Good day and thank you for standing by. Welcome to the RxSight Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Oliver Moravcevic, please go ahead.

Thank you, operator. Presenting today are RxSight President and Chief Executive Officer, Ron Kurtz; and Chief Financial Officer, Shelley Thunen. Earlier today, RxSight released financial results for the three-month and full-year ended December 31st, 2023. 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 your questions during today's call reflect management's views as of today, February 28th, 2024, 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 earlier today and in our filings with the Securities and Exchange Commission or SEC. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations to 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 website. With that, I will turn the call over to our President and CEO, Dr. Ron Kurtz. Ron?

Good afternoon and thank you for joining us. In a moment, Shelley will be giving an update on RxSight's financial performance for both Q4 and full year 2023. For context, I wanted to discuss key factors that we believe underlie the market success of Light Adjustable Lens and can drive RxSight's performance over a sustained period. The eye care field is at the forefront of many of the change drivers in medicine, most notably reduced reimbursements to doctors and practices from third-party payers, who are facing rising costs from an aging population. For ophthalmic practices, the major opportunity to offset these cuts began in 2005, when ophthalmologists were first able to charge patients directly for the additional costs associated with so-called premium intraocular lenses or IOLs, that can reduce a person's dependence on glasses after cataract surgery. Growing from very low levels, premium cataract surgery now represents about 20% of the overall US cataract market and about 10% of the global market, with premium procedures projected to double over the next 10 years. By providing anywhere from $1,500 to $5,000 in additional revenue per eye, above and beyond the approximately $500 reimbursed by third-party payers, participation in the premium IOL market has become essential for ophthalmic practices to remain viable and continue to serve all their patients. Our sales efforts are concentrated on the roughly 4,000 US cataract surgeons who perform 70% to 80% of all premium IOL procedures, though the percentage of premium cases varies widely from doctor to doctor and practice to practice. One reason for this variability lies in the challenging clinical requirements for a broadly successful premium cataract procedure, namely, the ability to deliver consistent, high-quality vision across a range of distances. With the commercial growth of the LAL and early introduction of LAL Plus, an…

Thank you, Ron, and good afternoon, everyone. Consistent with our January preannouncement, RxSight reported fourth quarter 2023 revenue of $28.6 million, up 78% compared to a year-ago quarter. Growth was broad-based, reflecting both the continued expansion of our installed base of light delivery devices and a sharp increase in LAL procedure volumes. The favorable trends we observed throughout 2023 continue to be driven by surgeons' growing recognition of the clinical and economic benefits provided by the RxSight system and the adjustability of our LAL technology. In the fourth quarter of 2023, we sold 77 LDDs, up 35% compared to the year-ago period. Fourth quarter 2023 LDD unit placements generated $10 million in revenue, representing a 52% year-over-year growth. We ended 2023 within an LDD installed base of 666 units, up 67% compared to year-end 2022. LAL sales continue to rise in the fourth quarter of 2023, reflecting surgeons' and patients' growing preference for the superior clinical performance of our adjustable IOLs. We sold 18,071 LALs in the period, up 98% from the fourth quarter of 2022. These procedure volumes translated into LAL revenue of $17.8 million in the fourth quarter of 2023, also up 98% compared to the year-ago quarter. Higher LAL volumes during the fourth quarter also contributed to an increase in the LAL revenue mix, with LAL revenue representing 62% of total revenue, compared to 56% in the fourth quarter of 2022. This changed the mix coupled with the sale of our LDD with a lower cost to manufacture and a higher average selling price expanded our gross profit margin to 62% in the fourth quarter of 2023, compared to 46% for the fourth quarter of 2022. Fourth quarter SG&A expenses were $21.2 million, up 35% versus the prior year period. This year-over-year increase in SG&A was primarily…

Thank you, Shelley. While we are pleased with the strong finish to 2023, we're also thrilled about the journey ahead. We're particularly inspired by the opportunity to achieve our ambitious goals, which will leverage the immense talent and creativity of both the RxSight team and our clinical partners. Like any new clinical capability, adjustability requires both a financial and intellectual investment. But as I noted earlier, the benefits to patients and practices are clear. As we celebrate the 75th anniversary of the intraocular lens in 2024, it's essential to recognize the eye care community's investments in innovation. This commitment has ushered in advancements, from which we all benefit today, highlighting the importance of adopting change over maintaining the comfort of the status quo. We look forward to highlighting this mutual commitment to continued innovation at the 50th anniversary meeting of the American Society of Cataract and Refractive Surgery in Boston in April, when our clinical partners will present more data on the latest advances in adjustable IOL technology and practice. With that, I'll ask the operator to open the call for questions.

