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Operator
I'm extremely proud of what we've accomplished to date, and I believe this is the start of a strong quarterly growth in placements and procedure revenue. Heretofore, Ally's only been marketed in the US as we await additional regulatory approvals. Despite selling into a single market, Lenzar's been able to achieve strong top-line growth and gain significant market share based on the compelling value proposition of Ally. US sales pipeline activity and system utilization have steadily increased, and we look forward to offering Ally in other markets, especially Europe. Although Ally is not widely available outside the US, surgeons in Europe, South Korea, Taiwan, and Hong Kong are awaiting regulatory clearance and commercial availability in their home countries, and our distributors are preparing to make Ally available quickly after receipt of marketing authorizations. We expect additional regulatory clearances before the end of 2024. At the recent ASCRS annual meeting in Boston, we had our highest level of surgeon engagement in the company's history, completing nearly 100 Ally demos. In the 52nd Laser Cataract Session, eight of nine presentations were from Lenzar surgeons, including one which was voted best presentation of the session. Many of the presentations in the session highlighted the clinical outcomes associated with managing astigmatism and increased efficiency-related benefits of Ally and overall enthusiasm toward the technology is continuing to grow. We presented 14 papers in total at the conference as we continue to be recognized as the innovation leader in laser refractive cataract surgery. As we've described in the past, Lenzar's focused on three key aspects in the delivery of Ally. We're focused on delivering technology that enables much higher efficiencies, better outcomes, and enhancing the experience for surgeons, staff, and their patients in the refractive cataract procedures. By delivering on these objectives, Lenzar is empowering surgeons to either significantly increase the revenue and EBITDA opportunity, or decrease their overhead costs while improving staff and patient satisfaction. At the same profitability of cataract practices is under pressure, given significant reduction in standard cataract surgery reimbursement and the next CMS reevaluation coming in 2025. With patients paying for a portion of surgery out of pocket, they increasingly demand and expect superb service and outcomes. The ability to maximize productivity and increase patient throughput is becoming more important than ever, while also continually producing better outcomes in happy patients. Recently, we published data from several time and motion studies demonstrating the potential for significant Ally time savings to physicians, staff, and patients, resulting in up to an additional half a million dollar annual revenue opportunity to the ASC, as well as an approximate $350,000 increase in annual revenue to the physician. In addition, the potential to have improved surgical outcomes and almost an hour time savings to the patient's total time spent in the ASC for their cataract surgery generates happier patients to accompany the financial benefit realized by the surgeons and facilities. The Ally value proposition provides a win-win for both the patient and the increasing number of practices that are choosing to integrate Ally into their surgical armamentarium. For example, one of our practices reported that comparing conversion rates during their first eight months of using Ally system versus the eight months prior using an older competitive device, femtosecond laser-assisted cataract surgery procedure conversions at their practice increased more than 4X. Based on market scope data around average surgeon charges for femtosecond laser-assisted cataract surgery to the patient, we forecast that Ally contributed approximately three quarters of a million dollars in additional revenue for this practice in just eight months. Better efficiencies, outcomes, and improving the experience are yielding more satisfied patients and higher revenue for the practice. As we disclosed in this morning's press release, according to market scope, Ally adoption and utilization led to an additional .5% gain and lends our share of the US femtosecond laser-assisted cataract surgery procedure market in the first quarter. We have gained share each quarter since the launch of Ally, picking up a total of .3% in the US procedure share market share since launching Ally. Our market share gain in Q1 2024 marked our highest ever single quarter increase. While we have clearly been successful in capturing a larger piece of the femtosecond laser-assisted cataract surgical procedures performed by taking market share from our competitors and increasing conversion rates, our longer range objective is to also grow the overall femtosecond laser-assisted cataract surgery market by converting more femto-naive practices and Ally representing a much larger percentage of the 31 million annual cataract