Hello everyone, thank you for joining us and welcome to RxSight 3rd Quarter 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Oliver Moravcevic, VP of Investor Relations. Please go ahead.

Thank you, operator. 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 September 30, 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 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 Securities 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 good afternoon, everyone. I've been at ArcSight for just over 90 days, and I want to start by saying how impressed I am with the team and what we've accomplished in such a short time. What has stood out to me most is the passion our people have for our technology, their commitment to patients, and the determination to position the company for long-term success. We have a strong foundation of talent across the organization, and I'm equally excited about the new leadership and capabilities we've added over the past several months. During this time, I've also prioritized being in the field and meeting with our key physician customers. Their feedback has been consistent and reinforced my conviction in RxSight's technology. They strongly believe in the benefits of the light-adjustable lens and the differentiated visual outcomes LAL delivers. These conversations have also provided valuable insights into how physicians are using our technology and where we have opportunities to better support their practices and drive broader adoption. When we spoke last quarter, I outlined my three initial focus areas. Develop a deeper understanding of the business, identify the underlying challenges and opportunities, and determine where we could have the greatest impact. I also committed to providing additional clarity on our strategy and the actions we will take to move the business forward. The bulk of that initial assessment is now complete and our priorities are clear. Strengthen the U.S. LAL business, advance our next generation adjustable lens pipeline, and execute on the significant opportunity represented by our collaboration with Alcon. Over the last three months, we've taken important steps to advance each of these priorities while maintaining financial discipline and building a more efficient operating model. Let me begin with our U.S. commercial business. We have a substantial install base and a large community of physicians who believe strongly in the value of adjustability. Our opportunity is to drive deeper adoption through more frequent and higher quality engagement, clearer education around the advantages of LAL, better integration into practice workflow, and stronger peer-to-peer advocacy. We see many of these elements already working very well in our highest utilizing practices and our goal is to develop a scalable and repeatable model that allows a broader group of customers to achieve similar success. Turning that model into more consistent execution across our customer base requires the right leadership and capabilities and we have made significant progress enhancing both. Most recently, we strengthened our commercial leadership team with the appointments of Taryn Conway as Chief Commercial Officer and Frank Shields as EVP of Sales and Commercial Strategy. Both are highly experienced leaders with strong track records building and executing commercial strategies across a broad range of ophthalmic businesses. I've had the pleasure of working with Taryn before, and I know firsthand the leadership and commercial expertise she brings. Her unique background spanning both commercial leadership and medical affairs is particularly valuable as we focus on strengthening physician engagement and driving broader LAL adoption. I've also known Frank for many years and have long respected his reputation as a highly customer-focused leader in the eye care industry. Since announcing their appointments a couple weeks ago, several key customers have reached out to express their excitement about these additions to our team. I share that enthusiasm and look forward to the positive impact that Taryn and Frank will have with our talented team in highly differentiated LAL technology. During this time, we've also made significant progress implementing our Salesforce expansion efforts, nearly doubling the team size. I've had the opportunity to meet many of our new sales representatives as they progress through their initial onboarding and training, and I've been extremely impressed by the quality of the talent We have brought into the organization. The majority of them bring extensive eye care experience and have well-established relationships with the physicians and practices we serve. As they complete training and establish themselves in their respective territories, we expect their impact to build over time. The rationale for the expansion is straightforward. It allows us to engage more frequently with our customers, build stronger relationships, and drive deeper LAL utilization across our existing user base. This higher-touch approach also gives us more opportunities to highlight LAL's unique ability to adjust and personalize vision after surgery to better meet each patient's needs, an important distinction in an increasingly competitive environment. I also witnessed the value of our differentiation firsthand while attending the recent American Academy of Ophthalmology meeting in New Orleans. It was particularly encouraging to see the breadth of physician-led discussion around adjustability throughout the scientific program. A consistent theme across these presentations was that adjustability empowers physicians to deliver strong, personalized visual outcomes across several different patient populations. These presentations made it evident that physicians continue to get strong outcomes in patients with prior corneal refractive surgery and report getting excellent results using blended vision strategies. Beyond the scientific presentations, I had the opportunity to personally meet with hundreds of surgeons during the conference. and what stood out was their continued enthusiasm for LAL and the outcomes it delivers. One physician interaction that stood out to me was an ophthalmologist who shared that he had recently chosen LAL for his own brother, a busy attorney with demanding visual needs and high expectations for his vision. He went on to tell me his brother is spectacle free and how thrilled he is with the results. To me, that kind of personal endorsement confirms that physicians truly believe in the differentiated outcomes LAL provides. In addition to the opportunity we see with the current LAL platform, We are advancing our next generation adjustable lens pipeline, focusing on innovations designed to expand the population of patients who will benefit from adjustability, reduce workflow, and further enhance performance. We're also pleased with a strong start to our collaboration with Alcon. Our teams are closely aligned and making great progress. Importantly, we have now passed the initial 120-day period under our agreement, and we're excited to continue advancing this long-term partnership. Together with our existing LAL platform and next-generation pipeline, this collaboration has the potential to bring the benefits of postoperative adjustability to the majority of patients across the premium IOL market. Finally, over the past several months, we have taken an extensive look at our investment priorities and sharpened our focus on operating more efficiently. This process involves some difficult decisions, which we did not take lightly. As part of that effort, we recently completed a significant restructuring that is expected to generate meaningful cost savings in our base business, while allowing us to invest in the areas we believe are important for long-term value creation, particularly our next generation pipeline and our partnership with Alcon. With that, I'll turn the call over to Mark to provide additional detail and review our third quarter financial results.

