IRIDEX (US:IRIX)2023-08-11 00:33Financial Data and Key Metrics Changes - Total revenue for the second quarter of 2023 was $12.9 million, a decrease of approximately 7% compared to the same period last year, primarily due to declines in surgical and medical retina revenue and reduced royalty income from expired patents [6][48] - Gross profit for the second quarter was $5.4 million, down from $6.3 million in the prior year, with gross margin declining to 41.7% from 45.6% [22][48] - The net loss for the second quarter was $2.8 million, or $0.17 per share, compared to a net loss of $2.2 million, or $0.14 per share, for the same period in 2022 [50] Business Line Data and Key Metrics Changes - Revenue from the Cyclo G6 product family increased by 5% year-over-year to $3.7 million, with 15,500 probes sold, representing a 9% revenue growth on a 4% unit growth [21][37] - Retina product revenue declined to $6.9 million from $7.5 million in the prior year, attributed to macroeconomic uncertainties and a high interest rate environment [44][49] - Other revenue, including royalties and services, decreased by 15% to $2.3 million, primarily due to reduced royalty revenue from expired patents [49] Market Data and Key Metrics Changes - The company experienced lengthening sales cycles for capital equipment amid rising interest rates, although recent trends indicate stabilization in customer behavior [18][25] - The installed base of Cyclo G6 systems increased by 41 units in the quarter, with expectations for unit sales to range from 61,000 to 63,000 for the year [33][70] Company Strategy and Development Direction - The company aims to enhance its long-term growth through differentiated clinical value propositions in non-incisional glaucoma treatments and the launch of updated retina laser platforms [7][44] - Key initiatives include educating clinicians on updated dosing recommendations and targeting comprehensive ophthalmologists to increase adoption of glaucoma treatments [11][13] - The company is focused on preserving its cash runway while executing growth strategies, with plans to reduce operating expenses and inventory [20][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the second half of the year may align more closely with expectations, as deferred orders from the previous quarter are expected to materialize [25] - The company is optimistic about the potential for growth in the glaucoma market, despite current mid-single-digit growth rates [34][80] - Management acknowledged the challenges in driving probe utilization but expressed confidence in the effectiveness of their educational initiatives and clinical evidence [27][88] Other Important Information - The company has adjusted its full-year revenue guidance to a range of $55 million to $57 million, down from a previous expectation of $57 million to $59 million [70] - The company is in the final stages of designing a large-scale multicenter prospective clinical trial to support the MicroPulse TLT treatment for moderate stage glaucoma patients [43] Q&A Session Summary Question: What is the outlook for the second half of the year? - Management indicated that orders deferred in the previous quarter are expected to come in, leading to a more positive outlook for the second half of the year [25] Question: How does the company plan to increase probe utilization? - The focus is on improving efficacy and safety through education and clinical evidence, which is essential for driving adoption among clinicians [27][88] Question: What are the expectations for the balance sheet and profitability? - Management emphasized ongoing efforts to reduce inventory and operating cash usage, with a focus on achieving profitability in the near future [79][80]