Core Insights - The Bank of Canada has conducted a survey indicating that many businesses are absorbing tariff costs due to competitive pressures and weak demand [1] Group 1: Economic Impact - Businesses are facing increased costs from tariffs, which they are unable to pass on to consumers due to competitive market conditions [1] - The survey highlights a significant concern among companies regarding the impact of tariffs on their profitability and pricing strategies [1] Group 2: Industry Response - Companies are adapting to the current economic environment by finding ways to manage and mitigate the financial burden of tariffs [1] - The findings suggest a potential shift in business strategies as firms navigate the challenges posed by both tariffs and subdued demand [1]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $37.9 million, a 28% increase from $29.5 million in Q1 2024, but a 6% decrease from $40.2 million in Q4 2024 [12][13] - The gross margin for Q1 2025 was 74.8%, up from 70.1% in Q1 2024 and 71.6% in Q4 2024, primarily due to lower LAL costs and a favorable product mix [14][15] - The company reported a GAAP net loss of $8.2 million, or $0.20 per share, compared to a loss of $9.1 million, or $0.25 per share, in Q1 2024 [17] Business Line Data and Key Metrics Changes - LAL revenue was $27.2 million in Q1 2025, up 37% year-over-year, representing 72% of total revenue, an increase from 67% in Q1 2024 [13][14] - LDD sales generated revenue of $9.4 million, an 8% increase year-over-year, but down 12% sequentially from Q4 2024 [14][15] - The number of LDDs sold in Q1 2025 was 73, an 11% increase from 66 units in Q1 2024, but down 12% from 83 units in Q4 2024 [14] Market Data and Key Metrics Changes - The company noted a year-over-year drop in LALs per LDD metric, attributed to macroeconomic headwinds and competitive disruptions [5][6] - The majority of respondents in a customer survey cited negative macroeconomic conditions as the primary reason for reduced LAL procedure volumes in Q1 [6][7] - The company received regulatory approval for its products in South Korea and expects UK approval in Q2 2025, indicating potential for market expansion [10][11] Company Strategy and Development Direction - The company is focusing on enhancing clinical education and marketing support to drive procedure growth and address workload challenges faced by practices [8][9] - A robust product innovation pipeline is in place, with recent approvals for low diopter LAL powers and software updates aimed at improving clinical outcomes [9][10] - The company aims to capture strategic placements to ensure sustained future growth while expanding its international presence [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q1 2025 due to macroeconomic pressures and competitive trialing but expressed confidence in the long-term growth trajectory of the company [21][22] - The company anticipates a recovery in LAL volumes in the second half of 2025, supported by ongoing clinical and marketing efforts [18][19] - Management emphasized the importance of the premium IOL market's structural shift towards customized solutions, which they believe will drive growth [22][23] Other Important Information - The company ended Q1 2025 with cash and short-term investments of $229.3 million, up from $207.2 million at the end of 2024, indicating a strong capital position [17][20] - Operating expenses for 2025 are projected to be between $150 million and $160 million, reflecting a 10% to 18% increase over 2024 [19][20] Q&A Session Summary Question: When might contributions from redoubled commercial efforts start to pay off? - Management expects to see impacts from these efforts in the back half of the year [26] Question: How are recent trends in April compared to earlier months? - Management noted that April showed signs of stabilization after a rough start, with improvements observed towards the end of the month [31] Question: What are the workload challenges mentioned? - Staffing challenges in practices were identified as a significant factor affecting workload, impacting the ability to perform more procedures [38] Question: Why is there an expectation for improvement in the second half of the year? - Management believes that as patients gain confidence in the economic environment, they will be more likely to proceed with cataract surgeries [40] Question: How does the company plan to support customers through education and marketing initiatives? - The company is compiling clinical and practice pearls to better educate customers on best practices and enhance their operational efficiency [45] Question: What is the company's strategy for international markets? - The company will decide on a market-by-market basis whether to go direct or partner with distributors, depending on local requirements [66] Question: What is the company's view on the potential saturation of the U.S. market? - Management does not see a saturation point for LAL adoption, citing the low current penetration rate and ongoing opportunities for growth [98]