Sight Sciences Inc Stock

Thank you, everybody, for joining. First, importantly, there's a disclaimer on the Morgan Stanley website that I encourage everybody to go to. With that, I'd like to welcome the Sight Sciences team. We have Paul, Ali and Jim here today to give a little bit of a deeper dive on the story and an update on how the company is doing. And I know there's been a lot of exciting updates. So looking forward to unpacking those. Maybe to start us off, I'll turn it over to Paul to introduce Sight Sciences and give folks a level set on the business.

Sure. Thanks, and good to be here. Sight Sciences, we're an ophthalmic medical device company in growth stage. We are focused on 2 of the major problems in eye care, glaucoma and dry eye disease. Glaucoma is the world's leading cause of irreversible blindness. And dry eye disease is one of the top reasons for a visit to an eye care provider for a patient to visit an eye care provider. We're an interventional company. So we believe strongly that patient care needs to move out of the hands of the patient and into the hands of the eye care provider. So we've developed over many years, 2 compelling, clinically proven and now commercial stage and growing interventional technologies, OMNI in the microinvasive glaucoma surgery space and TearCare in the interventional dry eye space. Excited both businesses are growing. MIGS is back in growth and OMNI is back in growth mode and TearCare on the dry eye side is also growing very nicely commercially as we're working to secure additional payer wins and market access in parallel.

Okay. Great. And the story has evolved significantly over the last 12 months. So for investors who are newer to it, how would you kind of characterize the differences of the company today versus a year ago?

Yes. I think we're quite different today. Several years ago, we were primarily an OMNI, MIGS company. That product was in growth mode. TearCare, lots of work was getting done, great work getting done in the field with our team, development work, perfecting the technology, running multiple RCTs to prove it out and to ultimately secure reimbursement.

But the headline of the company, the headline story was OMNI and MIGS. And for several years, there was a challenge with Medicare around what they would cover, what they wouldn't cover and it kind of took us sideways as a public company with a single product. But now fast forward 12 months, and as I mentioned in my opening remarks, we are very excited to be back in growth mode with both businesses. So OMNI is back in growth. The MIGS market is back in growth. Our team is laser-focused on MIGS and making OMNI a standard of care. It's the leading implant-free MIGS technology. So that's very different.

I'd say on the interventional dry eye side of our business, it's night and day. So if you go back a year, we didn't have any market access a year ago. It was less than a year ago, we secured our first 2 successful kind of payer coverage in First Coast and Novitas. And so with that reimbursement, we have been hiring great people who are locked in and focused on the opportunity and training eye care providers on the TearCare procedure, and we're growing a very nice business. We've been almost doubling every quarter since we got reimbursement. So growing that business is very encouraging. And in parallel, again, we're working on both driving more depth of coverage in the First Coast and Novitas regions, the 13 states that are covered by those 2 MACs as well as broadening access beyond First Coast and Novitas.

That's great. It's nice to see the story truly turn into a platform opportunity and with businesses humming. And Jim, maybe I'll turn it to you. The performance in Q2 was a strong 20% growth following Q1 performance of 13% growth. What gives you confidence in the durable change in the company's trajectory versus this being an episodic set of quarters?

Yes. Thanks. That's a great question. And as Paul said, excited to be back in growth mode. And I think for us, it's really the underlying metrics of both businesses. So 13% growth in Q1, 20% growth in Q2, as you said, excited to be back in that double-digit growth mode. And on each business, in glaucoma, we exited Q2 with a record number of accounts, strong utilization, strong pricing. So the health of that business and the momentum there, we expect to continue. And then on dry eye, Paul mentioned, revenue has been doubling. The underlying metrics in that business are also really compelling and performing really well, number of accounts, utilization, all those patterns. So the strength of those underlying metrics and you also saw after the Q2 -- during the Q2 call, our raise in guidance. So our confidence in the trajectory of the business and the rest of the year is really based on those underlying fundamentals and the growth of the markets and our ability to go execute.

Great. Well, maybe we'll spend a little bit of time on the interventional glaucoma part of the story because in particular, that grew quite strongly in Q2. How should investors think about the sustainability of that business, in particular, across combination cataract procedures, market share gains, utilization, pricing and stand-alone procedures? Maybe, Paul, you can help unpack that a little bit.

Yes. We're obviously very excited about the growth of the overall market and the strength of each of those segments, combo cataract and standalone. We're focused on both. Look, again, stepping back from all of it, glaucoma is a very tough problem. MIGS is a very important part of the treatment algorithm. We continue to advance the field. Other players continue to advance the field. This interventional mindset is here. It's growing, and we're moving beyond a mindset into greater and greater activation. We have folks on the site team that are doing a great job, specifically targeting kind of activating the interventional mindset, moving from -- yes, this makes sense, intervening earlier makes good sense to actually helping the practices schedule those patients for interventions and getting those interventions done.

So combo cataract is back in growth. Stand-alone is back in growth. I think we're driving a lot of that growth. In stand-alone, in particular, while it has taken longer to kind of hit those growth levels that we've been seeking for many years, I think it is starting to accelerate. We're starting to see -- it's becoming a more meaningful contributor to our overall growth profile. So we're going to continue to invest in that and we expect over the coming years for stand-alone to become a bigger and bigger percentage of our revenue mix. I think historically, MIGS has been around 90%, 10% combo cataract for stand-alone. I think our mix historically was 85-15 approximately. You can't measure it exactly. I think we're higher than that now. I think we're probably at 80-20, maybe 75-25, somewhere in between there. So stand-alone is becoming a more and more important part of our revenue mix. And ultimately, we're here to help improve care for patients and improve visual outcomes over a longer period of time. Stand-alone interventions has to get done more frequently.

Okay. And with that, you're also launching the next-generation OMNI Ultra. What can you tell us about the new device and how you expect that to impact the business?

Yes. We've been innovating in this category as the category creators for many years. OMNI Ultra is the latest, Neha, of our kind of circumferential glaucoma surgery technologies. We are trialing it right now with our surgeons, so 20 to 30 surgeons across the country. We've been in operating rooms all over the U.S. just in the last few weeks. It's going very well. We're excited about it. Our surgeons are excited about it. We're going to do a broader launch of OMNI Ultra at the American Academy of Ophthalmology meeting in mid-October in about a month. So it's good to get these cases under our belt right now to prove it's delivering on what we worked with our surgeon customer base to improve upon, and it is.

So we have a single pass canaloplasty. So it's a more efficient procedure. We've introduced TruSync Plus technology into OMNI Ultra, which is a gel that we deliver -- viscoelastic gel to deliver it on advancement of a microcatheter and on retraction. So we're performing canaloplasty on the way in and on the way out. That's a very nice feature, the ergonomics of the device. I was in the operating room with one of our KOLs, I think, just last week in Arizona and the ergonomics, she shared with us, she liked everything about it. So we're excited about it. Our surgeon customers are excited about it, and you'll be hearing more at the launch at AAO in about a month.

Perfect. Sounds very exciting and very promising. Maybe -- you've described the stand-alone glaucoma as a significant long-term opportunity for the company. I think investors understand OMNI well in combination cataract procedures, but stand-alone glaucoma is less developed. What is the opportunity that you see? And how are you helping develop the market itself? And what do you see as kind of the potential for Sight down the road?

Yes. It's still a very significant market opportunity and need, frankly. There is a very real clinical need for glaucoma patients to receive stand-alone glaucoma interventions. The reality is, MIGS has come to market associated with cataract surgery. But the reality is the majority of glaucoma patients don't need cataract surgery. It's either like prior to them needing cataract surgery or they've already had cataract surgery, but they have glaucoma. So there is a way bigger patient population with glaucoma that just needs glaucoma surgery. We know the data says that if you intervene earlier on these patients, they're going to be better off than waiting until it's end stage.

So I think the medical community understands that now and the name of the game is activating that, moving from an understanding to those patients getting to the operating room and getting these procedures. And so where does that activation happen, Neha? It happens in the office. And so we are mastering, as we speak, kind of how to improve that office flow, identify -- helping our customers and staff identify these patients, help bring them back for a glaucoma consultation, much like they would with a cataract consultation. They would bring the cataract patient back for a cataract consultation day and they'd walk through all of the options and then they would set a surgical plan in place and then take that patient to the operating room. We're mirroring that, and it's working. And we're having our customers bring patients back for glaucoma consults. They're putting a surgical plan in place. And then they're getting an interventional glaucoma procedure. It's not always OMNI. We're doing the work that needs to be done. It's often OMNI, but it's not always OMNI and that's okay. And I think as more and more industry also starts driving this, driving the activation, patients will be better off. And obviously, it's one of those scenarios where industry will benefit overall.

Yes. Okay. Great. I mean it really is about improving patient access to care that they need and getting to that underserved patient population. So that's great. And maybe switching gears to TearCare, which has grown rapidly over the last several quarters. What's driving the progression? And what must happen for this to be a repeatable, scalable, predictable procedural market rather than simply an early adoption opportunity? Maybe, Ali, I'll have you unpack that a little bit for us.

Yes, sure. And we're really excited about the TearCare opportunity. There are 19 million people in the United States who suffer from dry eye disease and about 7 million to 8 million that have moderate to severe MGD-associated dry eye disease. And so there are a lot of patients that are seeking alternatives to drops and looking for interventional solutions. And with our progress that we've seen so far in the First Coast and Novitas jurisdictions where we have appropriate fee schedules established, we've been able to treat patients and help them improve their dry eye symptoms and signs. And so we're really proud of the impact that we've had in those markets. They cover about 13 states here in the U.S. and right now, that's traditional Medicare fee-for-service patients, and then we have some Medicare Advantage plans in those areas that have also followed suit.

We're really focused in about 5 states right now, though, that's where we have sales commercial team coverage. And -- so those are the areas that we're focused on. And as you said, we have shown great traction. We sold over 3,000 lids this last quarter, $2.7 million of total revenue, and that was almost doubling from the first quarter and the first quarter was almost doubling from our fourth quarter. So we have seen good traction because this is an important part of the treatment paradigm and people are figuring out the workflow. What we really need to have this become more of a standard of care is we need to have, first of all, expanded market access, more access to this important treatment for our patients. We also need practices to create the workflow around this? How are they going to identify patients and put them into a TearCare-specific workflow and decide to treat them. But we've seen really great early traction. We're really proud of the results that we've achieved, and we'll continue to make progress as we move forward here.

Okay. Great. And maybe you could give us a little bit of a status update on expanding TearCare's market access. How important is the Medicare versus commercial patient population of the market? And how do you see that kind of evolving over time?

Yes. So when we look at the patients that have dry eye disease, about 70% of them are covered under commercial plans and about 30% are under Medicare or Medicare Advantage plans. And so over time, it is very important for us to get commercial payer coverage because that is where the majority of the market is. And we are continuing to talk with the medical directors at those policies and make sure that we have claims submitted. We have great clinical data to support the necessity of the procedure, and we're continuing to have those conversations.

For now, though, with Medicare establishing fee schedules and at least about 1/3 of the Medicare covered lives, we are focused on activating in those. And because of our glaucoma business, we actually see some great synergies there where there are a lot of patients that are being treated with OMNI for glaucoma or cataracts or in those same types of practices that also experience dry eye. And so that synergy has been a good leverage point for us in these early days. But long term, we do need to establish broader market access, and we are very actively working on that, both with expanding MAC fee schedules across the rest of the states and then also with the commercial payers and Medicare Advantage as well. It's hard to predict exactly.

Of course, of course. I mean the last tailwind I want to cover on the TearCare system is you guys have received expanded label on it. Can you talk about the label and why it's so important as you think about the trajectory of TearCare?

Absolutely. We're really proud of the fact that we were able to get an expanded label for TearCare to really showcase what TearCare does, which is treat MGD versus just a local application of heat and a tool label. So we are really proud of the fact that we were able to get that expanded label, and it's just a testament to the value of the TearCare procedure. It already resonated with customers. Customers could clearly see intuitively the value and the benefit based on the SAHARA data and OLYMPIA data that we had already published. But it is a great validation on the treatment and also important for payers over time to see that we have a label that actually reflects treatment of MGD versus just the prior label.

Yes. Okay. Perfect. Well, that's very exciting. Paul, maybe I'll turn it back to you. So you've increasingly described glaucoma and dry eyes as intersection of intervention. Where are you seeing the tangible commercial benefits of that overlap today? And how meaningful can that advantage become over time?

Yes. So if you think about the primary interventions that are available in the anterior segment and the most prevalent diseases of the anterior segment, you think about things like cataract surgery, that's an intervention, minimally invasive intervention. You think about glaucoma surgery and MIGS, that's a minimally invasive intervention on a very large patient population. And now we're introducing another procedural intervention on another significant population -- patient population that needs better care, better treatment. So you have this mix of cataract interventions, glaucoma interventions and dry eye intervention. So when we -- and Ali mentioned it, we have thousands of relationships through our glaucoma -- microinvasive glaucoma surgery business with surgeons, with staff in offices. And those are often the same customers that we will be targeting with TearCare. Why?

First of all, these doctors, ophthalmologists, we also sell TearCare to optometrists. But in the case of the ophthalmologist, that ophthalmologist probably does cataract surgery. That ophthalmologist probably does glaucoma surgery. And that ophthalmologist probably will want to adopt TearCare as a procedure. So they're capable of adopting all of these things. They want to adopt these things. They make good clinical and business sense. And they have all of these patients. That same ophthalmologist has patients who have cataracts. He or she has patients who have glaucoma. He or she has patients who have dry eye disease. Sometimes, it's that same patient might have all 3 comorbidities. So you can start to see the synergies. So when we talked earlier about building up our skill set and omnipresence in offices around the country to drive stand-alone OMNI activation, a lot of the work is similar to activating TearCare in that practice and integrating TearCare into the workflow, just like integrating OMNI stand-alone into the office workflow to generate stand-alone OR visits.

So as we develop this muscle, this in-office workflow muscle, it's going to -- the benefits are going to accrue both to our OMNI market development work in stand-alone as well as our TearCare market creation work. And so it's super exciting. I think it's a unique synergy. I think we're one of the few companies that has 2 leading interventional technologies in 2 of these big categories that has this kind of synergy. So what is the long-term impact? I think it makes us far more like commercially effective, commercially more efficient and capable. So we'll see that. We'll see the dividends over the coming years.

That's great. And look, I do think, again, the platform story becomes more and more true as you have these synergies also come to fruition. I think the last few quarters have really highlighted the strength of having these businesses come online. You've seen that in the revenue growth. And Jim, I guess, for you, there's always a question from investors when it comes to high-growth stories around the balance of growth versus improving profitability. Last quarter, in particular, revenue grew significantly, but operating expenses also declined. So you're kind of structurally making those moves on the leverage side and getting that benefit of the pull-through. How should investors think about the balance, though, of improving cash flow versus continuing to invest behind growth and powering the platform to really achieve its full potential from a top line perspective?

Yes, it's a great question. And I think the simple answer is we plan to do both. So you saw it in the first half with revenue back in growth mode, double-digit revenue growth, adjusted OpEx down year-over-year. And in our updated guide for the full year, revenue growing mid- to high teens and adjusted OpEx only growing mid-single digits. So part of this was a restructuring we did a year ago intentionally to really focus on our strategic objectives and make sure we go -- deploy the capital in the most efficient and high-value opportunities that we can. So fast forward to this year, we're starting to see that operating leverage and a reduction in cash burn each of the first 2 quarters. So we expect to continue driving that leverage. And as we go invest for growth, really be disciplined about that scale up and make sure that we continue to drive leverage.

Okay. Great. And if you could give investors 2 to 3 KPIs that you, in particular, are focused on that you think that they should also look to, what would they be?

Revenue is, obviously, very, very important to us. But also those underlying metrics like I talked about in each of the businesses, active accounts, utilization. Those are very important to us. And most importantly, some of the P&L metrics and balance sheet, cash burn and our efficiency through the P&L in deploying that capital.

Okay. Great. Well, Paul, maybe to wrap, what do you think investors should be focused on over the next 12 to 18 months? Talk a little bit about the upcoming milestones that you'd like folks to make sure that they look out for, you think, about kind of key developments to structurally helping Sight achieve its long-term goals?

Sure. Yes. Well, we're obviously super excited about where we are today. We love being back in high-growth mode. We love the fact that both of our interventional businesses are growing. So executing very well across our fundamentals, like we discussed, continuing to grow OMNI in the combo cataract MIGS space, continuing to grow OMNI in the stand-alone space, launching OMNI Ultra with excellence and having that scale up throughout 2027. On TearCare, on the interventional dry eye side, continuing the commercial excellence in Novitas and First Coast and demonstrating that we have a wonderful business, recurring revenue, high-margin recurring revenue business in the existing covered states and of course, securing additional market access. So if we're back here a year from now, we'd expect to have additional payers, commercial as well as MACs covering.

