Sign in

Sight Sciences, Inc. (SGHT) Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue was $20.2M (+1% YoY) with an 84% gross margin; EPS was $(0.22) vs $(0.27) a year ago as OpEx fell 8% YoY; sequentially, revenue declined on softer surgical glaucoma utilization and seasonality .
  • Free cash flow turned positive at $0.4M (vs $(10.0)M cash used in Q3’23) on working capital improvements; cash ended at $118.6M with $35.0M of debt .
  • Management maintained FY24 revenue guidance ($81–$83M) and lowered adjusted OpEx guidance to $104–$106M from $107–$109M; expects double-digit surgical glaucoma growth in Q4 but < $0.5M dry eye revenue post price increase .
  • Reimbursement is a mixed setup: finalized LCDs affirm Medicare coverage for single-MIGS procedures (canaloplasty and goniotomy) effective mid-Nov, but the final 2025 Medicare rule did not grant device‑intensive status to CPT 66174; combination-MIGS restrictions are a near-term headwind .

What Went Well and What Went Wrong

  • What Went Well

    • Positive free cash flow: “We generated $0.4 million of cash in the quarter reflecting continued operational discipline and a substantial improvement in working capital” .
    • Cost discipline: Total OpEx down 8% YoY to $28.1M; adjusted OpEx down 11% YoY to $23.8M, enabling narrower loss and reduced FY OpEx guidance .
    • Dry Eye outperformed expectations ahead of the Oct 1 price increase; management highlighted “significant interest in buying TearCare SmartLids before the price increase” .

  • What Went Wrong

    • Surgical glaucoma underperformed expectations; slower-than-expected recovery from LCD uncertainty, uneven territory rebound, and increased trialing of lower-priced devices during the disruption .
    • Gross margin compressed to 84% (vs 87% YoY) on higher overhead per unit from lower production volumes in both segments; dry eye margin fell to 48% (from 57%) .
    • CMS did not assign device‑intensive status to CPT 66174 for 2025; combination-MIGS restrictions likely to weigh on device volumes near term .

Financial Results

Selected consolidated metrics

MetricQ1 2024Q2 2024Q3 2024
Revenue ($M)$19.3 $21.37 $20.16
Gross Margin %86% 85.8% 83.9%
Total Operating Expenses ($M)$31.2 $30.996 $28.136
Adjusted Operating Expenses ($M)$26.6 $26.587 $23.753
Net Loss ($M)$(16.2) $(12.329) $(11.066)
Diluted EPS ($)$(0.33) $(0.25) $(0.22)
Cash from Operations ($M)$(10.8) $(9.1) $0.4
Cash & Equivalents ($M)$127.3 $118.18 $118.56
Total Debt ($M)$35.0 $35.0 $35.0

Year-over-year comparison (Q3)

MetricQ3 2023Q3 2024
Revenue ($M)$20.01 $20.16
Gross Margin %86.6% 83.9%
Total Operating Expenses ($M)$30.743 $28.136
Adjusted Operating Expenses ($M)$26.804 $23.753
Net Loss ($M)$(13.035) $(11.066)
Diluted EPS ($)$(0.27) $(0.22)

Segment revenue and margins

SegmentQ3 2023 Revenue ($M)Q2 2024 Revenue ($M)Q3 2024 Revenue ($M)Q3 2023 Gross Margin %Q2 2024 Gross Margin %Q3 2024 Gross Margin %
Surgical Glaucoma$18.43 $20.24 $18.63 89.1% 88.0% 86.8%
Dry Eye$1.58 $1.13 $1.53 57.4% 46.5% 47.7%

KPIs

KPIQ3 2023Q2 2024Q3 2024
Surgical Glaucoma active customers (#)1,108 1,131 1,107
Dry Eye active customers (#)318 277 296
Dry Eye lid treatment units sold (#)5,090 4,088 5,379

