
Iridex Reports Second Quarter 2025 Financial Results This report details Iridex Corporation's second quarter 2025 financial performance, highlighting revenue growth, expense reductions, and progress towards profitability Executive Summary Iridex's Q2 2025 results highlight a strategic shift to profitability, marked by revenue growth, reduced operating expenses, and consistent positive adjusted EBITDA Second Quarter 2025 Overview Iridex Corporation, a global leader in laser-based medical systems, announced its financial results for the second quarter ended June 28, 2025 - Iridex Corporation, a worldwide leader in laser-based medical systems for glaucoma and retinal diseases, reported financial results for the second quarter ended June 28, 20251 CEO Commentary CEO Patrick Mercer highlighted transformational progress towards profitability, driven by revenue growth, reduced operating expenses, and positive adjusted EBITDA - President and CEO Patrick Mercer highlighted transformational progress towards profitability, achieving year-over-year revenue growth, reduced operating expenses, and breakeven or better adjusted EBITDA for the third consecutive quarter3 Second Quarter 2025 Financial Highlights Q2 2025 financial highlights include 7% year-over-year revenue growth, reduced operating expenses, and positive non-GAAP adjusted EBITDA, reflecting a strategic shift to profitability Revenue Performance Q2 2025 revenue saw a 7% year-over-year increase, primarily driven by higher Pascal system sales and medical/surgical retina system sales Q2 2025 Revenue Performance | Metric | Q2 2025 | YoY Growth | Sequential Growth (vs Q1 2025) | | :----------------------- | :---------- | :--------- | :------------------------------- | | Total Revenue | $13.6 million | 7% | 14% | | Cyclo G6® product family revenue | $3.3 million | Flat | N/A | | Retina product revenue | $8.0 million | 10% | 21% | - Growth was primarily driven by higher Pascal system sales and medical/surgical retina system sales, partially offset by a decrease in surgical retina probe sales. Other revenue increased by $0.2 million due to service revenue4 Cyclo G6 Product Sales | Product | Q2 2025 Units Sold | Q2 2024 Units Sold | Change | | :------------------ | :----------------- | :----------------- | :----- | | Cyclo G6 probes | 13,100 | 15,100 | -2,000 | | Cyclo G6 Glaucoma Laser Systems | 35 | 28 | +7 | Profitability and Expenses Profitability metrics for Q2 2025 show a decrease in gross margin but a significant reduction in operating expenses, leading to a lower net loss and positive adjusted EBITDA Q2 2025 Profitability Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :---------------------- | :---------- | :---------- | :---------- | | Gross Profit | $4.7 million | $5.1 million | -$0.4 million | | Gross Margin | 34.5% | 40.7% | -6.2 percentage points | | Operating Expenses | $5.6 million | $7.8 million | -$2.2 million (-28%) | | Net Loss | $1.0 million | $2.7 million | -$1.7 million | | Net Loss Per Share | $0.06 | $0.16 | -$0.10 | | Non-GAAP Adjusted EBITDA | $21 thousand | -$1.7 million | +$1.7 million | - Gross margin decrease was primarily due to increased overall manufacturing costs, product mix weighing toward capital system sales, and geographic mix weighting toward international sales, partially offset by increases in ASPs5 - Operating expense reduction was mainly due to expense reduction measures taken in late 20247 Cash and Liquidity Cash and cash equivalents decreased slightly in Q2 2025, reflecting ongoing operational activities Cash and Cash Equivalents | Metric | As of June 28, 2025 | Change in Q2 2025 | | :---------------------- | :------------------ | :---------------- | | Cash and Cash Equivalents | $6.8 million | -$0.4 million | Detailed Financial Results This section details Iridex's Q2 2025 financial performance, covering revenue drivers, gross profit, and the impact of expense reduction on operating results and net loss Revenue Analysis A detailed breakdown of Q2 2025 revenue highlights growth in total revenue, with specific contributions from the Cyclo G6 product family and service revenue Q2 2025 Revenue Breakdown | Revenue Category | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :----------------------- | :-------------------- | :-------------------- | :--------- | | Total Revenue | $13.6 | $12.6 | +7% | | Cyclo G6 product family | $3.3 | $3.3 | Flat | | Other revenue (service) | $2.2 | $2.0 | +$0.2 million | - Revenue growth was primarily driven by higher Pascal system sales and medical/surgical retina system sales4 Gross Profit and Margin Analysis Analysis of Q2 2025 gross profit and margin reveals a decline attributed to increased manufacturing costs, product mix shifts, and geographic sales weighting Q2 2025 Gross