LENSAR, Inc. Q4 FY2025 earnings call

• Nick Curtis discussed that 2025 was a unique year for Lenzar with the termination of the Alcon acquisition. The Ally robotic laser cataract system was validated as superior. They received a $10 million transaction deposit. Despite acquisition - related uncertainty, they expanded the Ally install base by nearly 50% year - end 2024, had 20 +% year - over - year growth in procedure volume for Q4 and full year 2025. They focus on growing procedure volumes and recurring revenue through system placements and utilization, and are surgeon - centric. They also discussed the international business, with distributors being relieved about the acquisition termination but having conservative forecasts. - Tom Staub highlighted financial results, including the $10 million merger deposit becoming theirs, elimination of some acquisition costs, revenue decline due to lower system sales, recurring revenue growth, procedure volume growth, installed base growth, gross margin details, and future focus on accelerating revenue growth, maintaining cost discipline, and enhancing cash flow.

In the fourth quarter of 2025, total revenue was $16 million, a 4% year - over - year decline mainly due to lower system sales. U.S. Ally sales were 12 systems, an increase from Q4 2024. Outside the U.S., there was 1 Ally sale in Q4 2025 compared to 10 in Q4 2024. Recurring revenue in 2025 increased 15% over 2024, with Q4 2025 recurring revenue at $12.7 million, annualizing to over $50 million. Full - year 2025 recurring revenue was $46.3 million. Fourth quarter procedure volume increased ~20% year over year, full - year procedures grew 22% to surpass 206,000 globally. 15 Ally systems were placed in the fourth quarter, bringing the installed base to just over 200, up 48% year over year. Gross margin for the quarter was $6.9 million, 43%, and for the full year was 46% versus 48% in 2024. Forecasted gross margin percentage for fiscal 2026 is 46 - 49%. Adjusted EBITDA was positive for the year, with Q4 adjusted EBITDA at $595,000.

• Expect a gradual return to historical operating performance in the next several quarters of 2026. - Forecasted gross margin percentage for fiscal 2026 is 46 to 49%. - Expect no more than a 10% increase in cash - based operating expenses in 2026, with most increase devoted to commercial activities.

• Uncertainty regarding the acquisition process previously impacted U.S. customer decision - making on Ally and Lensar, and halted OUS distributor activities and purchasing systems. - Inflationary cost increases to raw materials and production process accompanied by tariffs in 2025, which impacted gross margin. - Distributors' conservative immediate forecasts could delay the re - engagement and growth in international system revenues.

Q: Regarding distributor commentary, Nick discussed that business outside U.S. is different with some countries having tender processes and hesitation due to uncertainty, and it will take several quarters to reinvigorate.

A: Nick mentioned about different markets in U.S. and OUS regarding revenue recognition and placement types.

Q: Ryan Zimmerman asked about U.S. procedure growth and recurring revenue.

A: Nick talked about recurring revenue growth, average procedures per Ally unit, and mix of customers.

Q: Ryan also asked about expenses and OUS efforts.

A: Nick discussed OUS strategy including looking at new markets like Australia, New Zealand, and further in Europe and Southeast Asia, and Tom confirmed the 10% increase in cash OPEX is on cash - based operating expenses