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Please stand by while we compile all the Q&A roster. First question comes from the line of Steven Lichtman of Oppenheimer. Go ahead.

Thank you. Good evening, guys. So just a few questions. First of all, on LAL Plus, given its ability to provide more near vision out of the box, do you see it as a door opener for surgeons who perhaps in the past would not have looked at LAL?

Well, Steve, thanks for the question. I think it's important to note, as we've presented, and our doctors have presented in various meetings that the LAL itself provides great distance in near vision. And so we're starting from a very high level. The LAL Plus does provide earlier return of near vision. And so doctors now have two adjustable tools and over time will decide how they're going to use them. I think that for any doctor who, for whatever reason, hasn't adopted adjustable technology yet, it's certainly another reason for them to adopt the technology and make this available to their patients.

Great. Shelley, how should we think about the relative growth of LDD sales versus LAL sales in your '24 guidance?

Yeah, well, we don't break out in our guidance the quantity of LALs and LDDs. I think what you've seen in the last several years is LAL revenue goes up faster than LDD revenue. And of course, that's just a natural evolution of a razor blade model. And that's very consistent with how we have performed. And it's really because of two reasons. One is, of course, we're adding new customers with sales of the LDD, as well as the fact that part of our impetus for growth is to get further embedded in each one of our existing accounts and increase their usage. So if normalized, we would expect, just like we saw last year that LAL revenue will accelerate faster than LDD revenue.

Okay. Got it. And then just lastly, for now, you're guiding to sales growth in '24, obviously well above OpEx growth. What are you assuming in terms of growth of the customer facing sales force? Are you growing the sales force on either the LAL or LDD side this year?

We expect the LDD sales force to remain relatively stable, maybe we would add one or so, but our territories are well covered by existing sales force, which numbers about 20. On the LAL sales force, we add some and this is really just depending on how their territories evolved, how many existing customers they have to support. But we'll continue to add on people, but not at a torrid place like we did, when we initially created the sales force, where we tend to add the most people is in our clinical sales force and those folks are responsible for training doctors both in the OR on use of our injector every, you know, IOL manufacturer has one that's a little bit different as well as techs in the OR, they tend to have pretty high turnover sometimes in some ASCs. And then also, they train on the use of the LDD both for the doctor, the optometrist and often for technicians. And they partner a lot with our LAL sales force to bring up procedure volumes in our existing customers. But that's where you'll tend to see the most additions in sales and marketing.

That's helpful. Thanks, Ron and Shelley, and congratulations on the quarter.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Robbie Marcus of JPMorgan. Your line is now open.

Oh, great. Thanks for taking the questions. Congrats on a nice quarter again. Maybe to start, you're getting of a fairly significant size and one of your competitors missed consensus IOL numbers today. I guess the question is really, at what point do you think doctors are starting to make the decision whether to go with RxSight versus other competitors that may have a bigger bundle because of the better clinical and selling benefits of the LAL?

Thank you for the question, Robbie. You know, I think doctors always want to do what's best for their patients. Fundamentally, that's their intent, they want a happy patient, both for selfish reasons, but also just quality of their own lives. And so they're really motivated to deliver the best clinical results possible, and they're going to make their decisions based on that. So our focus is really providing -- one, providing the best clinical results, but then presenting to doctors and practices that haven't yet adopted the LAL, that data and that information. So that they can make their own decisions and be confident in what they're offering. So I think that it's not necessarily an either/or decision, it's more of a decision of them making the choice to be able to offer this technology to their patients.

Robbie, I'd also like to add that in our latest customer survey, that we had a third-party conduct, and the results are very similar to the previous two years. About 44% of patients, as reported by our doctors, would not have gotten anything other than a monofocal lens. So in that case, we're growing our practice and in theory, growing the market. We're still very small. And then the balance come from toric lenses and other PCIOLs. So I think it's good to know that about 66% of the volume is coming from other alternatives that might have been taken, about most of those from toric lenses, where they're upselling, but a significant amount from PCIOLs as well.

