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Management characterized the second quarter as a financial inflection point, achieving positive cash flow following a two-year effort to transform the cost structure and strengthen working capital management.

The company is currently executing a long-anticipated headquarters relocation, a move intended to optimize infrastructure and improve long-term operational efficiency.

Glaucoma performance was driven by a 35% increase in Cyclo G6 probe volume, which management attributes to targeted physician engagement via MedScout and tailwinds from Medicare Local Coverage Determinations (LCDs).

Retina revenue declines were attributed to temporary commercial transitions and regulatory factors internationally, rather than a fundamental shift in product demand.

Gross margins were impacted by cost pressures and softer retina systems margins, though management expects the ongoing shift to third-party contract manufacturers to drive improvements in 2027.

International glaucoma growth was bolstered by distributor stocking in Japan and Brazil ahead of planned business transitions and regulatory blackout periods.

Full-year 2026 revenue guidance of $51 million to $53 million is reaffirmed, assuming a pro forma growth of 1% to 5% when excluding Middle East revenue.

Management anticipates a temporary reduction in cash on hand through 2026 due to safety stock inventory builds required to navigate regulatory blackout periods during the headquarters move.

Retina performance is expected to return to low-single-digit growth in the second half of 2026, supported by the American Academy of Ophthalmology meeting and annual promotional programs.

The company expects PASCAL systems to secure European MDR approval in the first half of 2027, which is anticipated to unlock meaningful demand in the EMEA region.

Working capital is projected to become a cash tailwind in 2027 as elevated inventory levels are worked down following the completion of manufacturing transitions.

The headquarters relocation requires a new registration process, necessitating global registration blackout periods that management is mitigating through proactive inventory builds.

Ongoing conflict in the Middle East remains a persistent headwind, leading management to exclude the region's revenue from their formal guidance framework.

Regulatory constraints and inventory digestion by distributors in China impacted retina sell-through during the quarter.

Operating expenses decreased 5% year-over-year, primarily due to the successful transfer of administrative functions to lower-cost structures.

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Management expects low-single-digit growth for retina in the second half, driven by international regulatory progress and seasonal U.S. promotional activities.

Q4 is historically the company's largest quarter, and management expects this seasonal trend to persist in 2026.

While the 17.7 thousand units included some 'lumpy' stocking orders from Japan and Europe to cover blackout periods, underlying growth remained strong at over 15%.

Management expects low-double-digit growth for glaucoma probes to continue through the second half of the year.

The dip to 18 units was attributed to order timing in EMEA and competitive pressures in Germany.

Management anticipates system sales will increase in the back half of the year, particularly in Q4, as they work through the UK registry and reimbursement processes.