IRIDEX Corp (IRIX) Q2 2024 Earnings Call Highlights: Navigating Growth and Challenges
Total Revenue: $12.6 million, sequential growth of 7% from Q1 2024, flat compared to $12.9 million in Q2 2023.
Cyclo G6 Product Family Revenue: $3.3 million, increased by $0.4 million from Q1 2024, decreased by $0.3 million from Q2 2023.
Retina Segment Revenue: $7.3 million, up 8% from Q1 2024 and up 6% from Q2 2023.
Other Revenue: $2 million, decreased from $2.3 million in Q2 2023.
Gross Profit: $5.1 million, compared to $5.4 million in Q2 2023.
Gross Margin: 40.7%, down from 41.7% in Q2 2023.
Operating Expenses: $7.8 million, decreased by $0.5 million from $8.3 million in Q2 2023.
Net Loss: $2.7 million, or $0.16 per share, compared to a net loss of $2.8 million or $0.17 per share in Q2 2023.
Cash and Cash Equivalents: $4.1 million as of June 29, 2024.
Cyclo G6 Probes Sold: 15,100, a sequential increase of 14% from Q1 2024.
Cyclo G6 Systems Sold: 28, compared to 22 in Q1 2024 and 41 in Q2 2023.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
IRIDEX Corp (NASDAQ:IRIX) reported a sequential revenue growth of 7% in the second quarter of 2024, indicating a recovery in their business segments.
The company saw a 12% increase in Cyclo G6 probe sales, driven by increased awareness of reimbursement stability in the US and a strong recovery internationally.
The retina business segment showed notable strength, with Pascal scanning laser systems growing double digits year over year.
IRIDEX Corp (NASDAQ:IRIX) has strengthened its balance sheet through a private placement financing, securing $3.4 million with an option for an additional $1.5 million.
Operating expenses decreased by $0.5 million compared to the same period last year, reflecting successful cost reduction initiatives.
Negative Points
Total revenue for the second quarter was roughly flat compared to the same period in the prior year, indicating limited year-over-year growth.
Glaucoma revenue was down $0.3 million compared to the second quarter of 2023, primarily due to softness in system sales.
Gross margin declined from 41.7% in the second quarter of 2023 to 40.7% in the second quarter of 2024, due to a shift in product mix and reduced high-margin royalty revenue.
The strategic review process has been ongoing for nearly a year, with no specific updates or transactions announced yet.
Net loss for the second quarter was $2.7 million, only a slight improvement from the $2.8 million net loss in the same period of 2023.
Q & A Highlights
Q: Can you discuss the competitive landscape for the G6 product and its long-term viability? A: David Bruce, President and CEO, explained that the G6's non-incisional, repeatable treatment remains unique, especially for moderate-stage patients. He highlighted its use post-cataract surgery to manage rising pressures without additional incisional procedures. Bruce noted that the Belkin system targets early-stage patients and doesn't compete directly with G6 in moderate-stage cases.
Q: What are the key hurdles in the strategic review process, and why is there a focus on completing a deal by the fiscal year-end? A: David Bruce stated that the strategic review began last August, and while the M&A environment was challenging last year, it has improved. He acknowledged that a previously anticipated transaction did not occur but remains optimistic about completing a deal this fiscal year. The process involves extensive discussions and negotiations, and while not rushed, they are committed to finding value-enhancing transactions.
Q: How has the Cyclo G6 product family performed financially this quarter? A: Fuad Ahmad, Interim CFO, reported that Cyclo G6 revenue was $3.3 million, up $0.4 million from the previous quarter due to a recovery in probe sales. However, it decreased by $0.3 million compared to the same period last year due to ongoing capital purchase headwinds.
Q: What are the financial highlights for the retina segment this quarter? A: Fuad Ahmad noted that retina segment revenue was $7.3 million, marking an 8% increase from the previous quarter and a 6% rise from the prior year. This growth was driven by strengthening system sales internationally and conversions from elongated purchase cycles.
Q: Can you provide an update on the company's financial position and cash flow management? A: Fuad Ahmad stated that cash and cash equivalents totaled $4.1 million as of June 29, 2024, with a cash reduction of $1.3 million in the quarter. The recent convertible note offering added $3.4 million in net proceeds, which will be used to optimize working capital and manage short-term cash variability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.