Great. Really helpful. And maybe one just on balance sheet and cash usage. You still have a pretty healthy cash balance right now. You're burning cash, though. I imagine that'll continue to decrease cash usage as you continue to grow here. But how are you thinking about your positioning and the potential to reach cash flow break even? Thanks a lot.

Thank you. We have said previously that we'll continue to reduce our cash use throughout 2024, as compared to 2023, and also to expect that cash use is heaviest in the first quarter. Just because we pay year-end bonuses and we get material in and those things get paid in January, but you should see decreases throughout the year. We have also said, and we continue to say, that we have adequate cash to get to cash flow break-even with a healthy balance sheet.

Very clear. I appreciate it. Thank you.

Thank you.

All right. Thank you. One moment for our next question. Next question comes from the line of Larry Biegelsen of Wells Fargo. Your line is now open.

Hey, guys, thanks for taking the questions. This is Simran on for Larry. I just wanted to start off on your 2024 outlook. I know you're not providing LAL versus LDD mix explicitly, but how are you thinking about LDD utilization in 2024? We're conservatively forecasting a small step-down, but any reason utilization can't grow year-over-year?

Yeah, I think that utilization is a nice metric just in that anybody can calculate it, but it will vary throughout the year, because we calculated as the number of LALs implanted in a quarter divided by the LDD installed base in the previous quarter. If you have a very heavy LDD placement quarter and a seasonal quarter for LALs, you might see a little bit of a step-down. But overall, our goal is to increase that. But if we get very high LDD sales, that can mute it a little bit, while we don't guide on that, as I mentioned to Steve's question, that we expect LAL revenue to grow faster than LDD revenue.

Great. Thank you. And just to clarify on the phasing of sales throughout the year, it sounds like we should expect sequential growth quarter-over-quarter throughout 2024, including Q1?

What we did guide is to sequential growth with seasonality, and where we said specifically that we would expect continued sequential growth despite seasonality in our LAL revenue.

Okay, perfect. And just in terms of your international business, how has the launch in Canada been progressing relative to your expectations? And will there be any contribution from new geographies in 2024?

So, Canada has gone very well. We're very pleased with the rollout in Canada, and that continues to go well. I think it's a good marker for the importance that international will play over time. And we're certainly considering other markets that we think will be particularly attractive to the LAL, and we'll be talking more about those as the year progresses.

Great. Thank you.

All right. Thank you. One moment for our next question. Next question comes from the line of Ryan Zimmerman, BTIG.

Hey, good afternoon. Thanks for taking the questions. Congrats on a strong year. Want to just start first with the LDD -- the capital sales force. And you guys are leaving that sales force unchanged. Is there a point at which you reach kind of a peak sales rate per quarter in terms of LDD units just based on simply capacity, even if the demand is there, and where are we at relative to maybe at peak capacity in your view from the LDD sales force?

Yeah, I think that as we look at the LDD sales force, these folks have developed a territory. Now, as you know, they typically start with their highest volume customers, customers that they know better. But their efforts are really enhanced by our marketing efforts, the ability to get out to shows. We do about 80 tabletop shows a year out in the territories and also they couple the LAL sales force on new accounts as well as potential new accounts. And so we'll add people, if we see it's necessary. But typically with capital equipment people, you kind of get the opposite effect, if you cut down their territories, because they've already put the money in and that doesn't work real well. But we'll always keep that ahead of ourselves. But we don't think like doubling the sales force just automatically doubles the placements. I think just continued market acceptance and knowledge about the LDD and them talking to peers, both at shows and one-on-one starts to, but we've seen the momentum build through the last several years.

Yeah, and just to reiterate.

Go ahead. Yeah.

I'm sorry, Ryan, I was just going to reiterate, the LAL account team has grown, and they are involved with capital equipment sales as well, to a lesser degree, but they do receive part of their compensation from that.

Okay. And then second question for you, Ron, bigger picture. When we think about the growth of the premium segment here, you talked about kind of where we're at today, maybe 20% in the US, 10% globally. And the expectations are that that goes to 2x. When you think about those market forces that you talked about, I mean, is there any reason to think that that cadence from A to B is not evenly distributed over the next, call it 5 to 10 years. Is there anything in your mind that accelerates it or maybe hockey sticks it, if you will, on the later half of that time frame? Just trying to think about kind of the broader adoption in the premium segment there, as you guys continue to grow?

