Thank you for standing by. My name is Jordan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2025 IRIDEX Corporation Earnings Conference Call. All lines have been placed on mute; there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Trip Taylor, Investor Relations. Please go ahead. Thank you, and thank you all for participating in today's call.

Joining me from the company are Patrick Mercer, IRIDEX Corporation's Chief Executive Officer, and Romeo Dizon, the company's Chief Financial Officer. Earlier today, IRIDEX Corporation released financial results for the quarter ended 01/03/2026. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact, including, but not limited to, statements concerning our strategic goals and priorities, product development matters, sales trends, and the markets in which we operate. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place reliance on these statements. For a discussion of the risks and uncertainties associated with our business, please see our most recent Form 10-Ks and Form 10-Q with the SEC. IRIDEX Corporation disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 26, 2026. I will now turn the call over to Patrick.

Thank you, Trip. Good afternoon, everyone, and thank you for joining us. Today, I am proud to share our fourth quarter and full-year results, which represent a successful year and a positive transformation for IRIDEX Corporation. In 2025, we achieved our goals to streamline our operations, reduce costs, and put IRIDEX Corporation on a path to sustainable profitability. For the full year 2025, we grew revenue by 8% and reduced operating expenses by 22% compared to the prior year. This leverage helped deliver positive adjusted EBITDA for the first time in the company's recent history. Further, we closed out the year by generating positive cash flow from operations in the fourth quarter. I believe it has been made clear that we have done the work to create a new financial profile capable of generating positive cash flow from operations in 2026 and beyond. For the full year, revenue was $52.7 million, representing 8% growth year over year versus 2024. Notably, we saw growth across every major product category—Cyclo G6, medical retina, surgical retina—as well as across both our U.S. and international businesses. Fourth-quarter growth was even stronger. The 16% increase marked the strongest quarterly growth rate of the year. I want to take a moment to highlight some of the important contributors to our strong Q4 performance. On the cost side, we are continuing to right-size the business to be more in line with revenues. We have continued to make meaningful progress with the relocation of certain general and administrative functions out of California. We expect this initiative alone to generate approximately $165,000 in quarterly savings beginning in Q1 2026. We also plan to relocate our headquarters later in 2026, which will further reduce our fixed cost base by approximately $600,000 on an annualized basis. Also, as part of our continuing efforts to reduce our cost structure, we are in active discussions with contract manufacturers as part of a multiyear initiative to transition production away from our Mountain View facilities and toward lower-cost third-party manufacturing. We expect to begin meaningful transfers in 2026, which will incrementally lower our cost of goods as the year progresses. Full implementation is expected to be completed in 2027, and will prove a further meaningful reduction to our cost of goods. This initiative is expected to be a significant driver of gross margin improvement over the coming years. Turning now to take a closer look at our commercial results. For the fourth quarter, beginning with our glaucoma business. In the United States, our strategy remains centered on leveraging our substantial installed base of Cyclo G6 systems and driving higher procedural utilization. Medicare LCDs introduced last year continue to create drivers for G6 adoption earlier in the continuum of care for mild- to moderate-stage patients. Our team is focused on educating our physician users on this opportunity, including highlighting our robust clinical data supporting the IOP-lowering efficacy of the procedure and updated sweep speed procedural technique. Using MedScout, our relatively new sales enablement software platform, we are identifying accounts in the mid-range of utilization to engage with clinicians and reiterate the benefits of our repeatable, incisionless procedure. In an extension of this effort, we are also now targeting high-volume MIGS surgeons who, based on their case volumes, have the potential to adopt the procedure at meaningful utilization levels. Pricing tailwinds based on the enhanced value of our procedure also contributed positively to Q4 glaucoma revenue. Physician relocations drove a number of system sales in the quarter as the new practice locations acquired their own dedicated G6 systems. With a growing installed base, higher ASPs, and