IRIDEX (NASDAQ:IRIX) executives highlighted what they described as a “successful year and a positive transformation” during the company’s fourth-quarter 2025 earnings call, pointing to revenue growth, a materially lower operating cost structure, and improved profitability and cash flow. The quarter ended January 3, 2026, and management noted that fiscal 2025 was a 53-week year, with the fourth quarter spanning 14 weeks compared to 13 weeks in the prior-year period.
Full-year and Q4 performance
Chief Executive Officer Patrick Mercer said the company achieved its objectives in 2025 to streamline operations, reduce costs, and “put IRIDEX on a path to sustainable profitability.” For the full year, Mercer reported revenue of $52.7 million, up 8% year-over-year, with growth across major product categories—including Cyclo G6, medical retina, and surgical retina—and across both U.S. and international businesses.
Q4 financial details: revenue up, margins pressured
Chief Financial Officer Romeo Dizon reported fourth-quarter 2025 revenue of $14.7 million, up from $12.7 million in the prior-year quarter. He attributed the increase primarily to higher retina sales, including PASCAL sales, as well as higher glaucoma probe sales.
- Retina product revenue: $8.9 million, up 22% year-over-year, driven by higher PASCAL system sales and medical and surgical retina system sales.
- Cyclo G6 glaucoma family revenue: $3.8 million, up 15% year-over-year, driven primarily by higher probe sales.
- Other revenue: $2.0 million, down from $2.1 million in the prior-year quarter.
Gross profit in the quarter was $5.5 million (gross margin 37%), down slightly from $5.6 million (gross margin 44%) a year earlier. Dizon said the decline was primarily due to increased manufacturing costs, including product costs associated with tariff developments during the year, as well as lower capitalization of manufacturing overhead as inventory levels declined. He also said full-year 2025 gross margins declined due to inventory write-downs in addition to similar cost pressures.
Operating expenses were $5.5 million, down $0.6 million (10%) from $6.1 million in the prior-year quarter, reflecting expense reduction measures taken in late 2024.
Net loss for the quarter narrowed to $0.2 million, or $0.01 per share, compared to a net loss of $0.8 million, or $0.05 per share, in the year-ago period. Dizon said the quarter’s net loss included a $0.1 million provision for income tax and $0.1 million in interest expense.
Non-GAAP adjusted EBITDA was $817,000, up from $611,000 in the prior-year quarter, which Dizon attributed primarily to the company’s cost reduction measures.
IRIDEX ended the quarter with $6.0 million in cash and cash equivalents, up from $5.6 million at the end of the third quarter. Dizon said 2025 cash use was $2.1 million, an improvement of 71% compared to 2024, and added that the company expects cash use to “continue or improve” from these levels.
Commercial trends: glaucoma utilization and retina upgrades
Mercer said IRIDEX’s U.S. glaucoma strategy remains focused on leveraging the installed base of Cyclo G6 systems to drive higher procedural utilization. He said Medicare LCDs introduced last year are supporting adoption earlier in the continuum of care for mild-to-moderate stage patients, and that the company is emphasizing clinical data and an updated sweep speed procedural technique.
Mercer also said IRIDEX is using its MedScout sales enablement platform to identify mid-range utilization accounts and is targeting high-volume MIGS surgeons with potential for meaningful utilization. He added that “price intel wins” contributed positively to fourth-quarter glaucoma revenue and that physician relocations also drove system sales as new practice locations acquired dedicated systems.
Operationally, IRIDEX reported the following unit metrics:
- Q4 Cyclo G6 probes sold: 15,900 vs. 13,300 in Q4 2024
- Q4 G6 systems sold: 44 vs. 47 in Q4 2024
- Full-year 2025 probes sold: 57,800 vs. 55,400 in 2024
- Full-year 2025 systems sold: 133 vs. 125 in 2024
On the retina side, Mercer said priorities include capitalizing on an ongoing upgrade cycle, driving PASCAL adoption in the U.S. and internationally, and securing additional regulatory approvals for next-generation retina platforms. He said PASCAL is “firmly established” as the company’s flagship system in the U.S., with a consistent trend of existing customers upgrading to newer platforms. He also said surgical retina revenue exceeded the company’s plan for the quarter, while EndoProbe sales were steady throughout Q4.