Thank you, Aziz, and good afternoon, everyone. Third quarter total company revenue of $24.6 million declined 19% compared with $30.3 million in the prior year period. LAL procedure volume accounted for $22.8 million of revenue in Q3 with the balance attributable to LDD and service revenue. Third quarter LAL procedure volume of 23,128 units declined 11% compared with 26,045 units in the prior year period primarily reflecting ongoing competitive pressures. Third quarter gross margin was 73.6% compared with 79.9% in the prior year period, primarily reflecting an increase in inventory reserves partially offset by favorable product mix. In the third quarter of last year, gross margin was uncharacteristically high, reflecting the sell-through of lower cost LAL and LDD inventory. Third quarter SG&A expenses were $27.4 million, in line with the prior year period. Research and development expenses were $9.2 million, consistent with $9.1 million reported in the third quarter of 2025. We reported a net loss of $16.2 million, or 39 cents per basic and diluted share, based on 41.7 million weighted average shares outstanding. Stock Base Compensation with $7.6 million, resulting in an adjusted net loss of $8.6 million, or 21 cents per share. We ended the third quarter with cash, cash equivalents, and short-term investments of $254.7 million, including $60 million received in connection with the Elkhorn Collaboration upfront payment. Turning to the restructuring of these discussions, I want to provide some additional perspective on the financial implications of these changes. Following a comprehensive bottom-up review, we implemented changes to our cost structure and resource allocation across manufacturing, corporate functions, and international operations. We expect these actions to generate meaningful expense savings in our base business and support a more efficient operating model. We expect the impact of these savings to be realized in 2027 and beyond. Importantly, these savings should provide us with greater flexibility to continue funding our key strategic initiatives while managing our overall expense base. Going forward, we will maintain a disciplined approach to resource allocation, directing investment towards areas where we believe it can create the greatest long-term value. Lastly, regarding our outlook, As we discussed last quarter, we are not providing formal guidance for full year 2026. We intend to resume providing financial guidance for 2027 when we report fourth quarter results early next year. With that, I'll turn the call back to Aziz.

Thank you, Mark. We've accomplished a great deal in a relatively short period of time, and I'm proud of how the team has moved with urgency and purpose. I believe the actions we've taken will strengthen our foundation and position the company for long-term success. The benefits of these changes will build over time and we still have considerable work ahead of us. Our focus now is to enhance our capabilities, advance our key strategic initiatives, and consistently execute across the business. We have made important progress and we intend to maintain that same sense of urgency going forward. With that, I'll ask the operator to open the call for questions.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Larry Bigelson with Wells Fargo. Please go ahead.

Good afternoon. Thanks for taking the question. Aziz, I wanted to ask a little bit more about what you're seeing in the business. I think on the Q2 call, you talked about being encouraged by trends quarter to date and that they were generally consistent with the prior guidance. It does look like things might have gotten slightly worse Is that fair, and if so, why? And I did hear you say that maybe, you know, it sounds like you might be focusing more on those post-refractory surgery patients, and I have one follow-up.

