RxSight (RXST) Q4 2025 Earnings Call Transcript
RxSight (RXST) Q4 2025 Earnings Call Transcript
Motley Fool Transcribing, The Motley FoolWed, February 25, 2026 at 11:06 PM UTC
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Date
Feb. 25, 2026 at 4:30 p.m. ET
Call participants -
President and Chief Executive Officer — Dr. Ronald Kurtz
Chief Financial Officer — Mark Wilterding
Takeaways -
Total sales -- $32.6 million, down 19% year over year, with the decline attributed to lower Light Delivery Device (LDD) sales and a difficult comparison to prior-year record placements.
LDD unit sales -- 25 units globally in the quarter, compared to 83 in the year-ago period, resulting in $3 million of LDD revenue versus $11 million previously.
LDD installed base -- 1,134 units at quarter end, up 17% from 971 at the end of the prior year.
LAL unit sales -- 28,611 Light Adjustable Lenses (LALs), down 2% year over year but up 10% sequentially; translated to LAL sales revenue of $28.2 million, unchanged from the prior year.
LAL revenue mix -- Accounted for 86% of quarterly sales, an all-time high, up from 71% in the prior-year period.
Gross margin -- 77.5%, up from 71.6% in the prior-year quarter, attributed to higher-volume, higher-margin LALs.
SG&A expenses -- $27.7 million for the quarter, down 2% year over year primarily from reduced personnel costs and offset by continuing LAL commercial investments.
R&D expenses -- $8.9 million for the quarter, down 3% year over year and 2% sequentially, due to lower personnel costs and offset by ongoing research investment.
Net loss -- $9.2 million for the quarter, or $0.22 per share, with an adjusted net loss of $1.3 million or $0.03 per share after excluding $7.8 million in stock-based compensation.
Full-year revenue -- $134.5 million, up 4%, driven by a 12% increase in LAL sales that partly offset a 48% decrease in LDD revenue.
Full-year gross margin -- 76.6%, up from 70.7% prior year, primarily reflecting stronger LAL mix.
Full-year net loss -- $38.9 million, or $0.95 per share, compared to $27.5 million, or $0.71 per share, last year; adjusted net loss was $7.3 million or $0.18 per share, excluding $31.6 million in stock-based compensation.
Year-end liquidity -- No debt and $228 million in cash, cash equivalents, and short-term investments on the balance sheet.
2026 revenue guidance -- $120 million to $135 million, with the midpoint implying an approximate 5% decline, mainly due to anticipated lower LDD sales.
2026 gross margin outlook -- 70%-72%, reflecting higher-cost inventory sell-through and manufacturing absorption headwinds.
2026 operating expense guidance -- $150 million to $160 million, representing a 1% decrease at the low end and up to a 6% increase at the high end versus 2025, driven by ongoing U.S. and international investments.
2026 R&D expense expectations -- Anticipated to remain consistent with 2025 spending levels.
2026 stock-based compensation -- Projected non-cash expense of $30 million to $32 million, included primarily in operating expenses.
International revenue expectation -- Minimal contribution embedded in 2026, from early capital placements in approved markets, as further expansion is methodical and focused on relationship building.
Premium IOL market penetration -- Company cited that "adjustable procedures represent approximately 10% of the U.S. premium market by volume and approximately 15% by revenue."
Clinical outcomes -- Newly published study shows "93% of LAL eyes achieved both spherical equivalent and residual cylinder within a half diopter of target," offering statistically superior refractive accuracy versus contemporary toric IOLs.
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Risks -
Mark Wilterding said, "full year 2026 gross margin guidance is 70% to 72%. This is down from 2025 levels" due to higher-cost inventory and manufacturing absorption headwinds.
Ronald Kurtz remarked, "Although the full year financial results were below our initial expectations," explicitly acknowledging underperformance relative to prior internal targets.
