STAAR Surgical’s first quarter results reflected a complex mix of regional performance and ongoing operational shifts. Management attributed the sharp decline in reported revenue to minimal sales to China distributors, who focused on consuming existing inventory amid macro uncertainty and tariff pressures. CEO Stephen Farrell acknowledged the magnitude of the challenges, stating, “We have to do better and we will,” while highlighting progress made in cost discipline, operational streamlining, and management changes, including his recent appointment and a new President and CFO. Outside of China, the company saw moderate sales growth across Asia-Pacific, the Americas, and EMEA, but restructuring charges and lower production volumes weighed heavily on profitability and margins.
Is now the time to buy STAA? Find out in our full research report (it’s free).
STAAR Surgical (STAA) Q1 CY2025 Highlights:
- Revenue: $42.59 million vs analyst estimates of $40.35 million (44.9% year-on-year decline, 5.5% beat)
- Adjusted EPS: -$1.01 vs analyst expectations of -$0.60 (66.9% miss)
- Adjusted EBITDA: -$26.39 million vs analyst estimates of -$26.51 million (-62% margin, in line)
- Operating Margin: -135%, down from -2.9% in the same quarter last year
- Constant Currency Revenue fell 44.3% year on year (6.5% in the same quarter last year)
- Market Capitalization: $842.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions STAAR Surgical’s Q1 Earnings Call
- Tom Stephan (Stifel): Asked about in-market procedure trends and competitive dynamics in China. President Warren Faust explained that procedure volumes were stable across the quarter and competitive impact from new entrants was minimal so far.
- Anthony Petroni (Mizuho Group): Sought details on consignment inventory levels and future tariff risk mitigation. CEO Steve Farrell described the multi-continent effort to position inventory for tariff protection and outlined plans to leverage new Swiss manufacturing capacity.
- Ryan Zimmerman (BTIG): Questioned the rationale for withdrawing guidance while discussing performance ranges. Farrell clarified the difference between formal guidance and transparency about internal expectations, emphasizing caution due to external uncertainties.
- Simran Korb (Wells Fargo): Inquired about the impact of leadership changes in China and the pace of recovery. Faust highlighted the new APAC strategy head’s local expertise and Farrell pointed to improving economic indicators and inventory normalization as reasons for confidence.
- Patrick Wood (Morgan Stanley): Asked about the U.S. go-to-market strategy and recent initiatives. Farrell reaffirmed commitment to supporting clinical adoption and economic competence among U.S. surgeons, with ongoing adjustments to cost structure and resource allocation.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) progress toward inventory normalization and resumption of China sales, (2) the successful approval and launch of the EVO+ lens in China, and (3) milestones in ramping Swiss manufacturing capacity to mitigate tariff impacts. Execution on cost controls and signs of margin recovery will also be critical indicators of STAAR Surgical’s ability to deliver on its operational turnaround.
STAAR Surgical currently trades at $17, down from $19.43 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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