Sight Sciences, Inc.

Good day and thank you for standing by. Welcome to the Sight Sciences second quarter 2026 earnings results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your phone and you will hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Tripp Taylor with Investor Relations. Please go ahead.

Thank you for participating in today's call. Presenting today are Site Sciences co-founder and chief executive officer, Paul Badawi, and chief financial officer, Jim Rodberg. Also in attendance is Site Sciences Chief Operating Officer, Ali Bauerlein. Earlier today, Site Sciences released financial results for the second quarter ended June 30th, 2026 and raised its revenue guidance and lowered its adjusted operating expense guidance for full year 2026. A copy of the press release is available on our website at investors.sitesciences.com. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements, including statements about our projected financial results, including revenue and adjusted operating expenses, our product development plans, market acceptance of our products, changes in the reimbursement environment, and our ability to drive profitability and achieve cash flow breakeven. These statements are based on plans and expectations as of today. In addition, actual results could differ materially from projected results due to a number of risks and uncertainties. For a discussion of factors that may affect the company's future financial results in business, please refer to the earnings release issued prior to this call in the company's most recent SEC filings. We undertake no obligation to publicly update or revise any forward-looking statements except as required by law. Also on this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. We believe these non-GAAP financial measures are important indicators of the company's operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. To your earnings release, for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as additional information about our reliance on non-GAAP financial measures. I will now turn the call over to Paul.