Sure, thanks for the questions, Larry. And the way I'd categorize this is Really looking at the dynamics in Q3 versus Q2, and there's a few. One is obviously seasonality. Q3 tends to be a little bit lighter than Q2 just in terms of holidays, time out of the office. We know that that's an impact there. I'd compound that with continued competitive pressure. It's something we highlighted last quarter. I think it's still something we're seeing in the marketplace now with recent launches affecting utilization. A lot of that is due to free product that's given, sort of sampling lenses. So I think we're working through that, but we definitely saw an impact of that in the third quarter. And then the third thing I'd highlight is we did undertake some significant restructuring, obviously, with the Salesforce expansion that requires territory changes. We had other changes that we made internally here within the organization that Mark and I alluded to on the prepared comments. So there's definitely some internal disruption. We've just brought in new leadership as well. So I think there's a few compounding factors that affected it. I think overall the trend is good. Obviously not where we want it to be. What I'd say gives me a lot of optimism and confidence is when I do look at pockets of surgeons, I do see some of our top surgeons actually growing. I see some surgeons who are at the top of the end still driving lots of volume. I was recently up in Seattle and visited a clinic that was celebrating their 5,000th placement of a lens from us. So there's definitely an opportunity to grow, and we see that in pockets. We just need to see it more consistently across the business, and that's where the strategy and the levers we're putting into place really need to take hold. You also asked about post-refractive patients. I think that's an area we hear a lot about. That's an obvious one that we should own. We're putting some efforts there, but I wouldn't certainly limit us to that. There's other patient segments that I think we can own as well, but that's one of the most obvious and clear segments that we hear all the time from docs, and we see a lot of positive outcomes there.

And maybe one follow-up for you or Mark. Just any color on Q4, Directionally, and whether you think you can return to growth in 27. And Mark, how much is the restructuring going to save in OPEX? Thanks for taking the question.

Sure, Larry. Kind of a multi-part question, but I'll talk through it with you. I'd say it's pretty early still in Q4, obviously, just finished October, but we were encouraged by trends that we saw, particularly, I'd say, the continued confidence that we hear from physicians in our technology. At the same time, though, I do think we expect continued competitive activity and ongoing product trialing to influence performance for the remainder of this year. I'd also like to err on probably the side of conservatism with respect to the potential for disruption related to some of the recent restructuring initiatives that Aziz alluded to earlier. and so for that reason, I anticipate kind of Q4 LAL sales at least to look more in line with what we saw in Q2. With respect to restructuring initiatives, yeah, we took a really hard look at this and made some difficult decisions. And as I mentioned in the prepared remarks, it included things like manufacturing, corporate G&A functions, international It was comprehensive and it was significant. We do expect these actions to generate meaningful expense savings in our base business. And when I say that, I mean it puts us in a position to, you know, continue to make meaningful investments in our Alcon collaboration agreement, in the build out of our U.S. commercial team, et cetera. But net of that, we do think we will be in a position to achieve lower OPEC spend in 2027 versus what you'll see in 2026.

All right, thanks so much.

Your next question comes from Ryan Zimmerman with U.S. Bancorp, PTIG. Please go ahead.

Good afternoon, and thanks for taking the questions. Maybe just to follow up on a couple things, you know, that Larry was asking, but first off, with the changes you're making, Aziz, you know, and I kind of quickly going through the 10Q, Are you maybe stepping back internationally right now? Should we think about that as maybe a step back in terms of prioritization towards domestic and the Alcon agreement? That's probably my first question. And then, you know, certainly want to understand, you know, how you think about, you called out the 120 days. I understand that that was a critical milestone for the agreement itself. but is there anything beyond that that we should be looking to in the next couple quarters on the agreement that you'd call it as an important milestone for investors? Thank you.

