Business Summary
IRIDEX is a U.S.-based medical device company specializing in laser systems and disposable probes for ophthalmology, particularly in retina and glaucoma. Its business model combines sales of lower-margin hardware with long-term recurring revenue from high-margin disposable probes, which carry 80% gross margins. Retina accounts for about two-thirds of revenue ($30,000,000 annually), growing at 3–4% per year, while glaucoma is positioned as the growth engine.
The company reported Q2 2025 revenue of $13.6 million, up 7% year-over-year and 14% sequentially, with gross profit of $4.7 million (34.5% margin). Operating expenses fell to $5.6 million from $7.8 million a year prior, delivering positive adjusted EBITDA for the third straight quarter. Cash and equivalents were $6.8 million. IRIDEX is valued at about $34 million with revenue of $48–50 million and $10 million in cash.
Most manufacturing (90%) occurs in the U.S., reducing tariff exposure, with only 10–15% of components sourced abroad, including 7% from China. The company collaborates with Novel to expand distribution, pursue tuck-in acquisitions, and enhance operational efficiency. Strategic initiatives also focus on outsourcing production and leveraging the global distribution network for capital-efficient growth.
Catalysts & Milestones
2021 - Topcon collaboration delivered strategic and financial benefits
2023 - Launch of new IRIDEX PASCAL with MicroPulse capability in retina
2023 - Strategic review process initiated by board to address undervaluation
2023 - Expiration of long-running royalty contract reduced quarterly revenue by $500,000
2024 - CEO transition and expense cuts led to improved financial discipline
2025 - Reported positive adjusted EBITDA for three consecutive quarters
2025 - Revenue grew to $13.6 million in Q2, up 7% year-over-year
Investment Highlights
Q2 2025 revenue of $13.6M, up 7% year-over-year and 14% sequentially
Retina contributes about $30M annually, two-thirds of total revenue
Disposable probes deliver 80% gross margins, driving profitability
Operating expenses reduced 32% year-over-year in Q1 2025
Cash and equivalents of $6.8M with stable liquidity position
Future Growth Drivers
Expansion of probe adoption through new dosing protocols and clinical data validation
Pascal replacement cycle as many units reach end-of-service life
Partnerships with Novel to broaden product portfolio and distributionTuck-in acquisitions targeting complementary products at lower multiples
Prospective multicenter glaucoma study to strengthen reimbursement and adoption
Risk Factors
LCD restrictions reduced glaucoma eligibility to 25% of advanced-stage patients
Gross margin fell from 40.7% to 34.5% in Q2 2025 due to mix and tariffs
Dependence on retina segment, a mature market growing only 3–4% annually
Manufacturing in high-cost Mountain View remains unsustainable for low-margin products
International rollout faces MDR certification delays and tariff-driven supply risks
Capital Allocation
10/08/2023 How do you view M&A or strategic options for growth and profitability?
That is a constant question in managing a company. Regardless of growth rate or cash position, you must evaluate when to monetize, leverage, or expand strategically. We regularly review opportunities on both sides of the table and are not opposed to either direction. The right opportunity must present itself. For example, our Topcon collaboration in 2021 was a strong transaction for us both strategically and financially.
We remain open to similar opportunities, though we have nothing specific to announce now. When such decisions reach a point that requires disclosure, we will communicate them. We are mindful of these inflection points and evaluate them carefully.
15/11/2023 Update on the strategic review announced in August.
We announced the process at the end of August. The board recognized that while our businesses are strong—arguably the strongest they have ever been—our market capitalization is near historic lows. Part of this reflects broader macro trends for microcap medical device companies, but undervaluation needs to be addressed.
As a public company, we must optimize shareholder value. The review process signals we are receptive to strategic interest. It is progressing, though we will not provide play-by-play updates. We will announce developments when there is something appropriate to disclose.
16/04/2025 Are you pursuing both acquisitions and possible asset sales?
Yes to both. One of the things we liked about working with Novel on the transaction is they shared our strategy. That included being open to folding other companies into IRIDEX and bringing those assets in house.
At the same time, any offer that makes sense for shareholders would be considered. We are in a much better cash position now than in Q4, but if a credible offer came in, the Board of Directors would review it. To reiterate, we will continue looking at opportunities to acquire assets that are accretive to our business.
13/05/2025 Is IRIDEX looking to buy companies or distribute more products through Novel?