Thanks, Tripp. Good afternoon, and thank you for joining us. We delivered a strong second quarter, with revenue growing 20% year over year. Our highest growth rate since 2023 and our second consecutive quarter of double digit growth. This performance reflected growth in both segments with interventional dry eye achieving record revenue as tier care adoption scaled in the reimbursed market and interventional glaucoma delivering its highest year over year growth rate since the fourth quarter of 2024. Importantly, we achieved this growth while significantly improving operating results and meaningfully reducing cash usage. As a result of this strong performance, we are raising our full year 2026 revenue guidance and reducing our adjusted operating expense guidance. At Sight Sciences, we are focused on advancing interventional eye care with innovative, minimally invasive technologies that address two of the most prevalent diseases in the anterior segment of the eye, glaucoma and dry eye disease. Across both categories, there is a growing interventional mindset, and we believe providers are increasingly seeking procedure-based treatment options that comprehensively address the underlying causes of disease in a minimally invasive manner and fit naturally into clinical workflows. We believe Site Sciences is differentiated by our focus on enabling earlier procedure-based care across these two large and complementary disease states. Both Omni and TierCare were purpose-built to support this evolution toward minimally invasive treatment options for providers and patients. Beyond the individual growth opportunities of each platform, we see a broader strategic advantage in what we call the intersection of intervention. Glaucoma and dry eye disease often affect the same patients, are treated within the same practices and fit within similar procedural workflows. This overlap creates opportunities to deepen customer relationships, increase account utilization, improve the patient care pathway, and drive durable growth while reinforcing site sciences leadership in interventional eye care. Now, turning to our segments, starting with interventional dry eye. We are pioneering the reimbursed interventional dry eye treatment market. We delivered another strong quarter with record revenue of $2.7 million, nearly doubling from the first quarter of 2026. As we build this significant category, the commercial signals continue to strengthen. We are also proud to have added approximately 4.1 million patient lives in the second quarter, during which certain insurance plans have published fee schedules in their provider portals that align with the updated Medicare pricing established in certain jurisdictions last year. This has increased our care care patient lives with access to appropriate reimbursement from approximately $10.4 million to $14.5 million. Based on this revenue and reimbursement momentum, we are raising our interventional dry eye guidance to a range of $9 to $11 million, up from the previous range of $6 to $8 million. The continued strong performance in our dry eye business was driven by strength in two key metrics. Account growth and utilization. Ordering accounts increased from 96 in the first quarter to 176 in the second quarter and included a healthy combination of new and reordering accounts. These accounts purchased more than 3,000 smart lids in the quarter, more than double our first quarter volumes. Importantly, even as the active account base nearly doubled, Average utilization also increased to approximately 18 smart lids per active account in the second quarter, up from 16 in the first quarter. We also saw meaningful evidence of the value created by the overlap between our two interventional segments. In the second quarter, approximately two-thirds of smart lids volume came from accounts that are also interventional glaucoma customers, and those overlapping accounts had significantly higher utilization and our interventional dry eye only accounts. This reinforces our view that our established interventional glaucoma relationships can help accelerate tear care adoption, deepen customer engagement and create a more efficient path to growth in interventional dry eye. The commercial traction we are seeing with tear care reinforces our conviction in the reimbursed procedural dry eye category. While we remain in the early stages of developing this market, We believe we are building a durable and efficient recurring revenue business model that can scale across additional territories as market access expands. Our commercial strategy remains focused on driving adoption in accounts with a history of significant dry eye prescription activity, coupled with an interventional mindset where we believe tier care can fit naturally into practice workflow and patient care. We added sales and clinic support headcount in the second quarter and will continue making investments in our commercial infrastructure to strengthen our team and equip providers with the support needed to adopt and grow their interventional dry eye practices. Over time, we see meaningful runway for growth as practices continue building patient funnels and integrating TierCare into their workflows. The adoption we are seeing also reflects TierCare's clinical outcomes, ease of use, Office Workflow Compatibility, and Value Proposition for patients, providers, and payers. Expansion of our interventional dry ice segment to its full potential will be enabled by additional market access. We continue to advance this priority through productive dialogue with multiple MACs and continue to anticipate that additional payers will establish fee schedules and or coverage policies this year. At the same time, We remain focused on executing within the currently serviceable market already in front of us. We believe continued execution in these regions can drive meaningful growth with additional positive payer decisions serving as important accelerators. Considering the encouraging care care adoption trajectory, ongoing payer engagement, and differentiated clinical profile, We remain very well positioned to continue pioneering the development of the reimbursed interventional dry eye category and drive meaningful long-term growth in this business. Turning to interventional glaucoma, Omni remains foundational to our interventional eye care platform and a key reason we are well positioned as the interventional mindset continues to expand across both glaucoma and dry eye. Since commercialization, Omni has enabled us to build deep relationships with surgeons and practices by offering a proven, minimally invasive, implant-free procedure that fits naturally into the glaucoma treatment pathway. This established base of customers, along with successful clinical experiences, procedural credibility, and strong partnership, all support continued growth in interventional glaucoma while also strengthening our commercialization within interventional dry eye. In the second quarter, we achieved our fourth consecutive quarter of year-over-year growth, with revenue of $20.7 million, up 8% versus the same period in the prior year. Growth was broad-based, with strength across all key metrics, including increases in active accounts, volumes, utilization, and pricing. Ordering accounts reached an all-time high in the quarter and increased 3% year-over-year. Importantly, utilization returned to its highest level since the fourth quarter of 2024, when LCDs began to adversely impact MIGS volumes. We are encouraged by the progress in the first half of the year, and the underlying trends support our expectation for continued interventional glaucoma growth in the second half of 2026. As a result, we are narrowing to the high end of the range for our interventional glaucoma revenue guidance to $79 to $81 million, up from our previous range of 77 to 81 million. We are also pleased to highlight that in July, coverage of Omni and Scion expanded with the addition of approximately 25 million covered lives from Aetna, one of the largest health plans in the United States. Aetna now recognizes certain implant-free glaucoma procedures as medically necessary for mild to moderate open angle glaucoma when specified clinical criteria are met. Our market access team has worked diligently to establish broad payer access for canaloplasty and goniotomy enabled by Omni and Scion, and we have now secured access across all major national payers. Additionally, we are preparing for the launch of OmniUltra, our next generation technology following its recent FDA 510 clearance. OmniUltra includes meaningful advancements that were informed by surge in feedback and designed to capture the voice of the customer, improve the surgical experience, and give surgeons even greater confidence throughout the procedure. Two notable features are the ability to perform a complete single-pass canaloplasty and the addition of TruSync Plus technology. The single-pass canaloplasty was designed to improve surgical efficiency and minimize intraocular procedural steps, while TruSync Plus technology enables automated, controlled viscoelastic delivery during both advancement and retraction of our microcatheter. We believe OmniUltra is an important enhancement within our glaucoma portfolio with the potential to deepen engagement with customers while reinforcing our leadership position in implant-free mix. Looking ahead, our interventional glaucoma strategy remains focused on driving growth and penetration in the combo cataract market while continuing to develop the standalone market. In combo cataract, We are focused on adding new surgeons, increasing utilization across our customer base, and continuing to take share with a differentiated implant-free technology. In standalone, our market development work continues to focus on helping practices implement a repeatable interventional glaucoma activation workflow. This workflow was designed with the cataract workflow in mind, a familiar and effective model for practices, and is intended to help move the standalone opportunity from physician education to practical activation. Over time, we believe this can help providers identify appropriate patients, integrate the procedure into clinic operations, and build more consistent adoption. The standalone market remains a large under-penetrated opportunity, and we believe the work we have done is beginning to contribute to growth today and is an important step toward expanding the role of interventional glaucoma in the treatment algorithm. To close, we delivered a strong second quarter with growth in both interventional segments, continued scaling care care in the reimbursed dry eye market, meaningfully improved operating results, and raised our full year 2026 revenue guidance while reducing our adjusted operating expense outlook. As we move through the remainder of the year, we remain focused on advancing both of our growing interventional platforms and capitalizing on the strategic opportunity created by the intersection of intervention. We will continue investing in growth while maintaining the operational and financial discipline necessary to improve operations and advance toward cash flow break even. We believe this balanced approach positions site science as well to drive sustainable growth and create long-term value for patients, providers, payers and shareholders. With that, I'll turn the call over to Jim to review our second quarter financial results and updated 2026 guidance in more detail.

