IRIX

Image source: The Motley Fool. Tuesday, Aug. 18, 2026 at 5 p.m. ET Investor Relations - Trip Taylor Chief Executive Officer - Patrick Mercer Chief Financial Officer - Romeo R. Dizon Operator: Okay. Name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 26 IRIDEX Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a Q&A session. To withdraw your question, press 1 again. It is now my pleasure to turn the call over to Trip Taylor, Investor Relations. Please go ahead. Trip Taylor: Thank you, operator. Thank you all for joining us this afternoon. With me on today's call are Patrick Mercer, IRIDEX's Chief Executive Officer and Romeo R. Dizon, the company's Chief Financial Officer. Earlier today, IRIDEX issued a press release detailing our financial results for the quarter ended 07/04/2026, which is posted to the Investors section of our website. Before we begin, I would like to remind you that management will make statements during this call that include forward looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 2 thousand. Any statements made during this call that are not statements of historical fact, including, but not limited to, statements concerning our strategic goals and priorities, product development matters, sales trends, and the markets in which we operate. All forward looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, should not place reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see the most recent Form 10-Ks and Form 10-Q filings with the SEC. IRIDEX disclaims any intention or obligation except as required by law, to update or revise any financial projections or forward looking statements. Whether because of new information, future events, or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast today August 18, 2026. With that, I will pass the call to Patrick. Patrick Mercer: Good afternoon, everyone, and thank you for joining us for our second quarter call. If there is 1 message I want to leave you with today, it is that IRIDEX has reached an important inflection point in its financial profile. We generated positive cash flow in the second quarter demonstrating the meaningful progress we have made over the past 2 years to fundamentally transform our cost structure, strengthen working capital management and create a more disciplined and sustainable business. As part of our activity to further improve the efficiency of the business, this month we began the process of relocating our headquarters. This is a long anticipated cost cutting step and an important part of our broader effort to optimize our cost structure improve operational efficiency and align our infrastructure with the business we are building for the future. The headquarters move will require a new registration process and managing global registration blackout periods in order to secure our international supply chain and protect top line distributor revenue streams through the transition we are in the process of building safety stock inventory to maintain supply continuity. This project is being implemented in a careful coordination with our vendors and distribution partners all of whom are familiar with the special demands of medical device manufacturing. And particularly the necessary regulatory approvals. We anticipate that the temporary working capital investment which impacted our second quarter cash flow, and will further impact our third quarter cash flow will enable us to achieve our 2026 revenue guidance, of $51 million to $53 million Cash flow from operations should be unaffected. But the increased deployment of working capital will reduce our cash on hand through 2026 without reversing and becoming a cash tailwind in 2027. As we work down the elevated inventory levels, and continue to more tightly manage our working capital. We continue to rightsize the business with discipline and the positive cash flow we delivered in the second quarter is a proof point of our success and the growing financial strength of the business. I am pleased to announce that we have again reduced our operating expenses compared to the prior year period through our various cost savings initiatives. As mentioned previously, the relocation of our headquarters is ongoing and the multiyear shift to production to our lower cost third party contract manufacturers, continues to advance. We view both as becoming powerful drivers of improving gross margins ahead in 2027. We believe some of the timing related impacts that affected our first half of 26 performance represent incremental revenue opportunities for the remainder of the year. Our focus in the back half of the year remains on strengthening our supply chain, building inventory ahead of our manufacturing transitions and advancing our international regulatory submissions. Now turning to our commercial performance in the quarter. Our glaucoma business once again delivered solid probe led growth this quarter. This continued growth in demand and utilization for this higher margin product is an encouraging indicator of the increasing utilization of our G6 platform. Demonstrating the increasing adoption of our technology by physicians. In our retina business, we faced a number of market dynamics and operational execution challenges that affected commercial activity during the quarter. We are actively addressing these factors and remain focused on strengthening execution improving performance and positioning the retina business for sustainable, profitable growth. Total revenue for the quarter was $12.6 million. Cyclo G6 probe volume rose 35% year over year and G6 product family revenue increased 19%. A direct reflection of expanding physician adoption of our non incisional approach and increased utilization of the G6 platform. The breadth of this growth is encouraging as it came from every region in which we operate. The year over year revenue decline in our overall business was driven entirely by retina and by a set of temporary commercial transition and regulatory related factors. Internationally rather than by any change in the fundamental demand of our products. Starting with glaucoma for the quarter, Cyclo G6 probe volume totaled 17.7 thousand units, a 35% increase from 13.1 thousand units sold in the prior year period in the U.S., 3 initiatives are driving strong growth customer targeting with MedScout. LCD tailwinds and increased ASPs. Our primary growth driver in glaucoma this quarter continued to be increased utilization of the G6 platform with particularly strong momentum in probe volumes. Through MedScout, we have become increasingly targeted in how we identify and engage physicians with the greatest opportunity to expand utilization. We are focused on 2 key segments, existing G6 accounts with moderate utilization, where there is an opportunity to increase procedure volume, and high volume glaucoma practices that have not yet incorporated MicroPulse therapy into their treatment protocols. In both segments, our commercial team is working directly with physicians through education focused on appropriate patient selection clinical outcomes, and the efficacy and versatility of the procedure. This targeted approach is helping us move beyond simply placing systems and toward driving greater utilization of the installed base. We are also seeing continued tailwinds from the Medicare LCDs implemented last year. Which have supported broader consideration of MicroPulse therapy across the glaucoma treatment continuum. Our commercial organization is using these reimbursement developments as an important educational opportunity working with physicians to highlight the procedure's ability to lower IOP while providing a non incisional repeatable treatment option which we believe this combination of clinical education reimbursement support, and growing physician experience is helping expand the role of G6 therapy within glaucoma treatment pathways. The 3rd contributor to glaucoma revenue growth was another increase in U. S. Average selling prices for both probes and systems. The continued improvement in ASPs reflects the value physicians place on MicroPulse therapy and the clinical utility of the G6 platform. Importantly, as we increase utilization within the installed base, we believe the combination of higher probe volumes and increased ASPs provides an attractive foundation for continued growth in the glaucoma business. On systems, we placed 18 Cyclo G6 units during the quarter versus 35 in the prior year period. That step down was driven largely by order timing in Europe, Middle East and Africa, together with ongoing competitive pressures on new console placements in our GmbH business. Moving to the international glaucoma business, In Europe, Middle East and Africa, our UK registry is progressing nicely and engagement from the clinical community has remained strong. We believe the data generated through the registry will be an important step in supporting broader reimbursement for micropulse therapy in the UK. Expanded reimbursement would improve access for patients increase physician adoption, and over time drive greater utilization of the installed G6 base and increased probe volumes. We believe this positions us well for continued growth in the UK and broader adoption across the region. In GmbH, Germany and Austria operations again performed well, as we continue to reclaim business previously handled by our former distributor. The main soft spot in the region remains G6 console sales. Where competition persists for new console placements. In Asia, our distributor partner began stocking inventory ahead of the coming business transition in Japan which increased purchases of MicroPulse P3 probes endo probes and PASCAL systems. In Latin America and Canada, G6 probe sales held steady driven primarily by Brazil, where our distributor increased inventory in preparation for our upcoming business. In Canada, we are seeing the commercial focus and initiatives implemented last quarter delivered stable results. Taken together, glaucoma growth was broad across our international regions this quarter, which reinforces how durable our value proposition is globally. Now turning to our retina portfolio. Our strategy remains focused on 3 pillars: advancing the PASCAL upgrade cycle domestically expanding PASCAL's international footprint, and securing regulatory clearances for our next generation platforms. That will allow us to leverage our global distribution network We remained encouraged by the opportunity for our retina business and customer demand remains strong. That said, during the quarter, we confronted the market and operational execution dynamics that impacted sales during the quarter. We are actively addressing these factors and are confident we are implementing long term solutions that will improve our execution and distributor sell through. Since our last earnings call, we took an important step to broaden access to our retina product portfolio domestically. Announcing the addition of our EndoProbe handpieces to our existing product offering with iPro GPO. That agreement now gives us more than 4.3 thousand-member practices ambulatory surgery centers, and hospitals across the country preferred pricing on EndoPro, building on the PASCAL IQ 32, IQ 577, Oculight TX. And Cyclo G6 platforms already available through that channel. We see this as a meaningful expansion of the value