IRIDEX CORP Q1 FY2025 earnings call

• IRIDEX has improved financial condition with 2 quarters of revenue growth and positive adjusted EBITDA.
• Cost reduction programs initiated, balance sheet strengthened with $10 million strategic investment from Novel Inspiration.
• Q1 2025 revenue was $11.9 million, positive adjusted EBITDA was $0.4 million.
• Glaucoma: Cyclo G6 revenue up 8% Y/Y; progress on driving earlier and repeat utilization of MP3 CPC treatments; MP3 probe unit sales exceeded expectations due to awareness, training, and sales support tool MedScout.
• Retina: PASCAL sales optimized, IQ family and surgical retina strong, Tx sales highest since Q3 2023, EndoProbes exceeded forecast.
• OUS: EMEA stable, Asia growing, Latin America stabilizing, GmbH had decline due to service issues.
• Partnership with Novel: Focus on innovation, leveraging customer base, optimizing gross margins, exploring partnerships/distribution agreements/small acquisitions.

Total revenue for the first quarter of 2025 was $11.9 million. The Cyclo G6 product family revenue was $3.2 million, an 8% year-over-year increase. Retina product revenue decreased 3% to $6.6 million, with PASCAL sales initially slower but offset by strong sales of the IQ family and surgical retina. Other revenue was $2.1 million, an increase of $0.1 million year-over-year. Cyclo G6 contributed approximately 26.9% of total revenue, retina contributed ~55.5%, and other revenue contributed ~17.6%. In OUS, EMEA is a stable revenue generator with glaucoma growth, Asia has strong PASCAL sales due to regulatory approvals, Latin America is stabilizing, and GmbH had a slight decline due to service issues.

• On track to deliver cash flow breakeven and positive adjusted EBITDA in 2025.
• Target to sell more MP3 units than G-Probes in 2025.
• Planning to achieve positive adjusted EBITDA and cash flow breakeven this year with revenue consistent with 2024.

• Tariff-related policies could impact, but IRIDEX expects minimal direct exposure as products are primarily US-sourced.
• Service issues in GmbH affecting sales.
• Volatile market for EndoProbes.

Q: Impact of tariffs remaining in place, particularly with respect to China?

A: IRIDEX products are overwhelmingly sourced from and manufactured in the United States. Final assembly is done in the U.S. Many competitors with imported products face higher costs, longer lead times, etc., giving IRIDEX a pricing and supply chain advantage. Shipments to China currently are not material.

Q: Is IRIDEX looking to buy companies or distribute more products through existing channels?

A: IRIDEX is working with Novel to identify opportunities to expand its portfolio of products via distribution agreements, partnerships, or small accretive acquisitions to leverage its global customer base. Novel is supportive of this strategy.

Q: Can IRIDEX really adjust to operating at better than cash flow breakeven?

A: Yes. Since late 2024, IRIDEX has reduced operating expenses. In Q1 2025, net cash used in operating activities decreased. It intends to continue with financial discipline and is on track to achieve positive adjusted EBITDA and cash flow breakeven this year with revenue consistent with 2024.