Narrative drivers and cross-checks

  • Revenue shortfall vs internal expectations was driven by surgical glaucoma (sequential utilization down ~7%) and a slower re-engagement in some territories post-LCD uncertainty; dry eye outperformed ahead of the price increase .
  • Gross margin pressure reflected lower production volumes across both segments; dry eye mix and scale also weighed on segment margin .
  • Working capital (AR and inventory) reductions drove the FCF inflection in Q3 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024$81.0–$83.0M (narrowed on Aug 1) $81.0–$83.0M (maintained) Maintained
Adjusted Operating ExpensesFY 2024$107.0–$109.0M $104.0–$106.0M Lowered
Surgical Glaucoma RevenueQ4 2024Double‑digit YoY growth expected (2H commentary) Double‑digit YoY growth expected; acknowledge combination-MIGS headwinds mid‑quarter Maintained (with caution)
Dry Eye RevenueQ4 2024Not previously quantified for Q4; FY24 < $3.0M < $0.5M in Q4; expect return to growth in 2025 with market access wins Newly specified (low)
Pricing/Policy Context2025 (ASC/OPD)Proposed device‑intensive status for CPT 66174 (July proposal) Final rule did not assign device‑intensive status; small ASC/OPD rate increases Negative vs proposal

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Previous Mentions (Q2 2024)Current Period (Q3 2024)Trend
Reimbursement/LCDs (MIGS)Rebuilding post-LCD withdrawal; utilization improving; target double-digit 2H growth Recovery momentum; utilization and active accounts up; LCD clarity expected Final LCDs effective mid‑Nov confirm single‑MIGS coverage; combination stacking restricted; uneven territory recovery Improved clarity but near-term volume headwind from stacking ban
Device‑intensive status (CPT 66174)—Proposal included device‑intensive status in ASC rule Final rule did not assign device‑intensive; ASC rate +$49 (~2%), OPD +$149 (~4%) Negative vs proposal; modest facility rate uplift remains
Sales force executionFocus on utilization first, then re-engage lost accounts and train new surgeons Momentum building; sequential utilization +5% in Q2 Organizational enhancements underway; addressing underperformance and re-engagement gaps Active optimization
Standalone MIGS strategyEmphasized market development; efficacy data pipeline (IRIS/GEMINI) Continued development commentary Defined target standalone patient profile; real‑world IRIS standalone outcomes targeted for 1H25 publication Building clinical and commercial foundation
Dry Eye (TearCare) market accessSAHARA RCT Phase 1–2 positive; begin payer dialogues for 2025 coverage Price increase announced (Oct 1); budget impact model coming Early paid claims (small volume); budget impact publication expected; Q4 revenue depressed near term Progressing toward 2025 coverage
Cash discipline/FCFPlan to achieve breakeven without equity raise Reduced cash burn Q2 FCF positive in Q3; reiterates breakeven plan without equity raise Improving trajectory
Leadership/R&D pipelineMention of sustained release and Helix stent development —New EVP R&D and EVP Operations appointed; pipeline advancing (glaucoma devices, sustained drug delivery, dry eye) Strengthened bench for execution

Management Commentary

  • “We generated total revenue of $20.2 million… Revenue did not meet our expectations due to surgical glaucoma… partially offset by higher dry eye revenue driven by demand for TearCare/SmartLids ahead of the price increase effective October 1.” — CEO, prepared remarks .
  • “We plan to achieve cash flow breakeven without the need to raise additional equity capital.” — CFO .
  • “The final rule did not assign device‑intensive status… we still feel like we can execute our growth plans in the existing reimbursement environment.” — CEO .
  • “We expect dry eye revenue for the fourth quarter of 2024 to be less than $0.5 million… before we expect to return to growth in 2025 with market access wins.” — CFO .
  • “Standalone intervention performed with OMNI can be effectively utilized for [later-stage] patients… thus potentially delaying the need for riskier advanced procedures.” — CEO .