"2026 sales are expected to be the lowest in the first quarter, reflecting typical seasonality and more challenging comparisons in the year-ago period," per Wilterding, indicating expected sequential performance weakness to start the year.
International sales contribution is expected to remain "relatively small" in 2026, delaying meaningful geographic diversification in revenue sources.
Summary
RxSight (NASDAQ:RXST) reported a double-digit revenue decline in the quarter, led by sharply lower LDD placements but partially offset by sustained LAL demand and higher-margin mix. Management issued 2026 guidance projecting year-over-year revenue contraction at the midpoint and compressed gross margin from inventory cost absorption, while affirming a continued focus on margin-accretive LAL sales and disciplined international rollout. The company ended the year with significant liquidity and reiterated ongoing U.S. commercial intensification, underpinned by peer-reviewed clinical evidence highlighting superior visual accuracy of its LAL platform.
Low single-digit LAL unit growth is projected for 2026, with utilization per device stabilizing at approximately eight lenses per LDD per month.
Quarterly revenue is expected to bottom in Q1 2026, with sequential improvement anticipated, while the third quarter may also reflect typical seasonal softness.
The company is taking "a prudent approach" to guidance after a period of results below initial expectations and expects international expansion to remain gradual due to a deliberate market development strategy.
Over 20 FDA approvals in five years were cited as evidence of RxSight's consistent pace of technical innovation, with ongoing development planned across both lens and device platforms.
A large post-market LAL registry echoed published clinical study results, reinforcing the platform's favorable comparative accuracy and potential for increased patient satisfaction in premium IOL procedures.
Management noted industry disruption in 2025 from competitor product launches but expects such events to be episodic rather than lasting headwinds to LAL adoption.
Industry glossary -
LDD (Light Delivery Device): An office-based device used post-cataract surgery to activate and adjust Light Adjustable Lenses within the patient's eye via programmed UV light exposure.
LAL (Light Adjustable Lens): An intraocular lens implanted during cataract surgery that can be adjusted postoperatively using a proprietary light delivery system to refine visual outcomes.
KOL (Key Opinion Leader): Influential practicing clinicians engaged to advocate for, and help clinically validate, new medical technologies within their peer communities.
OUS: Acronym for "Outside the United States," denoting all international markets beyond U.S. borders.
Premium IOL: Intraocular lenses used in cataract surgery that provide advanced visual features and are generally not covered by standard insurance reimbursement.
Refractive accuracy: The ability of a lens or procedure to deliver intended visual correction outcomes—measured here as patients achieving spherical equivalent and cylinder within a targeted diopter range.
Full Conference Call Transcript
Dr. Ron Kurtz, and Chief Financial Officer, Mark Wilterding. Earlier today, RxSight, Inc. released financial results for the three months ended 12/31/2025. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to questions during today's call reflect management's views as of today, 02/25/2026, and will include forward-looking and opinion statements, including predictions, estimates, plans, expectations, and other information. 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 Securities and Exchange Commission (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 Ron.
Ronald Kurtz: Good afternoon, and thank you for joining us today. I would like to start by both welcoming Mark to his first RxSight, Inc. earnings call and asking him to kick us off today by reviewing our fourth quarter and full year 2025 financial results, including the key drivers of performance and the trends across the business. After his remarks, I will discuss the progress our team made in the fourth quarter and outline the steps we are taking to position RxSight, Inc. for 2026 and beyond. With that, I will turn the call over to Mark.
Mark Wilterding: Thank you, Ron, and good afternoon, everyone. Consistent with our January preannouncement, RxSight, Inc. reported fourth quarter 2025 sales of $32.6 million, down 19% year over year due to lower LDD sales. As you recall, we had record levels of LDD placements in the year-ago period, totaling 83 units globally, accounting for $11 million of sales. In 2025, we sold 25 LDD units globally and generated $3 million of LDD revenue. Despite the year-over-year decline in the fourth quarter, we exited 2025 with an LDD installed base of 1,134 units, up 17% from the 971 units installed at the end of 2024.