So with all of that, lots to do, lots to execute with excellence, but also maintaining that OpEx discipline and continuing to show up that operating leverage. So I think we're going to execute well on all of those things. And then lastly, if we're here a year from now, we're also going to be excited to talk more about our interventional pipeline. Beyond OMNI Ultra, we've got a really elegant model of TearCare coming out next year, TearCare MGX, so we'll be excited to share with everybody. And then behind that, we have a platform -- a sustained release medication delivery platform that we think is going to be disruptive. We've shared it with a handful of ophthalmologists. They share our views that this could be disruptive in first line. And as we get close to human clinical trials, which I would expect, we'll be ready to talk about it if we're here 12 months from now.

Okay. Great. Well, look, that's a lot of things that you've listed out. So a lot of execution, and I know you guys are keen to do so and have building up a nice track record around that. So congratulations on all the success to date, particularly the performance in the first half of the year, and we're looking out for those milestones over the next 12 months.

Please do. Thank you.

Thanks for joining us.

Appreciate it.

Thank you. Good day and thank you for standing by. Welcome to the Site Sciences second quarter 2026 earnings results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and session. To ask a question, please press star 1 1 on your phone and you will hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Tripp Traylor.

Tripp Taylor with Investor Relations. Please go ahead. Thank you for participating in today's call. Presenting today are Site Sciences co-founder and chief executive officer, Paul Bedawi, and chief financial officer, Jim Rodberg. Also in attendance is Site Sciences chief operating officer, Allie Bauerlein. Here today, Site Sciences released financial results for the second quarter ended June 30, 2026, and raised its revenue guidance and lowered its adjusted operating expense guidance for full year 2026. A copy of the press release is available on our website at investors.sitesciences.com. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements, including statements about our projected financial results, including revenue and adjusted operating expenses, our product development plans, market acceptance of our products, changes in the reimbursement environment, and our ability to drive profitability and achieve cash flow break-even.

These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially from projected results due to a number of risks and uncertainties. For discussion of factors that may affect the company's future financial results in business, please refer to the earnings release issued prior to this call in the company's most recent SEC filings. We undertake no obligation to publicly update or revise any forward-looking statement except as required by law. Also on this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. We believe these non-GAAP financial measures are important indicators of the company's operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as additional information about our reliance on non-GAAP financial measures. I will now turn the call over to Paul.

Thanks Tripp. Good afternoon and thank you for joining us. We delivered a strong second quarter, with revenue growing 20% year over year. highest growth rate since 2023, and our second consecutive quarter of double-digit growth. This performance reflected growth in both segments, with interventional dry eye achieving record revenue as tier care adoption scaled in the reimbursed market, and interventional glaucoma delivering its highest year-over-year growth rate since the fourth quarter of 2024. Importantly, we achieved this growth while significantly improving operating results and meaningfully reducing cash usage. As a result of this strong performance, we are raising our full-year 2026 revenue guidance and reducing our adjusted operating expense guidance. At Sight Sciences, we are focused on advancing interventional eye care with innovative, minimally invasive technologies that address two of the most prevalent diseases in the anterior segment of the eye, glaucoma and dry eye disease. Across both categories, there is a growing interventional mindset, and we believe providers are increasingly seeking procedure-based treatment options that comprehensively address the underlying causes of disease in a minimally invasive manner and fit naturally into clinical workflows.

We believe site sciences is differentiated by our focus on enabling earlier procedure-based care across these two large and complementary disease states. Both Omni and TierCare were purpose-built to support this evolution toward minimally invasive treatment options for providers and patients. Beyond the individual growth opportunities of each platform, we see a broader strategic advantage in what we call the intersection of intervention. Glaucoma and dry eye disease often affect the same patients, are treated within the same practices, fit within similar procedural workflows. This overlap creates opportunities to deepen customer relationships, increase account utilization, improve the patient care pathway, and drive durable growth while reinforcing site sciences leadership and interventional eye care. Now, turning to our segments, starting with interventional dry eye. We are pioneering the reimbursed interventional dry eye treatment market.

We delivered another strong quarter with record revenue of $2.7 million, nearly doubling from the first quarter of 2026. As we build this significant category, the commercial signals continue to strengthen. We are also proud to have added approximately 4.1 million patient lives in the second quarter, during which certain insurance plans have published fee schedules in their provider portals that align with the updated Medicare pricing established in certain jurisdictions last year. This has increased our Tier Care patient lives with access to appropriate reimbursement from approximately $10.4 million to $14.5 million. Based on this revenue and reimbursement momentum, we are raising our interventional dry eye guidance to a range of $9 to $11 million, up from the previous range of $6 to $8 million. The continued strong performance in our dry eye business was driven by strength in two key metrics, account growth and utilization. Ordering accounts increased from 96 in the first quarter to 176 in the second quarter and included a healthy combination of new and reordering accounts.

These accounts purchased more than 3,000 smart leads in the quarter, more than double our first quarter volumes. Importantly, even as the active account base nearly doubled, average utilization also increased to approximately 18 smartLIS per active account in the second quarter, up from 16 in the first quarter. We also saw meaningful evidence of the value created by the overlap between our two interventional segments. In the second quarter, approximately two-thirds of SmartList's volume came from accounts that are also interventional glaucoma customers. And those overlapping accounts had significantly higher utilization than our interventional dry eye only accounts. This reinforces our view that our established interventional glaucoma relationships can help accelerate care adoption. deepen customer engagement, and create a more efficient path to growth in interventional dry eye. The commercial traction we are seeing with TierCare reinforces our conviction in the reimbursed procedural dry eye category.

While we remain in the early stages of developing this market, we believe we are building a durable and efficient recurring revenue business model that can scale across additional territories as market access expands. Our commercial strategy remains focused on driving adoption in accounts with a history of significant dry eye prescription activity. coupled with an interventional mindset where we believe tier care can fit naturally into practice workflow and patient care. We added sales and clinic support headcount in the second quarter and will continue making investments in our commercial infrastructure to strengthen our team and equip providers with the support needed to adopt and grow their interventional dry eye practices. Over time, we see meaningful runway for growth as practices continue building patient funnels and integrating tier care into their workflows. The adoption we are seeing also reflects TierCare's clinical outcomes, ease of use, office workflow compatibility, and value proposition for patients, providers, and payers. Expansion of our interventional dry ice segment to its full potential will be enabled by additional market access. We continue to advance this priority through productive dialogue with multiple MACs and continue to anticipate that additional payers will establish fee schedules and or coverage policies this year.

At the same time, we remain focused on executing within the currently serviceable market already in front of us. We believe continued execution in these regions can drive meaningful growth with additional positive payer decisions serving as important accelerators. Considering the encouraging care adoption trajectory, ongoing payer engagement, and differentiated clinical profile, we remain very well positioned to continue pioneering the development of the reimbursed interventional dry eye category and drive meaningful long-term growth in this business. Turning to interventional glaucoma, OMNI remains foundational to our interventional eye care platform and a key reason we are well positioned as the interventional mindset continues to expand across both glaucoma and dry eye. Since commercialization, Omni has enabled us to build deep relationships with surgeons and practices by offering a proven, minimally invasive, implant-free procedure that fits naturally into the glaucoma treatment pathway. This established base of customers, along with successful clinical experiences, procedural credibility, strong partnership all support continued growth in interventional glaucoma while also strengthening our commercialization within interventional dry eye In the second quarter, we achieved our fourth consecutive quarter of year-over-year growth with revenue of $20.7 million, up 8% versus the same period in the prior year. Growth was broad-based, with strength across all key metrics, including increases in active accounts, volumes, utilization, and pricing. ordering accounts reached an all-time high in the quarter, and increased 3% year over year.

Importantly, utilization returned to its highest level since the fourth quarter of 2024, when LCDs began to adversely impact MIGS volumes. We are encouraged by the progress in the first half of the year, and the underlying trends support our expectation for continued interventional glaucoma growth in the second half of 2026. As a result, we are narrowing to the high end of the range for our interventional glaucoma revenue guidance to $79 to $81 million, up from our previous range of $77 to $81 million. We are also pleased to highlight that in July, coverage of Omni and Scion expanded with the addition of approximately 25 million covered lives from Aetna, one of the largest health plans in the United States. Aetna now recognizes certain implant-free glaucoma procedures as medically necessary for mild to moderate open-angle glaucoma when specified clinical criteria are met. Our market access team has worked diligently to establish broad payer access for canaloplasty and goniotomy, enabled by Omni and Scion, and we have now secured access across all major national payers. Additionally, we are preparing for the launch of OmniUltra, our next generation technology following its recent FDA 510 clearance.

Ultra includes meaningful advancements that were informed by surgeon feedback and designed to capture the voice of the customer, improve the surgical experience, and give surgeons even greater confidence throughout the procedure. Two notable features are the ability to perform a complete single-pass canaloplasty and the addition of TruSync Plus technology. The single-pass canaloplasty was designed to improve surgical efficiency and minimize intraocular procedural steps. while TruSync Plus technology enables automated, controlled viscoelastic delivery during both advancement and retraction of our microcatheter. We believe OmniUltra is an important enhancement within our glaucoma portfolio with the potential to deepen engagement with customers while reinforcing our leadership position in implant-free mix. Looking ahead, our interventional glaucoma strategy remains focused on driving growth and penetration in the combo cataract market while continuing to develop the standalone market. At ComboCataract, we are focused on adding new surgeons, increasing utilization across our customer base, and continuing to take share with the differentiated implant-free technology. In standalone, our market development work continues to focus on helping practices implement a repeatable interventional glaucoma activation workflow.

This workflow was designed with the Cataract workflow in mind, a familiar and effective model for practices, is intended to help move the standalone opportunity from physician education to practical activation. Over time, we believe this can help providers identify appropriate patients, integrate the procedure into clinic operations, and build more consistent adoption. The standalone market remains a large, under-penetrated opportunity, and we believe the work we have done is beginning to contribute to growth today and is an important step toward expanding the role of interventional glaucoma in the treatment algorithm. To close, we delivered a strong second quarter with growth in both interventional segments, continued scaling care care in the reimbursed dry eye market. meaningfully improved operating results, and raised our full-year 2026 revenue guidance while reducing our adjusted operating expense outlook. As we move through the remainder of the year, we remain focused on advancing both of our growing interventional platforms and capitalizing on the strategic opportunity created by the intersection of intervention. We will continue investing in growth while maintaining the operational and financial discipline necessary to improve operations and advance toward cash flow break-even. We believe this balanced approach positions site science as well to drive sustainable growth and create long-term value for patients, providers, payers, and shareholders.

With that, I'll turn the call over to Jim to review our second quarter financial results and updated 2026 guidance in more detail.

Thanks, Paul. In the second quarter, total revenue was $23.4 million, a 20% increase compared to the prior year period, driven by growth in both of our interventional segments. This was our strongest quarterly revenue growth rate in three years. Interventional glaucoma revenue was $20.7 million, an increase of 8% compared to the prior year period, driven by increased Omni volume, a record number of active accounts stronger utilization. Interventional drive revenue was $2.7 million, nearly doubling from $1.4 million in the first quarter, driven by growth in ordering accounts and increased utilization within those accounts. Gross margin was 91%, up from 85% in the prior year period. The increase was primarily driven by a one-time impact of $1.4 million from tariff refunds received in the second quarter. Interventional glaucoma gross margin was 92%, which included a $1.2 million benefit from tariff refunds in the quarter.

Excluding tariff refunds, interventional glaucoma gross margin was 86%. with the prior year period. Interventional dry-eye gross margin was 85%, which included a .1 million benefit from tariff refunds in the quarter. tariff refunds, interventional dry-eye gross margin was 80%, up significantly from 38% in the same period in the prior year, primarily due to higher average selling prices. Total operating expenses were $25.3 million, a decrease of 11% compared to $28.3 million in the same period in the prior year. The decrease was driven primarily by lower personnel related expenses and stock-based compensation. As a reminder, we conducted a reduction in force in the third quarter of 2025, and this was the third full quarter operating under our lower cost structure. Adjusted operating expenses were $22.3 million, down 8% compared to $24.4 million in the same period in the prior year. That loss was $4.4 million, a 63% improvement from $11.9 million in the same period in the prior year.

Net loss per share was $0.08 compared to $0.23 in the second quarter of 2025. We ended the quarter with 79.8 million of cash and cash equivalents compared to 85 million at the end of the first quarter. Cash used in the quarter included a one-time $5.4 million payment related to a success fee paid following the final judgment in our litigation case against Alcon, partially offset by $1.6 million received in tariff refunds. Excluding these one-time items, cash used in the quarter was $1.4 million, down 81% from $7.3 million in the second quarter of 2025. This reflects meaningful improvement and underscores the progress we are making toward cash flow break-even. At the same time, we will continue making investments to drive growth in both interventional dry eye and interventional glaucoma. We ended the quarter with $40 million of debt, excluding unamortized discount and debt issuance With the operating discipline and cost structure to support growth in place, we believe this positions us to achieve cash flow break-even without the need to raise additional equity capital.

As a reminder, with respect to the Alcon patent litigation case, the final judgment from April confirmed past damages and interest totaling approximately $55 million, as well as ongoing royalties of 10% of HyDRIS revenue through patent expiration. As expected, ALCON filed an appeal, and we are continuing to progress through the remaining legal and appellate processes. To date, no cash has been received, and we remain confident in our position while the judicial process runs its course. Moving to our revenue outlook for full year 2026, we are raising revenue guidance to $88 to $92 million, which reflects growth of 14 to 19% compared to 2025. This is a prior guidance range of $83 to $89 million. This includes Interventional DRI revenue of $79 to $1 million representing growth of 4 to 7% and Interventional DRI revenue of $9 to $11 million compared to $1.6 million in the prior year. Our updated guidance reflects strong first half performance, the continued scale-up of interventional dry eye, and our focus on disciplined execution.

Turning to the third quarter, our updated guidance implies total revenue growth in the mid to high teens compared to the prior year. We expect interventional glaucoma to grow in the mid-single digits, reflecting continued growth against a tougher prior year comparison and historically lower procedural trends in Q3. We expect interventional dry eye revenue to be approximately $3 million, representing continued sequential growth following the significant step-up achieved in the second quarter. In addition to increasing revenue guidance, we are reducing our full-year 2026 adjusted operating expense guidance to $92 to $94 million, which reflects an increase of 5 to 7 percent compared to 2025. of 93 to 96 million. This updated outlook reflects the continued progress we are making to improve the efficiency of our operating structure while driving growth in both segments. As we move through the second half of 2026, we will continue investing in the growth opportunities in interventional dry eye and interventional glaucoma while maintaining expense discipline. Overall, we delivered strong second quarter performance. highlighted by 20% total revenue growth, continued momentum in both segments, and meaningful improvement in cash usage.

We look forward to building on this progress as we scale interventional dry eye. continue strengthening interventional glaucoma, and manage the business to drive sustainable growth, improve profitability, and progress toward cash flow break-even. Operator, please open the line for questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Adam Mader with Piper Sandler. Your live is live.

Hi, good afternoon. Thank you for taking the questions and congrats on the progress. a couple of different places I could take this, but I'll ask one on glaucoma, one on dry eye. Just maybe starting with glaucoma, you know, would love just to kind of better understand the interventional glaucoma market dynamics. You know, you put up good growth in Q1, you put up good growth in Q2. You know, I know there's a little bit of a comps dynamic in the back half of the year that you're, you know, facing. But as we think about underlying market conditions, growth, it feels like this has been potentially like the healthiest the market's been for some time. And so would you agree with that? And how do you think about like the underlying market trends going forward? And then I had a follow up. Thanks.

Yes, hi, this is Paul. We agree that the interventional glaucoma market and the interventional dry eye market, there's a growing interventional mindset in eye care generally, certainly in glaucoma. We do feel like we are finally operating in a stable environment. Team is very excited about that. I think they've been doing a great job. We believe the MIGS market is back in growth mode, maybe mid single digits. Our commercial priorities remain the same, to continue to grow and combo Cataract with taking share and expanding the market and adding new surgeons and developing the standalone market where we have a dedicated team that is implementing a playbook that we feel is beginning to work and contribute to growth. We feel like the interventional market is stable this year.

The outlook for 2027 remains stable. And we're very excited to be operating within that kind of stable environment where we can deliver commercial excellence.

Thanks, Paul. That's great to hear. And maybe switching over to Dry Eye, I guess I, you know, obviously a good quarter, wanted to ask about, you know, the reimbursement constructs and the payer coverage. And so, multi-part question, but the 4 million covered lives, I think, that were added to the in Q2 from the various payers. When did those come online? Did they impact Q2 at all? When do you expect to see an impact from those payer wins? And then, you know, as you kind of progress into the back half of the year, it does sound like you think you're going to make more progress. Maybe just frame. what's embedded in the updated dry eye guidance for for you know payer coverage can you get there with what you have today or do you need to onboard uh more more payers thank you.