increasingly effective commercial targeting through MedScout, we are well positioned to drive meaningful G6 growth throughout 2026. In total, in the fourth quarter, we sold 15,900 probes versus 13,300 in the prior-year period, and 44 G6 systems versus 47 in Q4 2024. For the full year 2025, we sold 57,800 Cyclo G6 probes compared to 55,400 in the prior year, and 133 G6 systems compared to 125 in 2024. International glaucoma was also strong across multiple geographies. In Europe, Middle East, and Africa, glaucoma probe sales grew for the third consecutive quarter, supported by fulfillment of several GPI orders, a meaningful milestone for the region. It is important to note that the conflict in Iran is impacting sales in the Middle East materially today. In GmbH, G6 probe sales remain stable with existing customers, and we believe our GmbH utilization is well positioned to absorb incremental volume as we work through distributor transitions in the region. In Asia, the region continued to experience volatile and operational challenges. Despite continued demand, shifting macroeconomic conditions continue to impact our commercial activity. The evolving tariff uncertainty with China continues to challenge sales and forecasting. In Japan, current headwinds continue to weigh on near-term results. Our partnership with Topcon remains, and we are monitoring the macro environment closely and expect conditions to improve over time. In Latin America and Canada, the region showed steady utilization in G6 probes, reflecting solid adoption of our technology in Canada and across key markets. Now turning to our retina portfolio, our top priorities continue to be capitalizing on the ongoing upgrade cycle, driving PASCAL adoption, both domestically and internationally, and securing additional regulatory approvals for our next-generation retina platforms to capitalize on our global distribution network. In the United States, PASCAL is firmly established as our flagship system, and we are seeing consistent trends of existing PASCAL customers upgrading to our newer platforms. Additionally, newly graduating ophthalmologists are choosing IRIDEX Corporation's PASCAL systems, in part due to our efforts to ensure PASCAL is the preferred system used in university and training programs. Medical and surgical retina revenue performed well. Surgical retina was a particular standout, exceeding the plan for the quarter. EndoProbe sales held steady throughout Q4, demonstrating consistent performance. Turning to international retina. In Europe, Middle East and Africa, the region continued to perform in line with expectations. PASCAL's performance in the Middle East and Africa was somewhat softer in Q4 following the fulfillment of several large orders in Q3. We are also making progress in expanding our E&C business in the U.K. with notable increases in ENT probes and IQ 532 XP systems. Italy remains stable and we continue to manage distributor quality and service in that market. Middle East sales of retina products are also being materially impacted by the conflict in Iran. In GmbH, capital equipment sales faced a slowdown in part due to purchase order delays. However, we completed our first IQ 532 XP sales in Germany. We believe this represents a promising new model for expanding our business. Our GmbH team has secured PASCAL Synthesis orders and continues to build a pipeline for placements with newer models pending MDR certification. In Asia, our retina business was affected by the same macro dynamics impacting glaucoma across the region, including the China tariff situation and currency pressures in Japan. Despite these headwinds, underlying demand for our retina products across Asia remains solid, and we believe the region represents meaningful upside as operational uncertainty is clarified. In Latin America and Canada, the region continues to stabilize, supported by consistent PASCAL sales driven by renewed distribution engagement in Chile and Colombia. Representative of our comprehensive commercial efforts, it is important to call out that clinician interest in our glaucoma and retinal laser platforms was very apparent at the American Academy of Ophthalmology annual meeting. Our booth location saw substantial foot traffic. We are pleased to see the growing attention to our industry-leading technology and have come out of the meeting with a large number of high-quality leads. More importantly, on the execution front, our sales team did an exceptional job converting those leads into orders, with close to $1,000,000 in business stemming directly from that meeting. We expect to continue to execute on our strategic initiatives and extend our commercial momentum with our glaucoma and retina platforms to drive revenue growth in 2026. For the year, revenue is expected to range from $51,000,000 to $53,000,000. This guidance contemplates no sales in the Middle East. When adjusted to exclude Middle East revenue in 2025, our guidance represents 2026 growth of 1% to 5%.