Turning to LALs, during the fourth quarter, we sold 28,611 LALs, down 2% from the year-ago period and up 10% sequentially. Procedure volumes translated into LAL sales of $28.2 million in the fourth quarter of 2025, in line with Q4 2024. LAL revenue accounted for an all-time high of 86% of total company sales in the fourth quarter, up from 71% in the year-ago period. Higher LAL revenue mix contributed to a gross margin of 77.5% in Q4 2025 compared to 71.6% in the year-ago period. Fourth quarter 2025 SG&A expenses were $27.7 million, down 2% compared to the prior-year period, primarily driven by lower personnel-related expenses, partially offset by continued investments in LAL commercial initiatives.
Fourth quarter research and development expenses were $8.9 million, down 3% year over year and 2% sequentially, reflecting lower personnel-related expenses, partially offset by continued investment in advancing our research and development pipeline. We reported a net loss in Q4 2025 of $9.2 million, or $0.22 per basic and diluted share, based on 41.2 million weighted average shares outstanding. Stock-based compensation was $7.8 million, resulting in an adjusted net loss of $1.3 million, or $0.03 per share. I will now provide a brief recap of full year 2025 results. Full year sales of $134.5 million increased 4% year over year, reflecting a 48% decrease in LDD revenue, partially offset by a 12% increase in LAL sales.
2025 gross profit margin was 76.6% compared to 70.7% in 2024, primarily driven by a higher LAL revenue mix. Total operating expenses were $151.2 million in 2025, up 11% versus 2024. Year-over-year expense growth was driven primarily by higher personnel costs and continued investments in research and development, as well as commercial activities to support our long-term strategy. For the full year 2025, we reported a net loss of $38.9 million, or $0.95 per share, versus a net loss of $27.5 million, or $0.71 per share, in 2024. Excluding $31.6 million in stock-based compensation expense, our adjusted net loss in 2025 was $7.3 million, or $0.18 per basic and diluted share.
Moving on to the balance sheet, we ended the year with no debt and approximately $228 million in cash, cash equivalents, and short-term investments. Turning to 2026 guidance, full year revenue guidance of $120 million to $135 million implies a year-over-year decline of approximately 5% at the midpoint of the range, primarily driven by lower LDD sales versus the year-ago period. 2026 sales are expected to be the lowest in the first quarter, reflecting typical seasonality and more challenging comparisons in the year-ago period.
Third quarter 2026 sales will also be subject to seasonality, although we anticipate a rebound in total company sales growth in the second half of the year as growth comparisons ease and commercial initiatives begin to gain traction. We anticipate a relatively small contribution from sales outside of the U.S. in 2026, primarily in the form of early capital placements, as we take a methodical approach to expanding our international presence. The team is currently focused on building relationships with key opinion leaders and collecting country-specific clinical data to position the company for more meaningful international sales in 2027 and beyond. Our full year 2026 gross margin guidance is 70% to 72%.
This is down from 2025 levels, but consistent with the company's gross profit margin profile in 2024. We have taken a prudent view of our 2026 gross margin guidance to reflect the sell-through of higher-cost inventory due to lower-than-originally-anticipated production levels in 2025. However, we expect manufacturing absorption headwinds to ease over time. We expect 2026 operating expenses to be between $150 million and $160 million, representing a 1% decrease at the low end of the range and a 6% increase at the high end compared to the prior year, and reflecting our ongoing investment in international expansion in addition to our U.S. sales and marketing efforts. We anticipate that R&D spending will be relatively in line with 2025 levels.
Included in our costs, primarily in operating expenses, is non-cash stock-based compensation expense in the range of $30 million to $32 million. With that, I will turn it back to Ron.