Yes, thanks Adam, and I'll take those questions. And first of all, we were very happy to see that we had some of the Medicare Advantage plans in the quarter put fee schedules into their provider portals. And we have started to see some of our providers build those and get successfully paid for those services. So impact in Q2 was very modest from those plans. We can't directly tie it out or break it out only because our customers are doing the billing, not us. But our feel is that we were still very much early in that process during the quarter and most accounts just like with traditional Medicare fee-for-service, they really wanted to test it out themselves and see a handful of claims get paid. So, minimal impact to Q2 should be a growing impact going into the back half of 2026.

And that was something that we took into account when we looked at guidance. In terms of other payers and additional wins in the back half of the year, we took the same approach that we've taken all year long in setting revenue guidance for IDE, and we did not assume incremental market access wins into that revenue assumption. So, while we still feel like there is a pathway and that we should see additional payers establish either fee schedules or coverage policies in the back half of the year, we are not including those in the revenue guidance at this point.

That was very clear. Thanks, Allie. Yes. One moment for our next question. Our next question comes from the line of Nelson Cox with Lake Street Capital Markets. Your line is live.

Hey, congrats guys on all the progress this quarter. Wanted to start with the... dry eyed business. You nearly doubled your active accounts this quarter and I had a nice step up in utilization. Last quarter, I think you mentioned something about a handful of accounts. I think it was around 10% were driving kind of a larger share of the volume. So with that base broadening that fat. Are you kind of starting to see volume spread out across your new account ads or is that, are you still kind of seeing top accounts doing a lot of happy listing?.

Yes, thanks. Great, great question. And we really are seeing traction across, uh, variety of accounts now and seeing consistent utilization. Of course, as you would expect in any business, there are those top ten accounts that are continuing to perform at a much higher utilization than other accounts and that that continued in this quarter. But we're really happy with the durable repeatability that we've seen with accounts where they really are integrating this into their practice workflow across all of the accounts. So I think in general while there is some level of higher utilization in a handful of accounts, really across the board, utilization is performing very nicely. And we're seeing those accounts stay in where they are reordering and building their tier care business line.

Great. That's helpful. And then, sorry, was someone wanting to follow up on that? GO AHEAD. OKAY. OKAY. AND THEN ON OMNI ULTRA, AND THEN ON OMNI ULTRA, CONGRATS ON THE CLEARANCE THERE. CONGRATS ON THE CLEARANCE THERE. I KNOW THE RELEASE WAS full US launches on track for Q4. Maybe just walk us through what happens between now and then, and if we should expect any limited release with select surgeons first, and maybe how you're thinking about pricing relative to edge, and then, And is there any ultra contribution baked into the guide this year at all? Or should we kind of view that as upside down?.

Yes, hi Nelson, I'll take that one, this is Paul. Yes, we're very excited to have finally received the clearance for Altra, it's going to be a great product in the IG space. The single-pass canaloplasty and TruSync Plus technology is something that our customers have been wanting. We stay close with our surging customers. So as I stated in the prepared remarks, we do feel like OmniUltra captures the voice of the customer very effectively. So excited to launch it. As you said, the full launch we're targeting for AAO in a couple of months, Between now and then, we will be rolling out ultra some of our earlier users earlier customers and close partners of the company we obviously want to get as much feedback as we can on the product and procedure in advance of the full launch so expect expect that over the coming months and we're the team is super excited about it our omni surgeons are super excited to give it a test run we have done some early human testing OUS with the product so we feel very confident about its usability and performance and looking forward to expanding that clinical use experience here in the U.S. over the coming months and then the larger launch at the American Academy of Ophthalmology meeting later this year. We do expect beyond AAO for that kind of... full launch to the broad market to kick in in 2027.

So think of it in three stages. Under the early release now before AAO, the launch at AAO and expanding to that next group of surging customers and then broad utilization and training in 2027.

Very helpful. Thank you guys for taking the questions and congrats on all the progress.

Thank you. One moment for our next question. Our next question comes from the line of Steve Lichtman with William Blair. Your line is live.

Thank you. Hi, everyone, and congratulations. I guess first on dry eye, I think, Paul, you mentioned ongoing dialogue with the other MACs. Can you give us any sense of how those are going and why that dialogue gives you confidence in more positive MAC movement by the end of this year? Sure.

Yes, Steve, I can take that one. And, you know, we have continued to have good conversations across multiple MACs and other commercial payers as well. I think first and foremost, we always anchor on our clinical data. We invested heavily in the Sahara trial and that Sahara trial was a very long head-to-head RCT versus the standard of care of a stasis that also included a crossover and then a third phase to look at durability of treatment effect. And that is quite compelling. clinical data in support of the procedure and showing the benefits. On top of that, we also have strong health economic data that shows how this is actually not only better for the patients from a clinical perspective, but also better for the payers because this can save the payers money over time. versus traditional prescription eye drop. And so that is a compelling message to payers.

What we really need to do to continue to make progress here is just continue to have patient and provider advocacy increase with payers to show that this is something that is important to dry eye and should be a priority for them in terms of establishing either fee schedules or coverage policies depending on the payer. So, really, that's what we're focused on. We do believe that we have a pathway to establish either more fee schedules or coverage policies this year from payers, and we'll continue to provide updates. I will say that, of course, You know what payers do timing of payers are outside of our control. So that's not completely something that we can predict, but we do feel good about the conversations that we're having the engagement that we're having the. And we'll continue to make progress on that as we progress. And we certainly feel good about the long-term ability for us to establish broad market access for tier care moving into 2027 and beyond.

Great. Thanks, Allie. And then just on the glaucoma side, you know, obviously, as we look at the first half, you outpaced the market. I'm wondering if you could So just aggregate that for us a bit on standalone versus combo cataract in terms of contribution of growth and also where standalone currently is as a percent of your total glaucoma revenue and where you think the market is now from a penetration perspective.

Hi, Steve. Yes, we believe the standalone market is growing in terms of mix. I think historically we've stated, we believe we're around. It's hard to be very prescriptive and exact because the claims data, it's not just our technology within a certain code, within a standalone canalplot decode, for example. We believe our mix was maybe mid 80s combo cataract, mid teens standalone. We think that mix is shifting a bit more towards standalone as we focus on pseudophagic market development. We can see in the claims data that standalone claims overall are growing as a percentage of the overall mixed market. I think our share mix is growing faster the mix of the overall market but I think both you know general market standalone is growing and then our standalone mix is also growing and we believe faster than market packs.

Does that make sense? Yes, it makes sense. Thanks, Paul. Sure. One moment for our next question.

Our next question comes from the line of Tom Steven with CIFL. Your line is now open.

Great. Hey, everyone. Thanks for taking the questions and congrats on the nice print here. I'll start with a big picture question. A bit OpEx related, but the business obviously has nice momentum, Qualcoma growing solidly, IG, thematically in the early innings. Obviously, tier care, huge potential and off to a nice start. So, Paul, maybe for you, talk about your confidence in striking the right balance between spending discipline and supporting these key initiatives. Do you feel like your current OPEX plans near-term and, more importantly, long-term can support that?.

the upside potential of these efforts? We do, Tom. I think we have a very good balance. I think we have a history of a history of solid execution, both focusing on growth of the business. We're here to grow. We're a growth med tech company, but also executing with discipline. I think the last couple of years, I think the last couple of years, Our rigorous execution was on full display. We, you know, with the LCDs over the past few years, revenue stalled kind of flat. But it was a great, great time for us, Tom, to really, go deep into our business and make it as efficient as possible. those years when companies and teams are confronted with those kinds of challenges and they're forced to look really close and hard at the business, fine tune it and make it more efficient.

That was just our reality and I think we did that very well. So today as we emerge, we said over the last few years we were flying a plane with half an engine. with IG back in growth, with IDE back in growth, with an interventional mindset that's only growing with us being in two interventional categories with leading technologies, with the synergies that are kind of proprietary to site because of the intersection of intervention. We believe we're flying a plane with two very strong engines right now. You couple that with excellence in operational discipline that we developed and fine-tuned over the past few years, we think we've struck a really good balance between growth and spend. I think it's on display today, and we're going.

to carry it forward over the coming years. Got it. That's really encouraging. Thanks, Paul. Appreciate that. And then more of a near-term, very near-term question relative to my first question, but just on glaucoma in the third quarter, and apologies if this has been a struggling couple calls, but I think the mid-single-digit year-over-year growth Jim, that you mentioned implies roughly flattish sequential revs in the segment. Usually we see a sequential decrease in 3Q in Ophtho and really MedTech broadly. So, yes. What gives you guys, I guess, the confidence in achieving that level of maybe flattish, at least flattish sequential growth and potentially or hopefully posting upside to that? And what are kind of the key drivers in getting you there? Thanks again and congrats. Yes, thanks a lot, Tom.

First of all, we're really proud of the team's execution here in the first half. We exit Q2 with a record number of active accounts, four quarters in a row of growth in interventional glaucoma, and we expect that momentum to continue. Q3 last year was unseasonably strong across all of MedTech. And I think baked into our guide is a mix of the momentum we're seeing, the strength we're seeing in the underlying metrics, upset by potentially some of that seasonality. So we feel we feel good about how we closed out the first half and going into Q3 with a lot of momentum, with a growing interventional mindset. and a team that has executed extremely well over the last four quarters. Fantastic. Thanks, Jim.

One moment for our next question. Our next question comes from the line of David Saxon with Needham and Company. Your line is live.

Paul, Ali, Jim, thank you very much for taking our questions. This is Joseph for David. Starting off with dry eye, just wondering if you guys have seen any competitive response from LipiFlow or ILUX just in terms of, you know, positioning of a cash pay procedure. versus the reimbursement, a reimbursed procedure of peer care. And then apologies if you mentioned it, but I'm just curious, the utilization of uh tier care and existing omni accounts how did that look in the quarter.

Yes, happy to take both of those. So really, TierCare is in a class of its own. We're the only ones with a RCT that shows head-to-head clinical data that supports market access and reimburse care for this procedure. As you know, the other products on the market have separate reimbursement codes and operate within the cash pay only segment because they don't have the appropriate support for why this should be covered from a medical network. necessity perspective. So we really have not seen any new market dynamics from that perspective and really have been focused on market development in those areas where we do have fee schedules established. And because of that, it's really more about workflow and patient identification. Of course, we would like more access for patients in those markets because right now it is those Medicare beneficiaries that we are primarily focused on.

But really, the cash pay market is an entirely separate market, and we have not seen any competitive response. In terms of tear care utilization, we continue to see very nice synergies between our business and what we've already established on the interventional glaucoma side, and we have been able to leverage those very strong relationships that have been created over many years. primarily with the Omni product. And so that has helped us. I would say that a significant portion, about two thirds of the volume in the quarter was associated with accounts where we have some level of interventional glaucoma engagement. And so we're very, We're very happy to see that we do see higher utilization in those accounts versus what we see in an ID only account. And that has been a primary leverage point in these early days where market access is in that Medicare beneficiary population. which of course has a lot of synergies with that glaucoma base of patients. And, you know, of course, patients with glaucoma, there is a significant amount of overlap with dry eye in that population as well.

Okay, great. And then maybe just an update on the manufacturing transition to outside of China. Just wondering when that would be complete and maybe how should we think about the benefit of that once it's fully transitioned?.

Yes, hi, this is Jim. I can take that one. So expect that to be that transition and and diversification of our supply chain to be complete here in the second half. of 2026. Overall, this was not a cost reduction play. While we're always obviously looking to reduce costs and optimize our manufacturing, that wasn't the sole purpose of this. So we don't expect to see a significant impact to our already really strong margins.

Okay, that's clear. Thank you very much and congrats on the quarter. Thanks.

Our next question. One moment for our next question. Our next question comes from the line of Joanne Wench with Citi. Your line is live.

Good afternoon. How are you doing? Good. Good. And thank you. Excellent, and thank you for taking the question. When I'm rolling through this model, the number of active customers, new customers for glaucoma, significantly higher than what you've seen normally in the second quarter. Was there a particular promotion? Is this tied to particular reimbursement or is just, matter of you know post LCD impacts utilization and practice and training has settled out.

Yes, thanks, Joanne. I could take that. Nothing abnormal. I would say it's really good execution by our team. a market that is more stable and growing. Those are all the contributing factors to this. I think for us to be, to exit Q2 with an all time high in active accounts, says a lot, the team's performing really well. And it says a lot about our technology and the execution of our Salesforce.

Yes, Joanne, we've been at it for a while, as you know. We maintained laser focus on our interventional categories, IG and IDE, and we've been working Executing commercially with focus in IG for many years. We've been iterating our market leading implant free IG technology for many years. And I think you saw the results of all of that focus and strong execution in all of those results across.

the board. Thank you. And my second question has to do with expenses. You've been excellent at managing your expenses over the last couple of quarters. Should we think of that as a continued trend or are you at a steady flow go rate at this stage?.

Yes, Joanne, I can take that one. So as we look in the back half of 2026, we will be making additional investments in the business. largely in SG&A. There's a couple of key areas here. Tier care, commercial buildup as we continue to scale there. We'll continue to make investments TierCare Market Access to continue to build out our market access initiatives and progress in DryEye. And then continued investments within the Glaucoma business on standalone as well as driving strong execution there. And we'll continue to make investments in our pipeline.

So to answer your question, we will see an uptick in OpEx, but those are – we will be disciplined in our investments like we've shown over the last – couple of years and will continue to have a mix of high high return investments while also looking for cash flow break even and working towards that. All of that has been built into the guidance that we set, but I think it's important to understand our investment philosophy remains looking for high return opportunities while being very financially disciplined. and working towards cash flow break-even. Thank you so much.

Thanks. This concludes the question and answer session. I would now like to turn it back to Paul Bedali for closing remarks.

Thank you for joining us today and for your continued interest in site sciences. We are encouraged by our second quarter performance and the momentum and progress we are making across the business. We remain focused on disciplined execution and look forward to updating you on our progress next quarter. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good afternoon. I'm Ray. I'm part of the Medtech research team here at Bank of America, and it's my pleasure to introduce Paul Badawi from Sight Sciences here today. Welcome, Paul. Thanks for being here.

Our mission at Sight is to develop transformative interventional technologies that procedurally elevate the standard of care, allowing eye care providers to elevate the standard of care and empower patients to keep seeing.

We are an interventional eye care leader. We are active, commercially active in 2 large growing segments in eye care anterior segment, glaucoma and dry eye disease. Glaucoma is the world's leading cause of irreversible blindness and dry eye disease is one of the leading causes, if not the leading cause for a visit to an eye care provider. Some exciting news at Sight Sciences. Late last year, the middle of October, I believe, we announced we're pioneering a new category in eye care, reimbursed procedural dry eye. We announced our first 2 payer successes, 2 MACs, Novitas and First Coast established fee schedules for TearCare. So we're very excited to be building that business as we seek additional market access.

We have a very strong balance sheet to drive commercial growth, selective investments as we -- on the TearCare side and reimbursed dry eye as we drive additional market access and also prove the business model within First Coast and Novitas and make targeted commercial investments there and also continue to scale our growing interventional glaucoma business led by OMNI, developing -- further developing the combo cataract market and also developing the stand-alone glaucoma market. Very strong gross margins historically and continuing. We also have a history of very disciplined operating expense management.

Something unique that's developing right now is as we pioneer reimbursed dry eye and we continue to scale interventional glaucoma, we're developing this really unique intersection as we build a leading interventional eye care company. There's an intersection between our 2 businesses. There's an intersection of our customers. There's an intersection of our patients. A lot of high-volume surgeons, high-volume glaucoma surgeons, high-volume cataract surgeons, have lots of dry eye patients, a lot of glaucoma patients also have dry eye disease. And so there's a really interesting overlap as we scale these 2 businesses. We call it the intersection of intervention. Internally, we call it IX. It's kind of this third proprietary value driver within Sight.

We believe strongly and a number of our interventional-minded customers believe strongly that early intervention for patients is better. Patients do better. If you intervene earlier, the long-term outcomes are better. There's -- it's one thing to have an interventional mindset, but then actually activating that interventional mindset and performing cases is another exercise. That's the market development that we're focused on. So this is kind of a strategic road map of how we do it, how we partner with our customers to move from an understanding of intervention and the benefits it can have for patients to identifying those patients, educating them on the benefits and ultimately performing those procedures.

So EMBRACE, starting with EMBRACE -- EMBRACE procedural intervention as a better alternative to medication management, identify those patients who can benefit from procedural intervention, educate them, educate those patients. And ultimately, when you do this well, you can activate intervention, whether that's a glaucoma, minimally invasive glaucoma procedure in the operating room or a procedural dry eye intervention in the office.

