STAAR Surgical Q2 EPS $0.16 beats $0.15 estimate; sales up 111%
STAAR Surgical reported Q2 2026 EPS of $0.16, beating the $0.15 estimate by 6.67%, while sales of $93.5 million surpassed the $90.6 million forecast. Driven by 111% YoY growth, largely from China, the company swung to a net income of $8.1 million from a prior year loss, with gross margin expanding to 74.5%.
*this image is generated using AI for illustrative purposes only.
STAAR Surgical Company (NASDAQ: STAA) reported second quarter 2026 earnings per share of $0.16, beating the analyst consensus estimate of $0.15 by 6.67 percent. This represents a significant turnaround from a loss of $(0.34) per share in the same period last year, marking a 147.06 percent improvement. Net sales for the quarter ended July 3, 2026, totalled $93.5 million, rising 111% year-over-year and surpassing the analyst consensus estimate of $90.6 million by 3.25 percent.
Second Quarter 2026 Financial Performance
The following table summarises key financial metrics for the second quarter of 2026 compared to the prior year quarter:
| Metric: | Q2 2026 | Q2 2025 |
|---|---|---|
| Net Sales: | $93.5 million | $44.3 million |
| Net Sales excl. China: | $41.2 million | $39.0 million |
| China Sales: | $52.3 million | — |
| Gross Margin: | 74.5% | 74.0% |
| Total Operating Expenses: | $59.6 million | $62.8 million |
| Operating Income (Loss): | $10.1 million | $(30.0) million |
| Net Income (Loss): | $8.1 million | $(16.8) million |
| EPS – Diluted: | $0.16 | $(0.34) |
| Adjusted EBITDA: | $20.0 million | $(14.8) million |
| Adjusted EBITDA/diluted share: | $0.39 | $(0.30) |
Net sales excluding China were $41.2 million, an increase of 6.0% compared to $39.0 million in the prior year quarter. China sales of $52.3 million grew over 100% year-over-year and 10% sequentially. APAC sales rose 189% year-over-year, with ex-China APAC sales up 7%. Americas grew 12% year-over-year, while EMEA declined 1% year-over-year; excluding the Middle East, EMEA grew 12% year-over-year.
Regional Sales Breakdown
The table below presents sales by region for the three months ended July 3, 2026, alongside prior comparable periods:
| Region: | Q2 2026 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Americas: | $7,307 | $7,211 | $7,531 | $8,493 | $8,196 |
| EMEA: | $11,436 | $10,364 | $9,823 | $12,731 | $11,351 |
| APAC: | $25,577 | $77,157 | $40,447 | $72,298 | $73,988 |
| Global Sales: | $44,320 | $94,732 | $57,801 | $93,522 | $93,535 |
(All figures in $000s)
China sales for the quarter ended July 3, 2026 were $52,342 thousand. Japan sales were $11,140 thousand, South Korea $4,297 thousand, and United States $6,055 thousand.
Operating Expenses and Profitability
Total operating expenses for the second quarter of 2026 were $59.6 million, compared to $62.8 million in the prior year quarter. Excluding restructuring and merger-related costs of $5.2 million in the prior year, operating expenses increased 3.7% over the prior year quarter. Key expense line items were as follows:
| Expense: | Q2 2026 | Q2 2025 |
|---|---|---|
| General & Administrative: | $22.7 million | $21.0 million |
| Selling & Marketing: | $26.9 million | $26.3 million |
| Research & Development: | $9.9 million | $10.3 million |
General and administrative expenses rose primarily due to higher amortisation costs associated with the launch of the company's new ERP system and increased expenses related to ongoing ERP initiatives, partially offset by a reduction in salary-related expenses. Selling and marketing expenses increased primarily due to severance expenses associated with workforce reductions in global marketing, partially offset by lower salary-related expenses. Research and development expenses declined, primarily reflecting lower salary-related expenses.
