This article first appeared on GuruFocus .
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Staar Surgical Co ( NASDAQ:STAA ) delivered record revenue for the first nine months of 2026, with Q3 net sales up 21% year-over-year excluding prior-year deferred China sales.
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China net sales grew 31% year-over-year excluding deferred sales, driven by a favorable mix shift to higher-priced V5 and toric ICLs, with in-market unit shipments up 12.4% year-to-date.
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Ex-China revenue increased 13% to $44.1 million, with strong growth in EMEA (31% or 51% excluding Middle East) and the Americas (14%), led by the U.S. with three consecutive quarters above $6 million.
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Staar Surgical Co ( NASDAQ:STAA ) improved profitability, turning a prior-year adjusted net loss into GAAP net income of $5.6 million, and generated $14.4 million in adjusted EBITDA with a debt-free balance sheet and $206.4 million in cash.
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The company advanced its innovation pipeline, with first-in-human trials for two Collamer-based presbyopia products expected to begin enrollment in the next few months, and received FDA label expansion to age 60 and Brazil label expansion to -0.5 diopters.
Negative Points
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Q3 net sales declined 12% year-over-year to $83.4 million due to the prior-year $25.9 million deferred China sales, and gross margin fell to 70.9% from 82.2% (or 75.5% excluding the prior-year item) due to temporary pressures.
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Staar Surgical Co ( NASDAQ:STAA ) was unable to fully meet demand for ICLs in China during Q3, particularly for V5 and toric lenses, which constrained revenue growth to ASP increases only and may have led to some unmet patient demand.
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Gross margin was negatively affected by higher manufacturing costs from low Q2 production volumes during ERP implementation, increased freight and tariff costs, and higher inventory provisions for expiring inventory, with unit costs expected to remain elevated through year-end.
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The company faces market weakness in South Korea, with the overall market down 5-10%, and a slight decline in Japan due to currency, which partially offset growth in other Asia Pacific markets.
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Staar Surgical Co ( NASDAQ:STAA ) stopped short of providing financial guidance for Q4 2026 or 2027, citing global macroeconomic and geopolitical uncertainties, leaving investors without clear near-term targets.
Q & A Highlights
Q: Can you elaborate on the China inventory dynamics in the quarter? Was the decline due to your inability to fully supply, and can you quantify the supply headwind to revenue? A: CEO Warren Faust explained that in-market unit volume growth of ~12.5% drove inventory below the six-month target. He noted that while inability to fully supply was a component, the high complexity of manufacturing Collamer-based products (with hundreds of thousands of SKUs) can create inventory "holes" that prevent same-day delivery. He emphasized that in-market demand, not inventory management, drove the depletion and that they continue to ensure inventory is not a driver of revenue in China.
Q: Ex-China revenue grew 13% year-over-year, a nice acceleration from the first half. Was there anything unique in the quarter that might not repeat, and what is the durable growth rate moving forward? A: CEO Warren Faust attributed the strong performance to a foundational shift in refractive surgery from lasers to lenses, as highlighted in their "Future of Refractive Surgery" report. He stated there was nothing one-time driving the acceleration but stopped short of predicting a specific go-forward growth rate, expressing pleasure with the progress and momentum.
Q: If demand went unmet in Q3, could customers have reached for a competitive lens, or should we expect Q4 restocking by distributors to contractual levels? A: CEO Warren Faust did not anticipate large volumes of restocking, noting they are close to the six-month target inventory level. He clarified that the supply shortage involved a relatively low quantity of lenses, primarily due to a higher mix of EVO+ (V5) and toric lenses putting pressure on the supply chain. He does not expect a big bulk order to drive Q4 sales.
Q: Can you discuss how the new presbyopia lenses differ from existing EDOF lenses, why there are two trials, and the anticipated timelines and spend? A: CEO Warren Faust expressed excitement about the two presbyopia options (a multifocal and an aspheric opportunity) entering first-in-human trials in the next few months, subject to regulatory approvals. He explained that the new optics incorporate learnings from the existing EVO Viva lens, better understanding patient demands and residual accommodation in patients who still have their natural crystalline lens.
Q: What is the funnel and pipeline look like for ICL volumes with key Chinese channel partners like Aier Eye Care Group heading into Q4 and early next year? A: CEO Warren Faust highlighted strong relationships with Aier and other large integrated health systems. He noted that Aier has cited EVO+ (V5) as a larger percentage of their procedural mix, with patients specifically asking for V5 for its larger optic and toric lenses for astigmatism. He stated that while overall refractive volume in China is stable, STAAR is gaining a disproportionate share due to this favorable mix, which also commands a premium average selling price.
Q: On the US side, with LASIK volumes declining, are there other channels beyond high-volume refractive centers that could bring in ICL patients? A: CEO Warren Faust noted the market has fallen significantly from its peak and that STAAR's job is to get people "off the sidelines" who are interested in freedom from glasses but are afraid of lasers. He mentioned that vertical integration by optometric providers, such as acquisitions of clinics, could unlock new opportunities, though he characterized this as speculative but potentially favorable for ICL adoption.
Q: Can you update us on EVO+ penetration in China today and where you think it can go longer-term? A: CEO Warren Faust stated that the higher mix of EVO+ (V5) and toric lenses is driving average selling price increases. He noted healthy in-market unit volume growth of 12.5%, with encouraging growth in lower diopter units and adoption at mid-tier hospitals. He emphasized that the largest, most established hospitals continue to lead, but growth in public and mid-tier hospitals shows significant room to expand across China's thousands of hospitals.
Q: Can you double-click on the market weakness in South Korea and thoughts on when it could turn around? A: CEO Warren Faust acknowledged broad market softness in South Korea, estimating the market could be down 5% to 10% for the year. He noted that despite this, STAAR's end market in the quarter did "just fine," and the company will continue to monitor the situation, attributing the weakness primarily to market issues rather than company-specific factors.
Q: Can you reconcile the 31% adjusted China growth with the 12.4% in-market unit volume growth? What is the end-market demand in China from a volume standpoint? A: CEO Warren Faust clarified that "sell-in" refers to STAAR's sales to distributors, while "in-market unit volume" refers to distributors' sales downstream to hospitals. He stated the in-market pace is a good proxy for implants and indicates STAAR is doing better than the market from a unit perspective. He reiterated that STAAR beat its internal plan, driven by a richer mix of toric and V5 lenses, despite not being able to fully supply demand.
Q: With unit pricing up significantly, how do you think about the durability of price as V5 takes the bulk of sales in China? A: CEO Warren Faust stated that customers love the toric lenses for astigmatism, and a higher mix of toric and V5 lenses improves ASP. He noted that STAAR has "just gotten started" with V5, as demand outstripped supply in the quarter. He sees continued runway to grow ICLs as a share of refractive surgery and to increase the mix of toric and V5 lenses within that.
Q: Historically, China is down about $10 million sequentially in Q4. Is it fair to think about China being flat sequentially in Q4, and can we expect 2027 guidance? A: CEO Warren Faust refrained from giving specific guidance for Q4 or 2027, citing global macro and geopolitical uncertainties. He noted the shape of demand in China, with Q1 and Q2 being high season and a sequential drop-off in Q4, but reiterated confidence that China will grow versus last year. He stated the company will update its thinking as conditions change.
Q: Can you quantify how much you can improve manufacturing yields, given the $750,000 to $1 million per point of yield? A
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