So here's a snapshot of glaucoma. Again, it's the world's leading cause of irreversible blindness. Right now, it's still standard of care is mostly daily eye drops and maybe in-office lasers. There is a need for more procedural intervention earlier, a large and underserved market, about a $6 billion addressable U.S. market, over 4 million patients in the U.S. have been diagnosed with glaucoma.

Our flagship technology, OMNI. It's a very comprehensive MIGS procedure. It allows the surgeon to access the entire circumferential disease outflow pathway that causes glaucoma through a single bloodless sutureless clear corneal incision. Very comprehensive procedure, safe, efficacious, user-friendly, long-term proven clinical outcomes. Our technologies, our minimally invasive glaucoma technologies have been used, as you can see there, and about 390,000 procedures to date. So very well established.

It's clinically very proven. We've got very robust data, retrospective data, prospective long-term data going out to 3 years, significant real-world evidence, proving the consistency of outcomes when a surgeon does treat the underlying cause of disease, the disease outflow pathway comprehensively, they see consistently good outcomes. Those outcomes led to a very strong indication for use from the FDA. I think we have one of the strongest labels in MIGS. Our technology OMNI is indicated for lowering intraocular pressure in adults with primary open-angle glaucoma. So large market opportunity, both for combo cataract as well as stand-alone.

Here's a snapshot showing the different market opportunities. Again, our label allows us to educate on all of these benefits of OMNI in combo cataract, both mild, moderate and severe as well as stand-alone, mild, moderate and severe. They're all significant opportunities today. Most of MIGS is done in combination with cataract. So you see that mild to moderate combo cataract, about a $4 billion opportunity. There's an opportunity for expanding that combo cataract market. And then the stand-alone market, which you can see down below, also very significant. Actually, the stand-alone is on top, combo cataract is on bottom there.

So today's market, most of the revenue in MIGS is combination cataract. While there is a much bigger market opportunity in stand-alone, most of the revenue, there's very little revenue in stand-alone. So that's the opportunity to develop the stand-alone market, bring patients back to the operating. They likely already had cataract surgery. They may have had MIGS at the time of cataract surgery. There's an opportunity to bring them back for a stand-alone minimally invasive glaucoma procedure. So in total, about a $6 billion market opportunity.

Here, it's a breakout of what I was just getting at in combo cataract and standalone. Again, market-wise, 90% of revenue in MIGS, combo cataract, 10% of revenue in MIGS is stand-alone. Our mix is maybe a little bit different. I think we have a higher mix of stand-alone, about 85% of our OMNI revenue is done in combination with cataract and about 15% is done in stand-alone. We obviously have an effort underway to expand the stand-alone market. We have got a team, a really good team dedicated to expanding that market.

Here's the patient journey. Here's the unmet need. As you can see, cataract and MIGS, cataract is very high-volume surgical procedure, often presents -- patients can present with glaucoma. They might get MIGS at the time of cataract surgery, they might not. After a few years after cataract surgery, there's millions of patients who have had cataract surgery, either had glaucoma at the time of cataract surgery, got MIGS, didn't get MIGS, developed glaucoma after cataract. So they're pseudophakic, they're stand-alone. They could benefit. Think of a patient who's 2 to 3 years out following cataract surgery on, say, 2 to 3 medications, should you allow that patient's pressure to continue climbing, should you offer them another medication or should you surgically intervene with something that is consistently reliable and can help get the pressure down and the reliance on medications down. We believe, obviously, that minimally invasive intervention is a better option. We have a number of surgeons who also believe the same.

Moving on now to interventional dry eye. This is a new category that we're excited to be creating reimbursed procedural dry eye intervention. Here's a snapshot of dry eye disease, what it looks like. Historically, most practitioners believe that dry eye was an aqueous deficient problem. The reality is the majority of dry eye disease is due to obstructed meibomian glands. Within the eyelid, the glands produce oil that coats the tear. That oily layer helps prevent the tears from evaporating prematurely. When these glands are diseased, as you can see here, the oil becomes hardened, obstructed. There's no good oil coating the tear anymore and your tears evaporate too quickly, leading to signs and symptoms of dry eye disease. So this here, what you're seeing meibomian gland disease is by far the #1 cause of the dry eye disease category. And we have a very elegant clinically proven technology and procedure that helps address the disease that you're looking at.

We are working on creating with our customers a new order of care. Here is the case for the TearCare system. You shouldn't wait for intervention. Right now, the market dominated by artificial tears when those fail or other at-home remedies, patients move on to prescription Rx. Eventually, if that doesn't work, then you start working towards procedures.

Our clinical data proves -- let me click through all of this here. Our clinical data proves that intervening earlier with TearCare is better for patients. We have a long-term 2-year RCT, the SAHARA trial, where we randomized TearCare against the market-leading therapeutic RESTASIS. We went head-to-head. Our 6-month endpoint, very successful. We're successful on our primary signs endpoint showing superiority and showing clinically and statistically significant improvements in every sign and every symptom at 6 months.

We then followed patients crossed over the RESTASIS patients to TearCare, looked at the 12-month outcomes, again, further improvement, significant improvements in all signs and symptoms. We followed the original TearCare cohort out to 24 months to prove durability of treatment effect. The summary is the typical TearCare patient depending on severity of disease, moderate or severe will need somewhere between 1 to 2 treatments per year. So we knew that this data would be necessary to secure coverage. We wanted to show superiority to the gold standard. We wanted to show durability of treatment effect. And with that data, we've begun productive conversations with payers.

Here's a snapshot of the opportunity, a large market, 19 million dry eye disease patients. As I mentioned, the majority suffer from meibomian gland disease. So we estimate there's a 7 million to 8 million moderate to severe MGD patient opportunity in the U.S. Here's a snapshot of the procedure. It's in office. Devices are affixed the eyelids, 15 minutes of melting to melt the oily obstructions in all 4 eyelids. Then the eye care provider after the melting cycle, eye care provider will come and evacuate lid by lid, evacuate all of those melted obstructions from the patient's eyelids and from the patient's glands. The results are very near term. Patients feel better immediately and those results last. So it's a nice, elegant in-office procedure, user-friendly for both the doctor and for the patient.

I talked about our RCT. I'll skip it to save time, but we were very successful in all 3 phases of the SAHARA RCT, Stage 1, Stage 2 and Stage 3. All of those have been published. That is the foundation of the clinical evidence that's driving our payer coverage conversations.

We're excited to be growing TearCare. Two objectives: commercialize with excellence within the covered territories of Novitas and First Coast. Team -- our IDE team is doing a great job creating this category, the matrix, the sales excellence, the marketing excellence we're very proud of. Some of the metrics on launch, how efficient the sales reps are, how fast they get to certain revenue generating milestones. It's a really interesting model. We're proving it in Novitas and First Coast.

In parallel with that, we are working on expanding coverage within both MACs as well as commercial payers. There is a tremendous category here that needs to be created. We're excited to be creating it because millions of patients deserve to have better dry eye treatments, procedural dry eye treatments.

So lastly, here's a snapshot of our performance, 23% revenue CAGR from '20 to '25. Obviously, there, you see some flattening of our growth. We had on our interventional glaucoma business, we had to work through some Medicare challenges in LCDs historically. We are excited that, that is now behind us. We are operating in a more normalized environment. We are back to growth in interventional glaucoma. We are back to growth in mode in interventional dry eye.

So we have two growing interventional businesses. There are synergies between these businesses, the intersection of intervention. There are millions of patients who can benefit from intervention. We're excited to be back in high growth mode. We achieved finally double-digit growth for the first time in a while. Excited for IG to be growing again and for TearCare to be in really exciting growth mode as we build that category out over the coming years.

Lastly, behind the two interventional businesses that we're excited to be building. We've got a really exciting pipeline of other interventional technologies that we believe will be transformative to patient care in the years ahead.

With that, everybody -- our technologies help everybody to keep seeing. Thank you all.

Good day, and thank you for standing by. Welcome to the Sight Sciences First Quarter 2026 Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Hannah Jeffrey, Investor Relations. Please go ahead.

Thank you for participating in today's call. Presenting today are Sight Sciences Co-Founder and Chief Executive Officer, Paul Badawi; and Chief Financial Officer, Jim Rodberg. Also in attendance is Sight Sciences' Chief Operating Officer, Ali Bauerlein.

Earlier today, Sight Sciences released financial results for the first quarter ended March 31, 2026, and raised its revenue guidance and maintained its adjusted operating expense guidance for full year 2026. A copy of the press release is available on our website at investors.sightsciences.com.

I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements, including statements about materials business considerations, 2026 outlook and financial guidance. These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially from projected results due to a number of risks and uncertainties. For a discussion of factors that may affect the company's future financial results and business, please refer to the earnings release issued prior to this call and the company's most recent SEC filings. We undertake no obligation to publicly update or revise any forward-looking statements, except as required by law.

Also on this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. We believe these non-GAAP financial measures are important indicators of the company's operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. See our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as additional information about our reliance on non-GAAP financial measures.

I will now turn the call over to Paul.

Thanks, Hannah. Good afternoon, and thank you for joining us. We delivered a strong start to 2026 with first quarter results that demonstrated a return to double-digit revenue growth, continued strength in gross margin and disciplined operating expense and cash management. We drove solid execution across both segments, Interventional Glaucoma and Interventional Dry Eye. This included a third quarter in a row of revenue growth in Interventional Glaucoma and continued positive commercial traction in Interventional Dry Eye, where revenue nearly doubled from the fourth quarter, representing early validation of our procedural in-office recurring revenue business model.

Based on our performance and outlook, we are raising our full year 2026 revenue guidance while maintaining our adjusted operating expense guidance. We are continuing to build an interventional eye care company focused on 2 significant anterior segment diseases, glaucoma and dry eye disease, where we believe procedural options can play a larger role in the treatment paradigm. Our 2 flagship technologies, OMNI and TearCare are designed to address the root underlying causes of disease and can efficiently integrate into established practice workflows. They each support our focus on earlier procedure-based care while helping providers deliver consistent clinical outcomes for patients. We believe there is meaningful customer and patient overlap in our 2 business units, particularly in high-volume cataract and MIGS practices, where ocular surface disease is common and where physicians are increasingly incorporating procedural options in their treatment algorithm.

Glaucoma and dry eye disease are often present in the same patient and eye care providers often want to address both as part of the patient's treatment plan. We're already seeing this overlap where we are driving new TearCare adopters from our existing glaucoma customer base. As we continue to drive earlier procedure-based care across these 2 significant market opportunities, OMNI and TearCare can fit naturally along the same patient journey, supporting consistent clinical outcomes for patients as well as practice efficiency for providers. Over time, that broader portfolio participation can help deepen account penetration and support our efforts to scale both of these businesses and drive sustainable growth long-term.

Our strategy is to help advance interventional care earlier in the treatment paradigm of both glaucoma and dry eye disease and to accelerate these efforts by leveraging the overlap of our 2 interventional business segments that we call the intersection of intervention. We began to drive momentum from this unique intersection in the first quarter. As we build on this progress, we remain focused on delivering sustainable growth and creating long-term value for our stakeholders.

Now turning to our segments. I'll begin with Interventional Dry Eye. In our first full quarter following initial market access, we drove expanded traction in our reimbursed dry eye business and increased customer adoption of our TearCare technology. We are increasing our Interventional Dry Eye revenue guidance by $1 million at the midpoint based on our strong results ahead of expectations and our confidence moving forward. We are very pleased by the commercial traction we generated with our dry eye customers in the first quarter, where we delivered revenue of $1.4 million, nearly doubling our fourth quarter revenue. The majority of this revenue was from our disposable SmartLids, and we sold approximately 1,500 in the first quarter, up from approximately 700 in the fourth quarter of 2025, more than doubling the volume. This includes sales to 96 accounts made up of a balanced mix of new accounts and reordering accounts.

Average SmartLids utilization increased from approximately 9 per active account in the fourth quarter to approximately 16 per active account in the first quarter. Our strong dry eye performance is primarily in the First Coast and Novitas regions, where fee schedules were recently established. We are pleased with the early validation of our reimbursed business model and solid customer engagement with TearCare. In addition, we are driving encouraging cross-selling dynamics with approximately half of all active accounts coming from our existing glaucoma customer base and with higher utilization in those accounts versus the Interventional Dry Eye-only customers. These early indicators demonstrate the depth and value of our established relationships and the synergies that exist between our 2 business segments.

Importantly, early utilization trends are improving with a growing number of accounts reordering and increasing procedure volumes. For accounts that reordered in the first quarter, utilization more than doubled from fourth quarter volumes. In addition, new accounts onboarded in the first quarter are ramping at higher initial levels than those in the prior quarter. Together, these dynamics point to improved customer targeting and enhanced office workflow training, strengthening adoption and early momentum for scaling this business. We are also focused on supporting practices as they incorporate TearCare into their workflow. A growing number of accounts have successfully completed reimbursed procedures and reordered SmartLids, which we view as a positive early indicator of repeat utilization. This adoption reflects the effectiveness of our targeted commercial approach, prioritizing high-volume dry eye practices with significant Medicare patient volumes.

These efforts are translating into meaningful traction with increasing interest from both new and existing accounts, supporting the broader shift towards Interventional Dry Eye care. To build on this foundation, we have continued to expand our commercial team in the first quarter, adding resources in both our sales rep and clinic support functions to enhance execution and deepen provider engagement. Our focus remains on scaling efficiently within established reimbursed markets while positioning the organization to drive meaningful growth as we move through 2026. In parallel, we are also focused on expanding market access through engagement with additional MACs as well as commercial payers. We are actively engaged in discussions with multiple MACs, including detailed reviews of our clinical and economic data and submitted TearCare claims reviews.

Based on these activities and discussions, we expect additional payers to establish fee schedules this year. We are encouraged by our continued progress and view expanding TearCare market access as an important catalyst to support long-term growth. Building on a foundation of clinically differentiated technology, initial reimbursement in select markets, ongoing reimbursement discussions and strong commercial traction, we are excited about our opportunity to drive the development of this large and underpenetrated reimbursed interventional dry eye market.

Turning to Interventional Glaucoma. Our OMNI technology continues to demonstrate its clinical value within the evolving glaucoma treatment paradigm and its increasing importance as a differentiated technology and durable growth driver in the expanding field of Interventional Glaucoma. In the first quarter, we delivered strong performance and generated the third consecutive quarter of year-over-year growth. Revenue was $18.3 million, up 7% versus the prior year period. Ordering accounts increased 6% compared to the prior year period, driven primarily by reactivating dormant accounts and adding new accounts. The revenue growth was primarily driven by increased volume and price and partially offset by slightly lower utilization per account. We finished the first quarter with a strong March with procedure volumes increasing from a slower than typical start in January and February.

Additionally, we drove continued strong adoption of OMNI Edge, which helped in reactivating accounts and adding new accounts. OMNI Edge includes a higher capacity viscoelastic delivery feature while maintaining the trusted safety, efficacy and usability of the OMNI technology platform. For 2026, our Interventional Glaucoma strategy is anchored in consistent execution as we work to expand the combo cataract market and capture additional share as well as further unlock the stand-alone market opportunity. In the combo cataract market, we are focused on adding accounts through training new surgeons, capturing share in existing accounts, expanding adoption and penetration with MIGS-naive surgeons and increasing combo cataract volumes through Interventional Glaucoma activations.

In stand-alone, we have hired a dedicated market development team and are encouraged by the early progress they are making in activating stand-alone glaucoma interventions. Together with our differentiated technology and experienced commercial organization, we are in a strong position to deliver our growth targets in 2026 in Interventional Glaucoma. Looking closer at the stand-alone opportunity, as the shift toward earlier interventional treatment continues to shape the glaucoma treatment landscape, our effective market development team has been instrumental in partnering with surgeons and their staff to help them introduce a streamlined and actionable Interventional Glaucoma patient workflow that is modeled after the well-known and proven cataract patient workflow. This differentiated approach is helping practices identify patients and support increased procedural interventions in those practices adopting this workflow. We believe this new Interventional Glaucoma patient workflow partnership with our customers represents an important driver of market development and a growing contributor to long-term revenue growth.

Before turning the call over to Jim, I want to briefly touch on the latest regarding our patent infringement case against Alcon. In April, the court issued its final judgment, which upheld the jury's finding of willful infringement by Alcon and confirmed past damages and interest totaling approximately $55 million as well as ongoing royalties of 10% of Hydrus revenue through patent expiration. This ruling is subject to appeal, and no cash has been received to date.

To close, we delivered a strong start to 2026 in both our Interventional Glaucoma and Interventional Dry Eye business segments and the progress we made in the first quarter reinforces our confidence in the year ahead, including our decision to raise revenue guidance while maintaining our adjusted operating expense guidance. In Interventional Glaucoma, we generated our third consecutive quarter of year-over-year growth and remain focused on expanding our leadership position in the combo cataract segment while continuing to activate stand-alone intervention. In Interventional Dry Eye, we are encouraged by increasing customer adoption and utilization, and we remain focused on scaling efficiently in markets where reimbursement is in place while working to expand market access over time.