Thanks, Paul. In the second quarter, total revenue was $23.4 million, a 20% increase compared to the prior year period, driven by growth in both of our interventional segments. This was our strongest quarterly revenue growth rate in three years. Interventional glaucoma revenue was $20.7 million, an increase of 8% compared to the prior year period, driven by increased omni-volume, a record number of active accounts, and stronger utilization. Interventional drive revenue was $2.7 million, nearly doubling from $1.4 million in the first quarter, driven by growth in ordering accounts and increased utilization within those accounts. Gross margin was 91%. up from 85% in the prior year period. The increase was primarily driven by a one-time impact of $1.4 million from tariff refunds received in the second quarter. Interventional glaucoma gross margin was 92%, which included a $1.2 million benefit from tariff refunds in the quarter. Excluding tariff refunds, interventional glaucoma gross margin was 86%, in line with the prior year period. Interventional Dry Eye Gross Margin was 85%, which included a 0.1 million benefit from tariff refunds in the quarter. Excluding tariff refunds, Interventional Dry Eye Gross Margin was 80%, up significantly from 38% in the same period in the prior year, primarily due to higher average selling prices. Total operating expenses were 25.3 million, a decrease of 11% compared to 28.3 million in the same period in the prior year. The decrease was driven primarily by lower personnel-related expenses and stock-based compensation. As a reminder, we conducted a reduction in force in the third quarter of 2025, and this was the third full quarter operating under our lower cost structure. Adjusted operating expenses were $22.3 million, down 8% compared to $24.4 million in the same period in the prior year. Net loss was $4.4 million, a 63% improvement from $11.9 million in the same period in the prior year. Net loss per share was 8 cents compared to 23 cents in the second quarter of 2025. We ended the quarter with $79.8 million of cash and cash equivalents compared to $85 million at the end of the first quarter. Cash used in the quarter included a one-time $5.4 million payment related to a success fee paid following the final judgment in our litigation case against Alcon, partially offset by $1.6 million received in tariff refunds. Excluding these one-time items, cash used in the quarter was $1.4 million, down 81% from $7.3 million in the second quarter of 2025. This reflects meaningful improvement and underscores the progress we are making toward cash flow breakeven. At the same time, we will continue making investments to drive growth in both interventional dry eye and interventional glaucoma. We ended the quarter with $40 million of debt excluding unamortized discount and debt issuance costs. With the operating discipline and cost structure to support growth in place, we believe this positions us to achieve cash flow breakeven without the need to raise additional equity capital. As a reminder, with respect to the Alcon patent litigation case, the final judgment from April confirmed past damages and interest totaling approximately $55 million, as well as ongoing royalties of 10% of Hydra's revenue through patent expiration. As expected, Alcon filed an appeal, and we are continuing to progress through the remaining legal and appellate processes. To date, no cash has been received, and we remain confident in our position while the judicial process runs its course. Moving to our revenue outlook for full year 2026, we are raising revenue guidance to 88 to 92 million, which reflects growth of 14 to 19% compared to 2025 versus a prior guidance range of 83 to 89 million. This includes revenue of 79 to 1 million representing growth of 4 to 7% and interventional dry eye revenue of 9 to 11 million compared to 1.6 million in the prior year. Our updated guidance reflects strong first half performance, the continued scale up of interventional dry eye, and our focus on disciplined execution. Turning to the third quarter, our updated guidance implies total revenue growth in the mid to high teens compared to the prior year. We expect interventional glaucoma to grow in the mid-single digits, reflecting continued growth against a tougher prior year comparison and historically lower procedural trends in Q3. We expect interventional dry eye revenue to be approximately $3 million, representing continued sequential growth following the significant step-up achieved in the second quarter. In addition to increasing revenue guidance, we are reducing our full year 2026 adjusted operating expense guidance to $92 to $94 million, which reflects an increase of 5 to 7% compared to 2025. This range compares to our prior guidance range of $93 to $96 million. This updated outlook reflects the continued progress we are making to improve the efficiency of our operating structure while driving growth in both segments. As we move through the second half of 2026, we will continue investing in the growth opportunities in interventional dry eye and interventional glaucoma while maintaining expense discipline. Overall, we delivered strong second quarter performance, highlighted by 20% total revenue growth, continued momentum in both segments, and meaningful improvement in cash usage. We look forward to building on this progress as we scale interventional dry eye, continue strengthening interventional glaucoma, and manage the business to drive sustainable growth, improve profitability, and progress toward cash flow breakeven. Operator, please open the line for questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone. and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Adam Mader with Piper Sandler. Your live is live.

