IRIDEX (NASDAQ:IRIX) reported first-quarter 2026 revenue that was essentially flat from a year earlier, while management said the company remains on track to generate positive operating cash flow for the full year despite supply chain, regulatory and geopolitical headwinds.
The ophthalmic laser systems company posted total revenue of $11.8 million for the quarter ended April 4, 2026, compared with $11.9 million in the first quarter of 2025. Chief Executive Officer Patrick Mercer said revenue came in above the guidance provided on the company’s prior earnings call, even as IRIDEX navigated “the Iran conflict, temporary supply chain constraints, and extended timelines associated with certain regulatory approvals.”
Chief Financial Officer Romeo Dizon said the year-over-year revenue decline was mainly tied to lower international retina system sales, partially offset by higher glaucoma probe sales and service and other revenue.
Glaucoma probes drive growth
IRIDEX’s Cyclo G6 glaucoma product family generated $3.6 million in product revenue, up 14% from $3.2 million in the prior-year quarter. Dizon attributed the increase to higher units sold both domestically and internationally, as well as higher average selling prices in the United States.
Mercer said the company sold 15,500 glaucoma probes in the quarter, compared with 13,900 in the first quarter of 2025. He described G6 probes as the company’s highest-margin business and said continued adoption reflected the platform’s value proposition and physician loyalty.
System placements were steady, with IRIDEX selling 24 G6 units in the quarter, in line with the prior-year period. Mercer said the company expects some system growth in 2026 but remains focused primarily on driving probe utilization.
During the question-and-answer session, analyst Scott Henry of AGP asked whether system sales could grow this year. Mercer said the company’s “real objective is to drive probe utilization,” particularly among moderate glaucoma patients, and highlighted its use of the MedScout platform to target existing G6 users and high-volume facilities that do not currently perform MicroPulse procedures.
Mercer also said Medicare local coverage determinations introduced last year are creating tailwinds by expanding the company’s target segments and supporting earlier adoption of G6 therapy in mild-to-moderate and post-MIGS glaucoma patients.
Retina sales pressured by international delays
Retina product revenue fell to $5.8 million from $6.6 million a year earlier, driven primarily by lower international retina system sell-through. Mercer said the retina business was affected by regulatory delays and supply constraints, particularly outside the United States.
In Japan, Mercer said large PASCAL orders were deferred to the second quarter because of regulatory delays related to electrical safety testing. He described the issue as a timing matter, “not a demand concern,” and said the company expects the order to ship in the current quarter.
In China, IRIDEX experienced EndoProbe supply constraints that materially impacted sell-through. Mercer said the company had been working with manufacturing partners and expected those issues to be resolved during the month.
In response to Henry’s question about the lighter retina quarter, Mercer said U.S. PASCAL and surgical retina performed well, while international results were hampered by regulatory and material issues. He said the company had about $800,000 of backlog at quarter-end, all in retina, and expected that revenue to ship in the second quarter.
“Going forward, we do not see these as issues at all,” Mercer said, referring to the resolved regulatory and supply matters.
Mercer also highlighted a commercial agreement announced in early April with EyeProGPO, which expands access to IRIDEX’s retina laser portfolio to more than 1,800 U.S. members, including ophthalmology practices, ambulatory surgery centers and hospitals. Under the agreement, EyeProGPO members receive preferred pricing on products including the PASCAL platform, IQ 532 and IQ 577 lasers, and the OcuLight TX laser.
Margins and expenses reflect transition efforts
Gross profit was $4.7 million, or 40% of revenue, compared with $5.0 million, or 43% of revenue, in the first quarter of 2025. Dizon said the gross margin decline was primarily due to higher manufacturing costs, including increased product costs associated with recent tariff developments. Sequentially, gross margin improved by 300 basis points from the fourth quarter of 2025.
Operating expenses declined to $5.1 million from $5.3 million a year earlier. Dizon said the decrease was primarily due to lower general and administrative expenses, including reduced consulting costs, lower deal-related legal expenses and savings from moving certain G&A functions out of California.
IRIDEX said it has achieved about 70% of that G&A relocation initiative and realized approximately $100,000 in savings during the quarter, below the expected quarterly benefit of about $165,000. Mercer said the company also remains on schedule to relocate its headquarters later this year, a move expected to reduce fixed costs by approximately $600,000 on an annualized basis.
The company is also transitioning production to lower-cost third-party contract manufacturers, with meaningful transfers initiated in the first quarter. Mercer said full implementation is expected in 2027 and should help drive gross margin improvement over time.
Net loss narrows; guidance reaffirmed
IRIDEX reported a net loss of $0.5 million, or $0.03 per share, compared with a net loss of $1.7 million, or $0.10 per share, in the first quarter of 2025. The prior-year quarter included $1.5 million in other expense, primarily tied to costs associated with a note payable settlement. Non-GAAP adjusted EBITDA was $0.3 million, compared with $0.4 million a year earlier.
Cash and cash equivalents totaled $4.6 million as of April 4, down $1.4 million during the quarter. Dizon said the company’s cash use is typically highest in the first quarter because of payments for accrued compensation and other year-end expenses and liabilities.
For 2026, IRIDEX reaffirmed revenue guidance of $51 million to $53 million. The guidance excludes revenue from the Middle East region because of market disruption from the ongoing conflict there. On a pro forma basis excluding Middle East revenue in 2025, the guidance represents growth of 1% to 5% versus 2025.
The company also reiterated expectations for adjusted operating expenses, excluding depreciation, amortization and stock compensation, of $19 million to $19.5 million for the full year. Management said it continues to expect positive operating cash flow for fiscal 2026.
“Our first quarter performance confirms that we are on track for 2026,” Dizon said.
Mercer said IRIDEX’s priorities for the year remain expanding G6 utilization, advancing international regulatory approvals for retina systems and continuing the transition to lower-cost contract manufacturing.
About IRIDEX (NASDAQ:IRIX)
IRIDEX Corporation (NASDAQ: IRIX) is a medical technology company specializing in the development, manufacturing and commercialization of innovative ophthalmic laser and imaging systems. The company’s offerings focus on energy-based therapies designed to treat retinal vascular disorders, glaucoma and other ocular conditions. IRIDEX’s portfolio includes laser photocoagulation platforms, micro-pulse laser technology, and related consumable devices for use by ophthalmologists and retina specialists.
The company’s flagship products include the Cyclo G6 Glaucoma Laser System, which delivers precise, controlled micro-pulse laser therapy for patients with refractory glaucoma, and the IQ 532 Retina Laser System, designed to support minimally invasive laser treatments for diabetic retinopathy and age-related macular degeneration.
