Net Sales of $83.4 Million in the Third Quarter
Net Income of $5.6 Million, with GAAP EPS of $0.11
Adjusted EBITDA1 of $14.4 Million, or $0.28 per Diluted Share
Record Revenue of $270.5 Million in the First Three Quarters
Net Income of $18.8 Million, or $0.37 per Diluted Share, in the First Three Quarters
Adjusted EBITDA1 of $58.8 Million, or $1.14 per Diluted Share, in the First Three Quarters
LAKE FOREST, Calif.–(BUSINESS WIRE)–STAAR Surgical Company (“STAAR” or the “Company”) (NASDAQ: STAA), the global leader in phakic IOLs with the EVO™ family of Implantable Collamer® Lenses (EVO ICL™) for vision correction, today reported results for the third quarter ended October 2, 2026. The Company will host an earnings call and webcast today at 5:30 PM Eastern Time.
Third Quarter and Year-to-Date 2026 Highlights Include:
- Net sales down 12% Y/Y; up 21% excluding a 33-percentage point ($25.9 million) impact from previously deferred China sales recognized in the third quarter of 2025
- China sales of $39.3 million, down 30% Y/Y; up 31% excluding a 61-percentage point impact from the deferred China sales
- EMEA sales up 31% Y/Y; up 51% excluding the Middle East
- Americas sales up 14% Y/Y, driven by U.S. sales of $6.5 million, the third consecutive quarter of U.S. sales exceeding $6 million
- Completed transition of all ICL manufacturing for the Chinese market to Switzerland, reducing U.S.-China tariff exposure
- Cash, cash equivalents, and investments of $206.4 million, compared to $181.5 million at the end of the second quarter 2026
- Key senior leadership hires, brought expertise across technology, product innovation, commercial execution, and business development
- Published global market report showing ongoing structural shift from laser-based to lens-based vision correction in multiple markets
- Initiating clinical trial process for next generation presbyopia technologies, with first-in-human clinical trials expected in the next few months
- Board authorized $50 million share repurchase program, reflecting its confidence in the business and belief that STAAR’s shares are undervalued
Fellow Shareholders,
During the quarter, we advanced our commercial, operational, and product development priorities. I am grateful for the opportunity to reflect on what we have accomplished and discuss what is to come.
Earlier this year, we set three goals: Revenue Growth, Profit Expansion, and Innovation Acceleration. Through the first nine months, we progressed against all three. We delivered record revenue for the first nine months of 2026, achieved strong profitability, and laid the groundwork to expand our product offerings. Our strong free cash flow and cash position give us the flexibility to invest in innovation and growth while maintaining a debt-free balance sheet. This financial strength also enabled us to establish a $50 million share buyback program in September, reflecting the Board’s confidence in STAAR’s long-term prospects and its belief that the current share price does not reflect the Company’s intrinsic value.
As we look ahead, our results give us the confidence to raise our ambitions. EVO ICL redefined the refractive landscape and is leading a market shift from laser to lens. Now we are applying even greater rigor to how we manufacture, how we go to market, and how we operate, across three strategic focus areas.
Advance the Future of Vision, enabled by Product Innovation: Investing in R&D, clinical proof, and regulatory progress to expand beyond our core offering and bring meaningful new products to patients.
Grow Adoption, enabled by Commercial Innovation: Expanding ICL adoption worldwide through partnerships, surgeon and patient education, practice enablement, and focused commercial execution.
Deliver with Excellence, enabled by Operational Innovation: Supporting profitable growth through advancements in manufacturing and supply chain management.
Our ability to execute rests on our mission-driven team, our commitment to quality, and a disciplined, returns-focused approach to capital allocation.
Advancing the Future of Vision with Product Innovation
STAAR’s lens-based vision correction leadership is built on the differentiated capabilities of EVO ICL and our proprietary Collamer® technology. As the global leader in phakic IOLs and the manufacturer of the most clinically studied phakic IOL, with more than 30 years of clinical evidence, over 100,000 eyes studied, and 4+ million lenses distributed worldwide, STAAR has set the standard in cornea-preserving vision correction. With this strong foundation, we are focused on targeted research and development investments, clinical evidence generation, and regulatory advancement to launch new products and expand beyond our core offering.
Leading that effort is Ben Park, Ph.D., our recently appointed Chief Technology Officer, who is guiding our R&D team as they advance next-generation ophthalmic vision correction technologies across a variety of therapeutic areas.
We are approaching an important milestone in expanding our product offering. We have begun the clinical trial process for our next-generation presbyopia technologies, with first-in-human clinical trials for two products expected to begin patient enrollment in the next few months, subject to receipt of the remaining required regulatory authorizations.2 These studies represent a tangible step from pipeline to patient, and as our programs advance, we expect to give shareholders greater visibility into their potential to expand our market opportunity and drive long-term growth.
