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VI

ViewRay, Inc. (VRAYQ)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 revenue was $34.7M, up 70% YoY and 31% QoQ; net loss per share was $(0.15) versus $(0.16) in Q4 2021 and $(0.14) in Q3 2022 .
  • Orders totaled $56.4M in Q4 (nine MRIdian systems), lifting backlog to $380.2M; FY22 orders were 32 ($191.0M) and revenue was $102.2M, up 46% YoY .
  • 2023 guidance introduced: revenue growth 25–40% and adjusted EBITDA loss of $(70)–$(80)M; projected GAAP net loss $(101)–$(111)M with detailed reconciliation provided .
  • Management emphasized therapy adoption driven by innovation and clinical data; CEO: “we focus on our mission of ‘Treating and proving what others can’t’… to drive revenue growth, gross margin expansion, and expense leverage again in 2023” .
  • S&P Global Wall Street consensus estimates for VRAYQ were unavailable due to missing CIQ mapping; therefore, formal beat/miss vs SPGI cannot be determined (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Robust top-line momentum: Q4 revenue grew to $34.7M on five revenue units vs $20.4M the prior year on three units; FY22 revenue rose 46% to $102.2M on 16 revenue units including one upgrade .
  • Bookings strength and visibility: Q4 new orders of $56.4M (nine systems) and backlog of $380.2M; FY22 orders of $191.0M and backlog up 21% YoY .
  • Management confidence in 2023 trajectory: “innovation and clinical pipelines, along with increased market awareness… are driving therapy adoption,” positioning for growth and margin expansion .

What Went Wrong

  • Continued operating losses: Q4 operating loss $(25.9)M; adjusted EBITDA loss $(18.4)M; FY22 adjusted EBITDA loss $(78.2)M, reflecting scale-up and opex intensity .
  • Expense pressure: Q4 opex of $30.4M vs $29.0M YoY; FY22 opex of $117.2M vs $104.0M YoY, driven by selling & marketing and G&A .
  • Cash usage and timing headwinds: Management revised 2022 cash usage guidance in Q3 citing interquarter timing of large system-related payments due to installation/construction/permitting timelines .

Financial Results

MetricQ4 2021Q3 2022Q4 2022
Revenue ($USD Millions)$20.387 $26.490 $34.692
Net Loss ($USD Millions)$(27.068) $(26.107) $(27.816)
EPS (Basic & Diluted, $USD)$(0.16) $(0.14) $(0.15)
Gross Profit ($USD Millions)$(0.209) $4.454 $4.407
Total Operating Expenses ($USD Millions)$28.989 $28.370 $30.354

Segment revenue and cost breakdown (quarterly):

SegmentQ4 2021 ($USD Thousands)Q4 2022 ($USD Thousands)
Product Revenue$15,443 $28,577
Service Revenue$4,825 $5,958
Distribution Rights$119 $157
Total Revenue$20,387 $34,692
Product Cost of Revenue$16,208 $24,480
Service Cost of Revenue$4,388 $5,805
Total Cost of Revenue$20,596 $30,285
Gross Profit$(209) $4,407

Key KPIs:

KPIQ4 2021Q3 2022Q4 2022
New Orders ($USD Millions)$40.700 $47.460 $56.400
Backlog ($USD Millions)$313.354 $370.519 $380.240
Revenue Units (#)3 4 5
Cash and Cash Equivalents ($USD Millions)—$146.9 (incl. restricted cash) $142.5

Non-GAAP:

MetricQ4 2021Q4 2022FY 2022
Adjusted EBITDA ($USD Millions)$(24.052) $(18.443) $(78.230)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2022 (as of Q2)$84–$104 $90–$104 Raised bottom end
Total Revenue ($USD Millions)FY 2022 (as of Q3)$90–$104 $94–$104 Raised bottom end
Cash Usage ($USD Millions)FY 2022 (as of Q3)$68–$83 $78–$92 Raised range due to timing
Total Revenue Growth (%)FY 2023—25%–40% New
Adjusted EBITDA ($USD Millions)FY 2023—$(70)–$(80) New
GAAP Net Loss ($USD Millions)FY 2023—$(101)–$(111) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2022)Trend
AI/technology initiatives (A3i)A3i went live; workflow enhancements; first GBM brain patients at Henry Ford Broadened A3i customer response referenced in Q3; continued innovation pipeline Expanding adoption/feature set
Market awarenessPartnered with Katie Couric Media to raise awareness of MRIdian SMART Management focus on increased market awareness driving therapy adoption Continuing campaigns
China regulatory/macroNMPA approval enables China commercialization; large cancer burden context Positioned to improve outcomes in China per Q3 materials Regulatory tailwind; regional opportunity
Product performance100% service attachment; units growth; margin expansion noted in Q3 deck Q4 revenue units grew to 5; gross profit positive Improving throughput and revenue per quarter
R&D execution/clinical dataSMART Pancreas, MIRAGE prostate data driving demand Management cites innovation and clinical pipelines driving adoption Reinforced clinical-led sales motion
Cash/timing and supply chainQ3 cited timing of large system-related payments (construction/permitting) affecting cash usage Cash and equivalents at $142.5M YE; ongoing expense leverage targeted Timing headwinds; liquidity adequate

Management Commentary

  • “Our innovation and clinical pipelines, along with increased market awareness efforts, are driving therapy adoption… We focus on our mission of ‘Treating and proving what others can’t’ which position us to drive revenue growth, gross margin expansion, and expense leverage again in 2023.” — Scott Drake, President & CEO .
  • Q3 prepared remarks highlighted strong customer response to SMART Pancreas and 12-month MIRAGE data: “Our clinical data are driving demand for MRIdian therapy… A3i launch… now broadening.” — Scott Drake .
  • Q2 commentary on awareness: “We’re excited to partner with Katie Couric… to spread awareness that short-course, non-invasive treatment… is available today at MRIdian centers.” — Scott Drake .
  • CFO transition: Appointment of William P. “Bill” Burke as CFO effective Jan 9, 2023; background and compensation detailed; outgoing CFO providing transition services through June 2023 .

Q&A Highlights

  • Participants included Stifel (Rick Wise), Piper Sandler (Jason Bednar), Nephron Research (Chris Pasquale), and Oppenheimer (Suraj Kalia) alongside CEO Scott Drake and CFO Bill Burke .
  • The company indicated it would provide an appendix of key metrics filed with the 8-K in lieu of an earnings presentation going forward, and emphasized forward-looking guidance and non-GAAP reconciliations available in the exhibits .

Estimates Context

  • S&P Global consensus estimates for VRAYQ were unavailable due to a missing CIQ mapping; as a result, a formal comparison of Q4 actuals vs SPGI consensus cannot be provided at this time. If SPGI mapping becomes available, we will update the beat/miss analysis accordingly.
  • External transcript sources reported Q4 2022 EPS of $(0.15) and revenue of $34.69M; however, these comparisons are not anchored to S&P Global and are provided for directional context only .

Key Takeaways for Investors

  • Execution improving: Sequential revenue growth and positive gross profit in Q4, with sustained bookings and backlog expansion supporting 2023 top-line growth .
  • Clear 2023 framework: Revenue growth of 25–40% with adjusted EBITDA loss narrowing to $(70)–$(80)M implies continued operating leverage; reconciliation to GAAP provided for transparency .
  • Clinical and market flywheel: Clinical data (SMART Pancreas, MIRAGE) and awareness initiatives (KCM partnership) underpin demand generation and therapy adoption across regions including China post-NMPA approval .
  • Watch cash/timing dynamics: Cash usage revisions in 2022 tied to installation/payment timing highlight near-term working capital variability; YE cash of $142.5M provides runway .
  • Operating discipline vs growth: Selling & marketing and G&A spend are elevated to support growth; monitor gross margin progression and opex leverage through 2023 .
  • Leadership continuity: New CFO with deep medtech/public-company experience may enhance financial rigor, capital allocation, and investor communications .
  • Near-term trading setup: Without confirmed SPGI consensus, focus on bookings cadence, backlog conversion, and margin prints in upcoming quarters; regulatory and clinical milestones can be catalysts.

Additional references and documents:

  • Q4 2022 press release and financial exhibits (8-K, Exhibits 99.1/99.2): detailed quarterly and annual financials and 2023 guidance .
  • Preliminary Q4 2022 release (Jan 9, 2023) and CFO appointment (8-K) .
  • Q3 2022 and Q2 2022 earnings releases and presentations (8-K) .
  • China NMPA approval press release (Sept 7, 2022) .