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Performance was driven by strong domestic adoption of G-Probes and the G6 platform, which offset international revenue constraints caused by geopolitical conflict and supply chain disruptions.

Management attributes the flat year-over-year revenue to approximately $800 thousand in retina backlog resulting from temporary EndoProbe supply constraints and Japanese regulatory delays.

Strategic focus has shifted toward high-margin probe utilization, utilizing the MedScout platform to target mid-utilization accounts and expand patient selection criteria into earlier glaucoma stages.

Operational efficiency improved through the relocation of G&A functions out of California, which delivered $100 thousand in savings during the first quarter.

The company is executing a multi-year transition to third-party contract manufacturing to structurally lower the cost base and drive gross margin expansion through 2027.

Medicare LCDs are acting as a tailwind, supporting earlier adoption of G6 therapy for mild-to-moderate and post-MIGS glaucoma patients.

Reaffirmed full-year 2026 revenue guidance of $51 million to $53 million, which assumes 1% to 5% pro forma growth and excludes all Middle East revenue due to ongoing conflict.

Management expects to achieve positive cash flow for the full year 2026, with quarterly cash generation projected to improve sequentially as inventory is sold through.

The headquarters relocation scheduled for later this year is expected to reduce the fixed cost base by approximately $600 thousand on an annualized basis.

Revenue from the $800 thousand retina backlog is expected to be recognized in the second quarter following the resolution of supply and regulatory hurdles.

Gross margins are expected to remain in the high 30s to low 40s range, heavily dependent on product and regional mix as the manufacturing transition progresses.

The ongoing conflict in the Middle East has led management to exclude the entire region's revenue from their 2026 guidance framework.

Lack of Medical Device Regulation (MDR) approval in Europe continues to constrain PASCAL system growth in that geography.

Increased manufacturing costs and recent tariff developments negatively impacted gross margins by approximately 300 basis points compared to the prior year period.

A new partnership with iPro GPO, announced in April, expands retina laser portfolio access to over 1.8 thousand member facilities in the United States.

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Management clarified that the Q1 weakness was due to specific regulatory delays in Japan and EndoProbe material issues, both of which are now resolved.

The $800 thousand backlog is entirely retina-related and is expected to ship in the current quarter.

The PASCAL upgrade cycle remains a primary growth driver for the retina business in both U.S. and international markets.

While system placements remained flat, the primary strategic objective is driving higher probe utilization among the existing installed base.

Management is targeting the 2.1 million 'moderate' glaucoma patients in the U.S. as a significant untapped market opportunity.

Growth in the glaucoma segment is being supported by both unit volume increases and Average Selling Price (ASP) increases implemented in 2025.

Margins improved 300 basis points sequentially as the company moved past certain one-time reserves related to the contract manufacturing transition.

Future margins are expected to stabilize in the high 30s to low 40s as production costs normalize and the transition to third-party manufacturers continues.