We are also excited about the increasing recognition within the eye care community that there is strong patient overlap between Interventional Glaucoma and Interventional Dry Eye. We are uniquely positioned to leverage this synergy with 2 leading interventions for these 2 large and overlapping disease categories as we build something bigger, a leading interventional eye care company. Across the company, we are investing to support growth while maintaining the operating and financial discipline needed to improve cash usage and advance our path toward cash flow breakeven.

With that, I'll turn the call over to Jim to walk through the financials.

Thanks, Paul. Before discussing the first quarter results, I want to underscore that we are executing against our strategic goals from a position of strength with the operating discipline and cost structure we need to support growth, and we believe this positions us to achieve cash flow breakeven without the need to raise additional equity capital. Unless otherwise noted, my comments reflect results for the first quarter of 2026 and comparisons are to the same period in the prior year.

In the first quarter, total revenue was $19.7 million, a 13% increase, driven by growth in each of our 2 Interventional segments. Interventional Glaucoma revenue was $18.3 million, an increase of 7%, driven by increases in ordering accounts and average selling prices and partially offset by lower utilization per account. Ordering accounts grew 6% from the prior year as well as 1% sequentially from the fourth quarter. Interventional Dry Eye revenue was $1.4 million, up from $0.4 million and nearly doubling from the fourth quarter of 2025. Dry eye results were driven by increases in average selling prices, utilization and ordering accounts, reflecting strong momentum in our reimbursed Interventional Dry Eye business model. Gross margin was 86%, flat compared to the prior year.

Interventional Glaucoma gross margin remained strong at 87%, in line with the prior year period on higher average selling prices and product mix, slightly offset by tariff costs. Interventional Dry Eye gross margin was 72%, up from 71% in the same period in the prior year, primarily due to higher average selling prices and increased SmartLids sold, mostly offset by a onetime inventory overhead adjustment in the prior year. Over time, we expect our dry eye margins to continue to improve as we scale our reimbursed business model and offset absorption and overhead costs.

Total operating expenses were $29.4 million, an increase of 2% compared to $29 million. primarily due to a $5.4 million one-time fee earned upon a successful final judgment in the Alcon litigation case described above. Excluding this fee, operating expenses were down 17%, driven primarily by lower personnel-related expenses and stock-based compensation. As a reminder, we conducted a reduction in force in the third quarter of 2025, and this past quarter was the second full quarter of our lower cost structure.

Adjusted operating expenses were $21.2 million, down 14% compared to $24.7 million. Net loss was $13 million or $0.24 per share compared to a net loss of $14.2 million or $0.28 per share. We ended the quarter with $85 million of cash and cash equivalents compared to $92 million at the end of 2025. Cash used was $7 million in the quarter, which was down significantly from $11.6 million in the first quarter of 2025. We ended the quarter with $40 million of debt, excluding unamortized discount and debt issuance costs.

Moving to our revenue outlook for full year 2026. We are raising revenue guidance to $83 million to $89 million, which reflects growth of 7% to 15% compared to 2025 versus the prior guidance of $82 million to $88 million. This includes revenue for our Interventional Glaucoma segment of $77 million to $81 million, representing growth of 2% to 7% and our Interventional Dry Eye segment of $6 million to $8 million compared to $1.6 million in the prior year. This guidance reflects our philosophy of setting achievable targets and our focus on disciplined execution and the growth we believe we can deliver.

Looking closer at the second quarter, we expect total revenue to grow low-double digits compared to the second quarter of 2025. We expect Interventional Glaucoma to grow mid-single digits compared to the second quarter of 2025. Interventional Dry Eye revenue is expected to be in the range of $1.5 million to $2 million in the second quarter, and we expect that revenue to continue to scale throughout the year. We are reaffirming our full year 2026 adjusted operating expense guidance of $93 million to $96 million, representing an increase of 6% to 9% compared to 2025. The increased spend compared to the prior year is driven by targeted commercial investments to capture growth opportunities in both Interventional Dry Eye and Interventional Glaucoma, while we continue to manage the business with operating discipline.

We are pleased with our return to double-digit revenue growth in the first quarter. Looking ahead, we are excited to continue pioneering the Interventional Glaucoma and Interventional Dry Eye markets, and we are laying a strong foundation for sustainable growth and continued success.

Operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Frank Takkinen of Lake Street Capital Markets.

This is Nelson on for Frank. Congrats on the solid progress. Maybe just to start, I want to start on the SmartLids utilization stepping from 9 to 16 in the quarter per active account. So, a strong read there. For your most mature kind of fully reimbursed accounts, can you talk about that steady state utilization and how we should think about that trajectory for the broader kind of installed base moving forward?

Yes. Thanks, Nelson. And it's a great question. And the good news is I don't think we're anywhere close to a steady state yet. All of our accounts are still relatively early in their usage of TearCare across their Medicare -- traditional Medicare fee-for-service population. And so, I think even our largest accounts are not yet fully activating this across their patient population. And then, of course, once we can also get additional coverage, that will also allow our customers to treat more and more patients across their patient pool.

I will say when we look at our customer mix, there are a handful of accounts, probably 10% of the accounts that are driving a larger portion of the total volume here. And that's -- those are accounts that have really figured out the workflow, how to put this into their overall practice. And frankly, we're really proud of the progress that we had in the first quarter, almost 100 active accounts. These accounts are really like the true early adopters of TearCare, the true believers in the future of procedural dry eye interventions. And we really see all of our customers are still very early in their utilization curves, which is really just a testament to how large this market is and how many patients could benefit from a procedural dry eye intervention.

That's very helpful. And then just quickly, you called out adding sales reps and clinical support resources during the quarter. Can you maybe size the Interventional Dry Eye team today and where we should see that going just throughout the year?

Yes. So, we're not going to provide a detailed sales force headcount every quarter, but we did incrementally add in the quarter. I know we reported at the end of 2025, we had about 10 between our direct sales force as well as clinical specialists. So that team is still very small and growing. So, we are investing in the team, really focused on those First Coast and Novitas areas where we have Medicare fee schedules established, and we would expect to continue to grow that team throughout the year.

Our next question comes from the line of Adam Maeder of Piper Sandler.

Congrats on a good start to the year. Two for me. And I guess the first one, I wanted to start on Interventional Glaucoma. And I really was hoping you could kind of double-click and contextualize the good result there, the plus 7% year-over-year. Curious to get your view on kind of underlying market trends, competitive dynamics. I think one competitor may have had a little bit of a supply issue, pricing. And then you obviously talked about some increment weather. So did you recapture those patients in the quarter. So just maybe kind of bring that all together for us? And then I have a follow-up.

Yes. Hi, Adam. We're excited to be back in growth mode in IG, in Interventional Glaucoma. The glaucoma community recognizes now that intervening earlier is better long-term for patients. So, there's this real tailwind in the ophthalmic community. You can feel it. We were just at ASCRS, A-S-C-R-S, American Society of Cataract and Refractive Surgery meeting last month, and there's just so much talk around earlier intervention, both IG, Interventional Glaucoma as well as IDE, Interventional Dry Eye. On the glaucoma side, we all know there's millions of glaucoma patients that are currently on medications and could benefit from an earlier intervention.

That market is growing. We're excited to be a leader. We're the leading implant-free microinvasive glaucoma surgical option in the market. And over time, as this category grows, we expect to continue to innovate and lead the category we've created. We've got new technology coming out. We're trying to stay ahead of the market with OMNI Ultra later this year. It's our third straight quarter of year-over-year growth. So, we're excited about that, excited about the tailwind of Interventional Glaucoma and continuing to lead as the implant-free market leader in IG.

Adam, this is Jim. On the Q1 dynamics, we closed the quarter very strongly. As you can imagine, March tends to be a pretty significant part of the first quarter and team executed really well. And we leave the first quarter feeling really good about where we're at. We had strength in March. We expect that strength and momentum to continue into Q2 and the balance of the year. And overall, confident about our path forward.

Okay. Fantastic. Very helpful color and great to hear the comments on the market. And then maybe switching over to dry eye. Congratulations, Ali, on the progress there. I wanted to push a little bit in terms of market access and try and better understand the expectations for new payer adds, whether it's on the commercial or the MAC side. I'm not sure if you can be any more specific in terms of potential timing there. And I guess, really, the -- one of the questions I have is, can you hit the updated $6 million to $8 million without any additional payer wins?

Yes. Thanks for the follow-up here. And of course, we are also very focused on increasing reimbursed access to TearCare with both Medicare payers as well as commercial payers. We're having continued good conversations across the payer mix really focused on the SAHARA data, the health economic data and also showing claims utilization and interest in the procedure. And so we are, of course, building a category here. It does take time. We still expect to have additional payer wins in 2026. It is hard to predict exact timing there, but we fundamentally don't feel any different about our ability to get payer wins over time here to get access to this technology for our patients and our ECP provider partners.

I will say that we do have some incremental positive movement with -- there are some commercial payers that are paying regularly, while they haven't established coverage policies. There are payers that are moving towards those types of activities, and we feel good about it. In terms of guidance, yes, we still feel extremely confident -- the guidance is put in place that only takes into account First Coast and Novitas fee schedules in place for 2026. And really, that market potential alone is still very large for us. We're still a very small fraction of the patients that have moderate to severe dry eye disease with MGD even within that traditional Medicare fee-for-service population. So very much early stages, and it's a large market, and we feel very good that we set appropriate guidance, taking into account all those factors for the areas where we currently have fee schedules established.

Our next question comes from the line of Steve Lichtman of William Blair.

Congratulations on the progress. Wondering if you could talk about customer accounts for dry eye in the regions that you are approved with reimbursement. What's your latest view on sort of the denominator, the number of viable centers that you think are target sets for you within the regions that you're currently in?

Yes. I'm going to shift that question a little bit and talk about ECPs, eye care providers because that's an easier way of thinking about this opportunity. When we talk about across the U.S., really the targeted payers -- targeted providers that do a lot of prescription eye drops, do procedural interventions for dry eye, have strong populations of patients here. We've talked about historically about 6,500 ECPs fall into that bucket as kind of that initial target population. Within First Coast and Novitas, there's 2,000 ECPs that would meet that same criteria. So, we are still very small. Obviously, active accounts is a little different than eye care provider counts. But even with there being a couple of ECPs per active account, we're still very much in the early penetration days of the opportunity within First Cost and Novitas.

Great. And then just a follow-up on the patent suit. Obviously, a decent amount of cash pending here for you guys. Either Paul or Jim, can you talk about the next steps here? I think Alcon has an opportunity to potentially appeal, but within the next couple of weeks, if that -- or there could be a settlement. What's the next steps and remind us of the interest accrual if it does go to appeal?

Yes. So, I can give an update on at least the amount. So, in April of this year, final judgment was issued and that preserved the jury verdict from 2024. That awarded us updated damages, interest and royalties of approximately $55 million as well as ongoing royalties of 10% of future Hydrus sales through the patent expiration. We have not received any cash to date, and we will not book anything, obviously, until such time when appeals would be exhausted and cash would change hands, for example. The final judgment is subject to appeal. And beyond that, we won't comment further on pending litigation, but we feel we are in a very strong position in this case.

Our next question comes from the line of Tom Stephan of Stifel.

First one on dry eye. Nice to see the guidance raise already really strong sequential growth in utilization. Maybe I'll just ask sort of a big picture question. Like what have been, call it, the top one or two upside surprises or learnings amidst kind of this relaunch, if you will? And part two to that, how do you feel about the playbook you're developing for when different markets and patient populations hopefully unlock and sort of your ability to deploy that quickly? I'll leave it there.

Yes. So, one to two areas, we've had a lot of learnings since launch, and most of them have been very positive, both about how large of an opportunity this is, how many patients really are looking for a better treatment, but also the synergies with our IG business. That's probably the largest benefit that we've seen is that those accounts are a large part of the accounts that have activated in these early stages. They have larger traditional Medicare fee-for-service populations, and they are looking for ways to help their patients who also experience a significant amount of dry eye. And so that is a very large part of our initial launch here, initial success. And we also see that those accounts are having higher utilization than the non-IG synergistic accounts. So really positive momentum there and good synergies across the team.

In terms of the playbook and what we see as we move forward here, there is still a lot of workflow activation that needs to occur when account decides that they want to implement procedural dry eye. So, we do think that this is involved with people, people really being in accounts and helping the clinics set up their workflow, identify the patients and identify how best to put them into a dry eye treatment workflow. And so, because of that, we do think that as we have additional market access wins, particularly in new geographies, that will involve additional commercial investments as we grow the team and, of course, work with the accounts that we already have in those areas as well.

And then as we have additional density happening with additional payers coming on in already markets where we have Medicare fee schedules, those are easier to activate because those accounts is just adding new payers that can process and add those patients into that same workflow. Over time, that may also shift the accounts that we're targeting. As you know, we are targeting right now a lot of those higher-volume ophthalmology practices that do have a lot of Medicare patients, which is where we're seeing the synergies with IG. Over time, that population may shift where we know that there is -- when we look at the dry eye disease market, 70% of patients are covered by commercial plans and 30% are being covered by Medicare or Medicare Advantage plans.

And so right now, we're targeting a subset of a subset there. As we get the commercial plans, that can really shift our strategy in terms of account targeting and where we look to really partner with people. But we're really happy with the progress we've seen in terms of creating workflow within accounts, and it is being replicated very efficiently across accounts so they can work TearCare into their procedure flow, whether that's I'm going to have a TearCare day or I'm going to have multiple TearCare afternoons or TearCare morning. They tend to stack them up in the day to be efficient. But all of that is being worked through and then we're having the assessment upfront to identify those patients that may benefit from a procedural dry eye intervention and working that into the workflow. So, a lot of different things coming together right now, but we do think we're in a good spot to continue to execute across this new area.

And Tom, I just want to add a few thoughts to Ali's comments around the intersection. Sight Sciences started -- we were born interventional. We started with OMNI and then we developed TearCare. These are 2 very strong interventions for 2 of the leading diseases in eye care. So, while that's been our philosophy, I think what we've seen and we've been pleasantly surprised by is the rate at which our customers and specifically surgeons, as Ali mentioned, have recognized the overlap of these 2 disease categories and the possibilities of offering these same patients multiple interventions. So, the alignment between the ophthalmic community and our philosophy of building an interventional eye care company has come faster, I'd say, than even we expected.

When we go out in the field and we meet with our happy OMNI surgeons and we're working with our dedicated commercial team, it's amazing how many of our glaucoma surgeons talk about how many of their glaucoma patients have dry eye disease, and they're complaining about their dry eye disease because you can feel that. They're not complaining about their glaucoma because it's a silent disease, unfortunately. And so, the -- us being able to show up as their interventional partner having an intervention for their glaucoma patients, having an intervention for their glaucoma patient who also has dry eye disease. It's a very powerful partnership. And I think we're just -- we're surprised and very happy about how fast the community is acknowledging that. We're calling it again internally IX. It's the intersection of intervention. It's this proprietary angle we have, and we're looking forward to like driving the benefits and the synergies of these interventional platforms to reach more patients with better interventions, offering better care more quickly.

Our next question comes from the line of Joanne Wuensch of Citi.

You seem to be making a fair amount of progress on expense management, cash management and everything else that goes along with it. Can you sort of give us a view on your philosophy of how do you balance everything that you're doing in terms of penetrating the MAC and educating the physicians and ramping them with the other metrics that we come to view and love on the side of Wall Street.

Joanne, thanks for the question. I'll take that one, and Paul and Ali can add as needed here. But we're in a really good spot with a really healthy balance sheet and a strong pathway to cash flow breakeven, while at the same time, having the ability to go invest in these 2 significant opportunities. As we look at 2026, the most important investments for us this year are in -- on the dry eye side, both in market access resources as well as commercial resources to scale up that business in markets where we already have reimbursement. And then on the glaucoma side, continuing to invest in the stand-alone opportunity there. So, the balance for us is we want to make disciplined, high-return investments. And we're fortunate, I think, to have the flexibility to go faster on some of those investments where there's outsized opportunity for growth.

And the only thing I would add to that, Joanne, on the R&D front, look, we have a history of developing -- cost effectively developing clinically differentiated interventions that can elevate the standard of care. I think we've done that well with OMNI. We've done that well with TearCare. We're making very selective -- we've got a number of selective R&D programs that we're investing in that we're going to be very excited about, all within this interventional category as we build a focused interventional eye care company. But we've got very interesting pipeline that we're developing cost effectively. And in due course, we're looking forward to sharing more about that, hopefully later this year.

Our next question comes from the line of David Saxon of Needham & Company.

So, I wanted to ask a similar question to Adams, but from a slightly different angle. So, I think you're only in 4 of the 13 states in First Coast and Novitas, those 2 regions or jurisdictions, I should say. So, does the guide assume you get into any more of those states? Or is the 6% to 8% really just reflective of presence in like a fraction of the total immediate opportunity?