Ronald Kurtz: Thank you, Mark. Although the full year financial results were below our initial expectations, 2025 was a year of meaningful progress for RxSight, Inc., for which I want to thank our 500 employees and thousands of customers as together we advance the delivery of our life-changing LAL technology around the world. Approximately five years after our IPO enabled us to broadly launch adjustability in North America, our clinical outcomes remain best-in-class, with doctors and patients continuing to be highly engaged with the technology, and with adjustable procedures representing approximately 10% of the U.S. premium market by volume and approximately 15% by revenue, proving that adjustability is no longer a concept but an established category with real commercial and clinical validation.
In 2025, following rapid years of expansion that resulted in approximately 25% of U.S. cataract surgeons being trained in this new paradigm, we initiated a number of strategic decisions to strengthen clinical and practice expertise across our user base, sharpening our approach to training, education, and support of new and existing practices and doctors. Although we are still early in external validation of this journey, we have been encouraged by recent trends that indicate these efforts are beginning to take hold. More specifically, and as Mark outlined, procedure volumes improved sequentially in the fourth quarter, driven primarily by LAL utilization within our customer base.
With over 1,100 LDDs in the field and an even larger number of practitioners, we have more work to do, highlighting our substantial opportunity to further leverage our installed base to drive same-store sales and patient outcomes. At the same time, we have taken a more disciplined approach to capital placements, with the goal of continuing to deliver sustainable execution through superior clinical outcomes, strong customer adoption, and efficient practice workflows that support long-term success. As we look ahead, our commercial focus is clear: improve utilization within our existing installed base through targeted practice engagement and new education initiatives, and expand access to our technology in a measured way through disciplined LDD placement and evolving access models.
We believe executing consistently in these areas will return the business to sustainable growth, with adjustability uniquely positioned within the premium IOL market to address the unmet needs of both doctors and patients, with the clinical thesis underlying this supported by both formal clinical studies and real-world data. To that point, we are pleased to announce that earlier this month, data from our post-approval study was accepted for publication in the Journal of Cataract and Refractive Surgery. The paper by Dr. Jack Holladay reported that 93% of LAL eyes achieved both spherical equivalent and residual cylinder within a half diopter of target, demonstrating statistically superior refractive accuracy compared to historical studies of contemporary toric IOLs.
Just as importantly, very similar results were identified in a more than 20,000-eye data registry of LAL cases presented at yesterday's meeting of the American-European Congress of Ophthalmic Surgery by Dr. John Doane, adding compelling big data to the growing body of evidence supporting the LAL platform and the ability of postoperative adjustability to provide unparalleled refractive accuracy across a broad patient population, thereby reducing outliers and enabling refractive customization that together raise patient satisfaction and grow premium procedures. With conventional cataract reimbursements facing continued downward pressure, we believe that the LAL is well positioned to deliver the superior outcomes demanded by patients as well as the enhanced profitability that is increasingly important to sustain ophthalmic practice viability.
RxSight, Inc. remains committed to advancing adjustability to even higher performance levels, as evidenced by the approximately 20 FDA approvals in direct support of product development over the past five years, with several new submissions planned over the next 18 months. These efforts continue to make LAL technology easier to adopt by a greater range of customers by enhancing the overall value proposition for both doctors and patients.
We believe that this historic pace of innovation presents another opportunity to engage with customers as we further the understanding and utilization of already released lens features like Active Shield, LAL+, and expanded IOL powers, as well as recently added LDD capabilities and our LDD and insertion device platforms, with even more innovation to come. Internationally, we are building a durable foundation for long-term success, with a focus over the next year on engaging with local clinicians to develop key opinion leaders in Europe, Asia, and now Australia who can generate their own early in-country outcomes and become advocates for adjustability in these major markets where the majority of global premium IOL procedures are performed.