procedures performed. As we continue to replace the older -of-life competitive laser systems in the market, we expect to see these phenomena continue to grow over time. The cataract surgery market is undeniably large, yet femtosecond laser-assisted cataract surgery continues to account for a small percentage of total procedures. There are several contributing factors, but the inherent limiting inefficiencies and lack of compelling outcomes data in managing the stigmatism associated with the legacy technology are the most influential factors. Lenzar is committed to be a surgeon-centric technology company, and Ally was specifically designed with these factors in mind. As I speak with you today, I have a deep confidence that in discussions with many surgeons, Lenzar is indeed receiving their nod of approval that we are addressing to continue to mitigate previous issues and concerns they've had with other first-generation technologies. Lenzar, with our next-generation system Ally, has clearly demonstrated practice's increased utilization of femtosecond laser-assisted cataract surgical procedures as compared to practices previously using first-generation technologies. Our increasing market share is also further validation where successfully converting previously loyal competitive system users, as well as introducing femtonaive surgeons and bringing back surgeons who had abandoned or lost interest in femtosecond laser-assisted cataract surgery due to limitations in first-generation technology. We believe the conditions in the ever-evolving cataract surgery market are creating a perfect storm for Ally that will drive growth in femtosecond laser-assisted cataract surgery as a percentage of total procedures, and Lenzar is optimally positioned to accelerate its market share gains in parallel with this anticipated broader market growth. Now let me turn the call over to Tom to cover our financial highlights for the quarter. Tom.
Tom
Thank you, Nick. Our first quarter 2024 financial results are included in our press release issued earlier this morning, but I'd like to make some brief remarks on certain items to provide additional detail and clarity. Revenue was $10.6 million in the first quarter of 2024 compared to $8.3 million in the first quarter of 2023, reflecting a 28% increase in strong growth. This growth was generated off a solid foundation of Ally system placements and strong procedure growth of greater than 20% in all three of our operating regions. Ally system sales and worldwide procedure volume were the largest contributors to our revenue increase, but we saw increases in all revenue lines. I do want to remind you that we are only marketing Ally in the United States until we are granted EU clearance. While our growth trajectory since the Ally launch has been impressive, we expect placement numbers to increase rapidly and significantly once we receive marketing authorization in Europe. Though any regulatory process is inherently uncertain, we continue to believe we will receive approval this year. Gross margin for the quarter was $5.7 million, representing a gross margin of 53% compared to $4.3 million and 52% gross margin realized in the first quarter of 2023. Our gross margin was strong this quarter, however, we expect a higher concentration of Ally sales in product mix to decrease our gross margin percentage in future quarters. For the year, we continue to expect a gross margin percentage of approximately 50%. Total operating expenses for the first quarter of 2024 were 8.5 million compared to 8.7 million in the first quarter of 2023. The decrease in operating expenses was primarily attributable to lower R&D and administrative costs, partially offset by higher expenses associated with the expansion of our commercial team. We will continue to expand our commercial team to accelerate our recent market share gains and Ally placement successes. Net loss for the quarter was $2.2 million, or 19 cents loss per share, reflecting a significant improvement over a $4.3 million loss and a 40 cent loss per share in the first quarter of 2023. Our net loss in both dollars and per share decreased 50% from the first quarter of 2023. We expect this trend to continue and expect to see operating breakeven quarters late this year and into 2025. As of March 31st, 2024, we had cash and cash equivalents of $19.1 million as compared to $24.6 million at December 31st, 2023. Cash used in the first quarter was $5.4 million. As a reminder, we are a seasonal business and the first quarter usually represents a lower level of revenue and a higher use of cash than other quarters of the year. Now I'd like to turn the call over to the operator and we look forward to answering your questions.
Ally
Thank you. We will now open the floor for questions. If you would like to ask a question, press star one on your phone keypad. Again, it is star one if you would like to ask a question. You may remove yourself from the queue by pressing star two. We will take our first question today from Frank Tackinen with Lake Street Capital Market.
