RxSight, Inc. Common Stock 2026 Q2 Earnings Call

With me on the call today are RxSight President and Chief Executive Officer, Aziz Mottiwala, and Chief Financial Officer, Mark Wilterding. Earlier today, RxSight released financial results for the three months ended June 30th, 2026. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that comments and responses to questions during today's call reflect management's views as of today and will include forward-looking and opinion statements, including predictions, estimates, plans, and expectations. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued today and in our filings with the Security and Exchange Commission or SEC. Our SEC filings can be found on our website or the SEC's website.

Investors are cautioned not to place undue reliance on forward-looking statements, and we disclaim any obligation to update or revise these forward-looking statements except as may be required by law. We will also discuss certain non-GAAP financial measures. Disclosures regarding non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, can be found in the press release. Please note that this conference call will be available for audio replay on our investor relations website. With that, I will turn the call over to Aziz.

Thank you, Oliver, and thank you and good afternoon, everyone. I'm delighted to be at RxSight and to be speaking with you today. I've spent most of my career in eye care, an area of healthcare that represents a significant opportunity to make life-changing differences in the quality of patients' lives. Joining a company dedicated to improving people's visions is a tremendous privilege, and in a large part is what attracted me to RxSight. Most recently, as chief commercial officer of Tarsus Pharmaceuticals, I helped build and lead the commercial strategy for one of the most important category-creating products in eye care. That experience reinforced the importance of differentiated innovation, disciplined execution, and strong customer engagement. I look forward to leveraging those experiences as we work to strengthen execution and create value for physicians, patients, employees, and shareholders.

I'd like to thank the board of directors for placing its confidence in me, and I also want to acknowledge the entire RxSight team. Over the past two weeks, everyone has been incredibly welcoming, and I've been impressed by the spirit of innovation, level of commitment, and problem-solving mindset across the organization. That doesn't surprise me given what this team has accomplished, but it's reinforced my excitement about the opportunity ahead. I also want to take a moment to recognize Ron Kurtz for his leadership in helping to build RxSight and establish the only commercially available adjustable IOL platform in the world. I'm pleased that Ron will continue to contribute his clinical expertise, product knowledge, and physician relationships as chief medical officer, and I look forward to working closely with him as we advance the platform.

The RxSight team has developed a highly differentiated technology and pioneered an entirely new category in cataract surgery. The ability to adjust and personalize a patient's vision post-surgery is truly unique and addresses one of the most important goals in cataract treatment, helping patients achieve the visual outcomes they desire. Along the way, the company has developed a robust base of dedicated physicians and practices that strongly believe in our technology and have experienced firsthand the benefit it provides to the patients. Having only been with RxSight for a short period of time, I want to offer some initial thoughts and observations. Over the last few weeks, I've spent considerable time listening, learning, and meeting with leaders across the organization, as well as key customers in the ophthalmic community.

Before I can drive change, I need to develop a thorough understanding of the business, identify the underlying challenges, and determine where we can have the greatest impact. With that said, my initial conversations have reinforced that the value of adjustability remains compelling and that physicians recognize the technology's differentiation and its ability to deliver more precise and personalized vision for their patients. I've also learned that most surgeons prefer LAL for their most important patients, including members of their own family. For example, at a recent dinner here in Orange County, an ophthalmologist shared that she had chosen LAL for both her brother and her sister. I also recently spoke to another ophthalmologist in Florida who implanted LAL in both of his parents. To me, those decisions reflect the high level of confidence physicians across the ophthalmic community have in our technology.

This level of physician confidence is supported by an extensive body of clinical and real-world evidence demonstrating the precision, consistency, and versatility of our technology. One recent example is a phase IV registry published in the Journal of Cataract & Refractive Surgery. The study involved more than 1,100 patients across 126 sites and reported strong refractive and visual outcomes in patients with and without prior corneal refractive surgery. The breadth and consistency of findings like this reinforce the strength of RxSight's clinical proposition and the value that adjustability offers to physicians and patients. In addition, our recently announced collaboration with Alcon is a major milestone for the company. It provides further external validation of the technology and its broader potential. It also provides meaningful non-dilutive capital through the $200 million in upfront and potential future milestone payments, along with the potential of significant long-term royalties.

Most importantly, this collaboration reinforces our belief that adjustability is the future of cataract surgery. Nevertheless, we have considerable work ahead of us to translate this opportunity into broader adoption. As I continue my assessment, I want to ensure that we have the flexibility to evaluate the business thoroughly and to make the decisions we believe are in the best long-term interest of the company and our shareholders. While underlying trends remain generally consistent with what we've previously guided, this work will require time, and we should not allow our prior outlook to constrain actions we may ultimately determine are appropriate. For that reason, we have decided to withdraw our previously issued full-year financial guidance. We recognize the guidance was provided recently, and we did not make this decision lightly. We believe that this is the appropriate step while we complete our assessment.

We will resume formal guidance in early 2027. Before sharing my initial priorities and perspectives on the path forward, I will turn the call over to Mark to review our second quarter financial results and provide some directional commentary on the remainder of the year.

Mark? Thanks, Aziz, and good afternoon, everyone.

Consistent with the revenue range we pre-announced last month, second quarter total company revenue was $33.7 million, including $6.5 million recognized in connection with our strategic collaboration agreement with Alcon. This amount represents the portion of the initial milestone payment allocated to our licensed intellectual property. Excluding revenue related to Alcon, our second quarter product sales were $27.2 million, down 19% compared to the prior-year period, reflecting heightened competitive trialing as well as broader marketplace headwinds. Second quarter LAL unit volumes were 24,917, down 9% compared to the prior-year period. LAL procedure volume translated into second quarter sales of $24.5 million, representing 90% of our RxSight product revenue. During the quarter, we placed 12 LDD units, which accounted for $1.3 million of quarterly revenue. We exited the quarter with an installed base of 1,166 LDD units.

Excluding the benefit from the partnership, second quarter gross margin was 71.2%, compared with 74.9% in the prior-year period. The year-over-year decline primarily reflected higher inventory-related costs due to slower than expected inventory flow-through. Including the favorable contribution of collaboration revenue, second quarter gross margin was 76.7%. Second quarter 2026 SG&A expense were $30.4 million, up 5% compared to the prior-year period, primarily reflecting legal and consulting expenses associated with the collaboration. Second quarter research and development expenses were $9.2 million, compared to $10.2 million in the prior-year period. This year-over-year decline was primarily due to lower personnel-related expenses. We reported a net loss in the second quarter of $12.1 million or $0.29 per basic and diluted share, based on 41.5 million weighted average shares outstanding. Stock-based compensation was $7.5 million, resulting in an adjusted net loss of $4.6 million or $0.11 per share.

We ended the second quarter with cash equivalents, and short-term investments of approximately $209 million. This amount does not include the $60 million upfront payment related to the partnership agreement that was received after quarter end. As Aziz Mottiwala previously mentioned, while current business trends remain generally consistent with our previous expectations, we have decided to withdraw our formal full-year 2026 financial guidance as we complete our assessment of the business. That said, we would like to provide some directional commentary on the key factors we expect to influence performance over the remainder of the year. We continue to expect to recognize between $30 million-$40 million of revenue associated with the Alcon strategic agreement. Revenue will be recognized as certain performance obligations are achieved, so the timing by quarter will be variable.