On the regulatory front, we are expanding EVO’s reach and commercial potential. Recent label expansions raised the U.S. eligibility age to 60, adding approximately eight million potentially eligible patients, and lowered the minimum prescription in Brazil to −0.5 diopters, adding an estimated 26 million potential patients. As our label harmonization efforts continue to broaden access, our commercial priority is to convert expanded eligibility into adoption.
Growing Adoption with Commercial Innovation
We are focused on growing global ICL adoption to capitalize on the market opportunity that we outlined in our September report entitled The Future of Refractive Surgery (FoRS Report).
The FoRS report confirmed what we have seen in our own results: the refractive market is shifting, and EVO ICL is driving that shift. Our job now is to accelerate the shift. We are making changes to how we operate commercially, sharpening our global model, strengthening local execution, and removing the barriers that slow surgeons and patients from choosing EVO.
To lead that effort, in September we announced the appointment of David Bailey as Chief Commercial Officer, who has returned to STAAR having previously served as CEO. David built much of what STAAR’s commercial engine is today, and he returns with a clear mandate to move surgeons from confidence to conviction. That means better education, stronger evidence programs, smarter use of data, and more targeted patient awareness, market by market, surgeon by surgeon. We also recently named Andrew Pilon, O.D. as Vice President of Business Development, reporting directly to me. Andrew is focused on expanding strategic partnerships and identifying new opportunities to broaden our global market footprint.
Across our markets, including China, EVO unit growth is outpacing the broader refractive market, and we are taking share. Surgeons and patients are increasingly asking about lens-based correction over laser, and we intend to make sure EVO ICL is their first and only solution.
Delivering with Excellence with Operational Innovation
We are focused on achieving advancements in manufacturing and supply chain management to support continued profit expansion.
In the third quarter, we completed the operational transition to allow for all China-bound ICLs to be manufactured in Switzerland, an initiative designed to improve gross margin by reducing U.S.-China tariff-exposure while strengthening supply chain resilience. Our ability to scale Swiss production was further enhanced by recently receiving DEKRA certification of a second clean room at our Nidau facility.
Additional efforts underway include targeted initiatives to improve manufacturing yields and expand capacity while maintaining the rigorous quality standards required to produce Collamer. We are expanding machining capacity at our Monrovia facility and evaluating automation opportunities throughout our operations. We estimate that each percentage point improvement in manufacturing yield could generate approximately $750,000 to $1 million in annual incremental gross profit.
This year, we implemented a new enterprise resource planning (ERP) system, and we ramped up production to support the launch of EVO+ in China, where demand was stronger than anticipated. In addition, we are strengthening our supply chain planning and inventory management capabilities.
Over the past four quarters, we made steady progress in reducing distributor inventory in China, which ended the third quarter below our six-month target. Inventory decreased while in-market volume grew, which tells us demand is outpacing current supply. We are adjusting manufacturing capacity to close that gap. With the channel in balance, we believe company shipments will more closely reflect the growth in underlying demand.
China: Continued Growth in Our Largest Market
What we see in China, our largest market, reinforces what we see globally. EVO ICL is gaining share, and the shift from laser to lens-based correction is accelerating.
Through the first nine months of 2026, unit volume shipments by our distributors in China grew 12.4%, a meaningful step up from the mid-single-digit growth in 2025. Year-over-year growth so far in 2026 has come from share gains, with in-market volume again outpacing the broader Chinese refractive market. Because of the mix shift to EVO+ and a higher percentage of toric lenses, the average selling price by our distributors of our lenses in China has risen substantially.
China sales grew 31% year over year excluding $25.9 million of previously deferred sales recognized in the third quarter of 2025. The deferred China sales related to an order placed and shipped in 2024. It was recognized in the third quarter of 2025 with no corresponding cost of sales, increasing sales and gross profit margin in the prior-year period and affecting year-over-year comparability.
Growth in China sales was led by performance in public hospitals. We are encouraged that hundreds of mid-tier hospitals have begun to close the gap with our largest and longest-established centers, which continue to set the benchmark for ICL productivity. In fact, most of our incremental volume increases came from rising procedures per hospital in the mid-tier category. These hospitals still perform a fraction of the procedures our leading centers do, so we are early in this effort with considerable opportunities to increase volumes. We also saw lower-diopter procedures grow faster than higher-diopter procedures, an encouraging signal for our strategy to move EVO ICL down the diopter curve, where the addressable patient population is substantially larger.
The increasing adoption of EVO+ and toric relative to EVO and spherical and the outperformance of public hospital channels are still in their early phases but are creating tailwinds that we believe will allow us to realize materially higher average selling prices with further opportunity to increase the mix of EVO+ in China. Because we were not yet fully able to meet lens demand during the third quarter, all of our sales increase in China during the quarter was attributable to increased average selling prices.