Q&A Highlights

  • Q4 setup: Management cited typical Q3→Q4 seasonal uplift in glaucoma procedures and early-quarter improvements, while acknowledging LCD combination restrictions as a mid-quarter headwind; dry eye expected at ≤$0.5M in Q4 but ahead of prior internal expectations .
  • Device‑intensive calculation: Company does not yet have the second‑half 2023 claims data underlying CMS’ calculation; will analyze when available and continue pursuing device‑intensive status .
  • Combination‑MIGS impact: The 10% figure cited is total combination-MIGS claims in the market; SGHT cannot isolate OMNI’s specific mix from claims data but believes OMNI’s comprehensive profile is advantaged in a “one‑MIGS” environment .
  • Free cash flow and runway: Working capital reductions (AR/inventory down ~$9M) supported Q3 FCF; management is balancing investment (TearCare access, pipeline) with discipline; no specific breakeven guidance provided .
  • Dry eye reimbursement: Only a small volume of claims paid so far (commercial and Medicare), with variable payments; payer discussions are ongoing and supported by SAHARA and a budget impact analysis pending publication .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for SGHT were unavailable due to data access limits at the time of this analysis; therefore, we cannot present a definitive “vs. Street” comparison for Q3 revenue/EPS or Q4/FY guide adherence. Values retrieved from S&P Global were unavailable due to request limits.

Where estimates may need to adjust:

  • Q4 segment mix: Explicit guide for dry eye revenue (<$0.5M) and the combination‑MIGS restriction suggest consensus (if assuming higher dry eye or unimpacted MIGS volumes) may need to lower dry eye and modestly temper glaucoma unit assumptions for Q4, offset by seasonal lift .
  • FY OpEx: Adjusted OpEx guidance was reduced to $104–$106M; Street models likely need to reflect lower operating costs in Q4 .

Key Takeaways for Investors

  • Execution reset in surgical glaucoma: Territory variability and LCD-driven disruption slowed recovery in Q3, but management is retooling leadership/coverage and expects seasonal and organizational tailwinds into Q4 and 2025 .
  • Reimbursement clarity with a caveat: Final LCDs de‑risk coverage for single‑MIGS canaloplasty/goniotomy, but the ban on stacking and the lack of device‑intensive status are near-term growth and facility economics headwinds; OMNI’s comprehensive profile could be a medium‑term relative winner in a “one‑MIGS” world .
  • Cost/FCF discipline credible: Q3 free cash flow positive and reduced OpEx guidance build confidence in the “breakeven without equity” narrative if top‑line growth reaccelerates in 2025 .
  • Dry eye is a 2025 story: Q4 will be a trough for TearCare given the price increase and cash-pay impact; early claim payments and pending budget impact publication support payer coverage efforts in 2025, with a ready installed base to activate .
  • Watch Q4 glaucoma growth vs headwinds: Management targets double‑digit SG growth despite combination restrictions effective mid‑quarter; the balance between seasonal lift and LCD impact is the primary near-term swing factor .
  • Catalysts: Initial TearCare coverage decisions/publications in 2025, IRIS standalone real‑world OMNI outcomes (targeted 1H25), and any progress on device‑intensive status or facility economics for CPT 66174 .

Appendix: Additional Relevant Disclosures and Press Releases

  • Leadership changes: Appointment of EVP R&D (MK Raheja) and EVP Operations (Brenton Taylor); COO retirement; supports pipeline and scaling initiatives .
  • Clinical: TearCare reading speed/quality of life study showed statistically significant functional and symptom improvements, reinforcing payer value proposition .

Citations

  • Q3 2024 press release and financials:
  • Q3 2024 earnings call transcript:
  • Q2 2024 press release (for trend/guidance):
  • 8‑K (Item 2.02 and exhibits) referencing Q3 results and guidance:
  • Leadership press release (Q3 timeframe):
  • Clinical dry eye press release:

Best AI for Equity Research

Performance on expert-authored financial analysis tasks

Fintool-v490%
Claude Sonnet 4.555.3%
o348.3%
GPT 546.9%
Grok 440.3%
Qwen 3 Max32.7%