We have long-term relationships with a global customer base as a leader in laser-based ophthalmology equipment. To build on this and grow sales, we are working with Novel to identify opportunities to broaden our product portfolio. This approach allows us to offer more solutions to customers in a capital-efficient way.
These opportunities may include distribution agreements, partnerships, or smaller tuck-in acquisitions that are accretive and synergistic. Novel supports this strategy, and we are actively pursuing it together.
Competitive Advantage
16/04/2025 How will tariffs impact your international operations, and how can you mitigate them?
While we rely on some outsourced precision and electronic components globally, these represent only 10% to 15% of our system components. About 90% of our manufacturing is already done in the United States, which puts us in a stronger position than many competitors who depend on overseas production.
We will still see some impact on raw materials we must procure abroad, but the exposure is relatively small. We are far less affected by cost and logistics disruptions than competitors importing finished devices. We actually view this as a competitive advantage in the U.S. market.
Operations
10/08/2023 How will you increase probe utilization per system?
The challenge lies in building clinician confidence so they recommend the procedure for a broader set of patients. Often, they treat a group, see mixed outcomes, and recall cases where results fell short. Without reinforcement and consolidated data, they narrow their patient selection. That is why we focus on improving efficacy while maintaining safety, supported by suite management software and clinical evidence that investigators have achieved success. These are the tools we use to shift perception.
It is a noisy environment with many other devices and companies competing for doctors’ attention. Our strategy is a “feet on the street” approach, focusing on target accounts and steadily moving them along the adoption path. Progress is slower than we hoped when we set guidance at the start of the year, but we are confident the results will prevail and adoption will broaden.
10/08/2023 Do you have tangible evidence that dosing and patient selection initiatives are improving utilization?
The pace of improvement comes from two areas: capturing new clinicians with updated dosing protocols and carrying them through long enough to see positive results, and helping existing users refine patient selection. The consensus panel’s recommendation provided a safe starting point, but newer evidence shows that escalating dosing can improve outcomes and durability while maintaining safety. For example, slowing sweep speed from 20 seconds to 30 seconds per hemisphere has delivered stronger results with the same safety profile.
A prospective single-center study with three dosing arms of about 20 patients each confirmed that reduced sweep speed leads to progressively better outcomes and higher success rates. These findings take time to work through the system because our procedure requires evaluation at 30 and 90 days rather than immediate feedback like MIGS procedures. We still face some users who are not yet receptive, which subtracts from growth. But by expanding usage among happy customers and onboarding new clinicians effectively, we believe we can move from around 5% growth toward our 10% guidance. We remain confident these efforts will drive higher adoption over time.
15/11/2023 Are new dosing protocols producing better outcomes and higher utilization?
We are seeing better outcomes and higher clinician satisfaction. We have not yet proven broader use across patient bases, but we see adoption success among comprehensive ophthalmologists. In a sample of about 45 such physicians across the country, volumes were about 40 percent higher than our average user base.
That success has come from adopting mid-range dosing recommendations rather than starting at the low end. We believe this validates our approach and supports broader adoption over time.
15/11/2023 Talk about execution in the retina business and long-term sustainable growth rate.
The retina business is solid for IRIDEX. We are the worldwide leader in system placements and installed base, and we believe we are the preferred provider. We launched the new IRIDEX PASCAL this year with a leading scanning laser engine and MicroPulse capability, which provides clinical efficacy with less retinal damage. MicroPulse began in retina before moving into glaucoma, so this is a return to our roots with strong response. The system is smaller, versatile, and includes scanning selective laser trabeculoplasty, which speeds treatment. Early next year we will launch a new single-spot platform that improves performance while reducing costs, making us more competitive and improving margins.
That said, retina is a mature segment, with overall global growth in the mid-single digits. We believe we can grow at or above that rate, particularly by triggering replacement cycles. In the U.S. there are many systems five to seven years old, including PASCAL units beyond service life. Our new platform should accelerate capital replacement cycles.
16/04/2025 Where are the 10% to 15% outsourced components produced?
Roughly half of that, about 7%, comes from China. The remainder is sourced from a variety of other countries.
16/04/2025 Are you still manufacturing lasers in Mountain View, California?
We are manufacturing some lasers in Mountain View and some in other locations within the United States.
16/04/2025 How do you plan to address inefficiency from manufacturing in an expensive location?
