ViewRay, Inc. (NASDAQ:VRAY) Q4 2022 Earnings Call Transcript

And we’re doing that very actively now, and that’s a big part of what you’re seeing here, Suraj, incremental tumor types being treated by individual customers. And then what happens when the system is completely full and in many instances, and you know this personally, there are customers that have eight, even 10-week backlogs on MRIdian, it forces them to contemplate or purchase incremental MRIdian systems. And that’s what we’re seeing a bit more of here. And I think that increase, that step-up in utilization on a per system basis, I think you can anticipate that, that will continue and be facilitated further by A3i.

Suraj Kalia : Scott, if I could push you on this, let’s say, 200 is average. Would you venture to say other systems normalized are doing what, 1,000 per year? Or how should we — just somewhere a road map for us to look forward to.

Scott Drake : Yeah. I would say the outliers would be on the low end, give or take 100 or 150 patients a year. On the high end, we may have — I’m looking at Zig right now. A couple of customers doing north of 400, maybe on their way to 500 patients. I think that’s kind of what you would find in the bell curve of our customers today. But again, I think you’re going to see that bell curve shift to the right in a positive way as we go forward and once A3i is more fully implemented throughout the customer base.

Suraj Kalia : Got it. Scott, one last for you, and Bill, one for you. Scott, many years ago, I remember at a dinner meeting, you were musing about some sort of a leasing model for MRIdian. Would love to get any updated thoughts if that’s still alive, that thought is still alive. And Bill, specifically for you, I know on the backlog, there was a lot of questions about the book-to-bill. Maybe if I can rephrase the question, right? As you look at the backlog, how would you define as the backlog churn and maybe even more — simplifying it even further, over the last three years, how many orders have been canceled? And we know how many have been added. So just sort of give us some flavor how the turnover is happening in the backlog. Gentlemen, thank you for taking my questions.

Scott Drake : Thank you, Suraj. I’ll help Bill out. You may know this. But in terms of over the last three years, I think we’ve had, on average, five systems per year. Maybe this year, 6 systems come out of backlog, and that’s been pretty consistent over the past three years. Bill, I’m not sure if you have a ready answer for Suraj there on the other component of his question.

Bill Burke : No, I did know that answer, and you stole my thunder there. But generally, what we’re seeing, right, is what you just said, Scott, right? We’ve seen five or six orders per year that we have taken out of backlog. And like this year, for example, we haven’t seen any cancellations, right? So what’s come out of the backlog is based on the criteria that we’ve established and the reviews that we do each quarter. Also, we’ve added 32 orders to the backlog this year. We ordered — we put 28 into the backlog last year. And we’ve seen 10 units come out last year and 16 units come out this year as revenue units. So that’s really the type of churn that we’re seeing. But overall, in terms of the growth in the backlog, right, we have a 21% increase in FY ’22 compared to FY ’21.