Well, I mean, obviously we hope to be part of that driver by providing clinicians with tools that they can use to give their patients high-quality vision with very high consistency. And so I think that that has been a factor in holding back not all clinicians, but a number of clinicians from participating more widely in this market. Also, it's an important component of our technology is that it involves optometry in a very meaningful way. And they are a huge part of the eye care community that up to now has had a relatively minor role in premium cataract surgery. So I think that those two factors are ones that will help to drive the overall market and obviously fuel our growth as well.

Understood. Thank you.

All right. Thank you. One moment for our next question. Next question comes from the line of Craig Bijou of Bank of America. Please go ahead.

Good afternoon, guys. Thanks for taking the questions. So, just wanted to ask on maybe some utilization trends at the individual practices. I know you guys have talked about seeing maybe faster adoption with the newer surgeons, faster utilization relative to some of the surgeons that were added a couple of years ago. So wanted to know, is that still kind of what you're seeing, is that what you expect for '24? And maybe just color from you on why you do think that's the case, why a newer adopter is going to move faster or ramp faster with the LALs?

Thanks for the question, Craig. I think maybe I'll take the broader question, and then ask Shelley to pontificate more about the future. But the -- it's not -- it's kind of understandable that as time goes on, two things happen. One, we get better at initiating customers. We've learned our processes; we've refined our processes. The customers themselves have experienced vicariously through their friends and competitors the LAL experience. And so it's just a better process for them. The second is, I think, a little bit the characteristic of people who are adopting not at the initial rollout, but a little bit later, still early, but a little bit later in the process. And those people, as you typically see in an adoption curve, tend to be a little bit more thoughtful about what they're trying to achieve, they're more focused on getting an ROI, as soon as possible. Obviously -- and so they're more likely to, once they are convinced of the value of the technology, to implement that a little bit more quickly.

Yeah. The only thing I would add is that our goal has become standard of care. And the first place we need to become standard of care is inside of each individual account. And other than a few customers, we haven't gotten there yet. And that's why it's so important for us to continue to penetrate our existing customers, and we're just not at that level yet. And so that is a major emphasis for our LAL sales people and our clinical personnel, as well. So we would expect, and it's certainly our goal, to continue to get further penetrated in each account.

Thank you, guys. And maybe just a follow-up on that. When you think about an individual practice, are you guys, obviously, Shelley, you just mentioned it's not standard of care yet or only with a few practices, but what is that percentage of penetration? Is that trending above the 20% of the broader market for premium. Maybe just a little bit of color on how you see an individual practice evolving in terms of percentage of IOLs that they're using LALs for?

I think that that's voice of customer. And I have to tell you that is not information that we ask customers on quarterly or even an annual basis. What we do look at is trends by account and trends by doctor. And so our clinical and account managers, which are LAL personnel, look at each one of the accounts that they're responsible for on a weekly and monthly basis. And if they see something up or down, they're going to talk to the practice. If they're down, maybe a doctor is on vacation. If they're up, they'll try and find out what's driving it. What can we do to continue to drive it for you. So we really go bottoms up in the accounts, but we do know overall, if we talk to a particular customer, that they'll say to us if they're very heavily penetrated, hey, I'm using you for 50% of my premium cases, or I'm using you for 80. Other people aren't saying that yet. So I would say mostly it's anecdotal overall. Ron, would you add anything to that?

The only thing I would add is that, and it goes to the previous question, I think a little bit, is that overall, while the earlier customers may be getting up to speed more quickly, all of our customer cohorts are continuing to grow. And that's driven by all the factors that we've already discussed, pulling in patients from the monofocal category by realizing that the technology can also provide excellent range of vision and extending it into that realm of their practices as well. So I think it's adding additional doctors within the practice once the infrastructure is there to support them. So there are just a number of factors, that help to drive adoption within a practice. And our team is looking at all of those, both the internal team and, of course, the R&D team here as well.

Great. Thanks for taking the questions.

Thank you. One moment for our next question. Next question comes from the line of Patrick Wood from Morgan Stanley. Your line is now open.