There will be changes with Novel as our partner. Patrick has already right-sized the business and managed costs well. He is an expert in operations and transferring technology, so we are confident he will lead outsourcing effectively. We agree Mountain View is one of the highest-cost areas to manufacture, which works only with high-margin products. In our commodity, competitive marketplace, that is not sustainable.
We are exploring all avenues, including connections in Costa Rica and Asia, to move production. More broadly, this company was founded by engineers but is now becoming a marketing company. We intend to outsource as much as possible and pursue accretive acquisitions. For example, if our multiple is 1.5 to 2 times sales and we acquire a business at 1 time sales, folding it into our model creates leverage. With a new board strategic committee in place, we will identify gaps quickly and guide acquisitions while aligning location decisions with tariff realities.
Competition
10/08/2023 Are G6 prices stronger than expected?
We implemented a price increase around the middle of last year, and it has held in the marketplace. As a result, the second and first quarters showed a bigger revenue increase than unit increase. That gap will start to subside as we move into the third and fourth quarters as we lap the timing of that increase, and by the beginning of 2024, revenue and unit growth should be roughly equivalent.
It was a one-time event rather than a continuing price increase, primarily in the U.S. market and less so internationally.
12/08/2025 What were the highlights and challenges in international retina markets?
In EMEA, revenue was strong and aligned with our forecast, especially in the Middle East and Africa where Pascal sales were robust. In GmbH, however, progress slowed due to ongoing service challenges and MDR certification delays for Pascal.
In Asia, tariff disputes with China created a stock order rush, straining supply chains in Q2 and potentially future quarters. Logistics delays also affected Pascal rollout in Japan, though those are being resolved. In Latin America and Canada, Pascal sales fell short because of pricing pressures, but we had a highly successful PAAO meeting in Colombia where we executed strategic initiatives to improve the region’s performance.
12/08/2025 What progress did you make in Latin America and in glaucoma initiatives?
We officially launched Pascal in Latin America, hosted a successful glaucoma retina symposium, and restructured distribution across multiple countries. In glaucoma, we are leveraging the large installed base of G6 systems in the U.S. to increase utilization by shifting mix toward higher-margin disposables, training additional users, and emphasizing ROI and clinical data. Consensus panel results and dose escalation studies support improved clinical outcomes and are resonating with users. New Medicare LCDs are also creating opportunities for earlier use of G6.
Operationally, we are using MedScout to target mid-level utilization accounts for engagement. Cyclo G6 unit sales exceeded plan, but probe sales were lighter due to supply constraints that have now been resolved. Internationally, glaucoma was steady in EMEA, rising in GmbH, stagnant in Asia due to weaker console sales, and modest in Latin America and Canada as competitors emphasized reusable probes. We view this as a chance to reinforce the clinical and economic benefits of our disposable solutions.
Growth
14/11/2023 What drives recent strength in the retina business, and what sustainable growth rate do you expect?
The retina business is strong. Earlier in the year, macro uncertainty caused clinicians to defer purchases, not cancel them. Some of those deferrals likely moved into the third quarter. We also launched the new IRIDEX PASCAL platform, which has been well received and contributed to solid U.S. capital equipment demand. Internationally, we see more volatility due to distributor inventory swings.
Overall, we believe retina is a mature industry segment with long-term growth in the mid- to lower-single digits. We think we can grow at that rate or better. Quarterly results may fluctuate, but the moving average is the best indicator. We are comfortable and confident in the retina side of the business.
14/11/2023 For retina, is mid-single-digit organic growth your target or the category’s growth rate?
We think long-term industry growth in retina is in that mid-single-digit range. It is a mature segment, driven by replacement cycles and some expansion as practices add satellite facilities and want consistent equipment. While we lead with strong technology, there is no disruptive new cycle, but many systems are aging. Numerous PASCAL units are now in the end-of-service period where repairs are no longer possible, creating replacement opportunities.
This environment could allow growth above trend if capital equipment conditions improve. Still, there will be quarter-to-quarter volatility, with strong quarters creating tougher comparisons later. The long-term trend remains up, and the short-term moving averages suggest mid-single-digit growth or better.
15/11/2023 Has MicroPulse evidence generation been underinvested historically, and what could the new prospective trial mean?
We have seen growth flatten recently, largely due to adoption challenges. Success depends on clinicians achieving good outcomes with durability, which is affected by dosing. Underdosing with faster sweep speeds can yield weaker or shorter results. Our dose escalation study showed significantly higher intraocular pressure reductions when slowing the sweep speed, with the same safety profile. Communicating that is key for adoption.