we offer retina specialists and ophthalmic providers and another lever supporting our US retina business going forward. Turning to international retina. Abroad, retina results were inconsistent and we are taking steps to ensure we are executing commercially and operationally to satisfy the strong demand from our global customer base. In Europe, Middle East and Africa, we expect PASCAL's to secure MDR Approval In Europe in the first half of next year and we anticipate meaningful demand once that certification is complete. In China, sell-through was impacted by regulatory constraints as well as the need for our distributor to work through existing inventory before placing additional orders. We are actively progressing the regulatory renewal process and expect these factors to normalize over the coming quarters. In Latin America and Canada, Pascal sales resumed following previous market challenges and we anticipate continued momentum and growth throughout the remainder of the year. As we turn to the rest of 2026, our priorities remain focused on commercial and operational execution in conjunction with continued expense management to drive positive cash flow from operations for the year In alignment with these priorities, we are reaffirming our full year revenue guidance of $51 million to $53 million To reiterate, that range excludes revenue from the Middle East region and on a comparable basis reflects 1% to 5% pro forma growth against 2025. The cadence of international ordering has had a meaningful effect on our results this quarter. In some markets, that sets up incremental opportunity as previously deferred backlog shifts and the product reregistration tied to our relocation are completed. In others, where distributors placed larger stocking orders this quarter, we expect a corresponding decline next quarter representing some continued choppiness in different regions globally. I will now hand the call over to Romeo to take you through the financials. Romeo R. Dizon: Thanks, Patrick, and good afternoon, everyone. As Patrick noted, as detailed in our press release, total revenue for the second quarter of 2026 was $12.6 million down 7% from $13.6 million in the second quarter of 2025. The year over year decline stemmed mainly from lower retina product sales, which were partly offset by continued growth in glaucoma probe sales, Turning to the components. Retina product revenue was $6.5 million versus 8 million in the prior year period. As Patrick noted, the decline was driven entirely by temporary headwinds. Including international commercial transitions and regulatory related factors. Underlying global demand for our core products remain robust and fundamentally intact. Total product revenue for the Cyclo G6 product family was $3.9 million representing growth of 19%. year over year compared to $3.3 million in the prior year quarter. Growth is attributed to both an increase in unit volumes both in the U.S. And internationally, and an increase in ASP domestically. Other revenue was $2.2 million essentially flat compared to $2.2 million in the second quarter of 2025. Gross profit in the second quarter was $4.3 million translating to a gross margin of 34.2%, relatively flat with $4.7 million or 34.5% in the prior year period. Favorable contribution from our higher margin glaucoma probes was largely offset by softer retina systems margins. And by a number of cost pressures in the quarter. We continue to view our transition to lower cost third party contract manufacturers as a meaningful driver of gross margin improvement over the balance of the year and in 2027. Operating expenses were $5.3 million in the quarter of 2026, down $300 thousand or 5%, compared to $5.6 million in the second quarter of 2025. That reduction was driven primarily by lower general and administrative expenses reflecting savings from the administrative function transfer initiative we have highlighted in prior periods. Progress on that initiative continues, and we remain on schedule to complete our headquarters relocation later this year. Net loss was $1.3 million, or $0.07 per share for the second quarter of 2026, compared to a net loss of $1 million, or $0.06 per share in the same period of the prior year. Non GAAP adjusted EBITDA for the second quarter of 2026 was a loss of $400 thousand for the quarter compared to a non GAAP adjusted EBITDA income of $21 thousand in the second quarter of 2025. We ended the quarter with cash and cash equivalents of $4.7 million as of 07/04/2026, an increase of $100 thousand compared to 04/04/2026. As Patrick emphasized, we were pleased to deliver positive cash flow in the quarter a meaningful marker of the financial discipline now driving the business achieved through disciplined cost control and improved working capital even as we build safety stock for certain distributors ahead of our relocation. Across the remaining quarters, expect quarterly cash generation to build sequentially as we sell through inventory and collect receivables on higher revenue However, we anticipate a temporary reinvestment of operating cash flow into advanced inventory procurement This proactive buffer secures our international supply chain and protects top line distributor revenue streams while we transition to our new production facility. Turning to guidance, we are reaffirming our 2026 guidance. We continue to expect revenue in the range of $51 million to $53 million As a reminder, given the market disruption for the ongoing conflict in the Middle East, that outlook excludes revenue from the region. On a pro forma basis that strips out 2020, 2025 Middle East revenue, the guide implies 2026 growth of 1% to 5% over 2025. We are also reiterating our expectation for operating expenses which include depreciation and amortization and stock compensation to be in the range of $19 million to $19.5 million for the full year of 2026. I will now pass the call back to Patrick for his closing remarks. Patrick Mercer: Thanks, Romeo. Looking back on the second quarter, I am energized by the continued broad based strength of our glaucoma franchise. And above all, by our demonstrated ability to manage the business to positive cash flow. Our cost discipline keeps translating into stronger cash generation and both our manufacturing transition and our headquarters relocation remain firmly on course to deliver meaningful additional margin improvement as the year unfolds. Our priorities for 2026 remain firmly in place, growing G6 utilization and adoption globally securing international regulatory approvals to open up new geographies for our retina systems and completing the move to lower cost contract manufacturers to increase gross margin. The foundation we built is solid, Our path to sustained profitability is clear. And we are excited about what lies ahead. We appreciate your continued support of IRIDEX and we look forward to sharing our progress with you again next quarter. Now we will turn the call over to the operator for questions. Operator: Our first question comes from the line of Scott Henry. Please go ahead. Scott Henry: Thank you, and good afternoon. Just a couple of questions. First, on retina, it sounds like there is a lot of moving parts domestically and international. The question is, do you expect retina to grow year over year if I look at the full year, which would that would require a pretty significant boost in the second half. So, you know, even if we forget about the full year, do you expect second half 2026 to be higher than second half 2025? Thank you. Patrick Mercer: Yes. Thank you, Scott, for the question. We expect the second half of the year for retina to show low single digit growth. We have several important tailwinds you know, as we advance international regulatory approvals, we expect that to broaden our addressable market and improve overall performance. Particularly with our flagship product, Pascal. And in The US, on the back half of the year, we expect momentum as we head into the American Academy of Ophthalmology meeting. We plan on implementing our annual promotion programs, which really help us with the sale of the capital equipment and really drive and customer engagement coming out of that meeting. We had some tailwinds. You know, those are the tailwinds that we see. We had headwinds due to the continued disruption in the Middle East. We had some sell through delays in China due to some stocking orders. Previously for the tariffs. And just managing our relocation in those subsequent inventory management for the blackout periods due to our headquarter relocation. But we do again expect the second half to generate low-single-digit growth for retina. Scott Henry: Okay. And would you expect historically, the fourth quarter is a lot stronger than the third quarter. Would you expect that to be the case? This year as well? Patrick Mercer: Yes. Most definitely. it is our it is our largest by quite a bit, generally speaking, Q4. Scott Henry: Okay. And then shifting to glaucoma, 17.7 thousand probes was a lot for Q2, you know, biggest quarter of the last many years by far, Do you think there was any inventory build there among your customers? I mean, should we expect that to normalize back to more typical levels? Or is this a new normal? Patrick Mercer: I would not say it is a new normal. We do expect low double digit growth for the second half of the year. If you back out some-- we did have Japan place some orders heavier orders to manage the blackout period. And if you have not just Japan, but in Europe, we had some of that too. Those support the blackout periods. But if you back that out, we still had over 15% growth. Which was if we get that at the back half of the year, we will be very happy with. So there was some, I will call it, lumpiness due to you know, the preorders to cover the blackout period, but with that backed out, we still had really good growth. Scott Henry: Okay and also, final question. You know, the system sold, 18, on the other hand, was a little bit of a lower number. Would you expect that to jump back higher in the second half of the year? How should we think about that 18 as far as a go forward number? Patrick Mercer: We believe it is gonna be much higher towards the back end of the year. We are again, Q4 is our largest quarter, and that includes system sales as well. So we expect that number-- those numbers to be higher as we move forward. We did have some slowness in Europe, Middle East, and Africa. That, you know-- waiting on that approval. That UK registry will once we get that approval there, for reimbursement, that will help boost sales there. So that hurt us this quarter, but we do expect those numbers to increase over the second half of the year. Okay. Great. Thank you for taking the questions. Thank you. Operator: And thank you all for joining us. Thank you again for joining us today. This does conclude today's conference call. You may now disconnect. Before you buy stock in Iridex, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Iridex wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. IRIDEX (IRIX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Revenue: $12.6 million in Q2 2026, down 7% from $13.6 million in Q2 2025. Retina Product Revenue: $6.5 million, down from $8.0 million in the prior year period. Cyclo-G6 Product Family Revenue: $3.9 million, up 