Hi, good afternoon. Thank you for taking the questions and congrats on the progress. A couple of different places I could take this, but I'll ask one on glaucoma, one on dry eye. Just maybe starting with glaucoma, we'd love just to kind of better understand the interventional glaucoma market dynamics. You put up good growth in Q1, you put up good growth in Q2. I know there's a little bit of a comps dynamic in the back half of the year that you're facing, but As we think about underlying market growth, it feels like this has been potentially like the healthiest the market's been for some time. And so would you agree with that? And how do you think about like the underlying market trends going forward? And then I had a follow up. Thanks.

Yeah. Hi, this is Paul. We agree. The interventional glaucoma market and the interventional dry eye market, there's a growing interventional mindset in eye care generally, certainly in glaucoma. We do feel like we are finally operating in a stable environment. Our team is very excited about that. I think they've been doing a great job. We believe the MIGS market is back in growth mode, maybe mid-single digits. Our commercial priorities remain the same. to continue to grow and combo Cataract with taking share and expanding the market and adding new surgeons and developing the standalone market where we have a dedicated team that is implementing a playbook that we feel is beginning to work and contribute to growth. So we feel like the interventional market is stable this year. The outlook for 2027 remains stable and we're very excited to be operating within that kind of stable environment where we can deliver commercial excellence.

Thanks, Paul. That's great to hear. And maybe switching over to dry eye, I guess I, you know, obviously a good quarter, wanted to ask about, you know, the reimbursement constructs and the payer coverage. And so multi-part question, but the 4 million covered lives, I think, that were added in Q2 from the various payers, When did those come online? Did they impact Q2 at all? When do you expect to see an impact from those payer wins? And then, you know, as you kind of progress into the back half of the year, it does sound like you think you're going to make more progress. Maybe just frame kind of what's embedded in the updated dry eye guidance for, you know, payer coverage. Can you get there with what you have today or do you need to onboard more payers? Thank you.

Yeah, thanks, Adam. And I'll take those questions. And, you know, first of all, you know, we were very happy to see that we had some of the Medicare Advantage plans in the quarter put fee schedules into their provider portals. And we have started to see some of our providers build those plans and get successfully paid for those services. Impact in Q2 was very modest from those plans. We can't directly tie it out or break it out only because our customers are doing the billing, not us. But our feel is that we were still very much early in that process during the quarter, and most accounts, just like with traditional Medicare fee-for-service, they really wanted to test it out themselves and see a handful of claims get paid. Minimal impact to Q2 should be a growing impact going into the back half of 2026. And that was something that we took into account when we looked at guidance. In terms of other payers and additional wins in the back half of the year, we took the same approach that we've taken all year long in setting Revenue Guidance for IDE, and we did not assume incremental market access wins into that revenue assumption. So while we still feel like there is a pathway and that we should see additional payers establish either fee schedules or coverage policies in the back half of the year, we are not including those in the revenue guidance at this point.