Yes. So, to your point, we have sales really across -- first of all, most of the 13 states, we have some level of sales. So, we do have some sales support across them. But you are right, we do have density within 4 or 5 main states that have the majority of the sales resources in them. We do expect to continue to expand the resources there, whether we expand them within those specific 4 to 5 states as there are still opportunities, as you can imagine. One rep in Florida would not be sufficient to cover the entire state of Florida, for example. So, we are looking at where we invest those resources. The plan does take into account that we do have incremental investments in commercial resources in those areas. We aren't going to get into specific territories or how we're going to break that out. But all of that is accounted for in our operating expense guidance. So, we have already adjusted for that appropriately.

Okay. And then on the IG side, Paul or Ali, would love to get an update on Omni Ultra timing of that clearance. And is that embedded in the IG revenue guidance? Or would that be upside when that comes out?

Yes, David, this is Paul. We are in discussions with the FDA on OMNI Ultra. While nothing is definitive, as everybody knows, with 510(k) clearance pathways, we feel confident that we should have a clearance, hopefully, within the coming months, certainly by the end of the year. So, we're very excited to launch Ultra, again, hopefully, by the end of the year it will be out in the market. It's got a number of great features, surgeon informed. We obviously partner very closely all the time with our surgeons and take their feedback to continue to innovate in IG and move the OMNI platform forward and stay ahead. It's got single pass, single incision, single pass 360. It's got viscoelastic delivery on both advancement and retraction, which is a really nice feature. It's got markings on the catheter to tell the surgeon how far they've advanced. It's got better ergonomics. The handle has better ergonomics.

It's got a number of features that we think will help elevate this category even further. Hopefully, it's getting released by the end of the year. We don't know when, ultimately, we can't predict with specificity when the clearance will come. I can say this. We've put out guidance that we are very confident we can deliver regardless of when Ultra arrives. Hopefully, it arrives sooner rather than later, and we can do even better.

This concludes the question-and-answer session. I would now like to turn it back to Paul Badawi for closing remarks.

Thank you all for attending today's call. We appreciate your interest in Sight Sciences, and we look forward to updating you on our progress in the future.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, everyone, and welcome to Sight Sciences Fourth Quarter 2025 Earnings Results. [Operator Instructions] Please note, this conference is being recorded.

Now it's my pleasure to turn the call over to Trip Taylor with Investor Relations. Please proceed.

Thank you for participating in today's call. Presenting today are Sight Sciences Co-Founder and Chief Executive Officer, Paul Badawi; and Chief Financial Officer, Jim Rodberg. Also in attendance is Sight Sciences' Chief Operating Officer, Ali Bauerlein.

Earlier today, Sight Sciences released its financial results for the fourth quarter ended December 31, 2025, and initiated its revenue guidance and adjusted operating expense guidance for full year 2026. A copy of the press release is available on our website at investors.sightsciences.com.

I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements, including statements about material business considerations, 2026 outlook and financial guidance. These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially from projected results due to a number of risks and uncertainties.

For a discussion of factors that may affect the company's future financial results and business, please refer to the earnings release issued prior to this call and the company's most recent SEC filings. We undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. Also on this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses.

We believe that these non-GAAP financial measures are important indicators of the company's operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. See our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as additional information about our reliance on non-GAAP financial measures.

I will now turn the call over to Paul.

Thanks, Tripp. We ended 2025 with solid execution across our business, highlighted by fourth quarter revenue growth in both segments, strong gross margins and continued operating expense discipline and cash management.

In 2026, we're building on this momentum with a clear strategy to return to double-digit growth while maintaining our operational rigor and financial discipline. Before reviewing the quarter, I want to frame our discussion around the size and significance of the markets we serve and why we're confident in our long-term opportunity.

Our flagship interventional technologies, OMNI and TearCare, address 2 of the most prevalent anterior segment diseases, glaucoma and dry eye disease. Glaucoma remains the leading cause of irreversible blindness globally and dry eye disease continues to be one of the most common reasons patients seek care from eye care providers. With proprietary minimally invasive technologies designed to comprehensively address the root underlying causes of disease, we are expanding both the role of interventional solutions in the markets we serve and the markets themselves.

Together, these 2 increasingly interventional categories offer substantial runway for continued growth in the years ahead. Consistent with that strategy, we've updated the way we describe our businesses. What we previously referred to as surgical glaucoma and dry eye, we now call interventional glaucoma and interventional dry eye, reflecting our focus on elevating the standards of care with earlier procedure-based interventions.

We believe this interventional focus positions us to participate in an important part of the treatment continuum and over time, creates multiple durable growth drivers across both glaucoma and dry eye. We believe there is significant customer and patient overlap in these 2 categories that can unlock synergistic commercial value. Many patients who suffer from glaucoma also suffer from dry eye disease and meibomian gland dysfunction, which can be exacerbated by continued use of glaucoma medications, a known cause of ocular surface disease.

In addition, many practices have dedicated eye care providers managing patients with both diseases, creating a natural synergy in care pathway and treatment. With strong collaboration between our interventional glaucoma and interventional dry eye teams, we have the potential to enhance our customer engagement, support adoption across both businesses and strengthen the scalability of our interventional eye care strategy. With proven technologies, experienced teams, strong customer relationships and a track record of execution, we believe we are well positioned to drive meaningful value as we continue building a leading interventional eye care company.

Now turning to our segments. I'll begin with interventional dry eye, where we recently achieved a very important reimbursement milestone. In the fourth quarter, 2 MAC, Novitas Solutions and First Coast Service Options, established pricing for CPT code 0563T, the code associated with our TearCare procedure. This marks a turning point for our TearCare business model, and we are now executing our strategy with the goal of pioneering the reimbursed interventional dry eye treatment market. We were very encouraged by the commercial traction we generated with a variety of dry eye customers in the fourth quarter. As preannounced in January, interventional dry eye revenue in the fourth quarter was $0.7 million, up both sequentially and compared to the prior year.

Revenues were driven by the sale of approximately 700 SmartLids to approximately 80 accounts, roughly 30 of which were new account engagements. The sequential and year-over-year revenue growth in the quarter was largely driven by sales in the Novitas and First Coast regions, where customer engagement with TearCare has been strong and reflects positive momentum in the reimbursed business model. A portion of new customers are existing glaucoma customers of ours who are excited to partner further on the TearCare treatment opportunity.

The increasing engagement across accounts as they establish their interventional dry eye practices and validate successful processing and payment of their first claims is promising. This progress is particularly notable, given our small but growing sales team and the limited time since our reimbursed launch. As part of our commercialization strategy, we are focused on high-volume dry eye prescribers where TearCare presents a clear and compelling clinical and economic value proposition. In parallel, we are engaging new eye care providers in states where fee schedules have been newly established based on existing dry eye treatment activity.

And we continue to expand our outreach to glaucoma customers in these markets, where TearCare is a natural complement to their current practice offerings. Early interest from new providers and renewed engagement from existing providers underscore growing demand for tier care and interventional dry eye procedures.

In order to scale this business in fuel growth, we are making additional investments in our interventional dry eye commercial organization. These investments are intended to strengthen provider engagement and expand commercialization in markets with established reimbursement. We added resources in the fourth quarter, and we'll continue building out our commercial infrastructure to drive growth in 2026.

Expanding market access also remains a critical pillar of our growth strategy. As we deepen our engagement with additional max and commercial payers throughout 2026, we believe we can accelerate adoption and expand access for patients. We have built a strong foundation on clinically differentiated technology, initial market access fee schedules and early commercial validation, positioning us to pioneer the reimbursed interventional dry eye market for years to come.

Turning to interventional glaucoma. The fourth quarter marked an important milestone in 2025 as we fully lap the LCD changes, restricting multiple mix procedures in combination with cataract surgery. These LCDs reduce the number of devices used and caused meaningful headwinds to market growth in 2025. Despite these headwinds, our OMNI technology once again demonstrated its importance in the glaucoma treatment paradigm in this single MIGS environment.

In the fourth quarter, we built on our strong third quarter performance and generated another quarter of growth compared to the prior year. Revenue was $19.7 million, up 5% year-over-year and flat sequentially. And at the top end of our preannounced revenue range provided in January. Ordering accounts increased 2% compared to the prior year, driven by a combination of reactivating accounts and adding new accounts.

Utilization remained healthy, down only slightly after a particularly strong third quarter. Additionally, we saw continued benefit from higher Omni Edge utilization, which drove higher average selling prices in the quarter. With the interventional mindset increasingly impacting the glaucoma treatment algorithm, we are focused on developing the stand-alone market with OMNI. We are investing in targeted commercial resources to drive pseudophakic education and activation with surgeons and clinic staff.

With similarities to the office-based cataract evaluation workflow, that is familiar to most ophthalmic and optometric practices. We have designed an interventional glaucoma evaluation workflow that we believe represents a significant opportunity to expand omni adoption and stand-alone interventions, and support a meaningful source of revenue growth over time.

In 2026, our interventional glaucoma strategy focuses on disciplined execution to drive share gains, expansion of the combo cataract segment and further development of the underpenetrated stand-alone market, driven by our experienced commercial team, clinically differentiated technology, our investments in our dedicated psuedophakic market development team, we are positioned for a return to sustainable growth in interventional glaucoma.

In closing, our strong fourth quarter performance reflects consistent execution across the organization and reinforces the momentum we are carrying into 2026. We believe we are well positioned to return to durable revenue growth in both segments as we leverage our differentiated technologies, experienced teams and the synergies of these 2 opportunities to continue building a leading interventional eye care company.

I will now turn the call over to Jim to discuss our financial results.

Thanks, Paul. Before I turn to the results, I want to emphasize that we're entering 2026 and from a position of strength. With the operating discipline and cost structure we need to support growth, and over time, we believe this positions us to achieve cash flow breakeven without the need to raise additional equity capital. Unless otherwise noted, my comments reflect results for the fourth quarter of 2025 and comparisons are to the same period in the prior year.

In the fourth quarter, total revenue was $20.4 million, a 7% increase Interventional glaucoma revenue was $19.7 million, an increase of 5%, driven by increases in ordering accounts and average selling prices. Interventional dry eye revenue was $0.7 million up from $0.3 million, reflecting positive traction in our reimbursed interventional dry eye business model.

Gross margin was 87%, consistent with the prior year. Interventional glaucoma gross margin remained strong at 88% compared to 87% with the increase primarily due to higher average selling prices and product mix, slightly offset by tariff costs. Interventional dry eye gross margin improved to 68% compared to 51%, primarily due to higher average selling prices. Total operating expenses were $21.5 million, a decrease of 25% compared to $28.5 million primarily due to lower personnel-related expenses and stock-based compensation.

As a reminder, we conducted a reduction in force in August 2025 and the fourth quarter was the first full quarter of our lower cost structure. Adjusted operating expenses were $18.9 million, a decrease of 23% compared to $24.4 million. Net loss was $4.2 million or $0.08 per share compared to a net loss of $11.8 million or $0.23 per share. We ended the quarter with $92 million of cash and cash equivalents compared to $120.4 million at the end of 2024.

Cash usage was $0.4 million in the quarter the lowest cash usage quarter of the year, reflecting continued operational discipline. We ended the year with $40 million of debt, excluding unamortized discount and debt issuance costs from our 2024 year-end balance.

Moving to our revenue outlook for full year 2026. We are initiating revenue guidance of $82 million to $88 million, which reflects growth of 6% to 14% compared to 2025. This guidance includes revenue for our interventional glaucoma segment of $77 million to $81 million, representing growth of 2% to 7%. And our interventional dry eye segment of $5 million to $7 million compared to $1.6 million in the prior year. This guidance reflects our philosophy of setting prudent targets and our focus on disciplined execution and the growth we believe we can deliver.

Looking closer at the first quarter, we expect interventional glaucoma to grow low single digits compared to the first quarter of 2025. We expect the first quarter revenue to be the lowest quarter of the year in this segment. and expect the second half of 2026 to be higher than the first half. Interventional dry high revenue is expected to be approximately $1 million in the first quarter. And as we expand and scale our reimbursed TearCare care launch, we expect revenue to ramp throughout the year.

We are also initiating our guidance expectations for full year 2026, adjusted operating expenses of $93 million to $96 million. representing an increase of 6% to 9% compared to 2025. The expected increase is driven primarily by targeted market access and commercial investments in both interventional dry eye and interventional glaucoma. We're pleased with the operational and strategic progress achieved in the fourth quarter and throughout 2025.

We remain focused on pioneering 2 significant categories in the interventional stand-alone glaucoma and reimbursed interventional dry eye markets. As we continue to execute against our long-term objectives, we're laying a strong foundation for sustainable growth and future success.

Operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Frank Takkinen with Lake Street Capital Markets.

Great congrats on a strong finish to the year. I was hoping to start with one on guidance. Just curious if you could provide some color on kind of low-end versus high-end assumptions and it'd be helpful to talk about interventional colon interventional GI disease separately.

Yes. Thanks, Frank. I can take that one. On interventional glaucoma, we're in a much more stable market and reimbursement environment than we saw a year ago. And we've got a couple of areas that we talked about in the prepared remarks, where we're focused on there, expanding the combo cataract segment as well as taking share there and expanding the stand-alone market opportunity.

So on the guidance there in a much more stable market and stable environment. It's an area where we've been a leader in implant-free MIGS and we've got a team that's had a proven track record of execution. And in a 1 MIGS world, OMNI performs quite well. So we feel good about getting back to growth here in 2026.

On IDE, baked into that guidance, we're early. Q4 was a really critical milestone for us. with the MAC fee schedules established. And you saw $0.7 million of revenue in the fourth quarter. As we look ahead to 2026, our initial guidance here we want to step prudent guidance. And then really within that, we haven't assumed additional market access wins within our guidance, but the team is certainly heavily focused on market access initiatives and moving that forward here in 2026.

So overall, I think we're excited about getting back to growth with both of our segments here getting to growth in 2026 and looking forward to executing here in 2026.

Perfect. And then a follow-up on kind of both of those factors. What are you assuming for underlying market growth in interventional glaucoma? And then saw the ASP a little bit over 1,000 for dry eye. Does that feel like a sustainable ASP rate? Or is that maybe a little bit high for how we should be thinking about it?

Yes. On the glaucoma market, Frank, we think it's in the low to mid-single-digit market growth there. And then Ali?

Yes. Happy to take the ASP question. So remember, when you look at the IDE revenue, that includes a mix of Smart Lids sold as well as Smart Hub sold. So that the ASP would be reflective of that mix within those segments. And we don't provide specific ASP information of our products but that is certainly a factor that you should think about when you're building out your IDE model and considering the different components of revenue.

Our next question is from Danielle Antalffy with UBS.

Sorry for my voice. I'm a little sick. Just a question on the standalone glaucoma market. I'm just curious what you see or how you see this evolving in the near term. I was at AO back in October, it seems to be very much a focus. And I'm a big believer in the standalone glaucoma market. But from a percentage penetration perspective, like how quickly can this ramp? And the second part of the question, what are the obstacles to getting there? And what are you guys doing to help break down some of those obstacles?

Danielle, this is Paul. Happy to take that one. Yes, it's an exciting time in interventional glaucoma for the past several years, Sight Science, as well as a handful of other industry players, have been spending a lot of time working with our eye care provider partners in educating the field on the benefits of earlier intervention with minimally invasive procedural-based solutions for glaucoma. I think we're moving, we're excited to be making some targeted investments in activating the stand-alone market so moving beyond an interventional mindset, moving beyond education.

I think most glaucoma surgeons today do genuinely believe that intervening earlier with proven procedural interventions, whether that's pharmaceutical or medical device, pure procedure is better for patients over the long term. And now the goal is how to activate, how to turn that understanding of interventions being better earlier into actual cases. And we spent the last year at Sight Sciences really trying to understand how to activate the stand-alone opportunity. I talked about it a bit in the prepared remarks. We're modeling our stand-alone activation after something that's so well understood in ophthalmology, that's cataract surgery.

Cataract surgery is a wonderful procedure. It's the #1 procedure by volume in all of medicine. And there's a well understood patient workflow for cataract surgery. So a patient understands that they need to get cataract surgery, what happens next, they come back to their eye care provider for a dedicated visit to really understand what are the available cataract options. And then from there, they get a surgery schedule. And we're finding in 2025 when we do that with a handful of accounts when we bring, when we work with our providers to help them follow this workflow where they bring back an interventional glaucoma patient candidate for an interventional glaucoma dedicated consult.

That consult results in a much higher level of procedural activation. That activation might be OMNI. It might be some other interventional procedure. But if we do that well and our industry partners do that well, and we convert this market from eye drops to intervention, whether that's omni or other procedures. It's good for patients. It's good for providers and ultimately, it will be great for site sciences as well.

