RxSight 2025 Q1 Earnings Misses Targets as Net Income Improves 10%

RxSight (RXST) reported its fiscal 2025 Q1 earnings on May 07th, 2025. Despite showing a 28% increase in revenue, the company missed expectations due to macroeconomic headwinds and competitive disruptions. RxSight reaffirmed its 2025 revenue guidance of $160 million to $175 million, showing in-line expectations for the year. The company aims to recover LAL volumes in the second half of 2025, with projected gross margins and operating expenses indicating ongoing investments in growth and innovation.

Revenue
RxSight's revenue rose to $37.90 million in Q1 2025, marking a 28.4% increase compared to the previous year. This growth was driven by $9.39 million from Light Delivery Devices (including training), $27.19 million from Light Adjustable Lenses, and $1.32 million from service warranty, service contracts, and accessories, totaling $37.90 million.

Earnings/Net Income
In Q1 2025, RxSight reduced its net loss to $8.19 million from $9.10 million in Q1 2024, improving by 10%. The losses narrowed to $0.20 per share, compared to $0.25 per share previously. The EPS reflects a positive trend with a 20.0% improvement from the previous year.

Price Action
The stock price of RxSight has climbed 5.30% during the latest trading day, edged up 1.22% during the most recent full trading week, and tumbled 8.36% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing RxSight (RXST) shares post-revenue increase and holding for 30 days has proven detrimental, yielding a significant loss over the past five years. The strategy delivered a return of -23.94%, significantly trailing the benchmark return of 23.35%, with an excess return of -47.29%. Such performance was characterized by a Sharpe ratio of -0.33, reflecting poor risk-adjusted returns. Additionally, the strategy experienced a maximum drawdown of -30.10%, underscoring the high risk and substantial losses associated with this investment approach. These figures highlight the challenges investors face when attempting to capitalize on short-term post-earnings price movements, suggesting a need for more stable, long-term investment strategies.

CEO Commentary
Ron Kurtz, President & CEO, highlighted Q1 2025 challenges, including macroeconomic headwinds and competitive disruptions that led to RxSight's first revenue miss since going public. Despite strong interest in light adjustable lens technology, there was a year-over-year drop in LALs per LDD metric. Kurtz emphasized the importance of refining clinical education and marketing support to drive procedure growth and noted ongoing product innovation, including a software update enhancing clinical value. He remains optimistic about RxSight's long-term growth, asserting their differentiated technology positions them well within the premium intraocular lens market.

Guidance
RxSight reiterates its 2025 revenue guidance of $160 million to $175 million, indicating year-over-year growth of 14% to 25%, contingent on a recovery in LAL volumes in the latter half of the year. The company anticipates a gross margin of 71% to 73% and operating expenses between $150 million and $160 million, reflecting a 10% to 18% increase from 2024. Kurtz expects macroeconomic pressures and competitive trialing to persist through Q2, with stronger recovery projected in the second half of 2025.

Additional News
Recent insider trading activities have attracted attention, with notable transactions over the past six months. JESSE ANDERSON CORLEY made significant purchases, acquiring 25,686 shares valued at approximately $1,114,574, without any sales. Conversely, ILYA GOLDSHLEGER executed nine sales totaling 21,710 shares, valued at around $1,020,409. Additionally, SHWETA MANIAR sold 7,301 shares for approximately $282,136, while TAMARA FOUNTAIN sold 7,000 shares for about $180,001. Institutional investors have also adjusted their portfolios, with CITADEL ADVISORS LLC adding 782,424 shares, marking a substantial increase, while others have reduced their holdings. These insider and institutional activities reflect strategic moves amidst the company's financial and market environment.