The capstone will be a prospective, multicenter study with statistically significant data and long-term follow-up. This will support both clinicians and reimbursement discussions. Strong clinical evidence and continued education will help broaden usage. We see the reimbursement restriction as a short-term limitation.
15/11/2023 With a large installed base, how do you leverage recurring revenue?
Recurring revenue from EndoProbes is a stable business. They are preferred products and are not limited to IRIDEX systems. Many are used on large vendors’ vitrectomy systems, where they are integrated into surgical procedures. That business is almost its own segment, and we see it continuing as a stable and important contributor.
15/11/2023 Can retina be a mid-single-digit sustainable growth business?
We do.
15/11/2023 Longer term, what is the sustainable glaucoma growth rate?
We see MicroPulse Transscleral Laser Therapy as the selective laser trabeculoplasty for moderate-stage patients. SLT is mature and accounts for about 20 percent of mild-stage patients annually. Applying that 20 percent to the roughly 2 million moderate-stage patients translates to hundreds of thousands of procedures. Our therapy is also repeatable. In our longest study, over six and a half years, patients averaged three and a half procedures, about every 22 months. That implies a pathway to 20 to 30 times current volume, compared to our 30,000 probes annually in the U.S.
In the near term, growth has been limited. We are focusing on adoption, with clinical studies as a key driver. LCDs aside, we believe we can achieve single-digit or even double-digit growth in the short term. Over time, as results from our studies come in and we enhance technology to make energy delivery less dependent on physician sweep speed, we believe growth could accelerate further.
16/04/2025 Will growth opportunities be in both retina and glaucoma?
Our strategy follows a model built at Martinidis Medical. We must first reach a reasonable valuation. Today we are valued at about $34,000,000 with a stable business of $48,000,000 to $50,000,000 and $10,000,000 in cash, so we see the company as clearly undervalued. Raising that valuation allows our stock to have real value, which in turn supports acquisitions of undervalued companies we can roll into our business to create accretion.
Because opening new distribution channels and calling on new doctors is very expensive, we will focus on companies that sell products to our existing customer base. That way we can use our current distribution network and leverage our global distributors effectively.
16/04/2025 Why continue selling lower-margin retina hardware if glaucoma is the growth focus?
Disposables are the true high-margin business, but you cannot reach them without first selling hardware. Hardware sales are competitive and lower-margin, but once placed, they drive a stream of probe sales for 10 to 15 years, given hospitals’ amortization cycles.
This model of “captive disposables” ensures recurring revenue after the initial capital investment. That is why retina hardware remains strategically important, even if it appears less profitable upfront. It underpins the long-term recurring revenue model that creates lasting shareholder value.
12/08/2025 How did Q2 2025 revenue perform, and what drove growth?
Second quarter revenue was $13.6 million, representing 7% growth year-over-year and 14% sequential growth from Q1 2025. Growth was driven primarily by higher laser console sales, particularly Pascal and G6 systems. Medical and surgical retina systems performed strongly, partially offset by lower G6 and surgical retina probe sales.
Despite a reduced Salesforce and scaled down marketing, our team leveraged technology and relationships to drive sales. EndoProbe sales held steady and are tracking ahead of our annual run rate. Medical and surgical retina exceeded expectations, with backlog expected to carry into Q3.
Financials
10/08/2023 What is your expected cash burn exiting the year, and when can you reach profitability?
One driver of our second quarter adjustments was the opportunity to reduce inventory. Supply chain challenges are easing, which lowers our need to carry excess stock. We had built up about $4 million in additional inventory versus pre-COVID levels and have unwound some of that, with more to go. This should be a capital tailwind in coming quarters, reducing operating cash usage alongside continued growth.
We do not provide specific guidance, but this quarter is representative of our downward trajectory. We believe we can ultimately reach below $1 million in cash usage per quarter, assuming successful sales. Glaucoma growth remains a challenge, but we expect capital softness to be temporary. Cost reductions, particularly in cost of goods sold, will further support cash flow. We have multiple years of execution capacity and the ability to manage expenses prudently, as demonstrated in mid-2023.
14/11/2023 The “other” line declined sequentially to $1.9 million. Is that the base, or should we expect further decline?