In terms of percentages, I think, Danielle, your other question, we believe we estimate that the current MIGS market is approximately like in terms of revenue cases, maybe 90% combo cataract stand-alone. We believe we have a slightly higher percentage of mix of stand-alone. We estimate mid-80s combo cataract, mid-teens stand-alone. And we believe that mix for us is going to shift.

Again, we've made some dedicated pseudophakic market development commercial investments, about half a dozen market development focused professionals at Sight Sciences right now, who are working across the country with our eye care providers and customers to activate the stand-alone market to follow that interventional glaucoma console playbook that we arrived at in 2025 and actually implementing it to drive stand-alone case volume. So we're excited about it. It takes time to develop significant markets, but we believe that this will continue to be an area of growth for us over the years ahead.

Our next question comes from the line of [ Steve Lichtman ] with William Blair.

Apologies for any background with them in the car. Congrats on the progress. I wanted to ask first actually on the operating expenses. 4Q performance and the 2026 outlook were both better than our thinking. So as you think about this year, how are you balancing the opportunity you see on both sides of your business, but in particular, on dry eye with keeping the level of spend in check. Are you focusing really on the 2 MAC areas for now in dry eye? Any color there would be helpful.

Yes. Thanks, Steve. It's Jim. So as we look at investments in 2026, yes, the bulk of them are on commercial infrastructure, and you nailed it on our interventional dry eye we're going to be placing investments in that space and both on the market access side and driving market access progress and then also on the commercial infrastructure side. So if and when we get additional market access wins, we're ready on the commercial side to drive traction.

Our thinking is we want to have a mind -- we have an eye on breakeven and financial discipline, like we've done over the past couple of years, we've proven we can really manage OpEx and manage spend. And now we're in a position with a strong balance sheet to go fuel that growth. And we're going to invest -- we're going to learn a lot and invest and potentially pivot quickly, but invest where it makes sense to go fuel that growth. in both dry eye as well as on the interventional glaucoma, particularly the stand-alone opportunity.

Yes. Just to add to that, I mean we see the interventional dry eye opportunity as such a compelling large market opportunity and the early traction that we're seeing with accounts has validated that with us. So the investments that we already have in commercial infrastructure appear to be seeing good returns on those investments. and we do expect to grow that team as we move forward, both in the areas where we already have fee schedules established and then also over time as we have additional reimbursement wins. So we are very excited about that, and that was something that we wanted to make sure we accounted for when putting out our operating expenses guidance.

Great. And then just double-clicking on that. In terms of the dry eye revenue for this year, it sounds like you're really laying out guidance essentially in those 2 MACs predominantly. And can you remind us, obviously, you're looking to get more wins, but just in those 2 MACs alone, what you see the revenue opportunity is for dry eye?

Yes, sure. So it's still an incredible opportunity just with those 2 MACs. They have 10.4 million covered lives our estimate because there is a higher prevalence of dry eye disease in a Medicare age population that there's about 700,000 patients in those markets with moderate to severe MGE. So still a very large market opportunity when you think about in Q4, we sold 700-ish smart lids, we're still at 0.1% of the market. So very early in terms of adoption curve here.

And when we think about guidance, even the revenue opportunity in those areas is quite significant. Our bigger constraint is our own commercial infrastructure and resources to go activate those accounts and work with customers to set up their interventional dry eye practices. So we do have a small team that is growing, but we also wanted to be careful to that prudent guidance, even taking into account the 2 states.

So we won't be providing today kind of what's the full revenue opportunity of those markets, but it is quite compelling, and we think we've put guidance in a very prudent and reasonable place to start the year. And as we learn more and as we expand the team, we will provide updates as we go.

Our next question is from Tom Stephan with Stifel.

Great. First one on TEAR CARE. I know it's early and this may be a difficult question. But as coverage and reimbursement starts to take hold, can you talk to us a bit about sort of how you think about the peak sales potential of TEAR CARE, the inputs, the framework, et cetera, and as a figure, I'll take a stab here, is the figure of at least $100 million a reasonable starting point as we think about TearCare peak sales? And then I have a follow-up.

Yes. Thanks, Tom. I'll take that. So first of all, obviously, dry eye disease is a prevalent problem here in the United States. And if you look at the people who have moderate to severe MGD, there are 7 million to 8 million people who suffer from dry eye disease. Obviously, TearCare Care is a procedure that has been proven through the HERA data to show real benefits to signs and symptoms of those patients with dry eye disease. And so we think it's a compelling opportunity for patients who need procedural intervention and want procedural intervention versus regular daily or multiple times a day drop.

And so in terms of the opportunity from a market potential, it's obviously very large. What is critical in that is our ability to gain market access to patients being able to get interventional procedures using their insurance benefits. And obviously, we are still very early in the curve of adoption there with $10.4 million covered lives, and we do look to expand that over time to be able to really make procedural intervention a standard of care. In terms of your question of peak sales, we see this as a very large market opportunity. We aren't going to quantify that today.

But you can very quickly do some math that shows this is an incredible opportunity for us from a revenue perspective. But more importantly, this is also an opportunity that is better for patients in terms of having a procedural intervention versus regular eye drops with proven clinical results. It's also better for the eye care providers because the eye care providers get to participate in the economics since they are doing a procedural intervention versus drops where there's no incremental reimbursement for them.

And we've also proven that it's better for the payers with our budget impact and cost utility analysis that shows that this is a better economic outcome for the payers as well. So we really think that this is a win for all we're very, very early in terms of market adoption and penetration. So we aren't going to get out ahead of that today. But to us, this is one of the most compelling opportunities in eye care today.

And Tom, I would just add to that. Obviously, we've spent a lot of time together in the MIGS category where you've got several thousand MIGS trained surgeons, several thousand surgeons who are trained on OMNI, in particular, when you think about procedural dry eye opportunity, not only are there more patients suffering from dry eye disease but there's also many more eye care providers and customers that will be our customers for TearCare across the country. That includes, obviously, in surgery, it's just ophthalmology.

In interventional dry eye, we have both the ophthalmic customers as well as the optometric customers. So there's thousands of ophthalmologists who can be customers for TearCare and there's many, many more optometrists who can be and will be customers for TearCare. So that's another way to think about the TAM. We'll obviously prove it as we go. We're excited to prove it commercially and generate the traction and deliver the results quarter after quarter.

But I think you're going to see a different kind of business model, one, because there's so many more patients. Two, there are so many more eye care providers. And lastly, the model the model becomes more interesting over time because unlike surgery and unlike MIGS, where the goal is a single treatment and hopefully, that treatment keeps pressure under control. for as many years as humanly possible. We know that's not the case with dry eye treatments drop or procedure and in this model patients should stay in the model, getting 1 to 2 treatments per year. So we think that the TAM is super interesting for all of those reasons.

Got it. Really appreciate the color. And then maybe to pivot to glaucoma, and just on the first quarter outlook, up low single digit year-over-year. I would presume maybe is a bit below market and it's against an easy comp. So can you talk a bit about just what you're seeing in the first quarter that supports that near-term view, anything we should be cognizant of from maybe a headwind standpoint that's driving that outlook?

Tom, it's Jim. I'll take that one. I would say the only thing to really call out that's impacted us here in the first quarter as well as many others are the storms across the U.S. in January and February. So that's one piece. Otherwise, we don't see any other meaningful things to call out here in the first quarter.

Our next question comes from Adam Maeder with Piper Sandler.

Two for me, one on dry eye and one on international glaucoma. On dry eye, I was hoping just to get some additional color around your conversations that you're having with the other MACs as well as commercial payers. Just trying to get a sense for when we could start to see some of those other payer domino's fall and would love just to better understand what exactly is -- are they pushing back on anything? Maybe it's just a matter of time and bureaucracy, but you have 24-month randomized controlled trial data. So what do we kind of need to get those additional payers over the goal line? And then I had an additional question.

Yes, I'll take that one. And we've continued to be very active engaging with the other MACs having great conversations discussing their own review processes of the clinical and economic data as well as establishing pricing. And I will say that those conversations are continuing to progress. We do expect to have more MACs join and have more MACs established fee seals, and we would expect that to happen this year. So that's kind of our expectation. More granularity, it's always hard to predict exact timing with MACs.

But I will say that, as you pointed out, there is very strong clinical evidence and economic data and we are showing demand and interest from constituents in their market. They are and patients are wanting access to this technology. And because we do have fee schedules already established in First Coast and Novitas, that is creating tightened pressure on other MACs to also allow access to their Medicare beneficiaries to have a fee schedule established. So we are happy with the progress there.

Again, we won't speculate on exact exactly who will be the next one to establish a fee schedule or when that will be. But I will say that those conversations have continued to move forward, and that's really what we expected at this point.

Okay. Fantastic.. And for the follow-up, I actually wanted to ask a reimbursement question on the glaucoma side. And I saw recently that AMA elected to move forward with the new goniotomy codes with an effective date of January 2028. So I guess what is sites expectation for kind of where reimbursement ultimately shakes out with those new codes. Can you level set us on the percentage of revenue tied to goniotomy for your business? And how are you thinking about any potential impact either positive or negative?

Adam, yes, we are aware of the potential read rock of goniotomy. We believe it's going to be -- the code will be split into an adult goniotomy code and a pediatric goniotomy code. Pediatric goniotomy, as you might expect, is more intensive procedurally and has more follow-up requirements. And so we would expect that the pediatric goniotomy economics might be maintained, but the adult goniotomy when it's revalued everyone, all experts in this area are saying they would expect it to be unfortunately reduced.

If and when that happens, it would be in effect January 2028. A fee reduction would obviously put pressure on the utilization of that procedure. OMNI, our flagship interventional glaucoma technology, it performs canaloplasty followed by trabeculotomy, or AKA goniotomy. It's built either 2 canaloplasty or 2 goniotomy. We would expect if there's pressure on goniotomy alone as a procedure from an OMNI perspective as the leader in implant-free Mig, and the leader in ab interno canaloplasty that, that could actually be a tailwind at that time.

Obviously, we believe, hopefully, the valuation of goniotomy is fair and reasonable. It's an important procedure in glaucoma. We hope that the assessment is acceptable to all stakeholders, mainly eye care providers.

Our next question comes from the line of David Saxon with Needham & Company.

Two for me, one on both of the businesses. First, just on interventional dry eye I think you talked about in the script, you're selling to some omni customers. And I think in the past, you've talked about something like 200 OMNI accounts in those 2 MAC regions. So just wanted to get an understanding, like is the selling approach to ophthalmologists, any different than what you would do with optometrists either in terms of the length of the sales cycle or clinical education or any other dynamics like that?

Yes, I'll take that. So first of all, I'd say we're still very much in early days with this. So the accounts that we're engaging with now truly are the early visionaries. They're the ones that are seeing procedural dry eye as real opportunity for them, an important part of their procedure practices and are looking to be leaders in this area. And so I do think that, that profile of account is already different than what we'll see kind of at scale, especially with coverage density.

Obviously, right now, it's a very targeted density associated with those accounts that have traditional fee-for-service Medicare beneficiaries. And so that also influences the accounts that are primary targets right now. So right now, we are seeing a lot of synergies with ophthalmology practices that are existing interventional glaucoma accounts because they do have a high mix of Medicare beneficiaries already, and they have a lot of experience with parts with site sciences.

That said, when we look at kind of our revenue mix, we are continuing to see new -- both a mix of new accounts and existing accounts order. So both accounts that already believed in the benefits of procedural dry eye and had adopted the product without reimbursement and then those that are now coming on board. So I think it's too early for us to call out specific trends or dynamics here just because it is a unique market environment, but we are very encouraged that our OMNI customers also have a serious problem with dry eye within their patient population, and they're looking for options to treat those. So that has been a great synergy for us and one that we expect to continue to grow on in 2026.

Okay. And then on the IG business, it looks like ordering facility count was down sequentially. Any color there? And then since you rolled out on the edge, you've been seeing a benefit from some pricing. I think you have Ultra the next iteration coming out shortly. So like anything baked into the guide around kind of additional pricing up a fair?

Thanks, David. On the utilization or account question, utilization has been fairly strong and from Q3 to Q4, relatively flat. On the account side, we did have year-over-year growth Q3 to Q4 down slightly, but Q3 was particularly strong in 2025. So as we look ahead, we continue to have a balance of reengaging accounts as well as adding new accounts. So our growth will come from a balance of accounts and adding new accounts as well as reengaging existing accounts and utilization at those.

In terms of pricing, we did have some favorable pricing from Edge in 2025. And as we look ahead to launching Ultra here at some time in 2 we don't have specific uplift baked in for ultra ASPs into the guidance.

And this concludes our Q&A session. I will pass it back to Paul Badawi for his closing comments.

Thank you for attending today's call. We appreciate your interest in Sight Sciences, and we look forward to updating you on our progress in the future. Thank you.

And with that, we conclude our conference. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to Sight Sciences Third Quarter 2025 Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Hannah Jeffrey, Investor Relations. Please go ahead.

Thank you for participating in today's call. Presenting today are Sight Sciences Co-Founder and Chief Executive Officer, Paul Badawi; and Chief Financial Officer, Jim Rodberg. Also in attendance is Sight Sciences' Chief Operating Officer, Ali Bauerlein.

Earlier today, Sight Sciences released financial results for the third quarter ended September 30, 2025, and raised its revenue guidance and lowered its adjusted operating expense guidance for the full year 2025. A copy of the press release is available on our website at investors.sightsciences.com.

I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements within the meaning of the federal securities laws.

These forward-looking statements include statements related to our 2025 revenue and adjusted operating expense guidance and the primary factors impacting our ability to achieve our guidance, our outlook for the fourth quarter of 2025 and into 2026, the impact of tariff costs on our cost of goods sold, our plans to expand our manufacturing lines to additional manufacturing locations and the expected time lines and related costs, our marketing, commercialization and growth strategy, in particular, for our TearCare segment, our ability to achieve our current and long-term strategic objectives and value drivers, the benefits we expect to realize from our recent executive management restructuring, our market opportunity and ability to compete and capture market share, the continued adoption of our products by surgeons, our product reimbursement coverage and strategy, including our ability to achieve broader positive reimbursement coverage and/or payment decisions for TearCare, expectations regarding commercial momentum, account utilization and customer engagement, our pipeline of interventional glaucoma and dry eye technologies, our clinical trial strategy and results, our investments in market development and research and development projects and expectations regarding the relief that we may ultimately be awarded and the potential impact of recently request exparte reexaminations on such relief in connection with our patent infringement case against Alcon.

Forward-looking statements are based on estimates and assumptions as of today and neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements.

A description of some of these risks and uncertainties can be found in our public filings with the Securities and Exchange Commission, including the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q.

We undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. On this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles of the United States, including adjusted operating expenses.

We believe these non-GAAP financial measures are important indicators of the company's operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. See our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as additional information about our reliance on non-GAAP financial measures.

I will now turn the call over to Paul.

Thanks, Hannah. Our proven interventional technologies continue to have a profound impact, shaping the treatment landscapes for glaucoma and dry eye disease. Glaucoma remains the world's leading cause of irreversible blindness and dry eye disease is one of the leading causes for a visit to an eye care provider.

Both conditions are the result of obstructed anatomy in the anterior segment where the standard of care, topical prescription eye drops often fail to address the underlying cause of disease.

With 2 clinically proven, efficacious and reimbursed interventional technologies for these 2 major anterior segment diseases, we believe that we have a unique opportunity to cross-functionally leverage team, market and disease synergies to create proprietary value and build a leading interventional eye care company.

Our strong third quarter results were driven by excellent performance by our Surgical Glaucoma team, where we returned to growth in the quarter, both versus the same period in the prior year and sequentially.

Our third quarter revenue of $19.9 million was driven primarily by adoption of our OMNI Surgical Glaucoma technology and we continue to deliver operational excellence, achieving solid gross margins and improved expense management.

In addition, we anticipate that our recent achievement of the carrier price fee schedules established for TearCare by First Coast Service Options and Novitas Solutions will allow us to pioneer the reimbursed market for interventional dry eye procedures and expand care for patients.

Our momentum in Surgical Glaucoma and the new fee schedules established for TearCare will be instrumental in driving sustained long-term growth. This progress further strengthens our outlook for 2025. And as a result, we are raising our full year 2025 revenue guidance to $76 million to $78 million.

I want to start with our Dry Eye business, where we have seen important advancements. In October, 2 MACs, Novitas and First Coast, each established jurisdiction-wide pricing for CPT code 0563T, which describes the procedure performed with our TearCare system.

The fee schedules were made retroactive for all dates of service on and after January 1, 2025. Within the areas covered by these 2 MACs, we estimate there are 10.4 million Medicare-covered lives.

