history of OMNI, our developed customer retention rate has been 99.8%, which means that we have had as many customers return as go inactive each quarter, which we believe is remarkable. In the first quarter of 2022, our base customer retention rate was 99.7%, exactly in line with what we've enjoyed since launch, and what has helped us to achieve tremendous growth throughout OMNI's ramp. Our dry eye segment revenues for the first quarter were $1 million, up 104% from $0.5 million in the first quarter of 2021, and a sequential increase of 33% from $0.8 million in the fourth quarter of 2021. We are pleased with the great receptivity and results from our small, focused sales effort in dry eyes that has now resulted in well over 600 ordering accounts and sequential growth acceleration in recent periods. Our combined gross margin for the first quarter was 80% compared to 73% in the corresponding prior year period, and 87% in the fourth quarter of 2021. Gross margin in surgical glaucoma was 89% in the first quarter compared to 77% in the prior year period. Our operations group continues to execute at a very high level, even in the face of supply chain challenges throughout the global economy. Gross margin in dry eye was negative 53% in the quarter versus 11% in the first quarter of 2021. Our dry eye cost of goods sold in the quarter included $0.9 million of charges related to a voluntary program we put in place to swap out first-generation TearCare smart hubs for upgraded smart hubs to ensure regulatory compliance with product classification codes following TearCare's 510(k) clearance with the FDA in December 2021. Absent the charges associated with this one-time program, dry eye gross margins for the quarter would have been positive 32%, and our overall gross margin would have been 85%. Operating expenses for the first quarter of 2022 were $34 million, an 89% increase from $18 million in the first quarter of 2021. Operating expenses included noncash stock-based compensation of $3 million compared to $0.3 million in the prior year period. SG&A expenses for the quarter were $28.4 million compared to $14.6 million in the first quarter of 2021. The increase in SG&A was primarily due to our continued investment in the scaling of our operations and corporate headcount to support our growth. As of March 31, 2022, we had 264 full-time employees versus 212 at the end of 2021. The sequential increase in Q1 was larger than we anticipate our rate of quarterly incremental investment will be for the remainder of the year. R&D expenses for the quarter were $5.6 million compared to $3.4 million in the first quarter of 2021. We expect our R&D expense to continue to modestly increase over the near term as we execute our clinical roadmap and develop our pipeline. As a result of the aforementioned expense increases, our loss from operations for the three months ended March 31, 2022, was $22.2 million compared to a loss of $11.7 million for the same period in 2021. We had a net loss of $23.3 million or $0.49 per share for the first quarter based on a weighted average post-IPO share count of 47.6 million shares. This compares to a net loss of $12.2 million or $1.29 per share for the first quarter of 2021 based on a weighted average pre-IPO share count of 9.5 million shares. We ended the quarter with $238.6 million of cash and equivalents and $32.8 million of long-term debt, which includes $2.2 million of debt discount. To restate what Paul said earlier, we have more than enough capital to execute our plan and retain the flexibility to make decisions based on maximizing long-term value. Turning to our outlook for 2022, we are affirming our full year revenue guidance range of $67 million to $75 million, representing growth of approximately 37% to 53% over 2021 revenues. We expect that our sequential growth in the second quarter will be more modest than in previous years. But given the strength of the leading growth drivers that I discussed and what we're observing to be a better informed commercial environment, we remain confident in our guidance for the full year and in our significant growth potential beyond. This concludes the prepared comments for the call. Paul and I will now be joined by Shawn O'Neil, our Chief Commercial Officer, to answer your questions.

Our first question comes from Cecilia Furlong with Morgan Stanley.

I wanted to continue with Jesse's comments recently on guidance and dig a little further into the cadence that you're expecting. But just if you could talk about expectations for 2Q specifically associated with trialing and then trialing of competitive products that you talked about? And then as you look at the back half of the year, too, any contributions that you're contemplating either from your goniotomy device or else your third gen OMNI in terms of just your outlook for the balance of the year?

Thanks, Cecilia. I'll take it out of order just because the latter question is simpler. Very limited contribution, none in terms of like the next-generation OMNI. We just kind of look at OMNI sort of holistically and very limited. We have a very conservative view of goniotomy contribution. In terms of cadence of guidance, I think the reality is that we've had some very exceptional growth in second quarters previously. Some of that is seasonality; some of that is sort of facts and circumstances. We got our expanded label in March of 2021, which was an accelerator in the second quarter. Paul talked about some of the dynamics specifically. Our view is confident. We think that the growth drivers we outlined in the metrics are fantastic and have really held firm with recent periods that were strong, but we just think that the growth won't resemble the trajectory in the second quarter and that the acceleration to hit guidance will occur in the back half of the year.