Profit and Margin | Metric | Q2 2025 | Q2 2024 | Change | | :----------- | :---------- | :---------- | :----------------------- | | Gross Profit | $4.7 million | $5.1 million | -$0.4 million | | Gross Margin | 34.5% | 40.7% | -6.2 percentage points | - The decline in gross profit and margin was attributed to higher overall manufacturing costs, a product mix shift towards capital system sales, and a geographic mix weighting towards international sales, partially offset by higher Average Selling Prices (ASPs)5 Operating Expenses and Net Loss Q2 2025 operating expenses significantly decreased due to cost reduction measures, leading to a reduced net loss compared to the prior year Q2 2025 Operating Expenses and Net Loss | Metric | Q2 2025 | Q2 2024 | Change | | :------------------ | :---------- | :---------- | :---------- | | Operating Expenses | $5.6 million | $7.8 million | -$2.2 million (-28%) | | Net Loss | $1.0 million | $2.7 million | -$1.7 million | | Net Loss Per Share | $0.06 | $0.16 | -$0.10 | - The significant reduction in operating expenses was a direct result of expense reduction measures implemented in late 20247 Non-GAAP Adjusted EBITDA Iridex achieved positive non-GAAP adjusted EBITDA for Q2 2025, marking the third consecutive quarter of improvement towards profitability Q2 2025 Non-GAAP Adjusted EBITDA | Metric | Q2 2025 | Q2 2024 | Improvement | | :----------------------- | :---------- | :---------- | :------------ | | Non-GAAP Adjusted EBITDA | $21 thousand | -$1.7 million | +$1.7 million | - This marks the third consecutive quarter of positive non-GAAP adjusted EBITDA, indicating progress towards profitability6 2025 Financial Outlook Iridex aims for cash flow breakeven and positive adjusted EBITDA in 2025, with revenue consistent with 2024 levels - The Company plans to achieve cash flow breakeven and positive adjusted EBITDA in 20259 - Revenue generation for 2025 is expected to be consistent with 20249 Company Information This section provides background on Iridex, investor engagement details, and legal disclaimers for forward-looking statements and non-GAAP financial measures About Iridex Corporation Iridex Corporation is a global leader in laser-based medical systems for ophthalmology, specializing in treatments for glaucoma and retinal diseases - Iridex Corporation is a worldwide leader in developing, manufacturing, and marketing innovative laser-based medical systems, delivery devices, and consumable instrumentation for the ophthalmology market11 - The company's proprietary MicroPulse® technology provides safe, effective, and proven treatment for targeted sight-threatening eye conditions like glaucoma and diabetic macular edema (DME)11 - Iridex products are sold in the United States through a direct sales force and internationally primarily through a network of independent distributors into more than 100 countries11 Webcast and Conference Call Information Details for accessing the Q2 2025 earnings conference call and webcast are provided for investor convenience - Iridex's management team hosted a conference call on August 12, 2025, at 2:00 p.m. PT / 5:00 p.m. ET, with live and recorded webcast access available on the company's website10 Safe Harbor Statement This statement advises investors that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - This announcement contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially from those described13 - Investors are advised to review a detailed description of these and other risks in Iridex's most recent Annual Report on Form 10-K and other SEC filings. Forward-looking statements are made as of this date and will not be updated1314 Use of Non-GAAP Financial Information This section clarifies the use and definition of non-GAAP financial measures, specifically Adjusted EBITDA, for evaluating company performance - The press release contains non-GAAP financial measures, specifically Adjusted EBITDA, which management uses to evaluate performance and make operating decisions15 - Adjusted EBITDA is defined as earnings before interest income and expense, taxes, depreciation, amortization, and share-based compensation, as well as excluding certain other non-GAAP adjustments like severance-related expenses and Nasdaq listing compliance plan expenses1618 - Non-GAAP results should be considered supplemental to GAAP results, with a detailed reconciliation provided in the financial tables at the end of the press release1517 Investor Relations Contact Contact information for investor relations is provided for inquiries regarding Iridex Corporation - Philip Taylor of Gilmartin Group serves as the investor relations contact for Iridex Corporation, reachable via investors@iridex.com18 Condensed Consolidated Financial Statements This section presents