International markets and geopolitical headwinds
Management repeatedly cited macro and geopolitical issues as meaningful variables internationally. Mercer said the conflict in Iran is materially impacting sales in the Middle East for both glaucoma and retina products. In response, the company’s 2026 guidance assumes no Middle East sales.
Mercer described Asia as volatile with operational challenges, citing macroeconomic conditions, tariff uncertainty with China that is affecting sales and forecasting, and currency and other pressures in Japan. He said the partnership with Topcon remains active in Japan, and management expects conditions to improve over time.
In Europe, Middle East and Africa, Mercer said glaucoma probe sales grew for the third consecutive quarter, supported by fulfillment of several GPO orders. In DACH, he said probe sales were stable with existing customers, and that the region’s utilization could absorb incremental volume as distributor transitions progress. He also noted that capital equipment sales in DACH slowed partly due to purchase order delays, but the company completed its first IQ532XP sale in Germany and secured PASCAL Synthesis orders while building a replacement pipeline pending MDR certification.
Mercer also said Latin America and Canada showed steady G6 probe utilization and stabilization in retina sales, including consistent PASCAL sales supported by renewed distribution engagement in Chile and Colombia.
Separately, Mercer said clinician interest at the American Academy of Ophthalmology annual meeting translated into sales execution, stating the company was “close to $1 million in business stemming directly from that meeting.”
Cost actions, manufacturing transition, and 2026 outlook
Mercer and Dizon detailed additional cost initiatives intended to lower the fixed cost base and improve margins. Mercer said IRIDEX is continuing to relocate certain general and administrative functions out of California, which is expected to generate approximately $165,000 in quarterly savings beginning in the first quarter of 2026. He also said the company plans to relocate its headquarters later in 2026, which is expected to reduce fixed costs by approximately $600,000 on an annualized basis.
Management also described a multi-year manufacturing initiative to transition production away from Mountain View facilities to lower-cost third-party contract manufacturers. Mercer said meaningful transfers are expected to begin in 2026 with full implementation in 2027, and Dizon said the company expects gross margins to improve as the transition progresses in 2026 and 2027.
For 2026, IRIDEX guided to revenue of $51 million to $53 million, explicitly excluding Middle East revenue due to ongoing disruption. Mercer said that when adjusted to exclude Middle East revenue in 2025, the guidance implies 1% to 5% growth. Dizon, discussing the same guidance, said that on a pro forma basis excluding Middle East revenue in 2025, it represents 15% to 25% growth compared to 2025.
The company also provided an operating expense outlook: adjusted operating expenses (excluding depreciation and amortization and stock compensation) are expected to be $19 million to $19.5 million. Dizon reiterated seasonality expectations, noting the first quarter is typically the lowest at around 22% of annual revenue, with the fourth quarter generally the strongest. He added that cash usage is typically highest in the first quarter due to payments of accrued compensation and other liabilities, and he expects the company to generate cash in the remaining quarters, with an expectation for positive cash flow for fiscal 2026.
In the Q&A, management said the Middle East historically represented about 5% of total revenue and 10% of revenue outside the U.S. Dizon described “other revenue” variability as tied to service activity and generally flat within a range of about plus or minus $100,000. Management also said U.S. average selling prices increased for probes and systems, and Mercer said he believes IRIDEX is gaining share in retina, citing momentum for PASCAL and expectations for further upside as additional global MDR approvals are obtained.
About IRIDEX (NASDAQ:IRIX)
IRIDEX Corporation (NASDAQ: IRIX) is a medical technology company specializing in the development, manufacturing and commercialization of innovative ophthalmic laser and imaging systems. The company’s offerings focus on energy-based therapies designed to treat retinal vascular disorders, glaucoma and other ocular conditions. IRIDEX’s portfolio includes laser photocoagulation platforms, micro-pulse laser technology, and related consumable devices for use by ophthalmologists and retina specialists.
The company’s flagship products include the Cyclo G6 Glaucoma Laser System, which delivers precise, controlled micro-pulse laser therapy for patients with refractory glaucoma, and the IQ 532 Retina Laser System, designed to support minimally invasive laser treatments for diabetic retinopathy and age-related macular degeneration.