Gross profit margin for the second quarter of 2026 was 74.5% of total net sales, compared to 74.0% in the prior year quarter. The year-over-year improvement was primarily driven by the elimination of period costs related to the ramp-up of manufacturing in Switzerland, a reduction in Advanced Manufacturing expenses, lower inventory provisions, and decreased freight and other cost of sales as a percent of sales. These gains were partially offset by higher per unit manufacturing costs resulting from selling lenses made during periods of lower production volume in 2025, and increased tariff expense on US-manufactured product sold to China.
Balance Sheet and Liquidity
Cash, cash equivalents, and investments available for sale at July 3, 2026 totalled $181.5 million, compared to $163.9 million at the end of the first quarter of 2026. The company has no outstanding debt. Total assets stood at $475,205 thousand as of July 3, 2026, versus $451,678 thousand as of January 2, 2026. Total stockholders' equity was $365,398 thousand as of July 3, 2026, compared to $344,184 thousand as of January 2, 2026.
Six-Month Performance
For the six months ended July 3, 2026, net sales were $187,057 thousand, up 115.2% from $86,909 thousand in the six months ended June 27, 2025. Net income for the six-month period was $13,264 thousand, compared to a net loss of $(71,023) thousand in the prior year period. Adjusted EBITDA for the first half was $24,437 thousand, versus an Adjusted EBITDA loss of $(6,556) thousand in the prior year period.
China Market and Seasonality
China remains the company's largest market, representing over 50% of revenue in the second quarter. Sequential growth in China was driven by increased EVO+ adoption, increased overall EVO ICL procedure volume, and a favourable shift towards toric lenses, which carry a higher average selling price. The company noted that its China sales growth has decoupled from the broader Chinese refractive surgical market in the first half of the year.
The company highlighted a shift in China's refractive surgery market seasonality:
- First quarter: Peak season, boosted by Chinese New Year-related procedures and a shift in military recruitment vision screenings
- Second quarter: Peak season, supported by summer demand
- Third quarter: End of peak season; summer tailwinds continue
- Fourth quarter: Off-season; consistently the smallest quarter
The company noted that third quarter 2025 results included the recognition of $25.9 million related to a one-time order placed in 2024. Excluding this item, the adjusted base for the third quarter of 2025 is $68.8 million. Fourth quarter 2025 net sales of $57.8 million reflected ordinary course business activity.
Constant Currency Sales
On a constant currency basis for the three months ended July 3, 2026, total sales were $94,291 thousand, representing a 112.8% change versus the prior year quarter, compared to the as-reported change of 111.0%. For the six months ended July 3, 2026, constant currency total sales were $186,656 thousand, a 114.8% change versus the prior year period, compared to the as-reported change of 115.2%.
Innovation and Strategic Priorities
Warren Foust, President and Chief Executive Officer, stated that the company delivered on its three priorities of revenue growth, profit expansion, and innovation acceleration in the first half of 2026. The company is in the process of recruiting a new Chief Technology Officer to lead its innovation agenda. The R&D team and Advanced Research group are preparing for first-in-human studies of next generation products.
Deborah Andrews, Executive Vice President and Chief Financial Officer, noted that the second quarter results reflect tangible progress, with revenue, gross margin and net income all growing both year-over-year and sequentially, and that the company successfully navigated the complexities of its ERP cutover while maintaining focus on efficiency and growth.
What the Numbers Show
The beat on both EPS and sales estimates underscores the strength of STAAR Surgical's recovery trajectory. With China sales contributing $52.3 million to the $93.5 million total, the region accounts for approximately 56% of quarterly revenue, highlighting a significant concentration risk alongside the growth opportunity. The company's ability to grow gross margin to 74.5% while operating expenses declined indicates improving operational leverage, particularly as it moves past one-off restructuring costs seen in the prior year.
How will the appointment of a new Chief Technology Officer influence the timeline and success probability of STAAR's upcoming first-in-human studies for next-generation products?
Given that China accounts for over 56% of Q2 revenue, what specific strategies is STAAR implementing to mitigate concentration risk and stabilize growth as the market enters its traditional Q4 off-season?
To what extent will increased tariff expenses on US-manufactured products sold to China impact future gross margins, and has management outlined plans to offset these costs through pricing or supply chain adjustments?
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