The volatility has two main drivers. First, we had a long royalty contract tied to a patent that expired, which reduced revenue by about $500,000 per quarter. That accounts for the year-over-year dip. Second, the category includes service revenue. We run a strong service business, mostly depot service where systems are shipped back, repaired, and returned. We also sell extended warranties and accrue that revenue quarterly. In addition, we perform individual repairs and preventive maintenance, which vary depending on state requirements. These activities can move the number by $100,000 or more in any quarter, creating fluctuation.
15/11/2023 What percent of retina sales are capital versus consumable recurring?
We have not broken out that detail. The business has three parts. First, surgical-level systems targeted at surgery centers and hospitals, used with our single-use EndoProbes. Second, the scanning laser segment, including PASCAL, typically sold for in-office use. Third, the medical retina side of the business.
16/04/2025 How profitable is the retina business versus the glaucoma business?
The retina business grows 3% to 4% annually and currently contributes two thirds of revenue, about $30,000,000. It is projected to remain flat in profit year over year. Our focus is on higher-margin recurring revenue from probes, which deliver around 80% gross margins, and that is where we see the most opportunity.
Glaucoma required significant investment in 2023, when we added salespeople before all product settings were validated. We have since corrected that and improved efficacy in the market. With the new LCD and focus on post-MIGS and earlier treatment, we believe glaucoma is now positioned as the growth engine. Historically it has not been a cash drain, and we do not expect it to be one moving forward.
13/05/2025 Are we really done burning cash, and can we operate above breakeven?
Yes. When I became CEO in late 2024, the Board directed me to stop the cash burn immediately. Over the last two quarters, we have reduced operating expenses significantly and maintained strict cost discipline. In Q1 2025, net cash used in operating activities was $1.1 million, down $0.5 million or 31% from Q1 2024. Operating expenses were reduced 32% versus Q1 2024 and 14% versus Q4 2024.
We continue to monitor for additional savings while preserving efficiency. Going forward, we plan to maintain this financial discipline and achieve positive adjusted EBITDA and cash flow breakeven in 2025, based on revenue consistent with 2024.
12/08/2025 Can you summarize the company's Q2 2025 financial performance?
In the second quarter, we achieved year-over-year revenue growth, operating expense reductions, and positive adjusted EBITDA. This marked our third consecutive quarter accomplishing each of these goals. Since initiating cost reduction programs in October 2024, we reduced operating expenses by 28% compared to the prior year period. These savings have improved our financial health, lowered cash burn, and are expected to continue through the year.
We are also negotiating with contract manufacturers to further reduce production costs and planning to relocate when our current lease expires in August 2026 to capture additional savings. These actions put us on track to deliver cash flow breakeven and positive adjusted EBITDA in 2025.
12/08/2025 Can you review Q2 2025 financial results in detail?
Total revenue was $13.6 million, up 7% year-over-year and 14% sequentially. Retina products grew 10% to $8.0 million, led by Pascal, medical, and surgical retina systems, partially offset by lower surgical retina probe sales. Cyclo G6 revenue was $3.3 million, essentially flat year-over-year. Other revenue rose $0.2 million to $2.2 million, primarily from services. Gross profit was $4.7 million with a margin of 34.5%, down from $5.1 million and 40.7% last year, mainly due to product mix, strong international distributor sales, tariff effects, and inflation-driven cost increases.
Operating expenses were $5.6 million, down from $7.8 million in Q2 2024 due to cost reductions. Net loss was $1.0 million, or $0.06 per share, compared to a $2.7 million loss or $0.16 per share a year ago. Non-GAAP adjusted EBITDA was $21,000, an improvement of $1.7 million from a $1.7 million loss last year. Cash and equivalents ended at $6.8 million, down $0.4 million from Q1, reflecting reduced cash use that we expect to sustain or improve.
Outlook & Guidance
10/08/2023 Do you expect a rebound in retina in the second half of the year?
That's right, Scott. The stabilization we referred to seems to be coming, and you hear it in the broader economy as well. We did not see cancellations, just deferrals. People took longer in their decision processes to order, but those deferred orders are now coming in this quarter. There is a general improvement in sentiment.
Interest rate increases appear to have topped out, and people who perceive that are moving forward with their plans. We think the second half of the year can be closer to expectations. However, because the first half was down enough, we needed to adjust full-year guidance.
10/08/2023 What were U.S. vs. OUS G6 probe growth rates, and why are you confident in 2H guidance?