19% year-over-year from $3.3 million. Other Revenue: $2.2 million, essentially flat compared to the prior year. Gross Profit: $4.3 million, with a gross margin of 34.2%, relatively flat compared to 34.5% in Q2 2025. Operating Expenses: $5.3 million, down 5% from $5.6 million in Q2 2025. Net Loss: $1.3 million, or $0.07 per share, compared to a net loss of $1.0 million, or $0.06 per share, in the prior year period. Non-GAAP Adjusted EBITDA: Loss of $0.4 million, compared to income of $21,000 in Q2 2025. Cash and Cash Equivalents: $4.7 million as of July 4, 2026, an increase of $0.1 million compared to April 4, 2026. Cyclo-G6 Probe Volume: 17,700 units, a 35% increase from 13,100 units in the prior year period. Cyclo-G6 System Placements: 18 units placed during the quarter, down from 35 in the prior year period. Full-Year 2026 Revenue Guidance: Reaffirmed at $51 million to $53 million, excluding Middle East revenue. Full-Year 2026 Adjusted Operating Expense Guidance: Expected in the range of $19 million to $19.5 million. Warning! GuruFocus has detected 3 Warning Signs with IRIX. Is IRIX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 18, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. IRIDEX Corp (NASDAQ:IRIX) achieved positive cash flow in Q2 2026, marking a key financial inflection point and demonstrating improved cost discipline and working capital management. Cyclo-G6 probe volume grew 35% year-over-year, with G6 product family revenue up 19%, driven by broad-based adoption across all regions and higher US average selling prices. The company is on track with its headquarters relocation and transition to lower-cost contract manufacturers, which are expected to drive significant gross margin improvements in 2027. Operating expenses decreased 5% year-over-year, reflecting successful cost-saving initiatives, including the administrative function transfer. The addition of EndoProbe handpieces to the iPRO GPO agreement expands US market access to over 4,300 member practices, supporting future retina product sales. Total revenue declined 7% year-over-year to $12.6 million, driven by a significant drop in retina product sales due to temporary international commercial transitions and regulatory-related factors. Cyclo-G6 system placements fell to 18 units from 35 in the prior year period, impacted by order timing in Europe, Middle East, and Africa and competitive pressures on new console sales. Gross margin remained relatively flat at 34.2%, with benefits from higher-margin glaucoma probes offset by softer retina systems margins and cost pressures. The company expects temporary working capital investments for safety stock inventory to reduce cash on hand through 2026, impacting near-term liquidity. International retina results were inconsistent, with China sell-through impacted by regulatory constraints and distributor inventory overhang, and ongoing Middle East disruption excluded from guidance. Q: Do you expect retina to grow year-over-year for the full year, and specifically, do you expect the second half of 2026 to be higher than the second half of 2025?A: Patrick Mercer (CEO): Yes, we expect the second half of the year for retina to show low single-digit growth. We have several important tailwinds as we advance international regulatory approvals, which should broaden our addressable market, particularly for our flagship product, PASCAL. In the US, we expect momentum heading into the American Academy of Ophthalmology meeting and our annual promotion programs. These tailwinds were partially offset by headwinds from continued disruption in the Middle East, sell-through delays in China, and inventory management related to our headquarters relocation. Q: The 17,700 probes sold in the quarter was the highest in several quarters. Was there any inventory build among customers, and should we expect this to normalize?A: Patrick Mercer (CEO): No, I wouldn't say it's a new normal. We expect low double-digit growth for the second half of the year. We did have some lumpiness due to pre-orders from Japan and Europe to cover the blackout period associated with our headquarters relocation. However, even if you back that out, we still had over 15% growth, which we would be very happy with for the back half of the year. Q: The company placed only 18 Cyclo-G6 systems in the quarter versus 35 in the prior year. Should we expect this number to jump back higher in the second half?A: Patrick Mercer (CEO): We believe it's going to be much higher towards the back end of the year. Q4 is our largest quarter, and that includes system sales. We did have some slowness in Europe, Middle East, and Africa, partly due to waiting on approval for the UK registry, which will help boost sales once reimbursement is secured. We expect those numbers to increase over the second half of the year. Q: Can you provide more detail on the drivers of the strong glaucoma growth, particularly the 35% year-over-year increase in probe volume?A: Patrick Mercer (CEO): The growth was broad-based, coming from every region in which we operate. In the US, three initiatives are driving growth: customer targeting with MedScout, tailwinds from Medicare LCDs implemented last year, and increased average selling prices. Internationally, our UK registry is progressing nicely, our GmbH operations in Germany and Austria continue to perform well, and our distributor in Asia began stocking inventory ahead of the business transition in Japan. Q: What were the primary factors behind the year-over-year revenue decline, and how are you addressing them?A: Patrick Mercer (CEO): The decline was driven entirely by the retina business and temporary commercial transition and regulatory-related factors internationally, not by any change in fundamental demand. In China, sell-through was impacted by regulatory constraints and the need for distributors to work through existing inventory. We are actively progressing the regulatory renewal process and expect these factors to normalize over the coming quarters. In Latin America and Canada, PASCAL sales have resumed following previous market challenges. Q: Can you elaborate on the financial impact of the headquarters relocation and the decision to build safety stock inventory?A: Romeo Dizon (CFO): The temporary working capital investment impacted our second quarter cash flow and will further impact third quarter cash flow. This proactive buffer secures our international supply chain and protects top-line distributor revenue streams while we transition to our new production facility. Cash flow from operations should be unaffected, but the increased deployment of working capital will reduce cash on hand through 2026, becoming a cash tailwind in 2027 as we work down elevated inventory levels. Q: What is the company's expectation for gross margin improvement, and what are the key drivers?A: Romeo Dizon (CFO): Gross margin was 34.2% in the quarter, relatively flat with the prior year. Favorable contribution from higher-margin glaucoma probes was offset by softer retina systems margins and cost pressures. We continue to view our transition to lower-cost third-party contract manufacturers as a meaningful driver of gross margin improvement over the balance of the year and into 2027. The headquarters relocation is also expected to be a powerful driver of improving gross margins. Q: Can you provide an update on the regulatory front, specifically regarding MDR approval for PASCAL in Europe?A: Patrick Mercer (CEO): We expect PASCAL to secure MDR approval in Europe in the first half of next year. We anticipate meaningful demand once that certification is complete. This is a key part of our strategy to expand PASCAL's international footprint and leverage our global distribution network. The UK registry is also progressing nicely, and we believe the data generated will be an important step in supporting broader reimbursement for MicroPulse therapy in the UK. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterized the second quarter as a financial inflection point, achieving positive cash flow following a two-year effort to transform the cost structure and strengthen working capital management. The company is currently executing a long-anticipated headquarters relocation, a move intended to optimize infrastructure and improve long-term operational efficiency. Glaucoma performance was driven by a 35% increase in Cyclo G6 probe volume, which management attributes to targeted physician engagement via MedScout and tailwinds from Medicare Local Coverage Determinations (LCDs). Retina revenue declines were attributed to temporary commercial transitions and regulatory factors internationally, rather than a fundamental shift in product demand. Gross margins were impacted by cost pressures and softer retina systems margins, though management expects the ongoing shift to third-party contract manufacturers to drive improvements in 2027. International glaucoma growth was bolstered by distributor stocking in Japan and Brazil ahead of planned business transitions and regulatory blackout periods. Full-year 2026 revenue guidance of $51 million to $53 million is reaffirmed, assuming a pro forma growth of 1% to 5% when excluding Middle East revenue. Management anticipates a temporary reduction in cash on hand through 2026 due to safety stock inventory builds required to navigate regulatory blackout periods during the headquarters move. Retina performance is expected to return to low-single-digit growth in the second half of 2026, supported by the American Academy of Ophthalmology meeting and annual promotional programs. The company expects PASCAL systems to secure European MDR approval in the first half of 2027, which is anticipated to unlock meaningful demand in the EMEA region. Working capital is projected to become a cash tailwind in 2027 as elevated inventory levels are worked down following the completion of manufacturing transitions. The headquarters relocation requires a new registration process, necessitating global registration blackout periods that management is mitigating through proactive inventory builds. Ongoing conflict in the Middle East remains a persistent headwind, leading management to exclude the region's revenue from their formal guidance framework. Regulatory constraints and inventory digestion by distributors in China impacted retina sell-through during the quarter. Operating expenses decreased 5% year-over-year, primarily due to the successful transfer of administrative functions to lower-cost structures. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects low-single-digit growth for retina in the second half, driven by international regulatory progress and seasonal U.S. promotional activities. Q4 is historically the company's largest quarter, and management expects this seasonal trend to persist in 2026. While the 17.7 thousand units included some 'lumpy' stocking orders from Japan and Europe to cover blackout periods, underlying growth remained strong at over 15%. Management expects low-double-digit growth for glaucoma probes to continue through the second half of the year. The dip to 18 units was attributed to order timing in EMEA and competitive pressures in Germany. Management anticipates system sales will increase in the back half of the year, particularly in Q4, as they work through the UK registry and reimbursement processes.

