RXST Q4 2024: Targets 80%+ margins as LAL implants grow
- Seasonal volatility and inconsistent quarterly growth: Management acknowledged that certain quarters (specifically Q1 and Q3) tend to be seasonally weaker, making sequential growth harder to sustain as revenue numbers grow.
- Competitive pressures in the premium IOL space: There is potential risk from competitive trialing and launches in the presbyopia-correcting segment, which could impact market share even if indirectly.
- Variability in LAL utilization metrics: While the absolute number of LALs implanted is growing, the LAL per LDD ratio fluctuates due to new account dynamics and seasonality, which might limit predictability in performance.
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Top-Line Guidance
Q: What sequential revenue trends are expected?
A: Management expects weaker Q1 and Q3 due to seasonality with Q2 and Q4 driving higher sales, reflecting a mature revenue cadence as numbers grow. -
Gross Margin Outlook
Q: What margin improvements are forecast?
A: They expect a consistent cadence of margin expansion, with gross margins aiming at 80%+ in the long run as the high‐margin LAL mix grows, though quarter-to-quarter results may vary. -
LAL Utilization Growth
Q: How are LAL per LDD metrics trending?
A: Utilization remains solid, with recent quarterly figures of 11, 8.7, and 10.9 implants per LDD, indicating steady growth despite some seasonal fluctuation and no evident ceiling. -
Commercial Investment
Q: How is SG&A spending evolving?
A: They are significantly boosting sales and marketing investments—expanding a commercial organization from 10 to over 200—to support customer education and market expansion. -
Pipeline Advancements
Q: What are the new product innovation plans?
A: The strategy centers on enhancing customization through additional LDD functionality and iterative LAL upgrades to further improve clinical outcomes and differentiate the technology. -
Competitive Impact
Q: How will competition affect performance?
A: While competitive launches are noted, any impact is expected to be modest as competitors target similar technologies, and the company’s unique offerings continue to drive premium IOL growth. -
R&D Allocation
Q: Where is the planned R&D spend directed?
A: The anticipated $40 million R&D budget is set to be used for technology upgrades and field enhancements, ensuring ongoing product evolution and long-term innovation. -
Buyer Adoption Profile
Q: Who are the current adopters?
A: Adoption spans a broad cross-section of ophthalmologists and practices, with both established and new users showing similar growth trajectories in embracing the technology. -
Patient Segmentation
Q: Are aspheric lens patients mostly younger?
A: Both the LAL and LAL+ are inherently aspheric; management noted there isn’t a distinct difference with younger or myopic patients, as benefits extend across various demographics. -
Business Model Replication
Q: Can innovative treatment models be replicated?
A: Unique business models seen in select centers are expected to eventually be replicated across more practices, enhancing overall market access and efficiency.
Research analysts covering RxSight.