Over time, we believe the growing prevalence of myopia and earlier cataract surgery in international markets represent meaningful long-term tailwinds for the LAL, as optimizing binocular vision and refractive accuracy become increasingly important for patients seeking spectacle independence and high-quality visual performance. We are also applying the lessons learned in North America to ensure that our teams and practices are well prepared to succeed as they introduce this paradigm to their patients. In summary, we are encouraged by the progress we saw in the latter part of the year with early signs of improvement and an organization that is better aligned to deliver superior clinical outcomes.
At the same time, we are realistic and taking a prudent approach to the durable opportunity RxSight, Inc.'s adjustable platform has created. There is certainly more work to do, and our focus is on delivering consistent performance over time. With an improved commercial structure, a large installed base, continued innovation, early infrastructure in key international markets, and a strong balance sheet, we believe we have the foundation in place to execute deliberately and build momentum. We are confident that the LAL platform will continue to help more patients globally, positioning the company to drive strong growth in the years to come as stakeholders increasingly recognize the significant benefits of RxSight, Inc.'s differentiated technology.
And with that, I will ask the operator to open up the call for questions.
Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We encourage everyone to limit yourself to one question and one follow-up. Your first question comes from the line of Robert Marcus with JPMorgan. Your line is open.
Robert Marcus: Hi. This is Alan on for Robbie. Quick question just on the 2026 guide. Curious what you are seeing so far in the underlying health of the market when it comes to both LALs and LDDs. You ended the year with a quarter a little bit better than expected on the LAL front, so curious how we should think about that through 2026 and what is contemplated in the guide.
Ronald Kurtz: So I think that—thanks for the question, Alan. I think that we did see a little bit of an uptick in Q4. I think that we are certainly hoping that continues through 2026. The guide, obviously, takes that into account as a potential. But maybe I will have Mark comment further on that.
Mark Wilterding: Yes, that is right. The guide definitely does take that into account. As you know, we do not give quarterly guidance, but year-to-date trends have been factored into our full year outlook. Remember, when we look back a year ago, Q1 2025 was our best LDD volume quarter and our second-best LAL unit volume quarter, and so total company sales increased, I think, about 30% year over year. It is a difficult comparison, and we wanted to take that into account as well with our guidance.
Robert Marcus: Got it. And then just a quick follow-up. On gross margin, I think in the past you have talked about high 70s as still being doable from a gross margin perspective going forward. Clearly, you are seeing some near-term pressure from manufacturing variances in 2026. But when I think about 2027 and beyond, is there any reason why you would not be able to see that improve back up to the high 70s? Thank you for the questions.
Mark Wilterding: Yes. We do look at this closely, as you can imagine. Longer term, we still do believe that is the case. We have proven that it is possible. We did achieve those types of margin levels last year. Ultimately, I think it really depends on what your assumptions for the mix profile of the business will be. Historically, a lot of the margin growth came from increases in the mix of LALs, and since they have a higher margin profile, that is obviously worth taking into account.
The other thing I would note from a margin perspective is that international is still early, and so as that ramps, that also has the potential to factor into that long-term gross margin profile of the company.
Operator: Your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.
Larry Biegelsen: Good afternoon. Thanks for taking the question, Mark. Congrats on the new role. And since this is your first as the new CFO, I would love to hear your guidance philosophy and, specifically, how much do you expect LDD placements to be down? Is 50% to 60% year over year a good range? And what kind of growth are you assuming for LAL volume? Is mid-single-digit growth a good place to be? I had one follow-up.
Mark Wilterding: Sure thing. Thanks, Larry. Just starting with guidance philosophy, I think coming into this role, my focus is definitely on setting achievable guidance. It is based on a bottom-up forecast and, in the case of 2026, what we have seen year to date in terms of trends. I would say, as Ron mentioned, we are seeing early signs of improvement, but we want to be realistic and take a prudent approach, and I want to reflect that in the guidance. So there is still work to do, but our focus is on delivering consistent performance over time. You asked a question on LDD assumptions.
