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    STAA
    Earnings call· Jun 2026(Q2 FY26)

    STAAR SURGICAL Q2 FY26 earnings call STAA

    Aug 12, 2026 Source

    Executive summary

    STAAR Surgical Q2 FY26 — Record First Half Revenue, Strong Profitability, and EVO Plus Momentum

    STAAR Surgical delivered a robust second quarter, achieving record first-half revenue and a strong return to profitability and free cash flow generation. The company demonstrated significant momentum in China with the EVO Plus launch driving market share gains, alongside solid performance in the Americas and EMEA. Management is focused on disciplined execution, expanding profitability, and accelerating innovation, including next-generation product development and a strategic CTO hire, to build a broader platform beyond its core EVO ICL offering.

    Highlights

    5

    • Net sales of $93.5 million, up 111% year over year, marking the strongest first half revenue performance in company history.

    • Return to profitability with net income of $8.1 million ($0.16 diluted EPS) compared to a $16.8 million net loss ($0.34 diluted EPS) in the prior year.

    • Significant cash flow generation, increasing cash and investments to $181.5 million from $163.9 million sequentially, with no debt.

    • China net sales increased over 100% year-over-year and 10% sequentially to $52.3 million, driven by EVO Plus launch and market share gains.

    • Americas grew 12% year-over-year, with the U.S. delivering its second consecutive quarter of approximately $6 million in sales.

    Concerns

    5

    • Q3 FY25 net sales included a non-recurring $25.9 million from a 2024 order, requiring an adjusted comparable base of $68.8 million for Q3 FY26 year-over-year growth calculations.

    • Currency headwinds dampened reported sales growth in Japan to 2%, despite a 14% unit volume increase.

    • Gross margin negatively impacted by China tariffs on U.S. manufactured product, which will continue until Switzerland manufacturing fully supplies China by end of 2026.

    • EMEA declined 1% year-over-year due to conflicts in the Middle East, though EMEA excluding Middle East grew 12%.

    • Supply constraints for EVO Plus and made-to-order Toric lenses due to higher-than-expected demand and manufacturing complexities, leading to backorders in some regions like the U.S.

    Guidance & targets

    8
    CategoryTargetConfidence
    Q3 FY26 Revenue Growth
    Year-over-year growth
    high materiality
    High
    Q4 FY26 Revenue Growth
    Year-over-year growth
    medium materiality
    High
    China Tariff Impact on Margins
    Impact to continue until 100% of products shipped from Switzerland
    medium materiality
    High
    FY26 Operating Expense Target
    $225 million
    medium materiality
    Medium
    FY26 Cash Balance
    Well over $200 million
    high materiality
    High
    Next-Generation Product First-in-Human Studies
    First part of next year or sooner
    high materiality
    High
    EVO Plus Inventory Supply (China)
    Enough to fully supply demand
    medium materiality
    High
    V4c Supply (China)
    Supply as much as possible
    medium materiality
    High

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    Total Company
    Strongest first half revenue performance in STAAR's history.
    		$93.5 million111%——
    APAC
    Overall APAC growth, driven by China.
    		—189%——
    APAC excluding China
    Solid growth in the region outside of China.
    		—7%——
    China
    Fueled by EVO Plus launch and market share gains. No evidence of inventory build, reinforcing demand-driven growth. Seasonal pattern evolving with Q1/Q2 strongest.
    EVO Plus share of unit volume: ~33% (exit Q2)
    		$52.3 million100%+10%—
    Japan
    Strong underlying demand, but reported sales growth dampened by currency headwinds. Bolstered by direct-to-consumer awareness initiatives launched in November 2025.
    Unit volume growth: 14%
    		—2%——
    Americas
    Growth led by the U.S.
    		—12%——
    U.S.
    Second consecutive quarter at this level. Market remains underpenetrated with opportunity to grow EVO sales and take market share from declining laser procedures. Impacted by overall refractive market decline and MTO supply constraints.
    		Approximately $6 million———
    EMEA
    Resulting from continued conflicts in the Middle East.
    		—-1%——
    EMEA excluding Middle East
    Reflecting solid underlying demand across much of the region.
    		—12%——

    Operational metrics

    21
    Net sales
    $44.3 millionN/A
    Q2 FY25

    Prior year quarter, impacted by minimal China shipments while distributors worked through excess inventory.

    Net sales (adjusted comparable base)
    $68.8 millionN/A
    Q3 FY25

    Comparable total base for Q3 FY26 year-over-year results, excluding the $25.9 million recognition related to the 2024 order.