That was very clear. Thanks, Allie.

Yeah. One moment for our next question.

Our next question comes from the line of Nelson Cox with Lake Street Capital Markets. Your line is live.

Hey, congrats, guys, on all the progress this quarter. I wanted to start with the dry-eyed business. You nearly doubled your active accounts this quarter, and I had a nice step up in utilization. Last quarter, I think you mentioned something about a handful of accounts. I think it was around 10% were driving kind of a larger share of the volume. So with that base broadening, that FAP, are you kind of starting to see volume spread out across your new account? Are you still kind of seeing top accounts doing a lot of heavy lifting?

Yeah, thanks. Great question. And we really are seeing traction across a variety of accounts now and seeing consistent utilization. Of course, as you would expect in any business, there are those top 10 accounts that are continuing to perform at a much higher utilization than other accounts. And that continued in this quarter. But we're really happy with the durable repeatability that we've seen with accounts where they really are integrating this into their practice workflow across all of the accounts. So I think in general, while there is some level of higher utilization in a handful of accounts, really across the board utilization is performing very nicely. And we're seeing those accounts stay in where they are reordering and building their tier care business line.

Great. That's helpful. And then I'm sorry if someone wanted to follow up on that.

Go ahead.

Okay. And then on Omni Ultra, congrats on the clearance there. I know the release The full U.S. launch is on track for Q4. Maybe just walk us through what happens between now and then and if we should expect any limited release with select surgeons first and maybe how you're thinking about pricing relative to edge. And then is there any ultra contribution baked into the guide this year at all? Or should we kind of view that as an upside thing?

Yeah, hi, Nelson. I'll take that one. This is Paul. Yeah, we're very excited to have finally received the clearance for Ultra. It's going to be a great product in the IG space. The single-pass canaloplasty and TruSync Plus technology is something that our customers have been wanting. We stay close with our surgeon customers, so as I stated in the prepared remarks, we do feel like OmniUltra captures the voice of the customer very effectively. So excited to launch it. As you said, the full launch we're targeting for AAO in a couple of months. But between now and then, we will be rolling out Ultra to some of our earlier users, earlier customers and close partners of the company. We obviously want to get as much feedback as we can on the product and procedure in advance of the full launch. So expect expect that over the coming months and we're the team is super excited about it. Our omni surgeons are super excited to give it a test run. We have done some early human testing OUS with the product so we feel we feel very confident about its usability and performance and looking forward to expanding that clinical use experience here in the US over the coming months and then the larger launch at the American Academy of Ophthalmology meeting later this year. We do expect beyond AAO for that kind of full launch to the broad market to kick in in 2027. So think of it in three stages. Kind of the early release now before AAO, the launch at AAO and expanding to that next group of surging customers, and then broad utilization and training in 2027.

Very helpful. Thank you guys for taking the questions and congrats on all the progress. Thank you.

One moment for our next question. Our next question comes from the line of Steve Lichtman with William Blair. Your line is live.

Thank you. Hi, everyone, and congratulations. I guess first on dry eye, I think, Paul, you mentioned ongoing dialogue with the other MACs. Can you give us any sense of how those are going and why that dialogue gives you confidence in more positive MAC movement by the end of this year?

Yeah, Steve, I can take that one. And, you know, we have continued to have good conversations across multiple MACs and other commercial payers as well. I think first and foremost, we always anchor on our clinical data. We invested heavily in the Sahara trial, and that Sahara trial was, you know, a very long head-to-head RCT versus the standard of care of a stasis. that also included a crossover and then a third phase to look at durability of treatment effect. And that is quite compelling clinical data in support of the procedure and showing the benefits. On top of that, we also have strong health economic data that shows how this is actually not only better for the patients from a clinical perspective, but also better for the payers because this can save the payers money over time versus traditional prescription eye drop. And so that is a compelling message to payers. What we really need to do to continue to make progress here is just continue to have patient and provider advocacy increase with payers to show that this is something that is important to to dry eye and should be a priority for them in terms of establishing either fee schedules or coverage policies depending on the payer. So really that's what we're focused on. We do believe that we have a pathway to establish either more fee schedules or coverage policies this year from payers and we'll continue to provide updates. I will say that, of course, you know, What payers do, timing of payers are outside of our control. So that's not completely something that we can predict, but we do feel good about the conversations that we're having, the engagement that we're having, and we'll continue to make progress on that as we progress. And we certainly feel good about the long-term ability for us to establish broad market access for tier care moving into 2027 and beyond.