Our assumption is that we see a slight acceleration from the 2025 exit rate of about 25 units a quarter, and that should increase through the year, with the additional contribution of some OUS units as well. Q1 units, I would expect to be the lowest in terms of LDD sales. As far as LAL unit growth, I think it is fair to assume for the full year somewhere in that low single-digit unit growth range for LALs.
Steve Lichtman: That is super helpful, Mark. On the gross margin, maybe help us a little bit more on that. We have always been under the impression that LALs have a higher gross margin than LDDs. So how long are these manufacturing variances you talked about going to persist? And it does look like pricing was also down on LDDs in Q4, if my math is correct. So help us think about that going forward as well, please. Thank you.
Mark Wilterding: I think in terms of the cadence of gross margin over the course of the year, our expectation is that we will still be working through some of the lower-cost inventory in the first quarter of this year, and so for that reason, I think the likelihood of Q1 gross margin being above that range is there. I think, though, as you go through the year, we do anticipate that higher-price inventory will make its way through the system beginning in the second quarter, and so for that reason, we do think that 70% to 72% gross margin is the, like I said, prudent place to be for the full year.
The anticipated higher LDD unit sales in the second half—and that speaks to, I think, the second part of your question about mix—they are also likely to put some additional pressure on that gross margin profile.
Operator: Your next question comes from the line of David Saxon with Needham and Company. Your line is open.
David Saxon: Great. Yes. Good afternoon. Thanks for taking my questions. I wanted to follow up on the gross margin. So higher-cost inventory starts to flow through in the second quarter. How long does it take for that inventory to kind of flush out and for us to see the true underlying unit cost as it relates to LALs?
Mark Wilterding: Good question. Thank you. As we said, we think it is transient. We will work our way through it over the course of the year. As I mentioned in response to Larry’s question, it shows up initially in the second quarter, and then it is something we will have to contend with in the third and fourth quarter as well. Beyond that, we are monitoring it diligently and following the situation very closely. We think ultimately that we have positioned ourselves from an inventory level consistent with our expectations for 2026 and beyond growth, and so I think that is also taken into account in consideration with that guidance.
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David Saxon: Okay. Great. Thanks for that. And then my second is just on the traction you are seeing with this kind of commercial pivot. Would love to just understand what you are seeing, if you have any success stories, and what is really kind of playing out that gives you confidence in this back half recovery you talked about in the script? Thanks so much.
Ronald Kurtz: Yes. Thank you, David. It is just what you alluded to. We are seeing some early success stories as the teams are able to focus on individual practices and on their individual needs through a structured program, and I think that our belief is that will continue as we expand into a larger number of clinical sites.
Operator: Your next question comes from the line of Steve Lichtman with William Blair. Your line is open.
Steve Lichtman: Thank you. Evening, guys. Ron, I am wondering on the initiatives what you are seeing so far about the durability of the initiatives you have put in place? I guess I am wondering how long the more intensive effort needs to be before things change. And when your team moves on, are you still seeing the benefits?
Ronald Kurtz: I think it is still early to comment on that, Steve. I think that practices are dynamic. There are changes in doctors and in personnel, and so I think that the concept that we are going to be able to go in and just have a one-and-done where they are back on track is probably not the correct assumption. We are going to continue to stay close to our customers.
We have other reasons to do that as we continue to add additional capabilities to the technology, and so I think that we will continue to—maybe not with the same intensity, and it may vary; it will vary depending on the specific needs of the practice—but we are not anticipating that this is going to be a one-and-done.
Steve Lichtman: Sure. Okay. Thanks, Ron. And then just secondly, wondering how you factored in the competitive environment in 2026 and any qualitative comments you can make in terms of what you are seeing out there and, again, how you are factoring that in? Thanks.
