On Wednesday, Staar Surgical (NASDAQ:STAA) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Staar Surgical reported strong financial performance in Q1 2026, with net sales of $93.5 million, reflecting a 19.6% year-over-year increase. This growth was driven primarily by strong sales in China and the U.S.
The company made substantial advancements in its strategic initiatives, including the successful launch of EVO plus ICL in China, normalization of inventory levels, and continued scaling of the Swiss manufacturing facility to supply lenses to China without import tariffs.
Staar Surgical achieved a significant milestone of surpassing 4 million ICLs sold globally, and it reported a meaningful improvement in profitability with adjusted EBITDA turning positive at $24.4 million, compared to a loss in the prior year quarter.
The company remains cautious about providing forward guidance due to macroeconomic and geopolitical uncertainties, despite a positive outlook and strong Q1 performance.
Management emphasized continued focus on revenue growth, expanding profitability, and advancing innovation, with a strategic priority on maintaining spending discipline and enhancing operational efficiency.
Full Transcript
OPERATOR
Greetings and welcome to the Staar Surgical First Quarter 2026 Results Call and webcast. During today’s presentation, all parties will be in a listen-only mode. I would now like to turn the call over to Connie Johnson, Director of Investor Relations.
Connie Johnson (Director of Investor Relations)
Thank you Operator. Good afternoon and thank you for joining us. On the call today are Warren Faust, Interim Co CEO, President and Chief Operating Officer of Staar Surgical and Deborah Andrews, Interim co CEO and Chief Financial Officer of Staar Surgical. Earlier today we reported a first quarter 2026 results via a press release and Form 8K. We posted our results release and shareholder letter to our Investor website@investors.staar.com Today’s call is scheduled for one hour and will include Q and A for publishing analysts. Webcast participants can also send questions for today’s Q and a session to IR.com before we get started, I want to remind you that during today’s call we will be making forward looking statements. Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward looking statements. I encourage you to read the disclosures in today’s release as well as disclosures in our filings with the SEC. Except as required by law, STAR assumes no obligation to update these forward looking statements to reflect future events or actual outcomes. In addition, during today’s discussion we will reference certain non GAAP financial measures including adjusted EBITDA and constant currency sales. Please refer to today’s release for definitions and reconciliations of non GAAP metrics for brevity. Unless otherwise specified, all comparisons on today’s call will be on a year over year basis versus the relevant period. Finally, a quick reminder, we intend to use our website as a means of disclosing material non public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the Investor Relations SECtion. Accordingly, Investors should monitor our investor website in addition to following our press releases, SEC filings and public conference calls and webcasts. And with that I would like to turn the presentation over to interim co CEO Warren Faust.
Warren Faust (Interim Co CEO, President and Chief Operating Officer)
Warren Good afternoon everyone and thank you for joining us. Deborah and I are excited to be with you once again and to update you on the progress that we have made in our first 100 or so days since we began leading the company as interim co CEOs. I’m really happy to talk about Q1 of 2026 as we have now largely moved past many of the challenges that that we faced in 2025. Significant disruption stemming from the potential Alcon merger process, elevated channel inventory in our largest market and risks of rising tariffs to name a few. Those issues are behind us now. Turning to Q1, we see that we’re off to a very positive start as reflected in our first quarter results. I would point to solid execution across the business and continued momentum broadly across our key markets. We made substantial advancements in pursuit of our core objectives, in particular relative to revenue growth and expansion of our profitability. We remain focused on these efforts as well as working to strengthen our product portfolio and developing our next generation pipeline. In the first quarter we delivered strong net sales growth both sequentially and year over year. We also delivered a meaningful improvement in profitability in the quarter with adjusted EBITDA turning positive. This performance was driven primarily by strong results In China, our first greater than 6 million dollar quarter in the United States and solid growth from each of our three regions. We were also excited to reach a significant milestone surpassing 4 million ICLs (Implantable Collamer Lenses) sold globally. I’m proud of our committed teams and distribution partners around the world who are driving revenue growth. At the same time, we are maintaining spending discipline and improving profitability through focused execution. I believe that our results are an early indication that our approach is beginning to work beyond the financial results. The quarter also included several important business milestones that reinforce our confidence in star’s long term opportunity. First, we made further advancements in the launch of EVO+ ICL in China and began shipping meaningful volumes into the market. Second, we entered Q1 with inventory levels in China normalized and aligned with our contractual targets and we were able to grow sales while maintaining and even slightly reducing inventory levels during the quarter. Third, our Niedau, Switzerland manufacturing facility continues to scale and is planned in 2026 to supply 100% of the Evo and Evo plus lenses shipped to China without import tariffs. And finally, we are progressing through the rollout of our new Oracle ERP (Enterprise Resource Planning) system with limited business disruption to date and expected benefits in visibility, coordination and scalability over time. Together, these milestones are important because they support both our near term execution and our longer term ability to scale the business more efficiently. Let me now provide more context on China, which was the primary driver of our first quarter and remains a key focus area for STAR in China. Our first quarter performance reflected continued share gains in premium lens based refractive surgery. The key messages were clear continued strength in EVO ICLs (Implantable Collamer Lenses), strong early demand for EVO+ ICLs (Implantable Collamer Lenses), normalized inventory levels, better downstream visibility and a more stable market environment. Refractive market conditions in China were more stable in the first quarter than during the volatile period from 2022 to 2024. The macro environment remains mixed, but based on what we are seeing and hearing from customers, refractive procedure demand continues to grow at a moderate pace. We are encouraged by our team’s performance in Q1 and the early response