管理層發言
My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2026 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.
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 1995. 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, are forward-looking. 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 undue reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see the 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, August 18, 2026. With that, I will pass the call to Patrick.
Good afternoon, everyone, and thank you for joining us for our second quarter call. If there is one 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 two 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 careful coordination with our vendors and distribution partners, all of whom are familiar with the special demands of medical device manufacturing and 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 before 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 with 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 2026 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., three 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 two 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. 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 third 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 our 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, EndoProbes, 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 transition. In Canada, we are seeing the commercial focus and initiatives implemented last quarter deliver 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 three 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 remain encouraged by the opportunity for our retina business and customer demand remains strong. That said, during the quarter, we confronted market and operational execution dynamics that impacted sales. 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 by 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 532, 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 U.S. retina business going forward. Turning to international retina, results abroad 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 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 re-registration 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.
Thanks, Patrick, and good afternoon, everyone. As Patrick noted, and 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 $8.0 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 remains 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 $1.0 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, we 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 from the ongoing conflict in the Middle East, that outlook excludes revenue from the region. On a pro forma basis that strips out 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.
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.
分析師問答
Our first question comes from the line of Scott Henry. Please go ahead.
Thank you, and good afternoon. Just a couple of questions. First, on retina, it sounds like there are a lot of moving parts domestically and internationally. The question is, do you expect retina to grow year over year if I look at the full year, which would require a pretty significant boost in the second half? Even if we set aside the full year, do you expect the second half of 2026 to be higher than the second half of 2025?
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. As we advance international regulatory approvals, we expect that to broaden our addressable market and improve overall performance, particularly with our flagship product, PASCAL. In the U.S., in 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 drive customer engagement coming out of that meeting. Those are the tailwinds that we see. We had headwinds due to the continued disruption in the Middle East, sell-through delays in China related to distributor inventory, and managing our relocation and the subsequent inventory blackout periods. But we do expect the second half to generate low-single-digit growth for retina.
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?
Yes. Most definitely. Q4 is generally our largest quarter by quite a bit.
Okay. And then shifting to glaucoma, 17.7 thousand probes was a lot for Q2, the biggest quarter of the last many years by far. Do you think there was any inventory build among your customers? Should we expect that to normalize back to more typical levels, or is this a new normal?
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 of the preorders, we did have Japan place heavier orders to manage the blackout period, and in Europe we saw some similar stocking to support blackout periods. But if you back that out, we still had over 15% growth. If we achieve that in the back half of the year, we will be very happy. So there was some lumpiness due to the preorders to cover the blackout period, but with that backed out, we still had really good growth.
Okay, and also final question: the system sales, 18, was a bit lower. Would you expect that to jump back higher in the second half of the year? How should we think about that 18 as a go-forward number?
We believe it is going to be much higher toward the back end of the year. Q4 is our largest quarter, and that includes system sales as well, so we expect those numbers to be higher as we move forward. We did have some slowness in Europe, Middle East, and Africa while waiting on approvals. The UK registry, once we get reimbursement support there, will help boost sales. So that pressure hurt us this quarter, but we do expect those numbers to increase over the second half of the year. Okay. Great. Thank you for the questions.
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.