Okay, great. If I could follow up on the 105 new facilities ordered for OMNI in the quarter, can you discuss the challenges from COVID in terms of accessing new accounts during the quarter? Also, what were the competitive dynamics regarding trials? As you look toward the rest of the year, what are your expectations for maintaining this level of growth or potentially accelerating, considering those challenges?

Cecilia, the 105 is a very strong result. It's actually stronger than what we averaged last year, right? And I think that number for us has been pretty consistent. It's a high-touch model. And given that and our desire to be there and hands-on for the initial user experience throughout initial cases and trialing that, we expect to be a consistent number. Where COVID impacted us was in opening up sort of that time for multiple trialing sessions and then the overall case load, right? Like just in terms of overall utilization. And so really the first four to six weeks, four weeks more pronounced, but six weeks of the quarter were impacted by it. So when I think about that level of new facility adds, that's good execution holistically, even taking COVID disruption out of the equation.

Our next question comes from Andrew Brackmann with William Blair.

I really appreciate some of the disclosures here today. Maybe just to sort of piggyback off of Cecilia's line of questioning sort of around the competitive environment and what you're seeing out there. Paul, maybe just from a commercial or strategic standpoint, are there any actions that your organization can sort of do or enact to maybe shorten that trialing period that you're seeing, closer to that two months rather than that six months that you referenced?

Yes. Andrew, I think as it relates to competitive trialing, we inform the field with the most current and complete information that we have. We remind the field and the field reminds surgeons about why OMNI wins. It's a really simple way to think about things, but just go through those four criterions I walked through in the prepared remarks: efficacy, indication, reimbursement, and usability. We've been iterating on OMNI for many years now. It's very proven. If you look at it from an efficacy perspective, there aren't any new entrants that can do what OMNI does. There aren't any new entrants that can address all three points of resistance in the outflow system, and the clinical data speaks for itself. From an indication, if you look at OMNI's indication, it's the Holy Grail indication that allows us to train the market effectively, to promote effectively and to win surgeons and generate that sticky base of business. It's indicated to treat all adult patients with primary open-angle glaucoma. If you look at the indications for existing products or the new entrants, there's a lot to be desired. From a reimbursement perspective, we remind everyone of the benefits of OMNI. OMNI enjoys a very stable, dependable well-understood Category 1 CPT code that was revalued last year. So there's no billing confusion; a lot of the other products or new entrants have confusion around what they are, what they are not, and what code should be billed. Lastly, from a usability perspective, we're on our fourth or fifth generation of OMNI, offering the surgeon that perfect user experience. I've been doing that since day one. You can see the robust predictable business we've generated, and we expect that to continue.

That's helpful. And then maybe just one on the 'Don't Wait for Too Late' campaign. Obviously, that was just recently launched. What can you tell us about how that's faring? Specifically within the optometrist community, how are you thinking about that as a demand driver for the back half of the year? And if I could just sneak one more in. Anything that you can tell us as it relates to the device intensive offset that we should be expecting here as we enter the middle part of 2022?

Shawn, do you want to take the campaign and I'll do device-intensive?

That sounds great. Yes, I was thinking the same thing. So Andrew, it's Shawn. Yes, as far as the 'Don't Wait for Too Late', we're really proud of that campaign. We're proud of the leadership position that Sight Sciences is taking in terms of educating the referral source, both the doctors managing the glaucoma patients and the patients themselves. We're seeing a lot of positive response from it. We've been heavily advertising it in optometric journals, and we created a lot of buzz around it. Also, we're reinforcing our investment in the education of the primary eye care providers who see many of those glaucoma patients to share that there is an intervention for mild to moderate likely pseudophakic patients, where a MIGS procedure like OMNI could be the right opportunity for them, and then get that patient over to a surgeon that is confident in performing the procedure. Overall, we're really excited about it and looking forward to continuing to see how that activates the standalone market in the second half of the year.