Yeah, thanks Ryan. So one of the areas that I'm very passionate about is ensuring that the company has a clear and direct focus where we do a couple things exceptionally well and I'd say the three biggest priorities for us as a company are one, to reinvigorate the US LAL sales, two, to drive the development of our next gen LAL. internally, and three, to focus on bringing the outcome partnership to fruition. So those are the three key priorities. When it comes to international, we're still going to do some things on international, very focused, very intentional effort there. But if you're asking where it sits in the hierarchy, I think our priorities are very clear. Those first three priorities, we're going to spend the vast majority of our time, that's where we're going to put the vast majority of our resources. That's going to be reflected, as Mark alluded to, in how we think about OpEx and capital allocation next year. It's what's going to allow us to bring our OpEx down year over year. It's just having that sheer focus. When it comes to the Alcon agreement specifically, the 120-day mark was really important because it represents the upfront payments being solidified and not being able to be retrieved back from Alcon. So that really solidifies our ability to move forward and allow us to account for that upfront payment on our balance sheet. So it's a very big deal. In terms of the progress we're making, I think the teams that have gotten together a handful of times already, discussions are robust, we're making great progress. In terms of those milestones, I'd expect us to give a little bit more color on some of the key steps and milestones when we get into 27 guidance. So I think of that as a comprehensive event where we'd say revenue guidance, OpEx guidance, as well as other milestone guidance in terms of our internal pipeline and the Alcon collaboration. Early days, but everything we're seeing is really positive and clearly getting past the 128-day milestone and solidifying the path forward is a great achievement for us and one that we're really looking to build on from here.

Okay. Very helpful. Just if I could squeeze one more in. You've had to have two rental agreements on the LDD side, not that we're keeping track or anything, but it does gum up the ASP numbers as we try to think about that. I'm just wondering, Mark, You know, how to think about the ASPs on the LDD side, if those are holding steady, if we should think of those maybe in a different light. Any color there is appreciated.

Yeah, thanks for the question, Ryan. We had three sales in the third quarter and one rental. From an ASP perspective, we're seeing very good stability there. No real change relative to what you've seen historically. We like the rental option. We've always been focused on providing a range of options for our customers and want to encourage the adoption of this therapy. And we're not taking a one-size-fits-all approach, and we never have. And so I think you can anticipate, you know, the potential of more of those. And, you know, we've heard, I think, good feedback from our customers as well that they like them also.

Thank you.

Our next question comes from David Saxon with Needham. Please go ahead.

Great. Thanks for taking my questions, Aziz and Mark. So maybe first to circle back on some comments you made, Aziz, to Larry's question just around pockets of strength. Like is there anything specific or unique, I should say, about the doctors in those pockets That is kind of driving the traction you're seeing. Is that kind of where you started some of these recent initiatives or like any color there on what's driving the pockets of strength and kind of whether, you know, whatever is happening there can be replicated in other regions?

Yeah, it's something that I spend a lot of time looking at what we're seeing and what we can glean from those areas of strength. And there are some, right? There's a handful here where we see some really strong trends and some very promising learnings that come out of that. I'd say first and foremost, one of the things we see is those top accounts that are performing well tend to have a higher level of frequency from our team. Our team is just able to get there with a higher cadence, which again is one of the reasons we expanded the team so that we could do that with more accounts. The second thing I see is the practice integration. We've really invested and spent a lot of time in those clinics, getting the workflow right, working with their staff, the training. I'd say in those particular practice and pockets where we're seeing strong performance, we've done a great job there. And again, some of that is rate limited by the number of people we have, and the intention is now through the Salesforce expansion that we're able to expand those efforts. and then take those learnings, what's worked in those clinics and spread those across the vast majority of our install base. So I'd say the two biggest things that stand out to me, particularly as I've been out in the field and talking to physicians at the recent academy meeting is they see us a lot and we've invested a lot of time in that practice integration. Those two are really key and they're also very savvy with the data. They know the data really well. They know how this performs. We've been able to share that in their own practice. there's a few things there that we can take and then scale across the whole audience that's part of the holistic strategy we're looking at now that we've got the right number of people out in the field we're going to be able to equip them with the right messages the right tools to be able to execute to those strategies so I'm optimistic that those things will take place and when you see those strong results and you see those practice outcomes I think you'll see that that is something that is We're applicable across a broader base and we hear that when we talk to doctors. They just need the support. They're asking for it. They want to use more. We just have to be able to support them and provide those resources to do so.