to Evo plus, an important step in our innovation strategy where strong surgeon adoption and clinical differentiation have already required higher output from our Swiss manufacturing site. Moving forward, we remain focused on disciplined execution and sustaining this momentum over the course of the year while carefully monitoring macroeconomic factors in the market. Now, as we look at the United States, we are encouraged by our first quarter sales that exceeded $6 million and we continue to view this market as an important long term growth opportunity for star. We also received FDA approval expanding the EVO ICL indication to patients aged 45 to 60, further increasing our addressable market. Net sales grew 22% year over year against a backdrop of continued sluggishness of laser vision correction procedures that require removal of corneal tissue. The continued adoption of EVO ICL reinforces our belief that the future of refractive surgery is largely lens based. We believe our performance reflects increased surgeon adoption, improved commercial execution and a more focused marketing strategy around customers who are incorporating EVO ICL more meaningfully into their refractive offerings. The US remains underpenetrated relative to more mature ICL markets, which is why we continue to view it as an important long term growth opportunity. Outside China and the U.S. several markets experienced geopolitical and trade related disruption during the quarter, particularly in parts of the Middle east. The impact on net sales was limited to less than $2 million. We continue to monitor these developments closely along with the broader macro uncertainty in Europe and in parts of Asia. We also continue to see attractive long term opportunities in markets such as India, even though near term price sensitivity and macro volatility remains require a measured approach. More broadly, as we pursue global growth opportunities, we are being disciplined in how we allocate capital and resources. We are prioritizing markets and commercial programs where we see the strongest potential while continuing to benefit from the cost reduction efforts we initiated in 2025. As sales grow, we expect this approach to support operating leverage going forward. Overall, our view is unchanged. The global shift toward lens based refractive surgery remains a meaningful long term growth driver for star. Taken together, these updates reflect the progress we are making commercially and operationally while maintaining the discipline needed to build more consistent performance over time. With that, I’ll turn the call over to Deborah to walk through the financials in more detail.
Deborah Andrews (Interim Co CEO and Chief Financial Officer)
Deborah thank you Warren. Our first quarter results reflect strong execution across both sales growth and profitability. Consistent with the framework we outlined in our fourth quarter shareholder letter. Net sales were 93.5 million, increasing one 19.6% year over year driven by strong China sales and double digit growth in the Americas. China net sales were 47.4 million in the first quarter driven by the commercial launch of Evo plus and continued demand for EVO distributor inventory remained comparable to year end 2025 levels and within our targeted range to appropriately service the refractive market. Excluding China, net sales grew 6% which we view as solid given the macroeconomic environment. First quarter net sales were bolstered by a solid quarter in the US market despite the downtrend in laser vision correction in the country, partially offset by macroeconomic and geopolitical headwinds in the Middle east and India. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was 24.4 million compared to an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of 26.3 million in the prior year quarter. Reflecting higher net sales, improved gross profit and the benefits of the cost actions we’ve implemented since 2025, we are beginning to see operating leverage emerge consistent with our path to sustainable profitability. Gross profit margin in the first quarter of 2026 was 73.6% of total net sales compared to 65.8 in the prior year quarter. The year over year improvement was primarily driven by the elimination of period costs related to the ramp up of manufacturing in Switzerland, a reduction in advanced manufacturing expenses, lower inventory provisions and decreased freight and other cost of sales as a percentage of sales. These benefits were partially offset by higher per unit manufacturing costs resulted from lower production volumes in 2025. Total operating expenses for the first quarter of 2026 were $60.9 million compared to 85.4 million in the prior year quarter. Excluding restructuring and merger related costs, operating expenses were 51.5 million compared to 62.7 million in the prior year quarter, a decrease of 18% reflecting the cost reduction efforts initiated in 2025 and continued spending discipline. The company remains on track with its spending target of $225 million in 2026. Operating income for the first quarter of 2026 was 8 million compared to a loss of 57.4 million in the prior year quarter. Net income for the first quarter of 2026 was 5.2 million or $0.10 per diluted share compared to a net loss of 54.2 million or $1.10 per diluted share in the prior year quarter the year over year improvement in net income was primarily attributable to higher gross profit and lower operating expenses, demonstrating our ability to grow net sales while maintaining spending discipline. We ended the quarter with $163.9 million in cash, cash equivalents and investments available for sale with no outstand outstanding debt on a sequential basis. Cash declined from the fourth quarter of 2025, primarily due to costs including seasonal bonuses and other employee incentives, global sales meetings, severance and costs associated with the cooperation agreement with Broadwood Partners. With these items now behind us, we expect to build cash throughout the remainder of the year. Overall, we are encouraged by the profitability and operating leverage demonstrated by our first quarter results. We remain focused on balancing growth with disciplined investment and maintaining financial flexibility. With that, I’ll turn the call back over to Warren. Warren thank you Deborah.
Warren Faust (Interim Co CEO, President and Chief Operating Officer)
To close Q1 was a strong quarter. It demonstrates the progress we are making toward building a stronger STAR with differentiated technology, greater operating discipline and a clearer path to sustainable growth and profitability. We believe STAR is better positioned today than it was entering the year. In the quarter we demonstrated strong growth, return to profitability, improved adjusted EBITDA margins and operational improvements. We launched EVO plus ICL in China, advanced our Swiss manufacturing capabilities, continued the rollout of our Oracle ERP and strengthened our cost structure. At the same time, our long term opportunity remains compelling. STAR possesses differentiated polymer material and advanced optical technology in evoiclav. Additionally, we see growing global adoption …
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