unaudited condensed consolidated financial statements, including statements of operations, balance sheets, and GAAP net loss to Adjusted EBITDA reconciliation Condensed Consolidated Statements of Operations Unaudited condensed consolidated statements of operations detail revenues, costs, expenses, and net loss for the three and six months ended June 28, 2025, and June 29, 2024 Condensed Consolidated Statements of Operations (Unaudited, In thousands, except per share data) | | Three Months Ended | | | Six Months Ended | | | :-------------------------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | | Total revenues | $ 13,571 | $ 12,631 | $ 25,467 | $ 24,392 | | Cost of revenues | 8,889 | 7,496 | 15,730 | 14,799 | | Gross profit | 4,682 | 5,135 | 9,737 | 9,593 | | Operating expenses: | | | | | | | Research and development | 871 | 1,501 | 1,747 | 3,037 | | Sales and marketing | 2,535 | 3,487 | 4,988 | 7,233 | | General and administrative | 2,216 | 2,785 | 4,147 | 5,253 | | Total operating expenses | 5,622 | 7,773 | 10,882 | 15,523 | | Loss from operations | (940) | (2,638) | (1,145) | (5,930) | | Other expense, net | (33) | (22) | (1,502) | (156) | | Loss from operations before provision for income taxes | (973) | (2,660) | (2,647) | (6,086) | | Provision for income taxes | 21 | 19 | 33 | 57 | | Net loss | $ (994) | $ (2,679) | $ (2,680) | $ (6,143) | | Net loss per share: | | | | | | | Basic | $ (0.06) | $ (0.16) | $ (0.16) | $ (0.38) | | Diluted | $ (0.06) | $ (0.16) | $ (0.16) | $ (0.38) | | Weighted average shares used in computing net loss per common share: | | | | | | | Basic | 16,793 | 16,287 | 16,760 | 16,270 | | Diluted | 16,793 | 16,287 | 16,760 | 16,270 | Condensed Consolidated Balance Sheets Unaudited condensed consolidated balance sheets present assets, liabilities, and stockholders' equity as of June 28, 2025, and December 28, 2024 Condensed Consolidated Balance Sheets (In thousands) | | June 28, 2025 | December 28, 2024 | | :------------------------------------ | :-------------- | :---------------- | | ASSETS | | | | Current assets: | | | | Cash and cash equivalents | $ 6,778 | $ 2,387 | | Accounts receivable, net | 10,030 | 8,394 | | Inventories | 8,435 | 10,817 | | Prepaid expenses and other current assets | 1,625 | 1,964 | | Total current assets | 26,868 | 23,562 | | Property and equipment, net | 40 | 115 | | Intangible assets, net | 1,144 | 1,307 | | Goodwill | 965 | 965 | | Operating lease right-of-use assets, net | 1,295 | 1,792 | | Other long-term assets | 1,273 | 1,394 | | Total assets | $ 31,585 | $ 29,135 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities: | | | | Accounts payable | $ 5,749 | $ 7,594 | | Accrued compensation | 1,861 | 1,672 | | Accrued expenses | 584 | 477 | | Convertible note payable, current | - | 1,734 | | Other current liabilities | 2,101 | 1,812 | | Deferred revenue, current | 2,269 | 2,176 | | Operating lease liabilities, current | 1,145 | 1,094 | | Total current liabilities | 13,709 | 16,559 | | Long-term liabilities: | | | | Deferred revenue | 7,587 | 8,350 | | Operating lease liabilities | 248 | 811 | | Convertible note payable | 3,675 | 1,004 | | Other long-term liabilities | 307 | 314 | | Total liabilities | 25,526 | 27,038 | | Stockholders' equity: | | | | Series B convertible preferred stock | 6,000 | - | | Common stock | 174 | 174 | | Additional paid-in capital | 90,587 | 89,881 | | Accumulated other comprehensive (loss) income | (13) | 51 | | Accumulated deficit | (90,689) | (88,009) | | Total stockholders' equity | 6,059 | 2,097 | | Total liabilities and stockholders' equity | $ 31,585 | $ 29,135 | Reconciliation of GAAP Net Loss to Adjusted EBITDA This table provides a reconciliation of GAAP net loss to non-GAAP Adjusted EBITDA, detailing adjustments for non-cash and non-recurring items Reconciliation of GAAP Net Loss to Adjusted EBITDA (In thousands) | | Three Months Ended | | | Six Months Ended | | | :---------------------------------------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | | GAAP net loss | $ (994) | $ (2,679) | $ (2,680) | $ (6,143) | | Interest income | (14) | - | (21) | (8) | | Other expense | 48 | 23 | 1,524 | 164 | | Provision for income taxes | 21 | 19 | 33 | 57 | | Nasdaq listing compliance | 152 | - | 152 | - | | Depreciation and amortization | 378 | 369 | 759 | 772 | | Stock-based compensation | 257 | 419 | 470 | 813 | | Severance related expense (for head count reduction) | 173 | 161 | 199 | 189 | | Adjusted EBITDA | $ 21 | $ (1,688) | $ 436 | $ (4,156) | - Adjusted EBITDA is calculated by adding back interest income, other expense, provision for income taxes, Nasdaq listing compliance expenses, depreciation and amortization, stock-based compensation, and severance-related expenses to GAAP net loss25