    Net sales (reported)
    $94.7 millionN/A
    Q3 FY25

    Consolidated net sales for Q3 FY25, including the $25.9 million recognition related to the 2024 order.

    Net sales
    $57.8 millionN/A
    Q4 FY25

    Fourth quarter comparisons are unaffected by the 2024 order.

    Gross margin
    74.5%Up 0.5 percentage points YoY
    Q2 FY26

    Improvement reflected lower costs, partially offset by higher per unit manufacturing costs and China tariffs.

    Total operating expenses
    $59.6 millionDown from $62.8 million YoY
    Q2 FY26

    Excluding $5.2 million in restructuring and merger-related costs from prior year, operating expenses increased approximately 3.7% year over year.

    Restructuring and merger related costs
    $5.2 millionN/A
    Q2 FY25

    Excluded from operating expense comparison for Q2 FY26.

    Marketing severance
    $1.2 millionN/A
    Q2 FY26

    Included within operating expenses. Not expected to repeat.

    ERP consulting expense
    $1.7 millionN/A
    Q2 FY26

    Included within operating expenses. Expected to decline significantly beginning in Q4.

    ERP system depreciation expense
    $1.1 millionN/A
    Q2 FY26

    Related to ERP systems.

    Net income
    $8.1 millionCompared to net loss of $16.8 million YoY
    Q2 FY26

    Return to profitability.

    Diluted EPS
    $0.16Compared to loss of $0.34 YoY
    Q2 FY26

    Return to profitability.

    Adjusted EBITDA
    $20 millionCompared to adjusted EBITDA loss of $14.8 million YoY
    Q2 FY26

    Strong improvement from prior year loss.

    Adjusted EBITDA per diluted share
    $0.39Compared to adjusted EBITDA loss of $0.30 YoY
    Q2 FY26

    Strong improvement from prior year loss.

    Cash, cash equivalents, and investments available for sale
    $181.5 millionUp from $163.9 million QoQ
    End of Q2 FY26

    Significant cash flow generation, company has no debt.

    U.S. active sites
    Hundreds and hundreds and hundredsN/A
    Q2 FY26

    Reflects growing adoption since commercial launch in 2023.

    Multi-specialty ASC operating cost per eye
    $900 to $1,800N/A
    Current

    Cost for surgeons to operate in a multi-specialty ASC, making in-office suites more economically favorable.

    EVO Plus share of China unit volume
    ~33%Higher than expected
    Exit Q2 FY26

    Demand outstripped supply capabilities, leading to higher penetration than anticipated.

    China consignment sales
    Way downN/A
    Q2 FY26

    Decline in consignments is contributing to increased tariff costs as U.S. manufactured product is shipped to China.

    China refractive market growth
    Mid to single digitsN/A
    Current

    Pulled down by struggling lasers, but offset by EVO Plus pricing and halo effect.

    Diopter curve shift
    —N/A
    N/A

    Company is moving down the diopter curve outside of China, taking share where lasers previously treated patients.

    Industry KPIs

    12
    MetricValueDetails
    Tariff impactNegative impact
    System utilization—
    Pricing realized priceConsiderable premium
    New product launch rampEVO Plus
    Procedure volume growth14%%
    FCF conversion leverage guidanceWell over $200 millionUSD
    Installed base system placements—
    Segment franchise organic growth100%+%
    Consumables recurring revenue mix—
    Sales force commercial capacity build—
    Indicated addressable patient populationUnlimited
    Pivotal trial clinical evidence milestonesFirst-in-human studies

    Risks & headwinds

    6
    China Tariffs on U.S. Manufactured ProductUntil end of 2026

    Negative impact on gross margin

    Mitigation: Transitioning to 100% Switzerland-manufactured products for China by end of 2026.

    Middle East ConflictsQ2 FY26

    EMEA sales declined 1% year-over-year

    Mitigation: N/A (implied focus on other EMEA regions which grew 12% excluding Middle East)

    Currency Headwinds in JapanQ2 FY26

    Dampened reported sales growth to 2% despite 14% unit volume increase

    Mitigation: N/A (underlying market activity remains strong, direct-to-consumer awareness initiatives)

    Supply Constraints for EVO Plus and Made-to-Order Toric LensesQ1 and Q2 FY26, expected to ease by end of Q3 FY26 for EVO Plus

    Outstripped supply capabilities for EVO Plus; U.S. goes on back order for MTOs

    Mitigation: Working to scale up supply; demand slowing due to seasonality will help catch up on inventory; focus on supplying V4c from Switzerland to avoid tariffs.