Amazing. Thank you. Just two quick ones for me. I guess maybe to jump off on the kind of the health of the customer and the practice side of things. I mean, I guess US refractive is probably down 20% in Q4. Trifocal and EDOF has been a little sluggish as a market. How much more opportunity is there for you today, given, to your point, you're still additive to a practice given 44% also going from monofocal to LAL. How much more of an opportunity is there to help the practice improve their economics given the environment seems a little trickier than it has been in the past?

Well, thanks for the question, Patrick. I think that we always have to remember that the market is complex in private pay and we don't want to conflate the refractive -- the corneal refractive markets, that are generally a younger population, much more sensitive to overall economic factors, than the patients who are the demographic for our technology, which quite frankly have done quite well over the last five years and are probably, they're sitting on the bulk of the wealth in our country. So, I think that potential is still very strong and the underlying desire of patients in that demographic to maintain their functionality, their ability to participate in work and leisure activities at the same levels, through great eyesight and without glasses, that's a durable trend. And that demographic, of course, is growing as the population ages. So I think that while the PCIOL market may have, we might have seen, or some people have reported a flattening of that, the overall premium market continues to grow. Obviously, we're a part of that, but the toric market continues to grow, and I think both of those are indicative of this drive to quality of vision, and we can't underestimate that that patients really do value quality vision.

That's helpful. I guess I meant more that the clinics themselves have been losing some of the patients on the refractive side and a little bit more sluggish on the other side, and therefore you can help them with that, because your business is obviously additive to them. I guess I was coming at it more from the clinic angle?

Yes, absolutely. I mean, I think that's an argument that our sales force is making that as the corneal refractive business goes up and down, ebbs and flows with the economy, certainly focusing on the premium IOL business, particularly one that provides high-quality vision is a much better long-term investment.

That's super helpful. And then follow-on, I know it must be hard for you guys to get this kind of data, but do you have any sense for how often you're getting bilateral implantation? Because obviously for some patients, monovision, if they're not familiar with it, can be a good, and sometimes it can be a bad fit. Do you know how often you're getting implanted, say, with an EDOF or trifocal simultaneously?

I think that that's pretty unusual. We don't have firm numbers, but we do have a large data registry, which has over, last time it was reported on, it was over 800 subjects. And in those patients, about 90% were bilateral -- bilateral LAL and presumably some of the residual patients either only had monocular cataract, which is certainly possible, or they had previous cataract surgery in one eye, possibly with a monofocal IOL or with a different premium IOL. You're beginning to see some talks from doctors, which are talking about using the LAL with perhaps a PCIOL, but I think with the addition of LAL Plus, that's probably going to be less important.

Super helpful. Thank you for taking the questions.

Thank you. One moment for the next question. Next question comes from the line of Tom Stephan of Stifel. Please go ahead.

Great. Hey, guys, thanks for taking the questions. First one on LAL Plus for me. Ron, I guess over time or once the full LAL Plus launch is in motion, is there a way we should be thinking about the split between legacy LAL and LAL Plus? I guess just trying to get a better sense for what level of impact do you anticipate LAL Plus having on the business relative to the legacy lens? And then I have a follow-up.

Well, obviously, we want to have a positive impact too, we wouldn't have introduced it, but I think people have recognized, or increasingly recognize that the LAL delivers exceptionally high-quality vision and can be used with a blended vision approach to provide a range of vision. And that works really well. We see again in our registry data that over -- approximately 90% of patients are seeing 20/20 at distance and able to read J2 at near, which is about 5.5, so it's the size of a footnote on a page. So I think that that's a great solution. To the extent that doctors felt that, gee, they wanted to have more immediate near vision and they might have not considered an LAL in a particular patient, I think the LAL Plus is going to give them additional motivation to get the benefits of adjustability. And there are a lot of them, as we've talked about.

The other thing I'd point out is both the LAL and LAL Plus, which we really just call our LAL platform, are both priced at $1,000 per IOL. And so we wouldn't see any mix change due to pricing.

Got it. That's helpful. Oh, go ahead.

I'm sorry, just the intent there is that we want the doctor and the patient to choose the best LAL for their case.

Perfect. That makes sense. And then quicker follow-up to shifting gears, just on Europe. Ron, could you maybe compare and contrast the US and European markets, just as we try to think about your ramp in the US in the context of, I guess, what's to come in Europe down the line, maybe you could talk to the competitive landscape, regulatory, any other key factors? Thanks.