Okay, great. Thanks for that, Aziz. And then my follow-up is just on LDD placements. So, you know, you had a handful in the quarter with a rental. I mean, some of the comments in the script just make it sound like you're focusing more on driving utilization of the existing installed base. So I'm not asking for a number for next year, but as we think about the evolution of the strategy, is it inherently going to be, you know, a lot less focused on placing LDDs, whether that's sales or rentals? And, you know, should we be thinking more about just, you know, adding a handful or so, you know, my words, not yours, on a quarterly basis? Thanks so much.

Yes, I'll just start with sort of maybe providing background how we're thinking about this strategically and let Mark speak to some of the numbers here. From a strategic standpoint, our focus is primarily on driving LAL utilization within our current install base. We have a tremendous install base. We can grow and drive lots of volume with that install base. And in fact, we've concentrated our resources on driving LAL. So whereas before there was a lot of resources put against LDD placements, we've allocated a lot of those resources now to LAL Performance and primarily LAL Performance. So it's not surprising to us that we're seeing lower volumes of LDD and I'd expect that to be the case going forward where these places are much more strategic and thoughtful in nature. I'll let Mark speak to sort of the actual numbers and trends and how the rental agreements, how we're put into the accounting there.

Yeah, well said, Aziz. I don't know how much more I have to add there, but like you said, I think our primary focus is definitely on reinvigorating growth in LAL procedures. So for that reason, and this is kind of, I think, where you were going, David, I would assume fairly limited LDD sales going forward, a handful, as I believe you put it.

Okay, super helpful.

Thank you.

Our next question comes from Robbie Marcus with J.P. Morgan. Please go ahead.

Hi, this is Alan on for Robbie. Thanks for the question. I just wanted to touch on trends on the top line in the quarter again. Understand that seasonality is definitely a dynamic to keep an eye on. But when we just look at the year-over-year performance, it definitely looks as though following a bit of a stabilization in 2Q that you took another step down in third quarter. Has anything changed on the competitive front? I know you called out disruption from restructuring internally. to help us to understand what changed to drive that greater than usual sequential step down.

Yeah, I think, Robbie, sorry, Alan, thanks for the question. I do think that it is a compounding effect of, one, the seasonality, two, continued competitive pressure, and then three, the restructuring and disruption we've had internally. It's great that we're able to expand the team, but that does require remapping the territories. It requires out-of-territory time for training and onboarding. a lot of our sales management time was in the recruiting space so not surprising that we're going to see some disruption there and that's what I would categorize as some near-term pain to set us up for long-term success and orient the business to the right place for the future so certainly part and parcel of overhauling the commercial strategy and the commercial infrastructure here but I do think if you're trying to decompose what the factors are I'd say that those are the three main drivers.

Got it. And then I know you're not providing guidance, but when we think about going forward, would you say that the bulk of that work is behind you now, and you can focus on just executing, driving those LAL adoptions that you're talking about, or is there more work to be done? Thank you.

You know, I think work is never done right. I think this is ongoing. I think we're encouraged by... some of the recent hires that we've made, certainly, but now it's a question of getting them trained and in the field, and we want to take that into consideration as we think ahead to next year. So that could definitely take some time. Aziz, I don't know if you want to add on anything else to that. No, I think this is all right. Thanks.

Your next question comes from Young Leaf with Jeffrey. Please go ahead.

All right, great. Thanks for taking the questions. I guess I wanted to follow up a little bit on the nearly doubling up to U.S. Salesforce. Definitely coming in earlier than our expectations. I'm just kind of wondering, can you talk a little bit more about the changes you're making there? Any attrition from existing reps, changes in territory and accounts, and anything you can provide on that front.

Sure, thanks for the question, Jan. It's a pretty significant overhaul of the commercial infrastructure. If you think about it, we're moving a lot of our resources that were previously dedicated to LDD, we're moving into LAL. That requires us to remap our territories, completely reorient customer alignment. So when you're doubling the team, it's a pretty significant undertaking. We spent a lot of time ensuring that we were recruiting high quality talent from across the industry. And as we mentioned in the prepared comments, I'm really pleased with the quality of talent we're bringing in the door. Almost every single person we're bringing in has strong eye care experience, existing relationships, so that's going to help translate that over time. But again, we did experience a lot of disruption in the quarter because we are moving things around, spending a lot of time recruiting. As you mentioned, we did that in pretty rapid fashion, which has obviously impacted our ability to be in front of customers. But it's the right thing to do to get us in the right orientation and the right structure so we can move forward and start executing on the long-term strategic plan here.

