IRIDEX (NASDAQ:IRIX) reported second-quarter revenue of $12.6 million, down 7% from $13.6 million a year earlier, as growth in its glaucoma franchise was offset by lower retina sales. Management said the company generated positive cash flow during the quarter and reaffirmed its full-year revenue outlook of $51 million to $53 million.
Chief Executive Officer Patrick Mercer described the quarter as an “important inflection point” in the company’s financial profile, citing cost reductions, working-capital management and efforts to make operations more efficient. The company has begun relocating its headquarters, a move Mercer said is intended to reduce costs and better align its infrastructure with its future business.
Glaucoma Growth Offsets Some Retina Weakness
The company’s Cyclo G6 glaucoma business continued to post growth. Cyclo G6 probe volume rose approximately 35% year over year to 17,700 units, from 13,100 units in the prior-year quarter. Revenue from the G6 product family increased 19% to $3.9 million, compared with $3.3 million a year earlier.
Mercer attributed the glaucoma performance to rising utilization of the installed G6 base, targeted physician engagement through MedScout, Medicare local coverage determination tailwinds and higher U.S. average selling prices for probes and systems. Growth occurred across all regions, according to management.
In the U.S., IRIDEX said its commercial organization is targeting existing G6 accounts with moderate utilization and higher-volume glaucoma practices that have not adopted MicroPulse therapy. The company is emphasizing physician education regarding patient selection, clinical outcomes and the procedure’s use as a non-incisional, repeatable treatment option.
Despite probe growth, Cyclo G6 system placements declined to 18 units during the quarter from 35 a year earlier. Mercer said the decline was largely tied to order timing in Europe, the Middle East and Africa, along with competitive pressure on new console placements in the company’s European business.
Management said some of the strong probe volume reflected distributor stocking activity ahead of blackout periods associated with the relocation, including larger orders in Japan and Europe. Excluding that effect, Mercer said probe growth would still have exceeded 15%. For the second half, the company expects low-double-digit glaucoma growth, while system sales are expected to increase, particularly in the fourth quarter.
Retina Sales Decline Amid Transition and Regulatory Issues
Retina product revenue was $6.5 million, down from $8 million in the second quarter of 2025. Chief Financial Officer Romeo Dizon said the decline resulted mainly from temporary international commercial-transition and regulatory-related issues, while management characterized underlying demand for core products as robust.
International retina performance was uneven. In Europe, the Middle East and Africa, IRIDEX expects its Pascal platform to receive Medical Device Regulation approval in Europe during the first half of 2027. In China, distributor sell-through was affected by regulatory constraints and the distributor’s need to work through existing inventory. The company said it is progressing the regulatory renewal process and expects those factors to normalize over coming quarters.
Pascal sales resumed in Latin America and Canada after earlier market challenges, and management said it expects continued momentum in those markets through the rest of the year. In the U.S., IRIDEX expanded its EyeProGPO offering to include EndoProbe handpieces, giving more than 4,300 member practices, ambulatory surgery centers and hospitals access to preferred pricing on the product.
During the question-and-answer session, Mercer said IRIDEX expects low-single-digit retina growth in the second half of 2026. He cited anticipated progress on international approvals and domestic commercial activity surrounding the American Academy of Ophthalmology meeting, where the company plans to implement annual promotion programs aimed at supporting capital-equipment sales and customer engagement. He also said the fourth quarter is typically the company’s largest quarter.
Margins, Expenses and Outlook
Gross profit was $4.3 million, representing a gross margin of 34.2%, compared with $4.7 million and a 34.5% margin in the prior-year period. Dizon said the higher-margin glaucoma probe mix was offset by softer retina-system margins and other cost pressures.
Operating expenses declined 5% to $5.3 million from $5.6 million, primarily because of lower general and administrative expenses associated with the company’s administrative function transfer initiative. IRIDEX expects to complete the headquarters relocation later this year and continues shifting production to lower-cost third-party contract manufacturers, which management expects to support gross-margin improvement over the balance of 2026 and into 2027.
- Net loss was $1.3 million, or $0.07 per share, compared with a loss of $1 million, or $0.06 per share, a year earlier.
- Adjusted EBITDA loss was $0.4 million, compared with adjusted EBITDA income of $21,000 in the prior-year quarter.
- Cash and cash equivalents totaled $4.7 million as of July 4, up $0.1 million from April 4.
- Full-year adjusted operating expenses are projected at $19 million to $19.5 million.
IRIDEX reaffirmed its 2026 revenue guidance of $51 million to $53 million, which excludes revenue from the Middle East due to disruption from the ongoing conflict in the region. On a pro forma basis excluding 2025 Middle East revenue, the forecast represents expected growth of approximately 1% to 5% over 2025.
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.