Thank you, Patrick. Good afternoon, everyone. Thank you for joining us today. Before I review the financial results for the quarter, please note that the fiscal year 2025 was a 53-week year, with the fourth quarter spanning 14 weeks compared to 13 weeks in the prior-year period. As we noted in our press release and in Patrick's comments, our total revenues for 2025 were $14,700,000, representing a 16% year-over-year increase compared to $12,700,000 in 2024. Growth was driven primarily by higher retina sales, including PASCAL sales, and glaucoma probe sales. Retina product revenue increased 22% in 2025 to $8,900,000 compared to 2024, driven primarily by the higher PASCAL system sales and medical and surgical retina system sales. Product revenue from the Cyclo G6 glaucoma product family was $3,800,000, representing growth of 15% year over year, driven primarily by higher probe sales. Other revenues decreased $100,000 to $2,000,000 in 2025, compared to $2,100,000 in 2024. Gross profit in 2025 was $5,500,000, or a gross margin of 37%, a decrease of $100,000 compared to $5,600,000, or a gross margin of 44%, in 2024. The decline was primarily due to an increase in overall manufacturing costs, including increased product costs associated with tariff developments throughout the year, and lower capitalization of manufacturing overhead as our inventory levels declined. Operating expenses were $5,500,000 in 2025, a decrease of $600,000, or 10%, compared to $6,100,000 in 2024, due to expense reduction measures taken in late 2024. Net loss for 2025 was $200,000, or $0.01 per share, compared to a net loss of $800,000, or $0.05 per share, in the same period of the prior year. Net loss for 2025 included a provision for income tax of $100,000 and interest expense of $100,000. Non-GAAP adjusted EBITDA for 2025 was $817,000, an improvement of $200,000 compared to non-GAAP adjusted EBITDA of $611,000 for 2024. The improvement is driven primarily by the expense reduction measures implemented in late 2024. Cash and cash equivalents totaled $6,000,000 at the end of the fourth quarter 2025, an increase of $400,000 compared to $5,600,000 at the end of 2025. In 2025, cash use was $2,100,000, an improvement of 71% compared to 2024. We are very pleased with our reduction in cash usage and expect cash use to continue or improve from these levels. While gross margin is a key driver to improving our financial profile, we experienced a decline in 2025 mainly due to an increase in overall manufacturing costs, including increased product costs associated with the tariff developments throughout the year, and lower capitalization of manufacturing overhead as our inventory levels declined. For the full year 2025, our gross margins also declined due to inventory write-downs, coupled with the reasons for the decline in the fourth quarter. We expect gross margins to improve as we progress through the manufacturing transition to third-party contract manufacturers in 2026 and 2027. Operating expenses continued their favorable trend in the fourth quarter, reflecting the sustained impact of the cost reduction initiatives implemented beginning in Q4 2024. For the full year 2025, operating expenses were reduced 22% year over year. The relocation of certain G&A functions out of California, commencing in 2026, is expected to generate approximately $165,000 in quarterly savings beginning in Q1 2026. We are very pleased to report that we achieved positive adjusted EBITDA for the full year 2025, consistent with the commitment we made at the outset of the year. In 2025, we achieved positive cash flow, another key milestone. Cash and cash equivalents at the end of the fourth quarter reflect our meaningfully reduced cash burn, and we expect to maintain this trajectory in 2026. As a reminder, in general, our cash usage is highest in the first quarter of the fiscal year, resulting from payments of accrued compensation and other accrued expenses and liabilities. For the remaining quarters of the year, we expect to generate cash, and for quarterly cash generation to improve sequentially as we sell through inventory and collect receivables on increased revenues. Cumulatively, this will result in positive cash flow for the fiscal year 2026. As Patrick mentioned, we are initiating our 2026 guidance. We expect to generate revenues of between $51,000,000 and $53,000,000. As a result of the market disruption from the ongoing conflict in the Middle East, this guidance does not include revenue from that region. On a pro forma basis, adjusted to exclude Middle East revenue in 2025, guidance represents 2026 growth of 1% to 5% compared to 2025. We also want to reiterate the seasonality we experience in our business. The first quarter on average represents 22% of our annual revenue and is the lowest quarterly total revenue for the year. From the total dollar perspective, the second and fourth quarters are seasonally stronger than the first quarter, with the fourth quarter being the strongest quarter of the year, and the third quarter is generally a sequential decline from the second quarter. We have provided the expectations for our adjusted operating expenses, which exclude depreciation and amortization and stock compensation, to be in the range of $19,000,000 to $19,500,000. And with that, I will turn the call back to Patrick.