MOUNTAIN VIEW, Calif., Aug. 18, 2026 (GLOBE NEWSWIRE) -- Iridex Corporation (Nasdaq: IRIX), a worldwide leader providing innovative and versatile laser-based medical systems, delivery devices, and accessories for the treatment of glaucoma and retinal diseases, today reported financial results for the second quarter ended July 4, 2026. Second Quarter 2026 Financial Highlights Generated total revenue of $12.6 million, compared to $13.6 million in the prior year period Cyclo G6® product family revenue was $3.9 million, representing growth of 19% year-over-year compared to $3.3 million in the prior year period Retina product revenue was $6.5 million compared to $8.0 million in the prior year period Operating cash flow positive second quarter 2026 “Our second quarter results were highlighted by the continued momentum in our glaucoma business and operating positive cash flows,” said Patrick Mercer, President and CEO of Iridex. “Cyclo G6 probe volume increased by approximately 35%, with this lifting G6 product family revenue by 19% compared to the prior year. This strong performance on the glaucoma side of the business, together with our continued success in controlling costs resulted in positive cash flow in the quarter. Our strong performance in glaucoma was offset by a weaker quarter in retina, due primarily to disruptions impacting the Middle East and reduced sell through in China. As we advance international regulatory approvals, we expect to improve overall retina performance driven by our flagship Pascal platform.” “We are continuing to make significant progress transforming our business, including the transfer of production to lower cost contract manufacturers and relocation of our headquarters to a lower cost facility. We expect this restructuring of the business will help us to achieve sustained long-term profitability” Mr. Mercer continued. Second Quarter 2026 Financial ResultsTotal revenue for the three months ended July 4, 2026 was $12.6 million, representing a decline of 7% compared to the second quarter of 2025. The decrease in revenue was primarily driven by lower retina product sales, partially offset by continued growth in glaucoma probe sales. Total retina product revenue was $6.5 million compared to $8.0 million in the prior year period. The decline was isolated to our retina portfolio and driven entirely by temporary, external headwinds—including international commercial transitions and regulatory approval related factors. Total product revenue from the Cyclo G6 product family was $3.9 million, representing growth of 19% compared to $3.3 million in the prior year period, driven by strong Cyclo G6 probe demand. Other revenue was $2.2 million, essentially flat compared to $2.2 million in the prior year period. Gross margin in the second quarter of 2026 was 34.2%, relatively flat compared to a gross margin of 34.5% in the prior year period. Operating expenses were $5.3 million in the second quarter of 2026, a decrease of $0.3 million, or 5%, compared to $5.6 million in the second quarter of 2025. The decrease was primarily attributable to lower general and administrative expenses, as a result of the administrative function transfer initiative announced in prior periods. Net loss was $1.3 million, or $0.07 per share, for the second quarter of 2026, compared to a net loss of $1.0 million, or $0.06 per share, in the same period of the prior year. Non-GAAP adjusted EBITDA loss for the second quarter of 2026 was $0.4 million, compared to non-GAAP adjusted EBITDA of $21 thousand for the second quarter of 2025. Cash and cash equivalents as of July 4, 2026 were $4.7 million, an increase of $0.1 million compared to April 4, 2026. 2026 Financial OutlookThe Company is reaffirming its annual revenue guidance for the full year 2026 of between $51 million and $53 million. Updating on cash flows for the full year, the Company plans to use more of its working capital to procure additional inventory in anticipation of transitioning to its new headquarters and production facility. The additional inventory will better secure international product supply chains and protect distributor revenue streams against the potential of interruptions related to obtaining required international regulatory approvals following the Company’s relocating its headquarters later this year. The Company continues to expect fiscal year 2026 adjusted operating expenses, which exclude depreciation and amortization and stock-based compensation, to be in the range of $19 million to $19.5 million. Webcast and Conference Call InformationIridex’s management team will host a conference call today beginning at 2:00 p.m. PT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by accessing the live and recorded webcast on the “Event Calendar” page of the “Investors” section of the Company’s website at www.iridex.com or by dialing +1-646-307-1963 from the US or +1-800-715-9871 internationally and providing Conference ID: 9329659. About Iridex Corporation Iridex Corporation is a worldwide leader in developing, manufacturing, and marketing innovative and versatile laser-based medical systems, which include capital equipment and consumable probes for the ophthalmology market. The Company’s proprietary MicroPulse® technology delivers the therapeutic benefits of laser treatment while minimizing tissue damage, offering a safe, effective, and proven treatment for targeted sight-threatening eye conditions. Iridex’s current product line is used for the treatment of glaucoma and diabetic macular edema (DME) and other retinal diseases. Iridex products are sold in the United States through a direct sales force and internationally primarily through a network of independent distributors into more than 100 countries. For further information, visit the Iridex website at www.iridex.com. MicroPulse®, Iridex PASCAL®, IQ 532®, IQ 577®, OcuLight® TX, Cyclo G6®, MicroPulse P3®, G-Probe®, and G-Probe Illuminate® are a registered trademark of Iridex Corporation, Inc. in the United States, Europe, and other jurisdictions. Safe Harbor StatementThis announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, including those statements concerning commercial trends, market adoption and expansion, expectations regarding profitability, demand for and utilization of the Company's products, financial results and forecasts and expected sales volumes. These statements are not guarantees of future performance and actual results may differ materially from those described in these forward-looking statements as a result of a number of factors. Please see a detailed description of these and other risks further described in the “Risk Factors” section of Iridex’s most recent Annual Report on Form 10-K, as well as in Iridex’s other reports filed with or furnished to the United States Securities and Exchange Commission (“SEC”), available at www.sec.gov. Forward-looking statements contained in this announcement are made as of this date and will not be updated. Use of Non-GAAP Financial InformationThis press release contains financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Management evaluates and makes operating decisions using various performance measures. In addition to Iridex’s GAAP results, we consider Adjusted EBITDA. This non-GAAP result should not be considered as an alternative to net income, net cash provided by operating activities, or any other performance measure derived in accordance with GAAP. We present this non-GAAP result because management considers it to be an important supplemental measure of Iridex’s performance and refers to such measures when analyzing Iridex’s strategy and operations. In calculating the above non-GAAP result: Adjusted EBITDA is defined as earnings before interest income and expense, taxes, depreciation, amortization, and share-based compensation, as well as excluding certain other non-GAAP adjustments. Adjusted EBITDA exclude from their GAAP equivalents items listed below: Share-based compensation expense. We excluded from our non-GAAP results the expense related to equity-based compensation plans as it represents expenses that do not require cash settlement from Iridex. Severance-related expenses. We excluded from our non-GAAP results the expenses related to restructuring events, partially offset by reversals of previously recognized severance expenses in subsequent periods. These expenses are unrelated to our ongoing operations, vary in size and frequency and are subject to significant fluctuations from period to period due to varying levels of restructuring activity. We believe that excluding these expenses provides a more meaningful comparison of the financial results to our historical operations and to the financial results of peer companies. Reconvention of shareholders’ meeting expenses. We excluded from our non-GAAP results the expenses related to the costs of reconvening our latest annual shareholders meeting. These expenses are unrelated to our ongoing operations and we believe that excluding these expenses provides a more meaningful comparison of the financial results to our historical operations and to the financial results of peer companies. Legal settlement expenses. We excluded from our non-GAAP results the expenses related to the non-recurring settlement of a legal case regarding the use of tracking software on the Company's website. We believe that excluding these expenses provides a more meaningful comparison of the financial results to our historical operations and to the financial results of peer companies. Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational or non-cash expenses involving stock compensation plans or other items. A detailed reconciliation between Iridex’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release as well as in Iridex’s other reports filed with or furnished to the SEC. Investor Relations ContactPhilip TaylorGilmartin [email protected] (a) Defined as earnings before interest income and expense, taxes, depreciation, amortization, and share- based compensation, as well as certain non-GAAP adjustments.