All right, great. Very helpful. And I guess maybe just a follow-up on that. Can you talk about some of the different operational rigor or self-discipline initiatives that you are implementing? Basically, what are you doing differently on that front versus before?

Absolutely. We're taking a much more data-driven, analytics-driven approach to Salesforce execution, a lot more measurement about how frequently we're in front of the customers, we're segmenting the customers. And I think this will translate when we get into 27 guidance, talking about what the key performance indicators are going to be, our KPIs, as we look to rebound this business in terms of the depth of utilization by surgeon, by cohort. We'll probably give some color on how we think about some of those segments and where we think we can see growth. Those are all ways we're measuring our effectiveness now. So as I mentioned earlier, we are seeing pockets as good performance. We just need to be able to translate that across the business. So there's a lot of operating rigor, data-driven approach that we're taking in terms of our commercial execution. And I'd say the other area that Mark is really overseeing here is a real operational rigor when it comes to capital allocation. And I give Mark and his team a lot of credit for helping head our restructuring and op-ex initiatives here. As he mentioned, this is a big deal. We're going to be able to reduce our OPEX next year pretty significantly from 2026. And that's while investing incrementally in a larger sales organization over time, as well as the Alcon development and the LIL NextGen platform development. So those are all incremental areas year over year. But despite having those incremental areas of expense, our total OPEX will come down. So that requires us to be really sharp and really diligent, requires us to be really smart about where we put every single dollar. and just have a different level of operating rigor when it comes to capital allocation. So that's a big commitment that we have as well.

All right, thank you. Our next question comes from Stephen Lickman with Bill & Blair. Please go ahead.

Thank you. Hi, guys. Aziz, when you look at the practices that are performing well, one of the factors you mentioned is a strong presence by RxSight sales reps. Obviously, you've grown the sales force, but I'm wondering how you can continue to expand those efforts to new practices without seeing utilization slippage in others. In other words, how durable are you able to make the changes without needing to have the same level of sales force intensity?

That's a great question, and a lot of this is predicated on focusing on our install base. So we've got a lot of physicians that have been trained, have access to an LDD, are doing reasonable volumes of LAL. And if we're in front of them more often, we believe that we're going to be able to drive their utilization. We were very intentional about the size and dimensions of the Salesforce to be able to hit the broad base of our install base with high frequency. So that's going to allow us to be in all the key customers we need to be in as often as we need to. I think that a vast majority of effort is going to be focused on those existing accounts. Now, we will see incremental growth and surge in base, but we've accounted for that, too. So we're banking on growth coming from our existing base versus relying only on new surgeons, where in the past, I believe it was driven by LDDs, new surgeons coming in. We just didn't commit to the existing surgeons to get them past sort of what I'd say is that baseline utilization to those high thresholds. In certain pockets we did, and when we have, we see really good utilization. We see that utilization continue to grow. And to answer your question, once you get past a certain threshold, we do see a lot of durability in those practices where they get in over 1,000 implants since launch, 2,000 implants over launch. but you do have to spend the time and cultivate that relationship with the practice, help build good patterns in terms of workflow, continue to educate the entire staff and that's where we're oriented now with the size of the team we have. I think we're going to be able to serve our entire install base, account for incremental surgeons coming in and be able to do that with the right frequency and build the right durability behind it.

Got it. That's helpful. And then just As a follow-up, I apologize if I missed this, but your views on the overall market, I know to start the year, cataract volumes were softer. Are you seeing any pickup, and are premium procedures sort of remaining relatively resilient?

I think for the most part, it's still, I'd say, I'd categorize it as slightly soft, but not dramatically soft. I think the bigger dynamic in the marketplace right now is probably just competitive pressure coming from new installs. And I think what you're seeing is a lot of trialing, meaning a lot of free product coming into the market. So that's affecting volumes, but the overall surgical volume or patient flow has rebounded a little bit since the beginning of the year. I wouldn't call it robust, but I'd say it's more stable than, say, in the first half of the year where we definitely saw an impact from weather, some economic uncertainty, etc. I think TBD, where that goes, balances here and into next, but I think it's been relatively stable. I'd say Q2 and Q3.

