LENSAR (LNSR) Q2 FY26 earnings call: the analyst Q&A

Inquired about the geographic split (US/OUS) of the 13 ALLY systems in backlog and whether US systems are sales or placements, and how this impacts Q3/Q4 expectations.

Nicholas Curtis stated the backlog is a mix of OUS (primarily Q4 delivery due to holidays) and US systems (some sold, some placed). US installations are sometimes delayed by new facility construction.

“So it's -- with everything. It's a little bit of both. We have some backlog with POs, as I may have mentioned in the previous quarter conference call for primarily fourth quarter delivery OUS, given the sort of the holiday season and whatnot that I mentioned towards the end of my remarks. And then some backlog in the U.S. with a few sold and placed systems.”

asked by Frank Takkinen · answered by Nicholas Curtis

Asked about the trend of recurring revenue per procedure and if it's expected to improve over time, noting a perceived uptick.

Nicholas Curtis expects ASP to remain relatively steady, with a modest increase due to more US procedures (which have higher ASPs than OUS distributor sales). He noted that new installations take 60-90 days to ramp up, and replacing legacy LLS systems with ALLY systems will see faster revenue ramp but are typically lower-volume accounts.

“I see the ASP staying a bit steady here. It may go up negligibly just because the U.S. procedures with more U.S. systems are going in. And so you'll see some increase, some creep, if you will, in the ASP as compared to systems sold outside the U.S., which are going through distributors.”

asked by Frank Takkinen · answered by Nicholas Curtis

Sought an update on the objective to reestablish and reaccelerate OUS distributor relationships.

Nicholas Curtis described it as a 'work in progress' that will take several quarters. He highlighted the company's direct presence at ESCRS in Q3 2026 Europe for important meetings to re-engage distributors.

“Work in progress, continued work in progress. I mentioned it was going to take several quarters for that -- for me to feel comfortable that, that was 'back, all the way back.' ESCRS, as I remarked, we're taking a direct presence there.”

asked by Frank Takkinen · answered by Nicholas Curtis

Asked about the trend and stability of ALLY system pricing, especially for sold systems, moving forward.

Nicholas Curtis expects fairly flat pricing for ALLY systems. He explained that prices vary slightly based on whether they are sold to distributors (lower) or in the US (slightly higher), and also depend on commitment levels from private equity groups. He clarified that these are not huge material differences.

“You're going to see fairly flat pricing on the ALLY systems. When we sell more to distributors, the price dips down. When we sell in the U.S., the price is up slightly from there, but they're starting to sort of normalize a little.”

asked by Ryan Zimmerman · answered by Nicholas Curtis

Inquired if the reported gross margin (52% excluding tariff refund) is a new sustainable level, given the growth in recurring revenue.

Mike Rossi confirmed that the current gross margin level (around 52%) is more sustainable due to the increasing contribution from higher-margin recurring revenue. He noted that the company previously targeted high 40s, but the current level is achievable.

“Yes, that's exactly right. That's really what's showing is because we're growing recurring revenue so much right now. So I know the company had previously talked about kind of high 40s. I think we're kind of comfortably in the low -- around where we're at right now basically. So this -- I think with the recurring revenue model, growing as it is, I think that's a more sustainable gross margin there.”

asked by Ryan Zimmerman · answered by Michael Rossi