Great. Thanks, Ali. And then just on the glaucoma side, you know, obviously, as we look at the first half, you outpaced the market. I'm wondering if you could sort of disaggregate that for us a bit on standalone versus combo cataract in terms of contribution of growth and also where standalone currently is as a percent of your total glaucoma revenue and where you think the market is now from a penetration perspective.

Hi, Steve. Yeah, we believe the standalone market is growing in terms of mix. I think historically we've stated, you know, we believe we're around. It's hard to be very prescriptive and exact because the claims data, you know, it's not just, you know, our technology within a certain code, within a standalone canalopathy code, for example. But we believe our mix was maybe mid-80s, combo cataract, mid-teens. We think that mix is shifting a bit more towards standalone as we focus on pseudophagic market development. We can see in the claims data that standalone claims overall are growing as a percentage of the overall mixed market. I think our share mix is growing faster than the mix of the overall market. But I think both general market standalone is growing and then our standalone mix is also growing and we believe faster than MarketMix.

Does that make sense? Yes, it makes sense. Thanks, Paul. Sure.

One moment for our next question.

Our next question comes from the line of Tom Stephen with CIFL. Your line is now open.

Great. Hey, everyone. Thanks for taking the questions and congrats on the nice print here. I'll start with a big picture question, you know, a bit OpEx related, but, you know, the business obviously has nice momentum, Qualcoma growing solidly, IG thematically in the early innings, obviously tier care, huge potential and off to a nice start. You know, so, Paul, maybe for you, talk about Your confidence in striking the right balance between spending discipline and supporting these key initiatives. Do you feel like your current OPEX plans near term and more importantly long term can support the upside potential of these efforts?

We do, Tom. I think we have a very good balance. I think we have a history of A history of solid execution, both focusing on growth of the business. We're here to grow. We're a growth med tech company, but also executing with discipline. I think the last couple of years, our rigorous execution was on full display. With the LCDs over the past few years, revenue stalled kind of flat. But it was a great, great time for us, Tom, to really go deep into our business and make it as efficient as possible. So those years when companies and teams are confronted with those kinds of challenges and they're forced to look really close and hard at the business, fine tune it and make it more efficient, that was just our reality and I think we did that very well. So today as we emerge, we said over the last few years we were flying a plane with half an engine. Today with IG back in growth, with IDE back in growth with an interventional mindset that's only growing with us being in two interventional categories with leading technologies with the synergies that are kind of proprietary to site because of the intersection of intervention. We believe we're flying a plane with two very strong engines right now. You couple that with excellence in operational discipline that we developed and fine-tuned over the past few years. We think we've struck a really good balance between growth and spend. I think it's on display today, and we're going to carry it forward over the coming years.

Got it. That's really encouraging. Thanks, Paul. Appreciate that. And then more of a near-term, very near-term question relative to my first question, but just on glaucoma in the third quarter, and apologies if this has been asked, struggling a couple calls, but I think the mid-single-digit year-over-year growth Jim that you mentioned implies roughly flattish sequential revs in the segment. Usually we see a sequential decrease in 3Q in ophtho and really medtech broadly. So what gives you guys, I guess, the confidence in achieving that level of maybe flattish, at least flattish sequential growth? and potentially or hopefully posting upside to that and what are kind of the key drivers in getting you there. Thanks again and congrats.

Yeah, thanks a lot, Tom. I mean, first of all, we're really proud of the team's execution here in the first half. We exit Q2 with a record number of active accounts, four quarters in a row of growth in interventional glaucoma and we expect that momentum to continue. Q3 last year was unseasonably strong across all of MedTech. And I think baked into our guide is a mix of the momentum we're seeing, the strength we're seeing in the underlying metrics, offset by potentially some of that seasonality. So we feel good about how we closed out the first half and going into Q3 with a lot of momentum, with a growing interventional mindset, and a team that has executed extremely well over the last four quarters. Fantastic. Thanks, Jim.

One moment for our next question.

Our next question comes from the line of David Saxon with Needham and Company. Your line is live.