We normally do not break down U.S. versus international probe growth, but in this quarter they were about even, both in the mid-single-digit range. International performance was particularly weak in the first quarter, but that has stabilized.
Our confidence in second-half guidance reflects the view that first-quarter weakness was a one-time decline. We are seeing incremental adoption, stronger engagement with accounts, and a shift in mentality. Doctors now ask how to improve technique if results differ from reported studies, rather than questioning the procedure itself. This change gives us confidence that utilization will stabilize and grow. Even modest uptake in the comprehensive segment, given the large patient base, can provide meaningful leverage.
10/08/2023 Will you provide evidence from early physician cohorts by year-end?
What you are asking for is reporting on subsets of users and how traction has been achieved in those groups. We can review that data and potentially address it in future calls.
14/11/2023 Why is the LCD expected to be a 2023 headwind if proposed rules came out in June, and why wasn’t it an issue earlier?
The proposed LCDs were released in June, and we responded with appeals, submitting clinical evidence and arguments to retain coverage. Initially, the LCDs had classified all cyclophotocoagulation as investigational, but final coverage included restrictions. We believe erroneous assumptions influenced that outcome.
Two years ago, a similar proposal was made, and our responses were successful, so we did not expect incremental restrictions this time. That is why we did not issue an 8-K earlier. Many clinicians are just now realizing that new LCD determinations are going into effect, reacting with frustration and figuring out how to move forward. With the final determination now active, we see two short-term impacts: deferred adoption and purchases of systems, and reduced probe reordering as clinicians use up inventory before restrictions apply. Reactions vary across practices, so rather than give a wide range of outcomes, we suspended guidance.
14/11/2023 How should we think about G6 performance in Q4, given current uncertainty?
Frankly, it is difficult to predict. Feedback is mixed. Some clinicians see no issue because coverage in their states has not changed, while others fear the restrictions will expand and are considering reducing or eliminating their use of cyclophotocoagulation (CPC). This uncertainty makes it nearly impossible to create reliable scenarios. The determination is only two weeks old, and many clinicians are pausing purchases until they understand reimbursement impacts. That is why we suspended guidance. We will stay focused and reinstate guidance once we have better visibility.
14/11/2023 Is retina typically stronger in Q4, and should we assume sequential growth?
Without issuing specific guidance, historically Q4 is the strongest quarter of the year, typically above Q2, which is usually the second strongest. This year Q2 was weak, but looking back, the fourth quarter has consistently been stronger. We expect that dynamic to continue, though capital equipment orders usually occur late in the quarter, so it is still developing15/11/2023 What percent of your volumes is that?
We are probably around one third in that segment. Our long-term target and where we believe MicroPulse Transscleral Laser Therapy fits is in the moderate stage, when a patient has gone through initial drops, maybe a selective laser trabeculoplasty, and eventually reaches maximum medical therapy. They may have had cataract surgery, possibly with a minimally invasive glaucoma surgery, and their pressures are rising. That is the sweet spot for MicroPulse TLT, and there is a very large number of those patients. Our focus is on comprehensive ophthalmologists managing those patients until they need referral for advanced surgery, so about one third are in that group.
At the advanced stage, some patients have had trabeculectomy or tube shunt procedures. As pressures rise over time, new interventions are required. Roughly another third, maybe a quarter, fall into that end-stage category, and the balance—about 40 percent—are in the advanced-to-moderate range.
15/11/2023 So the middle ground not covered under the criteria technically?
It depends on how the clinician interprets it. For example, if a trabeculectomy or tube shunt has failed, that could mean the surgery was done and pressures are rising, or it could mean the patient is not appropriate for that surgery. These are physician judgments, and interpretations will emerge as this develops.
15/11/2023 With strict CPC qualification criteria, do you think practice is more flexible, with physicians documenting to justify procedures?
You are asking me to interpret how practitioners will write their patient records, which is difficult, but we have heard many comment that they go down the list of criteria and find reasons to document qualification. Failed trabeculectomy, poor vision, or high intraocular pressure can be reflected in the patient record.
As we understand it, submissions do not require additional paperwork like a preapproval would, but physicians must be prepared in case of audit.
15/11/2023 Why did you pull guidance in November—were LCDs that much of a downside risk?