Thank you, Romeo. As I reflect on the past year, I am proud of what the IRIDEX Corporation team has accomplished. When we began this transformation in Q4 2024, we set out to grow revenue, reduce operating expenses, improve our financial profile, and position the business for sustainable profitability. We are proud to say that we have delivered on all four. Looking to 2026, our priorities are clear. On the growth side, we are focused on expanding our G6 user base, targeting high-volume MIGS surgeons using MedScout intelligence, while continuing to drive utilization among our existing installed base. For retina, we are pursuing international regulatory approvals to unlock new geographies and accelerating our PASCAL installed base replacement cycle domestically. On the cost side, we will continue our transition to contract manufacturing, minimize production at our headquarters, and advance our facility relocation. We thank you for your continued support of IRIDEX Corporation and look forward to updating you on our progress next quarter. Thank you.

As a reminder, if you would like to ask a question, press star one on your telephone keypad. Your first question comes from the line of Scott Henry from Alliance Global. Your line is live.

Thank you, and good afternoon. Just a couple of questions. First, when thinking about your 2026 guidance, how large is the Middle East in terms of revenues? What percent of the revenue base?

Hi, Scott. It is 5% of our total revenue base and 10% of U.S.

Hi, Patrick. Thank you. So larger than typical for that geography. Looking at Q4 also, I noticed the other was down sequentially. Is that just typical variability, or any trends going on, kind of down from Q3, in the other segment?

Segment? Say that again, Scott. When you say other segment, what do you mean?

The other revenue line. It is about $2,000,000. It was, I think, $2.2 million last quarter, $2.2 million before—I mean, not big numbers—but

This is basically dependent on the service product lines, and not really—one month we will just get a bunch of service to provide. Others, there is just, you know, it is pretty flat. It is staying around within that same level, plus or minus $100,000.

Okay. Fair enough. And then when I was looking at G6, we do not have—I will get the specific breakouts, but just based on the general statement—it looks like pricing was down a little bit from the past couple quarters relative to the systems sold and the probe utilization. Is that fair, and is that a trend or just, you know, quarterly noise?

No. If anything, if you are looking to consolidated numbers, that must have been the OUS driving that down because in OUS and in the U.S., we have actually increased ASPs on the probes. And the volume as well has picked up and has continued to pick up as of this quarter.

Yes. We have increased ASPs last year and this year on both the probes and the system for global—in the U.S.

Okay. I guess I will just take a look at that when the K is filed as well. Final question. When you look at the retina segment, and, I guess, a little bit the G6 segment, how do you think of organic growth rates, particularly on the retina segment? How should we think of kind of a steady-state or organic growth rate for that segment?

Scott, I guess, you know, when we were talking back four, five years ago, we always expected the revenue to decrease, like, 1% to 2%. Well, after I left, the company has acquired or merged with the Topcon and we have acquired the PASCAL systems. So I think in my own mind, in terms of the size of this distribution model plus the product itself, PASCAL, which is really becoming our product flagship in the U.S., has just really contributed to either a small growth in the product business the last couple years.

Okay. So, I mean, it sounds like you are—if I think about the category growing at about 4%, do you still think you are gaining share in the retina segment? To put it differently?

Absolutely. We, you know, with our PASCAL, we have a lot of momentum moving forward with that product. It is faster than the competition. It is serviced in the field. And it is doing really well. And as we get more MDR approvals globally, we are going to see that pick up. It has already taken off in the U.S., and as we get more approvals, it will definitely pick up. We expect to see that increase.

Okay. Great. Thank you for taking the questions.

Thanks, Scott.

There are no further questions. I would like to turn the call over to Patrick Mercer for closing remarks.

Great. I appreciate everyone's time. We will continue to update you on our business and appreciate the questions. Thank you.

That concludes today's meeting. You may now disconnect.