Iridex Corporation — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the quarter ended July 4, 2026, was $12.6 million, a 7% decline from $13.6 million in the prior year period.
• Cyclo G6 product family revenue reached $3.9 million, a 19% year-over-year increase from $3.3 million.
• Retina product revenue was $6.5 million, down from $8.0 million in the prior year period.
• Other revenue was $2.2 million, essentially flat compared to the prior year.
• Gross margin was 34.2%, relatively flat compared to 34.5% in the prior year period.
• Operating expenses were $5.3 million, a 5% decrease from $5.6 million in the prior year period, driven by lower general and administrative expenses.
• Net loss was $1.3 million ($0.07 per share), compared to a net loss of $1.0 million ($0.06 per share) in the prior year period.
• Non-GAAP adjusted EBITDA loss was $0.4 million, compared to a non-GAAP adjusted EBITDA of $21 thousand in the prior year period.
• Operating cash flow was positive for the second quarter of 2026.
• Cash and cash equivalents were $4.7 million as of July 4, 2026, an increase of $0.1 million from April 4, 2026.
• Total assets were $27.3 million as of July 4, 2026, down from $29.2 million as of January 3, 2026.
• Total liabilities were $23.6 million as of July 4, 2026, down from $24.2 million as of January 3, 2026.
• Stockholders' equity was $3.6 million as of July 4, 2026, down from $4.9 million as of January 3, 2026.
• Convertible note payable was $3.8 million as of July 4, 2026, up from $3.7 million as of January 3, 2026.
• Deferred revenue (current and long-term) totaled $8.2 million as of July 4, 2026, down from $9.0 million as of January 3, 2026.

Guidance and Future Outlook

• The Company reaffirmed full-year 2026 revenue guidance of between $51 million and $53 million.
• Adjusted operating expenses for fiscal year 2026 are expected to range from $19 million to $19.5 million, excluding depreciation, amortization, and stock-based compensation.
• The Company plans to utilize working capital to procure additional inventory in anticipation of transitioning to a new headquarters and production facility.
• Management expects to improve overall retina performance driven by the flagship Pascal platform as international regulatory approvals advance.
• The restructuring of the business, including transferring production to lower-cost contract manufacturers and relocating headquarters, is expected to help achieve sustained long-term profitability.

Business Segments and Product Lines

• Cyclo G6 probe sales volume increased by approximately 35% year-over-year, with 17,700 probes sold compared to 13,100 in the prior year period.
• Cyclo G6 Glaucoma Laser Systems sales decreased to 18 units compared to 35 units in the prior year period.
• Retina product revenue decline was isolated to the retina portfolio and driven by temporary external headwinds, including international commercial transitions and regulatory approval factors.
• The company is advancing international regulatory approvals to support future product performance.

Market and Competitive Landscape

• Retina performance was negatively impacted by disruptions in the Middle East and reduced sell-through in China.
• The company sells products in the United States through a direct sales force and internationally through independent distributors in more than 100 countries.
• The company is a worldwide leader in laser-based medical systems for the treatment of glaucoma and retinal diseases.

Risks and Challenges

• Temporary external headwinds, including international commercial transitions and regulatory approval factors, have impacted retina product sales.
• Potential interruptions related to obtaining required international regulatory approvals following the relocation of the headquarters later in the year.
• Forward-looking statements regarding commercial trends, market adoption, and financial results are subject to risks and uncertainties detailed in the company's SEC filings.

Management Commentary and Tone

• Patrick Mercer, President and CEO, stated that the second quarter was highlighted by continued momentum in the glaucoma business and positive operating cash flows.
• Management noted that strong glaucoma performance and cost control resulted in positive cash flow, offsetting a weaker retina quarter.
• Management expressed confidence that restructuring efforts will help achieve sustained long-term profitability.

Other Key Points

• The Company is relocating its headquarters to a lower-cost facility.
• Production is being transferred to lower-cost contract manufacturers.
• The Company incurred legal settlement expenses related to a non-recurring settlement regarding tracking software on its website, which were excluded from non-GAAP Adjusted EBITDA.
• The Company incurred expenses related to the reconvention of its latest annual shareholders meeting, excluded from non-GAAP Adjusted EBITDA.
• The Company excludes share-based compensation, severance-related expenses, and Nasdaq listing compliance expenses from its non-GAAP Adjusted EBITDA calculation.
• A conference call was hosted on August 18, 2026, at 2:00 p.m. PT / 5:00 p.m. ET.