Andrew, on device-intensive, I wish I had a positive answer today, but we're just going to have to wait and see in the proposed rule, usually at the end of June. That said, we've been very engaged over the past several quarters with CMS, MDMA, patient advocacy groups, and the ophthalmic societies in very productive dialogues. We feel very good about the broad support we're receiving in those discussions, particularly from our leading society, the American Academy of Ophthalmology, which has strongly supported our request for device-intensive status. We believe in our engagement and support; ultimately, we'll just have to wait and see until we can review the proposed rule sometime this summer.

Our next question comes from Matt O'Brien with Piper Sandler.

It's Adam on for Matt. Two from me. First, would love just to get a little more color on U.S. surgical glaucoma. Nice start to the year, but I was hoping you could flesh out the mix of growth between utilization versus the impact from adding new doctors. And then also talk a little bit about the usage of OMNI between combination cataract and standalone. And then I have a follow-up.

Adam, the quarter is a little funky because the number of ordering facilities increased nicely, right? But sort of flat quarter sequentially, so the implication is average ordering is down. Remember that January was a highly disrupted month in terms of operating room activity. So at the highest level, you look at it and think, 'Well, how do you get flat ordering facilities up with new adds? What happened to utilization?' But as we dig in and look at it, the big impact was January. Hence, our optimism about how that turns around for the rest of the year. And then the other part of your question was...

Just any color on combo cataract versus standalone volumes?

We believe we're low to mid-teens in standalone versus combo cataract. That being said, that's kind of organic. Historically, based on a strong product-market fit between OMNI and standalone, given all initiatives underway and investments we're making, we expect to accelerate the growth in standalone beyond the organic growth we're already seeing. One thing I want to point out is that for the near term, we shouldn't assess Sight Sciences' success as a percentage of mix. The two business segments are very related. As we bring on happy OMNI surgeons in combination cataract, those same surgeons serve as standalone surgeons too. So for us, as long as we are attractively growing both segments, combo cataract as well as standalone, we will be pleased with our performance.

That's really helpful color. And if I can sneak in just one more. I'll ask about the guidance, and not trying to push too much here, but you beat in Q1 by over $1 million. So why not take up the low end of the guidance range given the momentum that you're seeing? Is that just some conservatism at this stage in the year? And then maybe just talk about what gets you to the midpoint versus the high end of the range? Any puts and takes there would be much appreciated.

Yes. Not a ton of time has elapsed, just a little over a month since we did our year-end call. The reality, as Paul walked through, there are judgment calls in terms of the operating environment, and information is more uniformly absorbed into the end-user market. We think it's prudent to maintain the range where it is. As you hear from our comments, the growth funnel is tremendous, providing a confident path forward. It requires a normalized operating environment for us to function effectively. It's difficult to point to a specific metric that could shift us from the midpoint to the high end. The growth drivers we outlined confidently support our range while still considering uncertain elements in the macro market.

Our next question comes from Joanne Wuensch with Citi.

There has been some noise regarding reimbursement around canaloplasty and other types of procedures. I'm curious if you can comment on that or give feedback on the most recent reimbursement report?

Joanne, this is Paul. I can speak to the reimbursement for OMNI and the CPT code that OMNI uses when procedures are performed. OMNI is specifically indicated for canaloplasty followed by trabeculotomy. The definition of canaloplasty is clear, which is what OMNI physically performs: the microcatheterization and transluminal viscodilation of up to 360 degrees of Schlemm's canal. The code is clear, the requirements are clear, and the procedure is clear. OMNI was designed specifically to offer a consistent and reliable canaloplasty procedure followed by trabeculotomy. I'm not sure the other products we've seen to date do just that.

Can you remind us where we are today versus a year ago in terms of sales force build-out and goals for the rest of the year?

Yes, Joanne, it's Jesse. Last year, we had 53 hunter reps in surgical, about 10 hunter reps in TearCare, along with strategic account managers focusing on teaching institutions and the VA. This year, we added a handful of territories where there was great opportunity to the hunters for surgical and strategic account managers for teaching institutions and the VA. The big investment was going to 20 glaucoma clinical consultants as a stand-alone, focused field support team for the reps. We have really high expectations and optimism about their contributions. TearCare reps have also been super productive. By the end of Q2, we'll be staffed with about 20 TearCare reps, and the expanded label has really helped them market that product effectively. So that's where we stand today, and that will likely be the case throughout the year.

And I'm not showing any further questions at this time. I'd like to turn the call back to Paul for any closing remarks.

Thank you all for your participation, and thank you for your interest in Sight Sciences. Have a good day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.