Ronald Kurtz: Well, we certainly monitor the competitive environment. As you recall, in 2025, we had an unusual situation where we had the three biggest competitors all introducing new high-profile multifocal IOLs. We do not necessarily anticipate that. However, we already know that there are announcements of new premium IOLs, particularly in the presbyopia-correcting space, by some of the major players and some of the other players in the space. So, similar to what we talked about in 2025, these things tend to be episodic and transient. They occur as marketing efforts coalesce around a new product launch.
But then over time, the reality of the “new technology” is that they are essentially the same as the old technology, and that leads to a natural—
Operator: Your next question comes from the line of Aiden Leah with Bank of America. Your line is open.
Aiden Leah: This is Aiden on for Travis. One question on utilization assumptions for LALs. I know you said volumes of mid-single digits. But maybe I am doing the math wrong. Enterprise utilization is down. So maybe you could double click on that. Thank you. Okay, great. Thank you. And then on the premium market as a whole, I think you said that 40% of LAL patients would have otherwise received a non-premium lens. When we think about the market growth as a whole, how should we think about RxSight, Inc.’s gain for an incremental point of market growth? Thank you.
Mark Wilterding: Yes. Thanks, Aiden, for the question. In terms of LAL unit growth, up in the low single-digit range, I think is the right way to think about it, which implies utilization stabilizes around eight lenses per LDD per month.
Ronald Kurtz: Yes. As we have talked about previously, if you look back over the last five years and look at the growth of the premium segment, a very large portion of that is attributable to the LAL, specifically for the reason that you just outlined: that it appeals to patients who either cannot or do not want to compromise on quality of vision. And we believe that will continue, especially as trends that are going on in the market continue to play out, such as younger demographics seeking earlier cataract surgery and therefore being less accepting of reductions in contrast vision and other measures of quality of vision that the LAL does not impact. So we see those trends continuing.
Operator: Your next question comes from the line of Adam Maeder with Piper Sandler. Your line is open.
Adam Maeder: Hey. Good afternoon, Ron and Mark, and Mark, congratulations on the new role. From me, one on the guidance, one on international. So on the guidance front, wanted to ask, I guess, a little bit more clarification just around sequencing of models for FY 2026. Is the right way to think about it Q1 kind of being the low watermark and then quarter-over-quarter sequential growth for the rest of the year? And then I heard recovery in the back half; the comps are also easier. So should we take that to mean positive year-over-year growth in the second half of the year? And then I had a follow-up.
Mark Wilterding: Yes. Thanks, Adam. In terms of total company sales, I think the expectation is that Q1, consistent with what we typically see, will be a seasonally weaker quarter, with some summer-related headwinds also in the third quarter. As far as year-over-year growth rates, we do anticipate that they will improve over the course of the year by quarter based on our assumption of improving fundamentals and also easing year-over-year comparisons. So I think the way you framed it is accurate.
Adam Maeder: Okay. Perfect. Thank you for that. And then for international, it sounds like there is some modest revenue contribution embedded in the guide from OUS. Can you just help us understand which geographies that is coming from? And would love just the latest update on timing for Japan and China approvals. Thank you.
Ronald Kurtz: So, we have, as we have talked about before, received approvals in the European Union, the UK, as well as some Asian countries, specifically South Korea, Singapore, and some of the ASEAN countries, and then just recently Australia. So, clearly, the revenue would most likely come from those. We previously talked about the more lengthy review processes for regulatory approval in China and Japan. We are pursuing those, and we will have updates for that later in the year.
Operator: Your next question comes from the line of Daniel Antalfi with UBS. Your line is open.
Daniel Antalfi: Good afternoon. Sorry about that. Thanks so much, guys, for taking the question. Just a question just to get a little bit deeper into the international here. I am just curious if you could talk a little bit—appreciate it is probably early—but the go-to-market strategy you guys are thinking about there, and especially from a system placement perspective, just given some of the budgetary constraints internationally and the competitive environment. Thanks so much.
