IRIDEX Corporation

Thank you for standing by and welcome to Iridex First Quarter 2026 Earnings Conference Call. I'd like to remind everyone that this call is being recorded and all lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Tripp Taylor, Investor Relations. Please go ahead.

Thank you, and thank you all for participating in today's call. Joining me from the company are Patrick Mercer, Iridex's Chief Executive Officer, and Romeo Dazon, the company's Chief Financial Officer. Earlier today, Beardex released financial results for the quarter ended April 4th, 2026. A copy of the press release is available on the company's website. Before we begin, I'd 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, products and development matters, sales trends, and the markets in which we operate. 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 reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see our most recent Form 10-K and Form 10-Q filings with the SEC. ERDX 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, May 19, 2026. And with that, I'll turn the call over to Patrick.

Good afternoon, everyone, and thank you for joining us. I am pleased to share our first quarter results and the continued progress we're making as we build on the positive momentum we delivered throughout last year. For context, before diving into Q1, I want to highlight some of the significant milestones we achieved last year. In 2025, we delivered positive adjusted EBITDA for the first time in the company's recent history, and we also achieved positive cash flow from operations in Q4. These achievements represent a fundamental shift in Iridex's financial profile and reflect the hard work completed to reposition the business for sustainable profitability going forward. As a result of this work and our solid starts of the year, we remain on track to be cash flow positive in 2026. We executed according to plan in Q1 despite several anticipated headwinds. including the Iran conflict, temporary supply chain constraints, and extended timelines associated with certain regulatory approval. Against this backdrop, we delivered revenue of $11.8 million, essentially flat year over year and above the guidance communicated on our last earnings call. Our highest margin business, G6 Pros, was a clear bright spot during the quarter. Continued growth and adoption of our glaucoma solution underscore the strength of our clinical value proposition and the loyalty physicians have to the G6 platform. Internationally, we operated in a challenging environment with supply disruptions, regulatory delays, and geopolitical volatility, particularly impacting revenue in Asia and the Middle East. Importantly, underlying demand remained solid and we believe revenue and earnings would have been higher had we been able to fulfill certain orders that were backlogged at the end of the quarter. Looking ahead, supply chain conditions and regulatory processes are improving, and we continue to actively manage through these dynamics. As a result, we believe some of the timing-related impacts that affected our first quarter performance represent incremental revenue opportunities for the balance of the year. On the operations front, we again reduced our operating expense compared to the prior year period as we continue to drive efficiencies across the organization. We are pleased to report that the relocation of certain general and administrative functions out of California began delivering quarterly savings starting in Q1, 2026. We also remain on schedule to relocate our headquarters later this year, which is expected to reduce our fixed cost base by approximately 600,000 on an annualized basis. Additionally, our multi-year initiative to transition production to lower cost third party contract manufacturers is underway with meaningful transfers initiated in the first quarter. Full implementation is expected to be completed in 2027, And this transition will drive gross margin improvement as we progress through the year and into next year. Turning now to our commercial performance in the first quarter, starting with our glaucoma business. In total in the first quarter, we sold 15,500 probes versus 13,900 in the prior year period. This represented growth in the competitive glaucoma market which is a testament to the strength of our value proposition and physician loyalty to the G6 platform. Utilizing MedScout to target G6 adopters with average utilization continues to be our most effective strategy. Our MedScout platform continues to be a valuable tool for targeted outreach. Here we are focused on two groups. The first are those who already have G6 systems and are average users, And the second are high volume facilities that do not currently perform micropulse procedures. With the mid-utilization accounts, we focus on education, working with physicians to expand their patient selection criteria to treat patients earlier in the glaucoma severity continuum. With the second group, the focus is also on education, with particular focus on the efficacy of TLC patients who have already had a mixed procedure. Speaking of mixed, the Medicare LCD introduced last year are creating tailwinds for us, including expanding our target segments and supporting earlier adoption of G6 therapy for both the mild to moderate and post-mixed glaucoma patients. Combined with our updated suite speed, procedural techniques, and clinical data demonstrating the IOP lowering efficacy of the procedure. We believe we are well positioned to drive sustainable growth in this business throughout 2026. Pricing discipline also supported our Q1 performance as our ASP