This article first appeared on GuruFocus. Release Date: May 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. IRIDEX Corp (NASDAQ:IRIX) achieved positive adjusted EBITDA for the first time in its recent history in 2025, indicating a shift towards sustainable profitability. The company reported a 14% year-over-year growth in the Cyclo G6 product family revenue, driven by increased unit sales both domestically and internationally. IRIDEX Corp (NASDAQ:IRIX) successfully reduced operating expenses by 4% compared to the prior-year period, reflecting ongoing cost-efficiency efforts. The company is on track to relocate its headquarters, which is expected to reduce its fixed cost base by approximately $600,000 annually. A new partnership with iPro GPO expands access to IRIDEX Corp (NASDAQ:IRIX)'s retina laser portfolio to over 1,800 members, potentially driving future sales growth. Revenue for the first quarter of 2026 was essentially flat year-over-year, at $11.8 million compared to $11.9 million in the prior year. The company faced international headwinds, including supply disruptions and regulatory delays, particularly impacting revenue in Asia and the Middle East. Gross margin decreased to 40% from 43% in the prior-year period, primarily due to increased manufacturing costs and recent tariff developments. IRIDEX Corp (NASDAQ:IRIX) experienced a backlog of approximately $800,000 in the retina segment due to regulatory and supply chain issues. The company reported a net loss of $0.5 million for the first quarter of 2026, although this was an improvement from a $1.7 million loss in the same period of the prior year. Warning! GuruFocus has detected 3 Warning Signs with IRIX. Is IRIX fairly valued? Test your thesis with our free DCF calculator. Q: The retina line had one of the lighter quarters recently. Was this due to international headwinds, and should we expect a negative year-over-year move for Retina revenues in 2026? A: Patrick Mercer, CEO: The first quarter faced regulatory delays, particularly affecting Pascal orders to Japan and issues with endoprobes. These have been resolved, and we expect improvements moving forward. The U.S. Pascal and surgical retina performed well, and we anticipate the IPRO-GPO partnership will enhance performance in the coming quarters. Q: Can you quantify the backlog at the end of the quarter, and will it favorably impact Q2? Was the backlog in the retina section or G6? A: Patrick Mercer, CEO: The backlog was around $800,000, all in the retina section. We expect this revenue to shift to the current quarter. Q: The G6 system sales were flat year-over-year. Do you expect growth in total systems sold in 2026, or will the focus be more on probes? A: Patrick Mercer, CEO: We anticipate some growth in system sales but are primarily focused on driving probe utilization, especially among moderate patients. We are targeting utilization and selling more probes, with ASP increases contributing to growth. Q: Gross margin was up sequentially in Q1, but it dipped in the middle quarters last year. How should we think about gross margin in Q2 and Q3 relative to this quarter? A: Romeo Dezon, CFO: Gross margins have normalized in the high 30s to low 40s, depending on product and region mix. We have been setting reserves for contract manufacturing transitions, which impacted margins, but we expect stability moving forward. Q: What are the strategic priorities for the remainder of 2026? A: Patrick Mercer, CEO: Our priorities include expanding G6 utilization, advancing regulatory approvals internationally for our Retina systems, and transitioning to lower-cost contract manufacturers to improve gross margins. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by strong domestic adoption of G-Probes and the G6 platform, which offset international revenue constraints caused by geopolitical conflict and supply chain disruptions. Management attributes the flat year-over-year revenue to approximately $800 thousand in retina backlog resulting from temporary EndoProbe supply constraints and Japanese regulatory delays. Strategic focus has shifted toward high-margin probe utilization, utilizing the MedScout platform to target mid-utilization accounts and expand patient selection criteria into earlier glaucoma stages. Operational efficiency improved through the relocation of G&A functions out of California, which delivered $100 thousand in savings during the first quarter. The company is executing a multi-year transition to third-party contract manufacturing to structurally lower the cost base and drive gross margin expansion through 2027. Medicare LCDs are acting as a tailwind, supporting earlier adoption of G6 therapy for mild-to-moderate and post-MIGS glaucoma patients. Reaffirmed full-year 2026 revenue guidance of $51 million to $53 million, which assumes 1% to 5% pro forma growth and excludes all Middle East revenue due to ongoing conflict. Management expects to achieve positive cash flow for the full year 2026, with quarterly cash generation projected to improve sequentially as inventory is sold through. The headquarters relocation scheduled for later this year is expected to reduce the fixed cost base by approximately $600 thousand on an annualized basis. Revenue from the $800 thousand retina backlog is expected to be recognized in the second quarter following the resolution of supply and regulatory hurdles. Gross margins are expected to remain in the high 30s to low 40s range, heavily dependent on product and regional mix as the manufacturing transition progresses. The ongoing conflict in the Middle East has led management to exclude the entire region's revenue from their 2026 guidance framework. Lack of Medical Device Regulation (MDR) approval in Europe continues to constrain PASCAL system growth in that geography. Increased manufacturing costs and recent tariff developments negatively impacted gross margins by approximately 300 basis points compared to the prior year period. A new partnership with iPro GPO, announced in April, expands retina laser portfolio access to over 1.8 thousand member facilities in the United States. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the Q1 weakness was due to specific regulatory delays in Japan and EndoProbe material issues, both of which are now resolved. The $800 thousand backlog is entirely retina-related and is expected to ship in the current quarter. The PASCAL upgrade cycle remains a primary growth driver for the retina business in both U.S. and international markets. While system placements remained flat, the primary strategic objective is driving higher probe utilization among the existing installed base. Management is targeting the 2.1 million 'moderate' glaucoma patients in the U.S. as a significant untapped market opportunity. Growth in the glaucoma segment is being supported by both unit volume increases and Average Selling Price (ASP) increases implemented in 2025. Margins improved 300 basis points sequentially as the company moved past certain one-time reserves related to the contract manufacturing transition. Future margins are expected to stabilize in the high 30s to low 40s as production costs normalize and the transition to third-party manufacturers continues.