Paul, Ali, Jim, thank you very much for taking our questions. This is Joseph on for David. We're starting off with dry eye. I'm just wondering if you guys have Have you seen any competitive response from Lipa Flow or ILUX just in terms of positioning of a cash pay procedure versus the reimbursement, reimbursed procedure of TierCare? And then apologies if you mentioned it, but I'm just curious, the utilization of TierCare in existing Omni accounts, how did that look in the quarter?

Yeah, happy to take both of those. Really, tier care is in a class of its own. We're the only ones with a RCT that shows head-to-head clinical data that supports market access and reimbursed care for this procedure. As you know, the other products on the market have separate reimbursement codes and operate within the cash pay only segment because they don't have The appropriate support for why this should be covered from a medical necessity perspective. So we really have not seen any new market dynamics from that perspective and really have been focused on market development in those areas where we do have fee schedules established. And because of that, it's really more about workflow and patient identification. Of course, we would like more Thank you. Thank you. and what we've already established on the interventional glaucoma side and we have been able to leverage those very strong relationships that have been created over many years primarily with the the Omni product and so that has helped us. I would say that a significant portion about two-thirds of the volume in the quarter was associated with accounts where we have some level of of interventional glaucoma engagement. And so we're very happy to see that. We do see higher utilization in those accounts versus what we see in an IDE-only account. And that has been a primary leverage point in these early days where market access is in that Medicare beneficiary population, which of course has a lot of synergies with that glaucoma base of patients. And, you know, of course, patients with glaucoma, there is a significant amount of overlap with dry eye in that population as well.

Okay, great. And then maybe just an update on the manufacturing transition to outside of China. Just wondering when that would be complete and maybe how should we think about the benefit of that once it's fully transitioned?

Yeah, hi, this is Jim. I could take that one. So expect that to be that transition and diversification of our supply chain to be complete here in the second half of 2026. Overall, this was not a cost reduction play. While we're always obviously looking to reduce costs and optimize our manufacturing, that wasn't the sole purpose of this. So we don't expect to see a significant impact to our already really strong margins.

Okay, that's clear. Thank you very much and congrats on the quarter. Thanks.

Our next question. Oh, one moment for our next question.

Our next question comes from the line of Joanne Wench with Citi. Your line is live. Good afternoon.

How are you doing?

Good.

And thank you. Excellent. And thank you for taking the question. When I'm rolling through this model, the number of active customers, new customers for glaucoma, significantly higher than what you've seen normally in the second quarter. Was there a particular promotion? Is this tied to particular reimbursement? Or is just a matter of, you know, post-LCD impacts utilization and practice and training has settled out?

Yeah, thanks, Joanne. I could take that. Nothing abnormal. I would say it's really good execution by our team, a market that is more stable and growing. Those are all the contributing factors to this. I think for us to exit Q2 with an all-time high in active accounts says a lot. The team's performing really well, and it says a lot about our technology and the execution of our sales force.

Yeah, Joanne, we've been at it for a while, as you know. We've maintained laser focus on our interventional categories, IG and IDE, and we've been executing commercially with focus in IG for many years. We've been iterating our market-leading implant-free IG technology for many years, and I think you saw the results of all of that focus and Strong Execution, and all of those results across the board.

Thank you. And my second question has to do with expenses. You've been excellent at managing your expenses over the last couple of quarters. Should we think of that as a continued trend, or are you at a steady flow go rate at this stage?

Yeah, Joanne, I can take that one. So as we look in the back half of 2026, we will be making additional investments in the business, largely in SG&A. There's a couple of key areas here. TierCare commercial buildup as we continue to scale there. We'll continue to make investments. TierCare market access to continue to build out our market access initiatives and progress in dry eye. And then continued investments within the glaucoma business on standalone as well as driving strong execution there. and we'll continue to make investments in our pipeline. So to answer your question, we will see an uptick in OpEx but we will be disciplined in our investments like we've shown over the last couple of years and we'll continue to have a mix of high return investments while also looking for cash flow break even and working towards that. All of that has been built into the guidance that we set But I think it's important to understand our investment philosophy remains looking for high return opportunities while being very financially disciplined and working towards cash flow breakeven.

Thank you so much.

Thanks.

This concludes the question and answer session. I would now like to turn it back to Paul Badawi for closing remarks.

Thank you for joining us today and for your continued interest in site sciences. We are encouraged by our second quarter performance and the momentum and progress we are making across the business. We remain focused on disciplined execution and look forward to updating you on our progress next quarter. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.