Frank Tackinen
Great, thanks for the questions. Congrats on the solid start to the year. We wanted to start with the commentary around the new orders you called out in Q2 already. Maybe anything you can touch on related to any change in strategy. 18 just seems like obviously a significant jump up. Are these competitive wins? Are they Pento naive wins? Does any additional color you can give us about these 18 orders already, Q2?
Operator
Yeah, hey Frank, how are you? Appreciate the question. So, good question because in these 18 is a mix. 13 of those systems are replacing competitive systems and the other five, a couple of them are in these in-office surgery suites, which represents, and by the way, all 18 represent a new business for Lenzar. So, these are not people that we have done business with previous on the 18 systems. So, like I said, 13 of those will be replacing competitive devices. Several of those will be going into in-office surgery suites. And actually the 14th one will be replacing a competitive device as well. And we're getting into some regions that we had not previously had much penetration with either. So, starting to see opportunities in different areas we're here to for, we hadn't really covered.
Frank Tackinen
Got it, so Frank, not only is it
Tom
a big number, but competitive systems, it's all new business for us on the recurring revenues. So, we're really excited about where we are right now.
Frank Tackinen
Got it, that's helpful. And maybe kind of transitioning over to utilization. Your systems are typically being used quite a bit more than competitive systems, but maybe talk through the process to scale up these new sites, how that has gone with the placements from 2023, and when we could really start to see the new placements kick in from a recurring revenue standpoint.
Operator
Yep, so another good question, because typically, depending on the account and how many physicians and are really gonna be using the system, and how familiar the staff is with providing whatever current technology they're providing, or whether they're femto-naive, typically it would take between 30 and 90 days before the account starts actually purchasing procedures. And again, depending on the surgeons. If you have more surgeons, it takes longer to get folks trained. If you have fewer surgeons, or it's a one or two surgeon facility, you can get people up trained, and that's the difference between the 30 and let's say 90 days before they start producing procedures. But after that 90 day period, we generally see people ramp up, and depending on if they've been using a competitive device, then we usually start to see growth. Like I talked about with the one example, the doctor was able to convert a lot more patients. They had a lot of confidence because they started seeing the results come back very quickly in terms of the outcomes of the patient. And so it gives the staff a lot more confidence in presenting, and a lot of the increased utilization that we see comes from the way that we manage the astigmatism, and we do that in not only a unique fashion, but in a much more efficient way than any of the competitive devices, and so therefore people get confidence quickly that they're getting great results, and as they see that, they're presenting that more and more. And as you may be aware, astigmatism represents 70 to 90% of all cataract surgeries that are out there is prevalent. It's visually significant in 70 to 90% of all patients, and yet only a small percentage is being treated on a global basis.
Frank Tackinen
Yeah, that's helpful, and maybe just the last one, from a manufacturing capacity standpoint, obviously inflicting US systems this year, potential second half European clearance. Talk to us about what kind of manufacturing capacity you have right now.
Operator
So we're running single shift right now, and we have capacity, we've been anticipating that we would start to get to, again, I always say it's not an if, it's a when, things start happening, and so we've bought some inventory, we've been ordering parts, we're forecasting our bills, and right now we've got enough capacity, I don't anticipate any issues or back orders. There are some delays between receiving all of the parts associated with this, we assemble, we don't quote unquote manufacture machine parts per se, so we've got our suppliers with the parts, there's some lag, but we can build systems, we can build systems, we've got staff to do so, we've got state of the art manufacturing capability in terms of putting our systems together, and we're prepared for what's coming here.
Frank Tackinen
Perfect, appreciate
Ally
the color on stuff there, congrats on a strong start.
Operator
Thank you.
Ally
Thank you, our next question comes from Ryan Zimmerman with BTIG.
Ryan Zimmerman
Good morning, can you guys hear me okay?
Operator
Yeah, hi Ryan.
Ryan Zimmerman
Morning, thanks for taking the questions, congrats on the progress. I wanna talk a little bit about, Nick, you made some comments about kind of the state of the older laser system install base that's out in the market. I'm curious if you could put in more color around that, I mean kind of how you view that opportunity, any quantitative metrics there that you think are worth noting, or just kind of how quickly those can turn over over the coming years in presenting opportunities for you guys to bring in ALA.