Image source: The Motley Fool. Tuesday, May 19, 2026 at 5 p.m. ET Chief Executive Officer — Patrick Mercer Chief Financial Officer — Romeo R. Dizon Patrick Mercer, IRIDEX's Chief Executive Officer Romeo Dizon, the company's Chief Financial Officer. Earlier today, Iridex released financial results for the quarter ended 04/04/2026. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that include forward looking statements within the meaning of federal securities laws are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 2 thousand. Any statements made during this call that are not statements of historical fact including, but not limited to, statements concerning our strategic goals and priorities, products, and development matters, sales trends, and the markets in which we operate. All forward looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see our most recent Form 10-K and Form 10-Q filings with the SEC. IRIDEX disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward looking statements whether because of new information, future events, or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast. Today. 05/19/2026. And with that, I will turn the call over to Patrick. Patrick Mercer: Good afternoon, everyone, and thank you for joining us. I am pleased to share our first quarter results and the continued progress we are making as we build on the positive momentum we delivered throughout last year. For context, before diving into Q1, I want to highlight some of the significant milestones we achieved last year. In 2025, we delivered positive adjusted EBITDA for the first time in the company's recent history and we also achieved positive cash flow from operations in Q4. These achievements represent a fundamental shift IRIDEX's financial profile and reflect the hard work completed to reposition the business for sustainable profitability going forward. As a result of this work and our solid start to the year, we remain on track to be cash flow positive in 2026. We executed according to plan in Q1 despite several anticipated headwinds. Including the Iran conflict temporary supply chain constraints and extended timelines associated with certain regulatory approval. Against this backdrop, we delivered revenue of 11.8 million essentially flat year over year and above the guidance communicated on our last earnings call. Our highest margin business, G-Probes, was a clear bright spot during the quarter. Continued growth and adoption of our glaucoma solution underscore the strength of our clinical value proposition and the loyalty physicians have to the G6 Platform. Internationally, We Operate In A Challenging Environment With Supply Disruptions Regulatory Delays, And Geopolitical Volatility, Particularly Impacting Revenue In Asia and The Middle East. Importantly, underlying demand remains solid. And we believe revenue and earnings would have been higher had we been able to fulfill certain orders that were backlogged at the end of the quarter. Looking ahead, supply chain conditions and regulatory processes are improving. And we continue to actively manage through these dynamics. As a result, we believe some of the timing relating impacts that affected our first quarter performance represent incremental revenue opportunities for the balance of the year. On the operations front, we again reduced our operating expense compared to the prior year period as we continue to drive efficiencies across the organization. We are pleased to report that the relocation of certain general and administrative functions out of California again delivering quarterly savings starting in Q1 26. We also remain on schedule to relocate our headquarters later this year. Which is expected to reduce our fixed cost base by approximately 600 thousand on an annualized basis. Additionally, our multiyear initiative to transition production to lower cost third party contract manufacturers is underway. With meaningful transfers initiated in the first quarter. Full implementation is expected to be completed in 2027 and this transition will drive gross margin improvement as we progress through the year. And into next year. Turning now to our commercial performance in the first quarter. Starting with our glaucoma business. In total, in the first quarter, we sold 15.5 thousand G-Probes versus 13.9 thousand in the prior year period. This represented growth in the competitive glaucoma market which is a testament to the strength of our value proposition and physician loyalty to the G6 platform. Utilizing MedScout to target G6 adopters with average utilization continues to be our most effective strategy. Our MedScout platform continues to be a valuable tool for targeted outreach. Here we are focused on 2 groups. The 1st are those who already have G6 systems, and are average users, And the 2nd are high volume facilities that do not currently perform MicroPulse procedures. With the mid utilization accounts, we focus on education, working with physicians to expand their patient selection criteria, to treat patients earlier in the glaucoma severity continuum. With the 2nd group, the focus is also on education with particular focus on the efficacy of TLC patients who have already had a mixed procedure. Speaking of mixed, Medicare LCD introduced last year are creating tailwinds for us, including expanding our target segments and supporting earlier adoption of G6 therapy for both the mild to moderate and post-MIGS glaucoma patients. Combined with our updated sweep speed, procedural techniques, and clinical data demonstrating the IOP lowering efficacy of the procedure. We believe we are well positioned to drive sustainable growth in this business throughout 2026. Pricing discipline also supported our Q1 performance. As our ASP increases on both probes and systems in The U. S, carried over from 2025. This is indicative of enhanced recognition of the value proposition of our procedure and the growing recognition among ophthalmologists of G6 as a safe, effective alternative to incisional surgery. On the system side, we saw 24 G6 units in the quarter, in line with the prior year period. Unit placement has remained steady year over year and physician relocations continue to drive dedicated system acquisitions at new practice sites. This steady growing installed base provides a solid foundation for driving incremental probe utilization as we execute on our commercial strategy. Turning to our international glaucoma business, performance was mixed across regions. As we navigated a number of operational and macroeconomic challenges. In Europe, Middle East, and Africa, we conducted multiple high impact G6 symposiums and clinical trainings that reinforced our value proposition in multiple countries including Russia's Saudi Arabia, Egypt, and Poland. UK registry product is moving forward as planned. The engagement from the clinical community has been strong and we believe this positions us well for continued adoption in the region. In Germany, G6 probe sales remained stable with existing customers and we believe our German market utilization is well positioned to absorb incremental volume as we work through distributor transitions in the country. In Asia, we navigated ongoing volatility throughout the year. Demand of our products remained stable, but challenging economic conditions created some headwinds for our commercial execution. In Japan, we restored G-Probe inventory Following Prior Regulatory Challenges. Which Was A Meaningful Positive Development For The Region. However, Macro Headwinds From A Weekend Continue To Persist. And We Are Monitoring The Macro Environment Closely And Expect Conditions To Improve Over Time. In Latin America and Canada, we saw stable G-Probe performance with users being led by Peru and Mexico. Additional focus is being placed on Canada, Brazil, and Argentina to leverage the sizable installed base of G6 system. Turning to our retina portfolio. Our strategic priorities remain focused on 3 areas. Driving The U. S. PASCAL upgrade cycle expanding international PASCAL adoption, and obtaining regulatory clearances for our next generation platforms to leverage our established global distribution footprint. In The United States, surgical retina was a standout performer driven by continued strong demand for SLx Tx and LIOs. This category exceeded expectations for the quarter and demonstrated the underlying strength of our surgical platforms. Medical retina continued to perform strongly, particularly PASCAL, benefiting from a robust pipeline of leads generated at the American Academy of Ophthalmology annual mean Q4. It is worth noting that PASCAL continues to be firmly established as our flagship system in The U. S. Market. We are seeing a consistent trend of existing PASCAL customers upgrading to our newer platforms. And newly graduating ophthalmologists are selecting PASCAL systems due to our efforts to ensure PASCAL is the preferred system used in university and training programs. On the commercial front, we announced an important partnership with iPro GPO in early April. This agreement expands access to our retina laser portfolio to their more than 1.8 thousand members including ophthalmology practices ambulatory surgery centers, and hospitals in The United States. Through this partnership, iPro GPO members receive preferred pricing on our PASCAL laser platform IQ 32 and IQ 77 lasers, and the Oculight SLx laser. This adds to our existing Cyclo G6 contract with Ipro GPO and represent a significant commercial milestone. Beyond contract status reinforces the credibility of our check technology enables a more streamlined sales process for our team and customers. While expanding the addressable market for our retinal laser system. We believe this partnership will be an important driver of retina systems placements in the coming quarters. Turning to international retina, in Europe, Middle East, Africa. Lack of MDR approval continues to constrain PASCAL growth in Europe. Mildly offset by the launch of the new IRIDEX PASCAL in Africa. In Germany, EndoProbe cells are gaining traction, in line with plan, as we take over business from our previous distributor. In Asia, China experienced some challenges during the quarter, including EndoProbe supply constraints that materially impacted sell through. We have been working with our manufacturing partners and these issues should be resolved this month. In Japan, large Pascal orders were deferred to Q2 due to regulatory delays associated with electrical safety testing. This is a timing