Got it. Thanks, Aziz.

Thank you.

Your next question comes from Adam Mader with Piper Sandler. Please go ahead.

Hi. Good afternoon. Thank you for taking the questions. I'm going to keep it to one kind of multi-part pipeline question. I was looking through the slide deck and it looks like the next gen LAL, if I'm looking at the timeline correctly, is a 2028 approval. So I wanted to see if you could confirm that's correct and then maybe just talk through what's needed to bring that product to the market, some of the features with that technology, and I'll leave it there. Thank you.

Yeah, we haven't given a specific date in terms of the approval target just yet. I think the way I'd interpret that is 2028 is the earliest we could see that because there is considerable work to be done on that. In terms of the features and benefits of NextGen, I'd say there's really three that really stand out to me. One is the ability to offer this to more patients. We're thinking about having this open up the aperture, no pun intended, to a larger segment of patients. Two, one I know a lot of surgeons are excited about is reducing workflow, reducing the number of visits for a lock-in to be able to make that even more efficient. So that's a big feature of this. And then third is just some design elements that will make this a little bit more friendly during the surgical process. The lens is really unique. So some of the design elements we're able to put in there will make it even more intuitive for surgeons and hopefully make that user experience even better. So those are the three things we're looking at. Obviously, we're building that lens. We'd have to take it proof of concept into the clinic and what have you and do the right testing. So I'd imagine we'll give a little bit more color on that again in 27 as we provide guidance and provide some color on Your next question comes from Stephanie Elgassi with Bank of America. Please go ahead.

Hi, thanks for taking the question. Just given LEL utilization and where that's at, I wanted to ask from the assessment stage, what are the biggest barriers to growing LEL utilization that you identified and how much can be addressed by a commercial change versus, I guess, more structural issues potentially and maybe just what customer reception has been like? and how easy or difficult it is for them to implement some of these changes to grow LAL utilization.

Yeah, thanks for the question. I'd say the vast majority of challenges we've had commercially are all things we can address with a new commercial strategy. I don't see anything structurally in the market preventing us from doing so. I'd say the two most common things I hear from surgeons when I talk to them is, one, we love the technology, we want to do more, two, we just don't see enough of you guys. I mean that's really the crux of it and obviously then you kind of double click and you hear well I need help with you know working on the workflow and training my practice to be able to handle the workflow I need more guidance on who the right patients are when should I use your lens versus a competitive lens Those are all things we can address with the right commercial strategy. I think the three things, again, I'll focus on here are frequency, just being in front of the customer often enough. That's one of the things we hear loud and clear. Our competitors are there all the time. I think with this new Salesforce structure and design, we'll be able to maintain a higher voice and be more present. And that will allow us not only to stay top of mind, but also embed ourselves in the practice, help with that practice integration, help with the training of the staff. to pull the volumes through. And then also being able to have those meaningful discussions with the practice and the surgeon around who the ideal patients are, when you should be using LAL as opposed to a competitive lens. There's very clear distinctive benefits of the LAL in specific patient populations that we're just not able to convey when we're not in front of the customer. So we need to be able to do that. We need to be able to do it with a high frequency, and we need to be able to do it consistently None of which we've been able to do over the last several quarters. I'm optimistic as the team gets under their feet, they're trained and onboarded and out the door, we're going to start to see that build over time and build those relationships, build that frequency and durability. And I think the question earlier was, you know, is there going to be durability here? And I think the two things I'd highlight are one, these are all things that I believe we can fix through a better commercial output. And two, if we do it the right way, those outcomes will be durable for the business long term. and those are all investments we're making, I think, not only for the near-term LAL portfolio, but those are things that will pay off for us when it comes to our next-gen lens and also are very pertinent to the Alcon opportunity. I would take this opportunity just to underscore how significant that is. This is an opportunity in the pipeline to bring adjustability to the mass side of the market, to the vast majority of patients who are in the premium segment. The better we can do today, getting surgeons trained, onboarded, integrated in their practice to do adjustments, the more robust our success with our partner will be when those products come to fruition because it would represent an opportunity to address almost the entire premium market. It can be very robust if we do the right things now to feed the market and really integrate adjustability as a standard of care.

