LENSAR Q3 Earnings Call Highlights

Key Points

• Q3 revenue slipped 1% to $14.1 million as system sales fell to $1.5 million, offsetting 17% growth in recurring revenue to $12.6 million.
• Procedure volume rose 12% to 52,545, and LENSAR’s ALLY installed base grew to about 225 systems. Recurring revenue made up 89% of total revenue, up from 75% a year earlier.
• The operating loss narrowed to $1.4 million and adjusted EBITDA was positive $1.7 million, though the net loss widened to $4.7 million due largely to a non-cash warrant-liability expense. Available liquidity was $22.6 million, and the company said it expects to move closer to break-even in 2027.

LENSAR NASDAQ: LNSR reported a slight decline in third-quarter revenue as lower sales of its cataract surgery systems offset growth in procedure and other recurring revenue. The company said its installed base and procedure volume continued to expand, while its operating loss narrowed from a year earlier.

Revenue for the quarter ended Sept. 30, 2026, was $14.1 million, down about 1% from $14.3 million a year earlier. System revenue fell to $1.5 million from $3.5 million, while recurring revenue rose 17% to $12.6 million.

Chief Executive Officer Nick Curtis said the third quarter is historically the company’s slowest because of summer holidays and surgical scheduling. He also said the year-earlier quarter benefited from a particularly strong period of ALLY system sales and placements.

Procedures and Recurring Revenue Grow

Procedure revenue increased 17% to approximately $9.2 million, while procedure volume rose 12% to 52,545 from 46,811 a year earlier. Interim Chief Financial Officer Mike Rossi attributed the volume growth to an expanding installed base and improved utilization in the United States. Volume declined from the second quarter, which Rossi said was consistent with seasonal trends.

Recurring revenue accounted for 89% of total revenue, compared with 75% a year earlier. Curtis said the proportion can fluctuate with system sales, but emphasized that procedure activity following installation is central to the company’s longer-term growth.

LENSAR placed 10 ALLY systems during the quarter, bringing its global ALLY installed base to approximately 225, up from about 185 a year earlier. Its total laser installed base reached approximately 450 systems, and it ended September with 12 ALLY systems awaiting installation.

Curtis said 42% of installations over the preceding 12 months were with surgeons who had not previously used lasers. The company’s reported market share rose to 24.5% from 24.1% in the second quarter, with gains coming from both new laser users and surgeons switching from competing femtosecond systems, he said.

Margins Improve, Though Net Loss Widens

Gross margin increased to 58% from 42% a year earlier, helped by the revenue mix and lower-than-historical service costs. Rossi said procedure revenue carried a gross margin of roughly 80%, while service costs were unusually low during the quarter and probably would not remain at that level.

Selling, general and administrative expenses fell to approximately $8.1 million from $12 million. Rossi said the prior-year figure included expenses associated with the Alcon transaction, while the latest quarter included about $1.2 million of expenses for strategic initiatives intended to expand LENSAR’s global commercial footprint and access to ALLY.

The operating loss narrowed to approximately $1.4 million from $7.6 million. The net loss widened to approximately $4.7 million from $3.7 million, however, as the latest quarter included a $3.4 million net non-cash expense tied to changes in the fair value of warrant liabilities, compared with a $3.7 million non-cash gain a year earlier.

Adjusted EBITDA was positive $1.7 million, compared with negative $300,000 a year earlier. It declined from $3.6 million in the second quarter, reflecting seasonally lower revenue and a $1.1 million tariff refund recorded in that earlier period, Rossi said.

Liquidity and International Recovery

Cash and investments totaled $12.6 million at Sept. 30, down from $18 million at the end of 2025. Quarterly cash burn was $900,000. LENSAR also secured a $10 million revolving credit line during the quarter, bringing total available liquidity to $22.6 million, according to Rossi.

Asked about cash use, Rossi said the company had inventory investments and deferred fees related to the Alcon transaction to pay. He projected $1 million to $2 million of cash burn for the rest of 2026 and said LENSAR should get closer to break-even at some point in 2027.

Curtis said international distributor activity had slowed as distributors anticipated the end of their relationships with LENSAR during the Alcon transaction process. He also cited summer holidays and reimbursement changes in Germany and Switzerland. Activity was beginning to return, he said, and he expected international business to ramp, with more robust contributions around mid-2027.

ALLY Development Plans

LENSAR expects to introduce new robotic docking features around the end of the first quarter or into the second quarter of 2027, Curtis said. The company is also working toward capabilities for corneal procedures, including LASIK flaps, which he said would require a different patient interface device.

Longer-term possibilities include integrating phacoemulsification and operating microscope technology into ALLY. Curtis said a femtosecond laser and phacoemulsification project could take between 18 months and less than two years if LENSAR finds the right strategic relationship, while other projects would likely take three to five years.

About LENSAR (NASDAQ:LNSR)

LENSAR, Inc is a medical technology company focused on ophthalmic laser systems used in cataract surgery and other procedures involving the eye. The company develops and commercializes femtosecond laser technology designed to assist surgeons with key steps of cataract surgery, including corneal incisions, capsulotomy and lens fragmentation.

Its product portfolio includes the LENSAR Laser System, which incorporates image-guidance and planning technologies intended to support precise, customized procedures.

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