We remain focused on the underlying drivers of our significant opportunity in China: increasing adoption of EVO+, expanding the reach of lens-based vision correction, supporting surgeon training, deepening our relationships with key hospital systems, and improving patient education and awareness. We recently elevated Ying Chen to President of STAAR Surgical China, strengthening our leadership in our largest market and reinforcing our focus on execution. We will continue to grow and develop our organization in China to expand our capabilities and support long-term growth.
Other Regional Highlights
Outside China, APAC net sales increased 4% year-over-year, with growth in India, Taiwan, and other APAC markets, partially offset by declines in Japan, primarily due to currency headwinds, and South Korea, due to overall market weakness. We remain focused on supporting surgeons and patients through commercial investment tailored to local market needs, product availability, and patient-awareness activities. Earlier this week, Pascal Aeschlimann was appointed Vice President of Asia Pacific. During his earlier tenure with STAAR, Pascal spearheaded our expansion across Asia and the Middle East, and his expertise will be vital as we capture the significant opportunity across APAC.
EMEA net sales increased 31% year-over-year, or 51% excluding the Middle East. We saw strong double-digit growth in Spain, Germany, the UK, and distributor operations. EMEA’s strong growth benefited from improved conditions and a much smaller decline in revenue in the Middle East compared with the first half. Our commercial efforts have supported this growth by expanding surgeon engagement and strengthening customer relationships. User meetings in France and Poland have broadened our reach among surgeons and provided opportunities to share our clinical evidence, while agreements with key partners in Spain and Germany have deepened important customer relationships.
In the Americas, net sales increased 14% year-over-year, led by $6.5 million in U.S. sales, our third consecutive quarter exceeding $6 million. Data provided by the Refractive Surgery Council suggests that in 2026, laser vision correction procedures have declined 5.8% vs. 2025. Our consumer research reinforces that many patients want freedom from glasses and contacts, and that they value choice, reversibility, confidence, and understanding their treatment options.
This opportunity is reflected in our business performance and treatment patterns in the U.S. Alongside continued adoption among patients with high myopia, we have seen three consecutive quarters of significant growth among patients with less severe myopia, broadening EVO adoption across a wider range of refractive errors. Our focus in the U.S. market is on helping practices translate patient interest into treatment, creating additional revenue opportunities, and making use of their existing infrastructure to service the growth in demand.
Looking Ahead
Building on record net sales achieved through the first three quarters of 2026, our momentum positions us well to deliver strong full-year results. I am proud of the progress that our team has made and confident in the direction of our business.
The ongoing shift from lasers to lenses, EVO+ adoption in China, and opportunities across our global markets give us confidence in continued profitable growth. At the same time, we are investing in an innovation pipeline designed to expand our opportunities and accelerate growth in the years ahead. Our teams remain focused and unified in the effort to unlock the long-term value of our business by converting our efforts and investments into results. We will measure our progress through both financial performance and demonstrable execution against our strategic priorities.
We look forward to sharing our progress with you as we continue to build sustainable long-term value for our shareholders.
Thank you for your continued support and your belief in STAAR.
Sincerely,
Warren Foust
President and Chief Executive Officer
Third Quarter 2026 Financial Results
STAAR delivered third-quarter net sales of $83.4 million, a 12% decrease from $94.7 million in the same period last year. The prior-year quarter included $25.9 million of previously deferred China sales related to an order placed and shipped in 2024 for which revenue recognition was delayed until the third quarter of 2025 in accordance with GAAP. Excluding those sales, prior-year net sales were $68.8 million, and third-quarter 2026 net sales increased 21% against that base.
“Our record nine-month performance keeps us firmly on track to deliver strong full-year GAAP net income with free cash flow and a debt-free balance sheet,” said Deborah Andrews, Executive Vice President and Chief Financial Officer. “Temporary gross margin pressures are expected to abate beginning in the fourth quarter, while China seasonality should moderate revenue and earnings, but not free cash flow.”
China net sales in the third quarter were $39.3 million, compared with $55.8 million in the prior-year quarter, which included $25.9 million of deferred sales. Excluding the deferred sales, net sales in China grew 31% in the third quarter compared with $29.9 million in the prior-year quarter.
Excluding China, net sales were $44.1 million, an increase of 13% as compared to $38.9 million in the prior-year quarter. Growth outside China reflected increased sales in India, Taiwan, and other APAC markets, along with double-digit percentage growth in the Americas and EMEA. Within APAC, those increases were partially offset by year-over-year declines in Japan, primarily due to currency, and South Korea, due to overall market weakness. In the EMEA region, net sales increased 31% compared with the prior-year quarter, despite ongoing turmoil in the Middle East. Excluding the Middle East, EMEA achieved a 51% increase in net sales during the quarter.