Thank you. And then just wanted to follow up on competition. you mentioned samples and trialing is a big part of the pressure that you're seeing but maybe curious if you can elaborate more on what you're hearing in the field from the competitive perspective and I guess what gives you confidence it's maybe temporary sampling versus improvement in competitive IOL technology.

Yeah I think when you hear from doctors a lot of them are telling us right they're getting free lenses to trial the product and that's the biggest impact you see right because they're obviously going to use lenses that are I think that's expected behavior. I do think as you start to scale experience and you look at the data across these products, when you actually look at the clinical data for any of the new IOLs, they're all, I'd say, modest improvements over the current offering. So it's great that we have continued innovation in this space. I'd say there has been nothing as profound as what we've been able to do with light adjustable lens. and when we look at the outcomes we're able to deliver, the percentage of patients that are spectacle free, the percentage of patients that have great distance in near vision, it's really unparalleled. So our confidence comes from the fact that we've got proven outcomes over the last handful of years. The data we have is significantly better. Again, we just need to be able to get in those offices and talk about it and obviously need to have a better strategy. I mean, I'd say this, right, that when it comes to competition, I don't think we did a good job in preparing for that and I think that's an area as part of our overall commercial strategy we need to be a little bit more resilient and a little bit more forward foot on our forward foot when it comes to competitive entries to really make sure that we're carving out our niche for LAL and making sure that that's a little bit more durable and resilient so that's something that's top of mind with the commercial org and the new commercial leadership as well.

Your next question comes from Tom Steffen with Stifel.

Please go ahead.

Great. Hey, guys. Thanks for taking the questions. First one, just clarification to start. Mark, for 4Q LAL revenue, just to confirm, did you say more in line with 2Q or 3Q? And I guess if it was 2Q... I think that imply, you know, maybe up high single-digit sequential revenue growth roughly, which is solid. So what gets you there given competition, organizational disruption, et cetera? And then I have a follow-up.

Yeah, Tom, sorry if I wasn't clear. I did say Q2, and so I think your math is right, up in the mid to high single-digit range. And I think a large part of that is just, you know, the kind of lack of seasonality from Q3 to Q4, as well as some of the quarter-to-date trends that we saw in October give us confidence there.

Perfect.

Really helpful. And then, Aziz, maybe for you, I wanted to circle back on competitive pressures. Assume this is J&J's pure sea, and on that lens, we're hearing in our checks that it's being used, I'd say, pretty confidently by surgeons more in that post-refractive patient population, which certainly has been one of your moats, one of LAL's moats. Are you seeing early evidence of this as well? And or is this a risk moving forward if eat-off lenses specifically as a category, such as with Vividi Pro on the come, start to encroach on that post-refractive market for you, again, particularly as those lenses continue to innovate and improve. Thanks for taking the questions

Yeah, Tom, I think when you hear that, it's probably more experimenting and trialing in those patients. I wouldn't say it's the go-to lens. I don't think people are moving to eat off as the go-to. I think for the vast majority of post-refractive patients, LAL is still the primary go-to, and I think we can continue to feed that, and we've got great data to support that. I'd say you're going to see some trialing. Obviously, new lenses come out. People are going to explore different patient types. I'd expect that to be the case, but I don't expect that to change the standard. And that's not what we're hearing. We're hearing that, yes, we are hearing some trialing in those patient types. But what we're not hearing is a wholesale change in how physicians are thinking about that patient segment. And keep in mind, that's a very diverse patient segment. So these could be patients that are post-refractive, but maybe the lowest risk of any complication. When you think about a more significant patient type, that's definitely an LAL patient. And I do think that we can do more to, use your word, secure that moat. And that's part of our competitive strategy, right? How to secure that moat and potentially build on it to even expand to other patient types where LAL is the better option for these patients. I don't see it as a wholesale change. I'd expect to see a little trialing in those patients. But again, I think that's an area we can really focus our efforts to build a moat and expand from there. Got it. Thanks, Aziz. Thanks, Mark. Thank you.

There are no further questions at this time, and this concludes today's call. Thank you for attending. You may now disconnect.