RxSight, Inc. (NASDAQ:RXST) Q2 2023 Earnings Call Transcript

Steven Lichtman: Thank you, everyone. Beyond the top line, the other standout looked to be on the gross margin side. So, A couple of questions there. One, what’s driving the underlying gross margin benefit? Is it just a mix? Or is there something else afoot? And then secondly, Shelley, can you level set us on where you think we should be exiting the fourth quarter with a lower-cost LDD system in place?

Shelley Thunen : Okay. Thank you, Steve. Yes, the gross margin has really been driven by a few things. One is, of course, mix, right, with the LAL substantially more profitable at the margin level, than the LDD and that is something we see as a continuing trend. Costs have also gone down as we — 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 fourth quarter, but not much in the third relative to what we achieved in the first and second quarter. Due to the fact that our reconfigured LDD will bear a higher gross margin, and we think that will have benefits. So, we should see some differential between the third and the fourth quarters based upon not only mix but as well as the introduction of our reconfigured LDD.

Steven Lichtman: Great. Thanks. And 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 a pretty big presence? And is that part of what we’re seeing here in this LDD number? Thanks.

Ron Kurtz : I agree. We had a very strong ASCRS, and certainly, that has helped us in Q2. I think it’s generally consistent with increasing awareness about the light adjustable lens and that awareness drives interest on the parts of practices. So, we see that as a trend that has grown sequentially, and we would hope that would continue to grow.

Steven Lichtman: Thanks, Ron. Thanks, Shelley.

Operator: [Operator Instructions]. Our next question comes from Ryan Zimmerman of BTIG. Please proceed with your question.

Ryan Zimmerman : Hi, good afternoon. And congrats on a nice quarter. I wanted to ask just a couple of questions, Ron, more of a big picture question first. But as you’ve seen the uptake in the market here, I think when we talked earlier this quarter, it always feels like your aspirations are expanding, your aperture is widening. And just as you see such good adoption, does it change kind of how you view your commercial strategy in terms of not just the U.S. market, but I guess the question kind of hints that aspirations beyond the U.S., Canada, maybe Mexico or some of the clinical trial cases were done — and what the opportunity may be internationally and if and when we could see that?

Ron Kurtz : So, as you know, Ryan, ophthalmology is really an international field. But the U.S. traditionally has led in terms of especially in terms of the private pay markets. And so, we’re focused on fully developing the U.S. market initially and we’re — that is our primary focus. But we do see significant opportunities outside the U.S. as well. And we’ll — as we have started in Canada, we’ll continue to develop those with time.

Shelley Thunen : I think from specifically to you because the CE mark and kind of their 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 U.S.