LENSAR (LNSR) investor relations material

Executive summary

• Q1 2026 revenue was $13.4 million, down 5% year-over-year, primarily due to decreased system sales amid market uncertainty from a terminated acquisition, while net income reached $36.3 million, reversing a $27.3 million loss in Q1 2025, mainly from a $23.9 million gain in warrant liabilities and $10 million in acquisition-related income from a terminated merger deposit.

• Recurring revenue reached $12.6 million, up 9% year-over-year and now comprises 94% of total revenue, reflecting strong performance and optimism for future growth as distributor relationships and international sales resume.

• The ALLY Robotic Cataract Laser System continues to drive growth, with expanded regulatory clearances in the US, EU, India, Taiwan, and South Korea, though future growth depends on additional clearances and certifications.

• The company operates in a highly competitive and regulated environment, facing ongoing supply chain, inflationary, and tariff pressures impacting margins and capital needs.

• Focus shifted from short-term financial metrics to rebuilding momentum, expanding placements, and recurring revenue growth post-merger termination.

Financial highlights

• Product revenue was $10.1 million, lease revenue $1.7 million, and service revenue $1.7 million for Q1 2026; system revenue dropped to $800,000 from $2.6 million year-over-year.

• Gross margin was $6.4 million (48% of revenue), compared to $7.1 million (50%) in Q1 2025, with gross margin impacted by tariffs and inflation.

• Net income was $36.3 million ($1.56 per share), versus a net loss of $27.3 million last year, driven by non-cash gains and acquisition deposit recognition.

• Adjusted EBITDA was negative $311,000, down from positive $165,000 in Q1 2025.

• Cash, cash equivalents, and investments totaled $13.5 million at quarter end.

Outlook and guidance

• Management expects recurring revenue growth as system utilization increases and system placements return to historical levels post-merger uncertainty.

• SG&A expenses will increase judiciously as the company rebuilds its workforce and supports growth.

• Sufficient liquidity is projected for at least 12 months, but additional capital may be needed for expansion or if macroeconomic pressures persist.

• The company aims to return to its pre-merger growth trajectory in system placements.