increases on both probes and systems in the U.S. carried over from 2025. This is indicative of enhanced recognition of the value proposition of our procedure and the growing recognition among ophthalmologists of G6 as a safe, effective alternative to incisional surgery. On the system side, we sold 24 G6 units in the quarter, in line with the prior year period. Unit placement has remained steady year over year, and physician relocations continue to drive dedicated system acquisitions at new practice sites. This steady growing install base provides a solid foundation for driving incremental probe utilization as we execute on our commercial strategy. Turning to our international glaucoma business, performance was mixed across regions as we navigated a number of operational and macroeconomic challenges. In Europe, Middle East, and Africa, we conducted multiple high-impact G6 symposiums and clinical trainings that reinforced our value proposition in multiple countries including Russia, Saudi Arabia, Egypt, and Poland. The UK registry product is moving forward as planned. The engagement from the clinical community has been strong, and we believe this positions us well for continued adoption in the region. In Germany, G6 ProCells remain stable with existing customers, and we believe our German market utilization is well positioned to absorb incremental volume as we worked through distributive transitions in the country. In Asia, we navigated ongoing volatility throughout the year. Demand of our products remained stable, but challenging economic conditions created some headwinds for our commercial execution. In Japan, we restored G6 probe inventory following prior regulatory challenges, which was a meaningful positive development for the region. However, macro headwinds from a weekend continue to persist, and we are monitoring the macro environment closely and expect conditions to improve over time. In Latin American Canada, we saw stable G6 Pro performance with uses being led by Peru and Mexico. Additional focus is being placed on Canada, Brazil, and Argentina to leverage the sizable install base of G6 systems. Turning to our retina portfolio, our strategic priorities remain focused on three areas. Driving the U.S. Pascal upgrade cycle, expanding international Pascal adoption, and obtaining regulatory clearances for our next generation platforms to leverage our established global distribution footprint. In the United States, surgical retina was a standout performer driven by continued strong demand for SLX TX, and LIOs. This category exceeded expectations for the quarter and demonstrated the underlying strength of our surgical platforms. Medical Rampant continued to perform strongly, particularly Pascal, benefiting from a robust pipeline of leads generated at the American Academy of Ophthalmology annual meeting in Q4. It is worth noting that Pascal continues to be firmly established as our flagship system in the U.S. market. We are seeing a consistent trend of existing Pascal customers upgrading to our newer platforms, and newly graduating ophthalmologists are selecting Pascal systems due to our efforts to ensure Pascal is the preferred system used in university and training programs. On the commercial front, we announced an important partnership with iPro GPO in early April. This agreement expands access to our retina laser portfolio to their more than 1,800 members, including ophthalmology practices, ambulatory surgery centers, and hospitals in the United States. Through this partnership, IPRO GPO members receive preferred pricing on our Pascal laser platform, IQ532 and IQ577 lasers, and the Oculite TX laser. This adds to our existing Cyclo-G6 contract with iPro GPO and represents a significant commercial milestone. The on-contract status reinforces the credibility of our technology, enables a more streamlined sales process for our team and customers, while expanding the addressable market for our retinal laser systems. We believe this partnership will be an important driver of retina systems placements in the coming quarters. Turning to international retina, In Europe, Middle East, and Africa, lack of MDR approval continues to constrain Pascal growth in Europe, mildly offset by the launch of the new Iridex Pascal in Africa. In Germany, endoprobe sales are gaining traction in line with plans as we take over business from our previous distributor. In Asia, China experienced some challenges during the quarter, including endoprobe supply constraints that materially impacted sell-through We have been working with our manufacturing partners, and these issues should be resolved this month. In Japan, large Pascal orders were deferred to Q2 due to regulatory delays associated with electrical safety testing. This is a timing item, not a demand concern, and we expect the order to ship in the current quarter. In Latin America and Canada, Pascal and medical retina cells came below expectations, impacted in part by seasonal summer holiday slowdown. As we look ahead to the remainder of 2026, our strategic priorities remain clear and focused. For the full year of 2026, we are reaffirming our revenue guidance of $51 million to $53 million. As a reminder, this guidance excludes revenue from the Middle East region and represent approximately 1 to 5 percent pro forma growth versus 2025. I am proud of the sustained execution we have demonstrated across all four of our 2025 commitments, revenue growth, cost reduction, positive adjusted EBITDA, and positive cash flow from operations in Q4. The foundation is set for continued progress in 2026. Now I'll hand the call to Romeo to discuss our financial results.