Ronald Kurtz: Yes. I think that, just broadly, as we have talked about, the international market is actually about double the size of the U.S. market and concentrated in approximately 20 individual countries. So it is certainly approachable by a company our size. We have begun to get our regulatory approvals and establish a footprint, whether that is a direct force or through a distributor, in those markets where we have gotten those initial approvals.
And our focus right now is developing KOLs and clinical data in those markets, since we have gotten approvals without having to do a clinical trial like we did in the United States, and where we had kind of a built-in, I would say, KOL core of approximately 20 sites already. So we need to recreate that, of course. We do want to leverage all the learnings that we have had over the past five years, and that is certainly our plan.
Daniel Antalfi: Okay. That is helpful. And then just a quick question on the broader market. I mean, we are talking to docs sort of one at a time, so not sure how representative one or two physicians are. But it seems like the broader market environment is improving for the overall premium IOL segment. And I appreciate you guys are in your own sort of transition here, but curious if you have a view on the broader premium segment of the market and is that—I do not know that “accelerating” is the right word—but re-expanding or shifting again after what feels like a 2025 that was pretty suppressed from a penetration perspective. Thanks so much.
Ronald Kurtz: Thank you. So I think we have heard from some of the third parties and other players in the market that there was some acceleration in the premium market in the second half of the year. That would be consistent with our observations. The premium market tends to be more resistant historically to macro headwinds. So although there are some whisperings of those, I think that we would hope that those historical trends would continue moving forward. And certainly with the LAL kind of being at the higher end of the premium market, our customers would be less sensitive to those.
Operator: Your next question comes from the line of Thomas M. Stephan with Stifel. Your line is open.
Thomas M. Stephan: Great. Hey, guys. Thanks for taking the questions. Wanted to start on guidance. Ron or Mark, maybe if you can give us the key fundamental factors or what specifically gets you to the top end of that range. I appreciate the fairly wide range. Just kind of curious what gets you to the top end?
Mark Wilterding: Sure, Tom. I can start by taking that. Thanks for the question. I think when we look at the top end of the range, or $135 million, it assumes increased traction from some of these internal initiatives that Ron has spent some time talking through and updating you guys on. So that would be, I think, the first assumption. I think beyond that, we would take into account faster utilization uplift, with utilization growth especially higher in the second half of the year. And then the third factor would be competitive trialing and your assumptions for that. And so less headwind from competitive trialing would also benefit us, obviously, and lead to the higher end of that range.
Anything you would add there, Ron?
Ronald Kurtz: No. I think that is good.
Thomas M. Stephan: Got it. Got it. Super helpful. And, Ron, maybe to pivot to you. I wanted to ask about innovation in the pipeline. Just curious if there is anything you can discuss or provide on what may be on the come in terms of updates or development progress. I feel like we have not heard too much of late. And I guess I will ask directly, are there any new lenses potentially on the horizon from RxSight, Inc. that we can look forward to? Thanks.
Ronald Kurtz: Well, certainly, depending on the time frame, we will continue to innovate both on the lens side and on the LDD side as well as some of the other ancillary devices that are associated with our technology. I think that the best way to answer that is to review the pace of innovation that we have had, especially over the last five years—more than 20 significant, product-related FDA approvals. That pace is really, I think, unheard of in the industry, and we continue to have opportunities even with our already released innovations to continue to penetrate the market with those, having over 1,100 systems and 2,500 customers.
So even without adding additional—which we do plan to—we continue to have a lot of raw material to work with. And just to put it into more of a historical context, we are about five years into this. Typically, the technologies that I have been associated with have 10- to 15-year runs of significant technology innovation. So I still think there are many additional applications that adjustability is going to be beneficial for.
Mark Wilterding: Great. Thanks, Ron.
Operator: I will now turn the call back over to Ronald Kurtz, CEO, for closing remarks.
Ronald Kurtz: Thank you, operator, and thank you all for your interest in our company, and we look forward to updating you on our progress in future quarters. Goodbye.
Operator: Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.
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