Gross profit margin for the third quarter of 2026 was 70.9% of total net sales, compared to 82.2% in the prior-year quarter. The prior-year quarter included $25.9 million of deferred China revenue recognized with no corresponding cost of sales, resulting in a 100% gross margin on that revenue. This increased third-quarter 2025 gross profit margin by 6.7 percentage points. Excluding that revenue and its associated gross profit, prior-year gross profit margin would have been 75.5%.
Gross profit margin in the third quarter of 2026 also was negatively impacted by several temporary factors, including higher manufacturing costs due to low production volumes in the second quarter of 2026 resulting from the implementation of the Company’s new ERP system, higher freight costs, tariffs on U.S. goods produced for China, and an increase in inventory provisions from expiring inventory.
By the end of the third quarter, manufacturing of all ICLs destined for China had been transitioned to our Swiss facility, which is expected to reduce exposure to tariffs imposed on the U.S.-origin products entering China going forward. U.S. product in inventory and sold to China will continue to be subject to tariffs.
Unit costs will likely stay elevated for the rest of the year as STAAR sells through inventory produced in the second quarter of 2026. However, lower tariffs and smaller inventory provisions are also expected to lift fourth-quarter 2026 gross margins above third-quarter levels. With both production facilities now running at full capacity, unit costs are expected to improve further in 2027.
Total operating expenses for the third quarter of 2026 were $53.7 million, compared to $59.4 million in the prior-year quarter. Excluding restructuring and merger-related costs of $6.0 million in the prior-year quarter, operating expenses were flat compared to the prior-year quarter. STAAR remains on track to hit the $225 million operating expense target set at the start of the year.
General and administrative expenses were $18.9 million, compared with $20.8 million in the prior-year quarter. The decrease reflects a decrease in variable compensation, partially offset by an increase in depreciation expense related to the Company’s new ERP system.
Selling and marketing expenses were $24.3 million, up from $23.5 million in the prior-year quarter. The increase in selling and marketing expenses was due to an increase in consulting and depreciation expenses related to the new ERP system and an increase in advertising and promotional activities, partially offset by a decrease in variable compensation.
Research and development expenses were $10.5 million, up from $9.2 million in the prior-year quarter, primarily reflecting increases in salary-related expenses, expenses related to the new ERP system, and increased professional fees.
Operating income for the third quarter of 2026 was $5.5 million compared to $18.5 million in the prior-year quarter. Prior-year operating income included $25.9 million of gross profit from the recognition of deferred China revenue.
Net income for the third quarter of 2026 was $5.6 million, or $0.11 per diluted share, down from $8.9 million, or $0.18 per diluted share, for the prior-year quarter. Recognition of the deferred China revenue increased prior-year net income by $15.2 million after tax. Excluding that after-tax impact, the prior-year net loss would have been $6.3 million, or $0.13 per diluted share.
Adjusted EBITDA1 for the third quarter of 2026 was $14.4 million, or $0.28 per diluted share, down from Adjusted EBITDA1 of $34.7 million, or $0.69 per diluted share, in the prior-year quarter. Prior-year Adjusted EBITDA1 included the impact of recognizing $25.9 million of deferred China revenue. Excluding that impact, prior-year Adjusted EBITDA1 would have been $8.9 million, or $0.18 per diluted share.
Cash, cash equivalents, and investments available for sale as of October 2, 2026, totaled $206.4 million, compared to $181.5 million at the end of the second quarter of 2026. The Company has no outstanding debt. In September 2026, the Board authorized a share repurchase program under which the Company may repurchase up to $50 million of its outstanding common stock.
Earnings Conference Call and Webcast
The Company will host an earnings conference call and webcast today, Wednesday, November 4, 2026, at 5:30 PM Eastern / 2:30 PM Pacific to discuss its financial results and operational progress. To access the webcast, please use the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=IDONdcqb
In addition to live questions, participants may submit questions by email to [email protected].
|
1 |
Adjusted EBITDA and Adjusted EBITDA per diluted share are non-GAAP financial measures. For further information on non-GAAP financial measures, please refer to the “Use of Non-GAAP Financial Measures” section of this press release. Please also refer to the tables at the end of this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure. |
|
|
2 |
Source: ClinicalTrials.gov, Study of a Phakic Implantable Collamer Lens (ICL); Study of an Implantable Collamer Lens (ICL) |
Use of Non-GAAP Financial Measures
To supplement the Company’s financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA per diluted share and constant currency measures, free cash flow and net income (loss) and related per-share amounts excluding the impact of the China deferred revenue. Management uses these non-GAAP financial measures in its evaluation of Company operating performance and believes investors will find them useful in evaluating the Company’s operating performance, including cash flow generation, and in analyzing period-to-period financial performance of core business operations and underlying business trends.
Contacts
Investor/Media Contact:
[email protected]
Connie Johnson
(626) 303-7902 (ext. 2207)
[email protected]
