RXST Q3 2024: Utilization Growth Slows, Q4 Up 8% YoY
- Strong Utilization and Adoption Trends: Q&A responses highlighted that RxSight’s LAL implantation utilization per LDD is growing steadily across practices, with newer accounts ramping up quickly to established levels, suggesting increasing clinical adoption and favorable outcomes.
- Compelling Capital Economics: The management emphasized a rapid payback period of approximately 6 months on the LDD investment and consistent, stable pricing for both LAL and LDD, which makes the capital expenditure attractive and supports repeat purchases.
- Broadening Market Reach via Optometrist Engagement: The executives outlined initiatives to educate the approximately 50,000 U.S. optometrists, positioning them to drive referrals and further market penetration, thereby expanding the overall addressable market for RxSight’s products.
- Hurricane impact risk: The earnings call Q&A noted that hurricanes contributed to lost surgical days in Q3, potentially affecting revenue and procedure volumes, especially in key markets like Florida.
- Deceleration in utilization growth: Analysts highlighted a potential deceleration in LAL utilization growth, with Q4 projected to show an 8% year-over-year increase compared to previous quarters in the high teens to low 20s, which could indicate a slowdown as market saturation occurs.
- Challenges with market penetration and adoption: Questions regarding maintaining pricing, securing new capital equipment placements, and expanding market share beyond the current ~10% benchmark suggest that achieving higher and sustainable adoption rates could be challenging in a competitive environment.
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Margin Outlook
Q: Is gross margin stable post‑2024?
A: Management expects gross margins to remain around 70–71% thanks to ongoing cost efficiencies and a favorable shift in product mix. -
Capital & LDD Growth
Q: How is LDD placement growing?
A: Strong capital demand is evident with robust LDD placements delivering a return on investment in about 6 months. -
Pricing Stability
Q: Will product pricing remain unchanged?
A: Management is confident in holding the $1,000 LAL price and preserving steady LDD ASPs despite market pressures. -
Revenue Guidance 2025
Q: Any early guidance for 2025?
A: While no specific numbers were provided, management remains bullish on sustained growth driven by compelling clinical results. -
Utilization Trends
Q: Why is utilization growth moderating?
A: As the installed base expands, percentage growth naturally moderates even though overall LAL utilization stays strong. -
Global Expansion
Q: When will international approvals arrive?
A: Regulatory approvals in Asia and Europe are expected in the coming months, a key step in expanding global market share. -
Active Surgeons
Q: What’s the average surgeon count per LDD?
A: The average number of active physicians per LDD is roughly 1.5–1.6, varying with practice size. -
International Sales Channels
Q: How will international sales be managed?
A: A market-specific approach is planned; some regions like Canada will use distributors, while others will rely on direct sales. -
Optometrist Outreach
Q: How is the optometrist program progressing?
A: The program is gaining momentum as optometrists educate patients and refer them, supporting wider premium IOL adoption. -
Seasonality Effects
Q: Was seasonality a factor this quarter?
A: Yes, more pronounced seasonality—primarily due to extended doctor vacations—affected LAL volumes, though LDD sales stayed consistent.
Research analysts covering RxSight.