Executive Summary

Q4 delivered modest top-line growth and material profitability improvement: revenue $12.70m (+1% y/y, +10% q/q) and positive adjusted EBITDA $0.37m, driven by 24% OpEx reduction and a 480 bps gross margin expansion to 44.0% .
Cyclo G6 momentum continued: 13,300 probes (+5% y/y) and 47 systems (+34% y/y); retina product revenue was mixed ($7.3m, -3% y/y) amid international capex deferrals, partially offset by stronger U.S. sales .
Management guided to 2025 cash flow breakeven and positive adjusted EBITDA on revenue consistent with 2024; a special April call will detail the Novel Innovations strategic investment ($10m closed; option for +$10m) and growth initiatives .
Key potential stock catalysts: sustained adjusted EBITDA positivity, execution on LCD-driven glaucoma opportunity, manufacturing cost reductions, and April strategic update/preannouncement of Q1 2025 .

What Went Well and What Went Wrong

What Went Well
- Achieved positive adjusted EBITDA ($0.37m) versus a loss in the prior year quarter, supported by OpEx falling to $6.09m (down from $7.97m y/y) and gross margin rising to 44.0% (from 39.2%) .
- Glaucoma growth and unit momentum: Cyclo G6 revenue $3.3m (+9% y/y), probes 13,300 (+5% y/y), systems 47 (+34% y/y); management cited rising physician engagement post-LCD as a tailwind .
- Strategic funding at a premium valuation ($2.00 per share equivalent) strengthens balance sheet and positions IRIDEX to pursue growth and consolidation opportunities; CEO emphasized modernization of manufacturing to lower costs and expand capacity .
What Went Wrong
- Retina international capital equipment softness weighed on segment revenue ($7.3m, -3% y/y), although U.S. sales partially offset the decline .
- U.S. glaucoma reimbursement uncertainty created temporary softness in domestic probes and systems during the quarter prior to improvement; international glaucoma trends were stronger .
- Year-end cash was low at $2.39m pre-investment, reflecting constrained liquidity before the March strategic financing, and total stockholders’ equity fell to $2.10m as of year-end 2024 .

Quarterly progression (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($m)	$12.63	$11.58	$12.70
Gross Margin (%)	40.7%	37.3%	44.0%
Total Operating Expenses ($m)	$7.77	$6.19	$6.09
Net Loss ($m)	$(2.68)	$(1.93)	$(0.83)
Diluted EPS ($)	$(0.16)	$(0.12)	$(0.05)
Adjusted EBITDA ($m)	N/A	N/A	$0.37

YoY comparison (Q4 2023 → Q4 2024)

Segment revenue (oldest → newest)

Segment	Q2 2024	Q3 2024	Q4 2024
Cyclo G6 ($m)	$3.3	$3.1	$3.3
Retina ($m)	$7.3	$6.5	$7.3
Other ($m)	$2.0	$2.0	$2.1

KPIs (oldest → newest)

KPI	Q2 2024	Q3 2024	Q4 2024
Cyclo G6 probes sold (units)	15,100	13,600	13,300
Cyclo G6 systems sold (units)	28	26	47

Balance sheet snapshots

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA	FY 2025	None	Positive adjusted EBITDA in 2025	New
Cash Flow	FY 2025	None	Cash flow breakeven in 2025	New
Revenue	FY 2025	None	Revenue consistent with 2024 ($48.7m)	New
Adjusted EBITDA	Q4 2024	EBITDA breakeven expected (given on Q3 call)	Achieved positive adjusted EBITDA $0.37m	Achieved

Additional items: Company will preannounce Q1 2025 results in April to highlight improved financial condition and open insider trading window .

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Cost reduction/OpEx discipline	Q2: Cost reductions underway ; Q3: Accelerated to align spend with revenue	OpEx to $6.09m; adjusted EBITDA positive	Improving
Glaucoma reimbursement (LCD)	Q2: Reimbursement stabilization noted ; Q3: New LCD limits MIGS, potential IRIX tailwind	Rising physician engagement post-LCD; stabilization in G6	Improving
Retina capex environment	Q2: Recovery in system sales; elongated cycles remain	Q3: International regulatory delays; elongated cycles	Q4: International capex deferrals weigh on retina; U.S. offset
Strategic review / M&A	Q2: Active review; aim for FY transaction	Q3: Multiple parties engaged	Q4: Strategic investment by Novel; option for further $10m
Manufacturing/COGS	Q3: Expand outsourcing to improve margins	Q4: Plan to modernize manufacturing to reduce costs, increase capacity	Improving
Liquidity	Q2: Convertible note $3.4m net proceeds	Q3: Cash $3.9m; note outstanding	Q4: Cash $2.39m YE; $10m strategic investment closed Mar-19

“Successful execution of the cost reduction program… and the achievement of positive adjusted EBITDA operations in the fourth quarter. We intend… to deliver positive cash flow for the year on revenue in-line with… prior year.” — Patrick Mercer, CEO .
“The investment was done at a price of $2 per share… significant premium… reflects the strategic nature of the investment, and Novel’s appreciation of the intrinsic value of both IRIDEX’s existing business and… potential.” — Patrick Mercer .
“Gross margin [44.0%]… and OpEx [$6.1m] decline… resulted from expense reduction measures implemented in the second half of 2024.” — Romeo Dizon, CFO .

Q4 call: no Q&A session; management to provide more detail in the April special call .
From Q2 Q&A: Competitive landscape for G6 — management emphasized nonincisional, repeatable therapy in moderate-stage patients; BELKIN’s device viewed as early-stage SLT-like and not direct competition; focus on probe utilization to leverage installed base .
From Q2 Q&A: Strategic review timing — commentary on micro-cap M&A environment, diligence timelines, and intent to reach a transaction in the fiscal year (prior framework, now superseded by Novel investment) .

Q4 2024: S&P Global quarterly consensus for EPS and revenue appears unavailable; only actuals are present (Revenue $12.70m actual; no EPS consensus). Values retrieved from S&P Global.*
For context, Q2 2024: Revenue consensus $12.80m* vs actual $12.63m (miss); EPS consensus $(0.12)* vs actual $(0.16) (miss). Values retrieved from S&P Global.* [Values retrieved from S&P Global]

Estimate vs Actual (illustrative prior quarter)

Period	Revenue Consensus ($m)	Revenue Actual ($m)	EPS Consensus ($)	EPS Actual ($)
Q2 2024	12.80*	12.63*	(0.12)*	(0.16)*

Note: Asterisks indicate values retrieved from S&P Global.

Margin/expense execution is the near-term story: 44% gross margin and materially lower OpEx drove positive adjusted EBITDA; sustaining this trajectory is key to multiple expansion .
Glaucoma growth runway: post-LCD reimbursement environment creates a structural tailwind for MicroPulse/Cyclo G6 utilization; watch probes/system sell-through trends as leading indicators .
Retina remains cyclical: international capex deferrals persist; U.S. strength can buffer but not fully offset — monitor capital environment and backlog conversion .
Liquidity improved post-quarter via $10m strategic investment (premium pricing) with potential for another $10m; reduces financing overhang and supports growth initiatives/manufacturing upgrades .
2025 guide implies operating consistency over top-line growth: model flat revenue with improving profitability (cash flow breakeven and positive adjusted EBITDA) .
Near-term catalysts: April preannouncement of Q1 2025, special strategic call, evidence of sustained adjusted EBITDA positivity, and any updates on product portfolio expansion via partnerships/distribution .
Risk checks: keep an eye on working capital/cash conversion, execution on cost-outs and manufacturing modernization, and retina capital cycles .