STAAR Surgical Company

Second-quarter net sales were $93.5 million, up 111% year over year from $44.3 million. Excluding China, net sales were $41.2 million, up 6% year over year. China net sales increased 100+% and grew 10% sequentially to $52.3 million; APAC net sales increased 189%, the Americas grew 12%, and EMEA excluding the Middle East grew 12%. Gross margin was 74.5% versus 74.0% last year. Net income was $8.1 million, or $0.16 per diluted share, versus a net loss of $16.8 million, or $0.34 per diluted share, in the prior-year quarter. Adjusted EBITDA was $20 million, or $0.39 per diluted share, versus a loss of $14.8 million, or $0.30 per diluted share, last year. Cash, cash equivalents, and investments available for sale ended at $181.5 million, up from $163.9 million in Q1, with no debt. For Q3, management said China revenue should be moderately lower than Q2 because of seasonality, but year-over-year growth should still be achievable once the $25.9 million 2025 order item is backed out of the comparison base; Q4 was described as seasonally softer but also planned to grow year over year. The company continues to manage toward a 2026 spending target of $225 million, though targeted investments could make spending marginally higher.

Warren Foust emphasized that STAAR delivered the strongest first-half revenue performance in its history and said the company advanced on all three priorities: revenue growth, profit expansion, and innovation acceleration. His tone was upbeat and strategic, highlighting China share gains from EVO Plus, back-to-back record U.S. quarters, and a successful ERP go-live. He also framed STAAR as moving beyond a single-product mindset, with a broader ophthalmology platform, a new CTO search, and first-in-human work on next-generation products coming soon.

Deborah Andrews focused on the financial turnaround and operating discipline. She cited 74.5% gross margin, $59.6 million of operating expenses, $8.1 million of net income, $20 million of adjusted EBITDA, and $181.5 million of cash with no debt, and she said the company expects significant free cash flow in the second half and to end 2026 with well over $200 million in cash. She also noted $1.2 million of marketing severance and $1.7 million of ERP consulting in Opex, with ERP consulting expected to decline significantly starting in Q4, and reiterated the 2026 spending target of $225 million.

Analysts pressed management on Q3/Q4 modeling, China growth durability, EVO Plus pricing and unit mix, U.S. site expansion, and whether the ERP rollout hurt sales. Management responded that they do not guide to consensus, but they want investors to use the $68.8 million adjusted Q3 2025 base excluding the $25.9 million order item and expect growth off that base in both Q3 and Q4. On China, they said EVO Plus demand has outstripped supply, penetration was about a third of units exiting the quarter, and pricing remains at a premium; on ERP, they said any revenue impact was negligible and the main effect was higher operating effort, not material lost sales.