Operator
Yep, thanks, nice question. So there's about 1200 systems that are in the United States and close to about 2000 systems globally that are installed, and this is all systems including current LENZAR systems of which globally let's say there's just over 300 systems installed to date. So you've got 1700, 1800 systems in the field that are competitive devices. Those first devices came into the field in the latter part of 2010, and then the other companies, competing companies, came into the marketplace in the 2011 timeframe. So those systems are getting 12, 13 years old, some of them have been in the field that long, quite a few have been in the field that long, and even the systems that have been in the field less than that, you consider the fact that they've got their technology base what now is what, 14 or 15 year old technology takes several years to develop the lasers you have. They're essentially the same as they were when they came into very few upgrades if you will. They weren't software based and upgrading systems and adding capability like LENZAR has over the years with our first generation LLS and now moving into Ally. So we feel like we're in a great position here. There isn't a lot that doctors use that generates revenue for them in their practices that is 12, 13, 14 years old, and changing the paradigm by getting into the operating rooms and doing fully sterile procedures with a device that's highly ergonomic and much smaller and much faster and allows the doctor to be much more efficient. Again, this is kind of like, it's not an if, it's a when.
Ryan Zimmerman
Yeah, no, that's great color, Nick, and certainly good perspective and kind of the opportunity before you. I'm curious, the 18 units that are coming in the second quarter, those are all in the US. I might have missed this.
Operator
That's correct.
Ryan Zimmerman
Yeah, okay, all right. So this is not accounting for anything that could potentially come in with the mark later this year. Okay, that's very nice there. And then, as you think about the procedure environment, I mean, you're taking share in the flax market. You put up 25% growth on a fairly negative comp just because of the Korean headwinds. How do you think about kind of the health of the procedure market as we look out at the end of the year?
Operator
So we're optimistic about the procedure market for us because we view the market opportunity as really looking at this 70 to 90% of patients that have visually significant astigmatism. And for example, in LASIK, PRK, or SMILE procedures, doctors would never allow the patient to leave with three quarters of a diopter of cylinder, God forbid, a diopter of cylinder, or even a quarter to a half a diopter of cylinder remaining as part of the procedure. The patient just simply wouldn't be happy. So we're really, our higher utilization in most cases can be traced to higher utilization in astigmatism management. Presents a great opportunity for the doctor because they can provide much better vision to the patient no matter what lens the patient's choosing if they're managing the astigmatism. So we view that as potential expansion. The other thing is is that when we designed Ally, we took into consideration all of these reasons why the 45% of doctors here at the four that don't identify with femto laser or had started doing it and stopped doing it or are still trying to evaluate whether they should do it or not, we looked at all the reasons why they chose at this point not to do it. And so we tried to build those features into Ally that would not only appeal to doctors that were currently offering femtosecond lasers and had found value and utility in it, but at the same time, those doctors that were not doing it. And so we feel like not only can we replace the market that's out there today with these older devices, but that ultimately we start penetrating and providing opportunity to surgeons that you're the four had not done it or had stopped doing it.
Ryan Zimmerman
Got it. And then just, we've talked in the past, I know we're still not putting guidance out, but any commentary about kind of where to think about your ability to sustain 20% plus growth on the top line and if you're still comfortable kind of with that expectation.
Operator
We're comfortable with that expectation.
Ryan Zimmerman
Okay, that's it for me. Thanks guys.
Operator
Thank you, Rod.
Ally
Thank you. We have no further questions at this time. I will now turn the floor back over to Nick Curtis for any closing remarks.
Operator
So I appreciate everybody joining our call today and thank you for your continued interest in LENZR. We look forward to updating you as we continue to make further progress. We're really looking forward to an exciting remainder of 2024. Please stay tuned.
Ally
Thank you, everyone. This concludes today's teleconference. We appreciate your participation. You may disconnect at any time.
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