item not a demand concern, and we expect the order to ship in the current quarter. In Latin America and Canada, PASCAL and medical retina cells came below expectations impacted in part by seasonal summer holiday slowdown. As we look ahead to the remainder of 2026, our strategic priorities remain clear and focused. For the full year 2026, we are reaffirming our revenue guidance of $51 million to $53 million. As a reminder, this guidance excludes revenue from the Middle East region and represent approximately 1% to 5% pro forma growth versus 2025. I am proud of the sustained execution we have demonstrated across all 4 of our 2025 commitments revenue growth, cost reduction, positive adjusted EBITDA, and positive cash flow from operations in Q4. The foundation is set for continued progress in 2026, Now I will hand the call over to Romeo to discuss our financial results. Thank you, Patrick. Romeo R. Dizon: Good afternoon, everyone. You for joining us today. As we noted in our press release and in Patrick's comments, our total revenues for 2026 were 11.8 million basically flat with 11.9 million reported in 2025. Revenue was in line with our expectations and the guidance we provided with our Q4 results. The decrease in revenue was primarily driven by a decrease in retina system sales, partially offset by an increase in glaucoma probe sales and service and other revenues. Retina product revenue was $5.8 million compared to $600 thousand in the prior year period, driven primarily by lower sell through of retina system sales internationally. Total product revenues from the Cyclo G6 product family was $3.6 million representing growth of 14% year over year compared to $3.2 million in the prior year quarter. Increase is attributable to both an increase in units sold domestically and internationally and an increase in ASB domestically. Other revenue increased $200 thousand to $2.3 million in 2026 compared to $2.1 million in 2025, driven primarily by the increase in service and other certain legacy product revenues. Profit in 2026 was $4.7 million or a 40% gross margin, a decrease of $300 thousand compared to $5 million or a 43% gross margin, in the prior year period. Gross margin decreased primarily due to the increased in overall manufacturing cost including increased product costs associated with the recent tariff development. On a sequential basis, first quarter gross margins improved 300 basis points compared to fourth quarter 25 gross margins. Operating expenses were $5.1 million in the 2026 a decrease of $200 thousand or 4% compared to $5.3 million in 2025. The decrease was primarily attributable to lower general and administrative expenses driven by reduced consulting costs, reduced deal related legal expenses, and cost savings realized from the general and administrative transfer initiative discussed in prior period in Q4, we announced that we were relocating certain G&A functions out of California commencing in the 2026. We have achieved about 70% of this initiative and have realized approximately $100 thousand in savings in the 2026. Scott of our expected quarterly benefit of approximately $165 thousand. We will update you on our progress on our next call. Loss from operations was $300 thousand an increase of $100 thousand compared to a loss from operations of $200 thousand in 2025. Other expense net was $100 thousand in the 2026 primarily consisting of interest and amortization of loan expenses. Other expense net was $1.5 million in 2025, due primarily to costs associated with a note payable settlement. Consequently, net loss was $500 thousand or $0.03 per share, in the 2026 compared to a net loss of $1.7 million or $0.10 per share in the same period of the prior year. Non GAAP adjusted EBITDA for the quarter of 26 was $300 thousand compared to non GAAP adjusted EBITDA of $400 thousand for the 2025. Cash and cash equivalents as of 04/04/2026, were $4.6 million, a decrease of $1.4 million in the quarter. As we guided on our last call, in general, our cash usage is highest in the first quarter of the fiscal year, resulting from payments of accrued compensation, and other year end accrued expenses and liabilities. For the remainder of the year, we expect to generate cash, and for the quarterly cash generation to improve sequentially as we sell through inventory and collect receivables on increased revenues. Cumulatively, this will result in positive cash flow for fiscal year 2026. Total operating expenses contained a favorable trend in Q1 26, reflecting the sustained impact of cost reduction initiatives implemented beginning in 2024. Our first quarter performance confirms that we are on track for 2026. The sequential revenue decline we saw in Q1 was anticipated as consistent with the normal seasonality we see in our business, and we managed to reduce our net loss despite the lower revenue. As Patrick mentioned, we are reaffirming our 2026 guidance We expect to generate revenue of $51 million to $53 million. As a result of market disruption from the ongoing conflict in The Middle East, this guidance does not include revenue from that region. On a pro forma basis, adjusted to exclude Middle East revenue in 2025, guidance represents 2026 growth of 1% to 5% compared to 2025. We also want to reiterate the seasonality we experienced in our business. Q1 on average represents ~22% of our annual revenue, and is the lowest quarterly total revenue for the year. From the total dollar perspective, second and fourth quarters are seasonally stronger than the first with the fourth quarter being the strongest quarter of the year and the third quarter is generally a sequential decline from the second quarter. We are also reiterating our tax expectation for adjusted operating expenses, which exclude depreciation, amortization, and stock compensation to be in the range of $19 million to $19.5 million for the full year 2026. We also continue to expect to generate positive operating cash flow for the full year 2026. And with that, I will turn the call back to Patrick. Patrick Mercer: Thank you, Romeo. As I reflect on the first quarter, I am encouraged by the progress we are making on our strategic initiatives. Our U. S. Glaucoma business delivered solid growth in a competitive environment. Our cost structure improvements are flowing through as planned and our manufacturing transition is underway and on track to drive meaningful margin expansion. We remain confident in our ability to deliver on our priorities for 2026. These priorities are clear, Expand our G6 utilization through effective targeting advanced regulatory approvals internationally, to unlock new geographies or our retina systems and continue to transition to lower cost contract manufacturers to drive gross margin improvement. We will now turn the call over to the operator for your questions. Operator: Thank you. We will now begin the Q&A session. If you have dialed in and would like to ask a question, please press *1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press *1 again. If you were called upon to ask your question and are listening via loud speaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Scott Henry from AGP. Your line is now open. Analyst (Scott Henry): Thank you, and good afternoon. A lot of information in there. Just to get started, on the Retina line, 1 of the lighters lighter quarters we have seen in a while is that a lot to do with the international headwinds? Anything else there? And when we think about full year 2026, I know last year was a strong retina year. Should we be thinking about that comp making the 2026 kind of a negative year over year move for retina revenues? Patrick Mercer: Hi, Scott. Thank you for your question. You know, with first quarter, we ran into some regulatory delays that hurt us internationally. Particularly on Pascal There were orders that did not ship to Japan because of that. There were other orders that did not ship due to a material issue with our EndoProbes. That issue has been resolved, and we are gonna ship the product this month. The regulatory issues have been resolved. So going forward, we do not see these as issues at all. In fact, you know, our PASCAL in The US performed very well and so did our surgical retina. So going forward, we do not expect anything different. You know, we still see the Pascal upgrade cycle to be ongoing both international and in The US. You know, we have engaged hospitals and universities for graduating ophthalmologists to start using our PASCAL systems. And, you know, particularly with this iPro GPO partnership, we see things improving over Q1. Q1, we got snagged by a few challenges and supply chain and regulatory issues, but those hopefully will be behind us. We feel strong that certainly, you know, moving forward, they will be. Analyst (Scott Henry): Okay. Great. And you mentioned you had some backlog at the end of the quarter. I did not hear, but did you quantify the amount of that? And should that have a favorable impact on Q2? And also was that backlog was that in the retina section? Or was it in G6? Patrick Mercer: That backlog was around $800 thousand and it was all retina. And we did not we anticipated the EndoProbe backlog. We did not anticipate the regulatory. We would hoped to get that over the finish line. But as you know, with regulatory items, some of those things are up to the bodies of those countries. But going forward, we look for we look for that revenue to ship this quarter. And yes. Analyst (Scott Henry): Okay. Great. And then, you know, shifting gears to G6. The system sold was flat year over year. You think you can grow that total systems sold in 2026? Or you know, will the focus be more on the probes, which did you know, very well? In the quarter. Patrick Mercer: Yeah. You know, we think we will grow the system somewhat but we are really focused on driving probe utilization and driving particularly those more moderate patients in the U.S., there is 2.1 million moderate patients, and we are just scratching the surface there. And with our MedScout targeting that we are going after where we can see you know, who is doing what procedures We are gonna continue to focus on utilization and selling more probes. Certainly, we are setting up new accounts, and we look for those numbers to remain in line with our expectations and our plan. But our real-- our real objective is to drive probe utilization. And, you know, I want to-- 1 reminder is we, in The US particularly, we increased ASP on both the probes and the systems. So we saw growth from obviously, the ASP, but also from units as well. And we are excited about that. We feel really good about our glaucoma business going throughout the rest of the year. Analyst (Scott Henry): Okay. Great. Final question. Gross margin was up sequentially in Q1. But last year, it did dip in those middle quarters. How should we think about gross margin in Q2 and Q3 relative to what we saw this quarter? Thank you. Romeo R. Dizon: Hi, Scott. This is Romeo. Thanks for the question. Yeah. Basically, going forward now, we have the last couple of quarters, we have been studying the reserves for the contract manufacturing transition of products. So we figured those part costs. We would expense them there. that is why the margins were lower. But given even with the continued increase in our production cost, I think they have normalized to the high 30s, low 40s just to really dependent on the product and region mix as well, which helped this quarter. Analyst (Scott Henry): Okay. Great. Thank you for the color, Romeo, and thank you for taking the questions. Thanks, Scott. Operator: That concludes our Q&A session. I will now turn the conference back over to Patrick for closing remarks. Patrick Mercer: Thank you for your time today. We look forward to updating you on future calls. Thank you. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Thank you. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Iridex (IRIX) Q1 2026 Earnings Transcript was originally published by The Motley Fool