We normally give full-year guidance, but this was effectively fourth-quarter guidance. There is significant uncertainty around how clinicians will react. Unlike minimally invasive glaucoma surgery, which had been under review since June, our restriction was a later development. We went through the comment period, restrictions were pulled, and coverage continued.
This time, however, reimbursement advisors and clinicians told us it could have a strong impact if unchanged. That created high volatility in the glaucoma business, and we were not comfortable forecasting the outcome. For the full year the impact may not be large, but for Q4 it is material. We chose to suspend guidance temporarily and will reinstate it once there is clarity.
15/11/2023 Looking to 2024, if LCD language remains unchanged, how will you balance U.S. glaucoma resources versus outside the U.S.?
Two thirds of our volume is still covered, so we have opportunities to continue adoption and expand our patient base. We are balancing that against any reduction. We already invest significantly in glaucoma and will adjust as needed. We hesitate to be dramatic early on because opportunity remains.
If impacts worsen and affect cash usage, we have levers we can pull. We are also significantly promoting outside the U.S. through distributors, and that will continue since it is unaffected.
.16/04/2025 Why will this turnaround with the new partner be different from past restarts?
The strategic process was not a complete failure. We had many interested parties, were very close with two, and nearly finalized with one. However, those parties themselves were acquired. Last year we were also spending too much, so we acted. We cut expenses, reduced headcount, streamlined processes, and eliminated waste. As a result, we became financially healthy and have now reported positive EBITDA for two consecutive quarters.
The difference today is that we are no longer burning cash. We have proven we can be good stewards of capital, and the partnership has strengthened our position. We are running lean, disciplined, and with focus. That is why we believe this turnaround is enduringly different from past attempts.
16/04/2025 Will you commit to reviewing every aspect of the business and staying cash flow positive?
There are no sacred cows. Patrick has taken control of expenses and stabilized the business by following a simple model: revenue must generate profit. That discipline will continue. The board has also been reshaped, adding new perspectives. Right now, our appeal is to deep value investors, and as performance improves, we will attract growth and momentum investors.
The priority is to raise the company’s multiple through growth and profitability. Patrick has committed to maintaining profitability under normal conditions, despite external factors like tariffs. That is the foundation for building trust with shareholders and ensuring long-term success.
12/08/2025 How do you view execution and outlook going into Q3 2025?
Despite isolated challenges, we executed with resilience and captured opportunities across the business. We outperformed in key areas including the U.S., EMEA, and particularly in retina with strong Pascal system performance.
With healthy revenue carryover, improved supply visibility, and growing demand across strategic platforms, we are confident in our fundamentals and plans heading into Q3.
Risks & Macro
14/11/2023 What is the current mix of moderate versus severe Cyclo G6 patients, and why would coverage criteria be such a headwind?
Thanks for the question. The criteria for very late-stage patients include limited visual potential, pain, and a prior trabeculectomy or tube-shunt procedure. These restrictions eliminate many later-stage procedures. We think about 25% of cases qualify under this strict criteria, while roughly 75% of our procedures are advanced-stage but occur before these thresholds. In markets where Medicare Administrative Contractors (MACs) are payers, coverage is very restrictive.
That said, if clinicians understand their patients’ coverage, on average two-thirds maintain coverage. It is important to work closely with clinicians so they recognize what coverage applies. If they are not currently in the practice of checking coverage, this is something they may need to start doing.
14/11/2023 What is the next data point in the LCD appeals process?
We submitted an appeal based on misinterpretation of the study they cited to set criteria. That appeal is now with MAC administrators, who do not operate under a defined response timeline. We hope for a prompt correction, as it is highly unusual to alter criteria from the very paper quoted. Everyone we have consulted sees this as an error in interpretation, and we believe the appeal is compelling. We hope the administrators reach the same conclusion.
13/05/2025 What is the impact if tariffs remain in place, especially the high tariffs on China?
Our products are overwhelmingly sourced and manufactured in the United States. While we use raw materials and components from global suppliers, final assembly is done in the U.S., though not all within our Mountain View headquarters. Most of our disposable products and an increasing percentage of hardware are produced by third-party original equipment manufacturers (OEMs), mainly U.S.-based.
Because of this structure, we have minimal direct exposure to recent tariff policies. Many competitors relying on fully imported products face higher costs, delays, and uncertainty, giving us a pricing and supply chain advantage. Customers value the stability of U.S.-made products. As for reciprocal tariffs affecting U.S. exports, our shipments to China are not material today.
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