    Uneven Broader Refractive Market in China and APACOngoing

    Procedures remain pressured in parts of China and APAC; laser procedures continue to struggle

    Mitigation: EVO is gaining market share due to EVO Plus rollout and patient/surgeon preference for lens-based surgery; disciplined investment in markets with clearest returns.

    Overall Refractive Market Decline (U.S.)Q2 FY26

    Total refractive market (driven by lasers) went down sequentially in Q2, impacting STAAR

    Mitigation: Focus on U.S. market penetration with differentiated lens-based alternatives; targeting practices with economic message.

    What to watch in Q3 FY26

    5

    Q3 FY26 Revenue Growth

    Next quarter (Q3 FY26)
    CurrentQ2 FY26 revenue $93.5M, up 111% YoY
    TargetYear-over-year growth off adjusted Q3 FY25 base of $68.8M

    Why it matters

    Verifies management's ability to grow off the adjusted base, indicating underlying demand and execution despite seasonality and prior-year one-time📎 orders.

    While the third quarter revenue is expected to be moderately lower than the second quarter due to shifts in seasonality, excluding the 1-time order of $25.9 million booked in the third quarter of 2025, we expect year-over-year growth.

    Q&A highlights

    6

    Asked for comfort on consensus Q3 revenue ($80.9M) given the adjusted Q3 FY25 base ($68.8M) and how to think about Q3 growth.

    Management does not comment on consensus but reiterated the need to use the adjusted Q3 FY25 base of $68.8M for year-over-year growth. They expect to grow off this adjusted number and also in Q4. China's comeback and EVO Plus launch are key drivers, along with performance in other regions.

    “Look, we don't comment on consensus numbers generally. What I would say is we tried to give a little bit of a bridge to how you think about Q3 and Q4. We wanted to be clear that you needed to take the 2024 order out of each quarter so that you could have an appropriate base. We intend to grow off of that number.”

    asked by John Young · answered by Warren Foust

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and First Half Records

    STAAR Surgical reported its strongest first half revenue performance in company history, driven by robust Q2 results. Net sales reached $93.5 million, marking a 111% year-over-year increase, and the company returned to profitability with $8.1 million in net income. This performance reflects successful navigation of challenges and leveraging significant opportunities, including the EVO Plus launch in China and record quarters in the U.S.

    02

    China Market Share Gains and EVO Plus Momentum

    China remains a critical market, with net sales increasing over 100% year-over-year and 10% sequentially to $52.3 million. The launch of EVO Plus fueled market share gains, with approximately one-third of China's unit volume being EVO Plus by the end of Q2. Despite an uneven broader refractive market and pressure on laser procedures in China and APAC, STAAR's performance indicates EVO is gaining share, supported by patient and surgeon preference for lens-based surgery.

    03

    U.S. and International Market Dynamics

    The U.S. market delivered another quarter of approximately $6 million in sales, showing continued growth in an underpenetrated market as practices seek lens-based alternatives to declining laser vision correction. In APAC, Japan saw a 14% unit volume increase, though currency headwinds🌐 limited reported sales growth to 2%. EMEA, excluding the Middle East, grew double digits, reflecting solid underlying demand.

    04

    Profitability Expansion and Financial Discipline

    The company demonstrated meaningful progress in expanding profitability, with gross margin improving to 74.5% from 74% in the prior year. This, combined with disciplined financial management, led to significant cash flow generation, increasing cash and investments to $181.5 million. The successful ERP implementation is expected to improve visibility and scalability, positioning the company for future growth.

    05

    Innovation Acceleration and Future Product Pipeline

    STAAR is accelerating innovation, moving beyond a single-product mindset to build a broader platform and diversified product organization. The R&D team is preparing for first-in-human studies on next-generation products as early as Q1 2027. The company is also hiring a Chief Technology Officer to drive its innovation agenda, leveraging its proprietary Collamer material and expertise in lens-based refractive surgery.

    06

    Seasonality and Comparability Adjustments

    Management provided clarity on China's evolving seasonality, with Q1 and Q2 emerging as the strongest revenue quarters due to Chinese New Year, military recruitment procedures, and summer demand. Q3 is expected to be moderately lower than Q2, and Q4 seasonally softer, but both are projected to show year-over-year growth when excluding a non-recurring📎 $25.9 million order from Q3 2025.

    AI-generated summary of the company’s earnings call. Not investment advice.