2026 Guidance Affirmed MOUNTAIN VIEW, Calif., May 19, 2026 (GLOBE NEWSWIRE) -- Iridex Corporation (Nasdaq: IRIX), a worldwide leader providing innovative and versatile laser-based medical systems, delivery devices, and procedure probes for the treatment of glaucoma and retinal diseases, today reported financial results for the first quarter ended April 4, 2026. First Quarter 2026 Financial Highlights Generated total revenue of $11.8 million, compared to $11.9 million in the prior year period Cyclo G6® product family revenue was $3.6 million, representing growth of 14% year-over-year compared to $3.2 million in the prior year period Retina product revenue was $5.8 million compared to $6.6 million in the prior year period Reduced operating expenses by 4% compared to the prior year period “Looking back at the first quarter of 2026, I am encouraged by our execution across the business as first quarter results were in line with our expectations, building the foundation for a cash flow positive fiscal year,” said Patrick Mercer, President and CEO of Iridex. “Our U.S. glaucoma business delivered solid growth, and our cost structure improvements are flowing through as planned. We remain confident in our ability to deliver on the priorities we’ve outlined: expanding G6 utilization, advancing regulatory approvals, and continuing to drive gross margin improvement.” First Quarter 2026 Financial ResultsTotal revenue for the three months ended April 4, 2026 was $11.8 million, representing a decline of 1% compared to the first quarter of 2025. The decrease in revenue was primarily driven by a decrease in retina system sales, partially offset by increases in glaucoma probe sales and service and other revenues. Total retina product revenue was $5.8 million compared to $6.6 million in the prior year period. The decrease was primarily due to international supply constraints and delayed regulatory approvals, offset by strength in U.S. retina sales. Total product revenue from the Cyclo G6 product family was $3.6 million, representing growth of 14% compared to $3.2 million in the prior year period. Other revenue increased $0.2 million to $2.3 million, driven primarily by an increase in service revenue. Gross profit in the first quarter of 2026 was $4.7 million or a 40% gross margin, a decrease of $0.3 million compared to $5.0 million, or a 43% gross margin, in the prior year period. Gross margin decreased primarily due to higher manufacturing costs and increased product costs related to recent tariff developments as the Company continues its transition to lower-cost contract manufacturers. Operating expenses were $5.1 million in Q1 2026, a decrease of $0.2 million, or 4% compared to $5.3 million in Q1 2025. The decrease was primarily attributable to lower consulting costs, reduced deal related legal expenses, and cost savings realized from the general and administrative function transfer initiative announced in prior periods. Net loss was $0.5 million or $0.03 per share for Q1 2026, compared to a net loss of $1.7 million, or $0.10 per share, in the same period of the prior year. Non-GAAP adjusted EBITDA for Q1 2026 was $0.3 million, compared to Non-GAAP adjusted EBITDA of $0.4 million for Q1 2025. Cash and cash equivalents as of April 4, 2026 were $4.6 million, a decrease of $1.4 million in the quarter. The Company’s cash usage was planned and reflects the normal annual cycle where usage is highest in the first quarter, primarily due to annual compensation payment timing and other year-end accrued expenses and liabilities being paid during the first quarter. For the remaining quarters of the year, the Company expects to generate cash and for quarterly cash generation to improve sequentially. Cumulatively, the Company expects to generate positive cash flow for fiscal year 2026. 2026 Financial OutlookThe Company is reaffirming its’ annual revenue guidance for the full year 2026 of between $51 million and $53 million. This guidance contemplates the impact of market disruptions from the conflict in the Middle East, which are impacting product delivery timelines. The Company also continues to expect fiscal year 2026 adjusted operating expenses, which exclude depreciation and amortization, and stock compensation, to be in the range of $19 million to $19.5 million and to generate positive operating cash flow in the full year 2026. Webcast and Conference Call InformationIridex’s management team will host a conference call today beginning at 2:00 p.m. PT / 5:00 p.m. ET. Investors interested in listening to the conference call may do so by accessing the live and recorded webcast on the “Event Calendar” page of the “Investors” section of the Company’s website at www.iridex.com or by dialing +1-646-307-1963 from the US or +1-800-715-9871 internationally and providing Conference ID: 3693990. About Iridex Corporation Iridex Corporation is a worldwide leader in developing, manufacturing, and marketing innovative and versatile laser-based medical systems, delivery devices and consumable instrumentation for the ophthalmology market. The Company’s proprietary MicroPulse® technology delivers a differentiated laser treatment that provides safe, effective, and proven treatment for targeted sight-threatening eye conditions. Iridex’s current product line is used for the treatment of glaucoma and diabetic macular edema (DME) and other retinal diseases. Iridex products are sold in the United States through a direct sales force and internationally primarily through a network of independent distributors into more than 100 countries. For further information, visit the Iridex website at www.iridex.com.MicroPulse® is a registered trademark of Iridex Corporation, Inc. in the United States, Europe and other jurisdictions.  © 2026 Iridex Corporation.  All rights reserved. Safe Harbor StatementThis announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, including those statements concerning commercial trends, market adoption and expansion, expectations regarding profitability, demand for and utilization of the Company's products, financial results and forecasts and expected sales volumes. These statements are not guarantees of future performance and actual results may differ materially from those described in these forward-looking statements as a result of a number of factors. Please see a detailed description of these and other risks further described in the “Risk Factors” section of Iridex’s most recent Annual Report on Form 10-K, as well as in Iridex’s other reports filed with or furnished to the United States Securities and Exchange Commission (“SEC”), available at www.sec.gov. Forward-looking statements contained in this announcement are made as of this date and will not be updated. Use of Non-GAAP Financial InformationThis press release contains financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Management evaluates and makes operating decisions using various performance measures. In addition to Iridex’s GAAP results, we consider Adjusted EBITDA. This non-GAAP result should not be considered as an alternative to net income, net cash provided by operating activities, or any other performance measure derived in accordance with GAAP. We present this non-GAAP result because management considers it to be an important supplemental measure of Iridex’s performance and refers to such measures when analyzing Iridex’s strategy and operations. In calculating the above non-GAAP result: Adjusted EBITDA is defined as earnings before interest income and expense, taxes, depreciation, amortization, and share-based compensation, as well as excluding certain other non-GAAP adjustments. Adjusted EBITDA exclude from their GAAP equivalents items listed below: Share-based compensation expense. We excluded from our non-GAAP results the expense related to equity-based compensation plans as it represents expenses that do not require cash settlement from Iridex. Severance-related expenses. We excluded from our non-GAAP results the expenses related to restructuring events, partially offset by reversals of previously recognized severance expenses in subsequent periods. These expenses are unrelated to our ongoing operations, vary in size and frequency and are subject to significant fluctuations from period to period due to varying levels of restructuring activity. We believe that excluding these expenses provides a more meaningful comparison of the financial results to our historical operations and to the financial results of peer companies. Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational or non-cash expenses involving stock compensation plans or other items. A detailed reconciliation between Iridex’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release as well as in Iridex’s other reports filed with or furnished to the SEC. Investor Relations ContactPhilip TaylorGilmartin [email protected] (a)Defined as earnings before interest income and expense, taxes, depreciation, amortization, and share- based compensation, as well as certain non-GAAP adjustments.