Well, I think that it's always hard to generalize about a whole continent. There are a number of countries in Europe and each of one has individual market characteristics. So we don't necessarily look at it as Europe, we look at it as specific markets within Europe. They do for the most part share a regulatory process, which has gotten more complicated, especially over the last year or so. But overall, it's a large market, wealthy market, and ultimately patients are driven by the same motivations as they are everywhere else. They want to have high-quality vision and excellent range of vision, and I think that ultimately there'll be a number of very attractive markets for the LAL.

That's great. Thanks again.

All right. Thank you. One moment for our next question. All right. Our final question comes from the line of David Saxon of Needham and Company. Your line is now open.

Great. Good afternoon, Ron and Shelley. Thanks for taking my questions. Apologies if any of these have been asked. Shelley, maybe I'll start with you. I know we talked about patents a couple of months ago. You have a couple expiring in '26, I believe, but can you remind us what those ones are and then when the kind of key patents expire and generally how you feel about the IP portfolio? And then I'll have a quick couple of follow-ups.

Hey, David.

Yeah, I'm going to have Ron answer that question.

Hey, David. So, you know, I don't know that I would identify any specific patent as a key patent. We've got a very large patent portfolio that we've expanded over the years, as we continue to develop and further develop this technology. And so as things come off patent, there's a whole slew of things that replaces them. Underlying your question, I think, though, is an assumption that IP is somehow critical for us, and I don't want to minimize the importance of intellectual property. Of course, we take it very seriously and we have an excellent program to maintain and expand our portfolio. But there are a number of barriers to entry to this technology, and I wouldn't put IP at the top of it. The number one barrier is this is just technically really hard to do. To adjust a lens after it's been implanted in the human body with the precision of making glasses is really difficult. And I think that it took us a long time to do it. I wish anybody luck to try to, in their quest to do it as well. And then obviously, over the last several years, we've built a commercial footprint, which we're expanding, and with that comes a whole education of the field and building of expectation on the part of clinicians as to what is adjustability, what are the measures of adjustability, what are the requirements for adjustability, and we keep advancing those. And that same process, of course, is going on the regulatory front, where we continue to move the technology forward and thereby educate the regulators. And so there are just several layers of barriers.

Okay, perfect. Thanks for that, Ron. And then couple for probably Shelley. Gross margin was kind of flat sequentially, so can you help us with the drivers there? I think mix was better in the fourth quarter. So anything there? And then on international, have you talked about what percent of revenue is coming from international and then what pricing is in Canada, Mexico and Germany? Thanks so much.

Okay, good. Thank you very much. Yeah, our mix between LAL and LDD in the third and the fourth quarter was very similar. And therefore, also our gross margin was similar. I think what you were perhaps intimating is that you would hope we'd have a little bit more increase in gross margin from the fact that we were selling the LDD with the higher ASP and lower costs throughout the entire fourth quarter. And I just have to say, and I think we've talked about this before, is that there are always period costs. And those period costs, particularly on the LAL, are things like the consumption and the ordering of glasses and cartridges and other accessories from customers, they're not a one-for-one relationship, and we don't charge separately for those, as well as just period costs for things like inventory reserves and on things like that, both on the LAL and LDD side. Scrap on the LDD, it just depends quarter to quarter. So the period costs tend to have a minor impact on margin, but they can vary quarter by quarter and we saw a little of that in the fourth quarter, but that's quite usual. And then, I think your next question was, what percent of revenue are we getting from international? And that would just be Canada in our case. And no, we don't break it out. It has remained relatively steady in terms of their contribution on a quarterly basis but growing throughout 2023. But it's not significant relative to the overall, but it's a great market for us. And then, I think your third question was pricing in Canada. And we do use the distributors that changes our ASP internally a little bit. But again, it's not predominant in terms of our overall LDD volume and LAL volume, but the absolute pricing to the end user customer in Canada is a bit higher than it is in the US. One, they're in an earlier stage of adoption, but more often they do expect to pay more, just because of product introductions, lower volume, things like that.

Okay, great. Thank you so much.

Thank you.

All right. Thank you. This concludes the question-and-answer session. I would now like to turn it to Ron Kurtz, CEO for closing remarks.

Thank you for your time and attention today. We appreciate your interest in RxSight and look forward to updating you on our progress in future quarters. Goodbye.

All right. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.