By securing appropriate fee schedule amounts for TearCare in these 2 MAC regions, we are beginning to realize our vision of pioneering the reimbursed interventional dry eye treatment market. We are seeing results from the deliberate phased approach that started with the development of best-in-class technology, demonstrated strong long-term clinical and health economic outcomes and now we are focused on building customer advocacy, expanding market access and commercialization.

The payment rate established within these fee schedules is approximately $1,142 for participating providers in these areas and represents real value for all stakeholders, including Medicare, providers, patients and sight scientists when considering the clinical value of the procedure.

These MAC fee schedules are an important benchmark as we pursue additional coverage and fee schedules with other MACs and commercial payers in the coming periods.

We estimate there are approximately 6,500 eye care providers nationwide, including both ophthalmologists and optometrists identified as potential adopters of TearCare procedures based on high utilization of alternative dry eye disease treatments.

We estimate an existing footprint of approximately 200 professional eye care providers who have previously purchased TearCare SmartHubs in these states with Medicare fee schedules established.

With at least 15% dry eye disease prevalence estimated in the Medicare population, an established customer base in these regions and a tenured sales team eager to support clinicians and patients, we are ramping targeted TearCare commercialization efforts.

We are now focusing our commercial resources on supporting providers in these specific geographies and are expanding the use of our sight access portal to streamline insurance authorizations and reimbursement.

Our strategy is focused on facilitating provider adoption through the foundation of our experienced sales, marketing and customer support teams already dedicated to the dry eye market. We will also target new eye care providers in these states based on their current treatment of dry eye disease and focus on our Surgical Glaucoma customers in these states who may also benefit from adding TearCare to their treatment offerings.

While it has been just 3 weeks since receiving confirmation that fee schedules were established, we have seen strong new customer interest in learning more about TearCare and good reengagement with existing accounts.

We are pleased with this enthusiastic customer engagement early on and expect this activity to continue to increase through the rest of 2025 and into 2026.

There is significant patient need that we believe will lead to substantial revenue growth over time as the pioneer of reimbursed interventional dry eye treatments.

Turning to our Surgical Glaucoma segment. We've now completed the third full quarter operating within the new MIGS environment, where Medicare coverage in most states restricts performing multiple MIGS procedures in combination with cataract surgery and we are very pleased with our execution. Our performance this year demonstrates that OMNI is a foundational component of many MIGS surgeons' treatment algorithms.

In the third quarter of 2025, our Surgical Glaucoma revenue was $19.7 million, up 6% compared to the third quarter of 2024 and up 3% sequentially. Importantly, the sequential growth comes off the typically seasonally high second quarter.

Our strategic priorities include reinforcing our competitive position, making focused commercial investments, accelerating adoption of OMNI Edge and expanding the stand-alone OMNI opportunity in pseudophakic patients.

Throughout the third quarter, we made meaningful progress across each of these initiatives, which was reflected in ordering accounts, utilization and average selling prices. For the second quarter in a row, we reached a record high for ordering accounts.

In the third quarter, ordering accounts were up 2% sequentially and 8% versus the same period in the prior year. This was driven by both reengagement efforts with accounts who had ordered previously but had gone dormant and also new accounts ordering for the first time.

Utilization was also strong, delivering a flat sequential performance versus typical seasonal declines from the second quarter to the third quarter. In addition, our average selling price increased versus the same period in the prior year with increased OMNI Edge utilization, which continues to be well received by surgeons.

These metrics represent our core growth drivers and main focus of our commercial team and we are very pleased that we continue to see strong progress.

Additionally, we believe there are market and tactical synergies across our Surgical Glaucoma and Dry Eye segments. There is customer overlap as most glaucoma surgeons treat dry eye disease and have many glaucoma patients talking to them about their ocular surface disease symptoms.

There is also disease overlap because some glaucoma eye drops can cause or exacerbate dry eye and damage the ocular surface, including prostaglandin analogs or PGAs, the most frequently prescribed medication for glaucoma.

Long-term PGA use has been associated with obstructive meibomian gland disease. We expect our Surgical Glaucoma team to be a partner to our ocular surface sales team as they create awareness for the benefits of TearCare treatments.

As discussed before, we believe there is a significant unmet need among pseudophakic patients and that this patient population is well suited for a stand-alone procedure with OMNI. We believe that our efforts to grow this segment with a targeted approach that prioritizes education efforts aimed at surgeons and their staff are yielding positive results and that by targeting this segment, we will drive OMNI adoption that can be a meaningful growth driver for us.

The strength of the third quarter highlights the progress we are making and we recently hit another milestone that we believe will further drive growth within our Surgical Glaucoma segment. In September, it was announced that OMNI was included in UnitedHealthcare's expanded coverage of glaucoma surgical treatments effective October 1, 2025. We believe that this will be a growth driver starting in the fourth quarter and beyond.

Lastly, I want to comment on the management changes that we announced today. I am very excited for the latest evolution of the Sight Sciences management team with the promotion of Ali Bauerlein to Chief Operating Officer; and Jim Rodberg, to Chief Financial Officer.

Both Ali and Jim have been critical members of the team for multiple years and they have each made many contributions over their tenure at Sight Sciences. We have all been working very closely together in that time to advance our strategic priorities and drive our results. I'm confident that their unique skill sets directly align with our vision of the future of eye care and the needs of the organization.

As Chief Operating Officer, Ali will have direct responsibility for the successful scale-up of our TearCare franchise and increased oversight over our day-to-day operations. Ali has a proven track record of leading a rapidly growing med tech organization through multiple phases of growth.

As we achieve more TearCare market access wins over the coming quarters and years, we are poised to create a new standard of care and significant new category in eye care, reimbursed procedural Dry Eye.

We are confident that Ali's promotion to a COO role right now is a timely one, helping to ensure that our company maintains its daily cross-functional execution discipline and that our TearCare business scales reliably and predictably and achieves its fullest potential.

Jim is also a great fit for our CFO role as Ali transitions to COO. Like Ali, Jim has also been a top performer at Sight for many years and we are very pleased to recognize his demonstrated impact, leadership capabilities and significant potential with this promotion to CFO.

Having served as our interim CFO in 2023 and having worked closely with Ali and me for the past 2 years, Jim brings a strong finance background from a leading med tech organization that will be critical to our continued execution and predictable growth in the coming years.

We expect our ability to drive growth while maintaining operational discipline to continue under Jim's leadership and are very pleased to welcome him to our executive leadership team. We believe this will be a seamless transition as our cohesive management team continues to execute against our priorities.

As we look ahead, our strategy is focused on several key priorities, which include securing additional reimbursement coverage and our payment decisions for TearCare, accelerating commercial momentum in MIGS and Dry Eye, deepening customer engagement through ongoing education initiatives, generating new clinical and economic evidence to support broader adoption of our technologies and progressing our robust product pipeline.

We believe that we are well positioned to finish the year strongly and thereby set ourselves up nicely for a return to growth in both business segments in 2026. We intend to continue to elevate our market leadership position in MIGS and drive momentum in Surgical Glaucoma with OMNI and to begin to scale the reimbursed interventional Dry Eye category we are creating with TearCare.

It's an exciting time at Sight Sciences, given the significant patient impact we are positioned to make over the coming years by enabling our customers to treat 2 major obstructive ophthalmic diseases with proven procedural interventions.

I will now turn the call over to Jim to discuss our third quarter financial results and updated guidance for 2025.

Thanks, Paul. I'm thrilled to be stepping into an expanded role at Sight Sciences, especially at such an exciting time for the company. During my time here, I've been able to work alongside the management team and see firsthand the growth and progress that we have made. As CFO, I look forward to continuing to build from our strong foundation and deliver on our strategic goals.

Turning to our results. Unless noted, results are for the third quarter of 2025 and all comparisons are to the same period in the prior year. In the third quarter, total revenue was $19.9 million, a 1% decrease.

Surgical Glaucoma revenue was $19.7 million, an increase of 6%. Surgical Glaucoma growth was due to an increase in both ordering accounts and average selling prices, partially offset by lower account utilization.

Our Dry Eye revenue was $0.2 million, a decrease from $1.5 million, in line with our expectations due to fewer SmartLids sales as we focus primarily on achieving reimbursed market access for TearCare procedures.

Gross margin was 86%, up from 84%. Surgical Glaucoma gross margin was 87%, flat compared to 87%, primarily due to tariff costs, higher overhead cost per unit and product sales mix, offset by higher average selling prices.

We incurred $0.4 million in Surgical Glaucoma cost of goods sold associated with tariffs. Dry Eye gross margin was 38% compared to 48%, primarily due to higher overhead cost per unit, partially offset by higher average selling prices.

Total operating expenses were $25.1 million, a decrease of 11% compared to $28.1 million, primarily due to lower stock-based compensation, personnel-related expenses and research and development expenses.

As part of the reduction in force announced in August, we incurred $2.8 million in restructuring costs and a reduction in stock-based compensation of $0.6 million.

Adjusted operating expenses were $19.8 million, a decrease of 17% compared to $23.8 million. Our net loss was $8.2 million or $0.16 per share compared to a net loss of $11.1 million or $0.22 per share.

We ended the quarter with $92.4 million of cash and cash equivalents and $40 million of debt, excluding unamortized discount and debt issuance costs. Cash used was $9.1 million, including $1.5 million of restructuring costs.

As a reminder, we have not received any monetary damages awarded in our successful jury trial verdict in our patent infringement case against Alcon.

Moving to our revenue outlook for full year 2025. We are raising our revenue guidance to $76 million to $78 million compared to our prior guidance of $72 million to $76 million. Our revenue guidance includes revenue for our Dry Eye segment of $0.5 million to $1 million for the fourth quarter.

This revenue guidance range implies fourth quarter revenue growth from our Surgical Glaucoma of low single digits at the midpoint of the range versus the fourth quarter of 2024.

We still expect Surgical Glaucoma segment's tariff exposure to be between $1 million to $1.5 million for full year 2025, although we acknowledge this is a very dynamic environment with uncertainty on future tariff rates.

As a reminder, we have been working on additional third-party manufacturing locations outside of China and we expect these facilities will begin producing a portion of our volumes, starting with our OMNI Edge and TearCare SmartLids product lines in the first quarter of 2026.

We expect Dry Eye gross margin in the fourth quarter to be higher than the gross margin seen in the first 3 quarters of 2025. We expect our Dry Eye gross margin to expand significantly with higher volumes associated with broader reimbursed market access as we ramp commercialization, partially offset by import tariffs.

We are also reducing our adjusted operating expense guidance for full year 2025 to $90 million to $92 million, representing a decrease of 9% to 11% compared to 2024.

This guidance still includes investments in pseudophakic stand-alone market development, TearCare market access and commercialization as well as focused research and development projects and also reflects reductions in spend associated with the August reduction in force. We still expect the reduction in force to generate approximately $12 million in annualized personnel-related savings.

We're pleased with the operational and strategic progress achieved this quarter and remain focused on deepening our presence in the Surgical Glaucoma and Dry Eye markets. As we continue to execute against our long-term objectives, we're laying a strong foundation for sustained growth and future success.

Operator, please open the line for questions.

[Operator Instructions] Your first question comes from the line of Danielle Antalffy with UBS.

Congrats on a really good quarter and congrats on the TearCare news on coverage. I was at [ AO ] and it was really fun to see the excitement around it. And also get my TearCare procedure. That was very exciting as well. And I loved it.

My question is for Ali. Actually, congratulations on the new role. I guess just at a high level, as Chief Operating Officer, what's going to be your primary focus over the next 6 to 12 months?

And where do you think you see the most potential for near-term change to drive improving performance? I guess where are you going to be spending most of your time? And what do you think -- like what are areas you think you can really have a near-term impact?

Yes. And we're really excited about where we are from a development perspective here at Sight Sciences. I will really be focused on accelerating our growth, increasing the oversight on the day-to-day operations, but most importantly, really working with the team to drive the successful scale-up of the TearCare franchise. And I am very excited about the TearCare potential.

This is a new category of reimbursed interventional Dry Eye that we are establishing and now having our first payer pricing established at appropriate rates really allows us to go approach the market. And we have a very unique value proposition here.

This is something that is great for payers, great for providers, great for patients. And all of that leads to a great opportunity to drive this market over time.

And it's a large market. We have a product that has great clinical efficacy. This is a recurring revenue business. And we're very excited about establishing TearCare as a leading interventional dry eye treatment company and category. So that's really what I'll be focused on primarily and really excited to be taking on this new role at Sight Sciences.

Your next question comes from the line of David Saxon with Needham & Company.

Congrats on the quarter. And Ali and Jim, congrats on the new roles. I got 2, one on glaucoma, one on Dry Eye, starting with glaucoma.

So it looks like one of your competitors has kind of repositioned their product in a different sales force. So just wanted to get your thoughts on kind of how you see that opportunity? Have you seen any benefit from that yet? Or what are your thoughts on kind of what you could do with that opportunity in 2026?

Yes, David, this is Paul. I'll take that one. We've been focused since the LCDs went into effect over the past year, we're finally about to lap those headwinds.

But as surgeons were forced to choose 1 MIGS procedure because of the restrictions that prevented surgeons from doing 2 MIGS procedures in a single surgical setting, our team has done a great job working with their surgeon customers and reminding them of the comprehensive efficacy of OMNI, the durable clinical outcomes, the consistent clinical outcomes that have been proven time and time again with lots of clinical studies.

So they've done a great job winning that business as it converts from 2 MIGS to 1 MIGS. We're seeing the results of that this year. We're going to continue focusing on selling the benefits of OMNI and winning as much of that business as we can.

As we head into 2026, the MIGS market will return to growth. We've been focusing internally with our team on doing as well as we could commercially. I think we've done a great job. Team has done a great job this year to position ourselves as strongly as possible entering 2026 to capture as much of that growth as possible.

So does some disruption at competitors allow for further opportunity for us? It should. But I think we're doing a great job regardless. We're looking forward to the MIGS market getting back to growth in '26 and Sight Sciences and OMNI capturing as much of that growth as possible.

Okay. Yes. And then on Dry Eye, the TearCare opportunity, obviously, congrats on that news there. So you've got 200 accounts in those 2 jurisdictions.

Can you talk about the initiatives you have going on to kind of build engagement and utilization? And then I know that happened post the quarter, but out of the 50 active accounts in the third quarter, can you talk about how many of those are in those jurisdictions and could kind of see some quick ramp?

Yes, sure. So I'll take that. And we obviously got this news in the middle of October. We're able to share this with the industry at AAO and really generated a significant amount of excitement and engagement around this new reimbursed category.

And so we have continued to leverage those initial communications and have additional follow-up communications with customers as they explore how they want to use TearCare in their treatment paradigm.

So mostly right now, we've been primarily focused on education, identification and then activation of accounts. I will say that it's still early. It's been about 3 weeks from the time that we got that announcement, but we've seen heavy engagement both from existing accounts wanting to learn about how they can activate this new payer payment rate and also new interest from new customers and of course, interest outside of the First Coast and Novitas regions.

This also is something as we look to expand our coverage, we are engaging with customers in other jurisdictions as well to show the need and the interest in TearCare.

I will say that we also have had now successful claims processed at these new payment rates. So it's good to get confirmation, not only have the fee schedules been published, but we also are now seeing claims activities being paid, which is important for customers.

So all of that is great and kind of built into our opportunity here. Of course, in the fourth quarter, we do expect to continue those activities. But this is a very large market opportunity.

Obviously, we included modest contributions in the fourth quarter associated with these activities, but we do expect that to ramp substantially going into 2026 as we continue to work with these accounts and broaden both the coverage as well as customers.

In terms of the accounts that we already had engaged with, we aren't going to provide specifics around how many of them are in the First Coast and Novitas regions. But we do have a base of customers that we are engaging with.

And as we said, there's kind of 200 within this group of accounts that have ordered over the last few years that we are in communication about reengaging on TearCare in this new reimbursed environment.

Your next question comes from the line of Tom Stephan with Stifel.

Congrats on the progress and the new roles as well. I'll start with guidance. I think the midpoint implies for 4Q flat quarter-over-quarter revenue growth and I believe slightly down sequentially in Surgical Glaucoma given, Jim, I think you said TearCare is expected to step up sequentially.

So I guess thinking about Surgical Glaucoma specifically in Q4, anything to call out that might keep you from growing sequentially despite what I think should be some seasonality benefits from 3Q to 4Q?

Yes. Appreciate that, Tom. No, nothing specific to call out. I would say Q3 was a really strong quarter for Surgical growing 6% year-over-year and on the heels of a record number of active accounts, increased ASPs and utilization from Q2 to Q3 being flat, the team performed really well.

And in setting up our Q4 guidance, at the midpoint, there still is some year-over-year growth there. And our objective and our practice in setting guidance is to set prudent and achievable guidance. So we feel really good about where we're at in the Surgical business and feel good about Q4.

That's great. And then a follow-up just on TearCare. I appreciate all the color on the different initiatives and sort of the ramp up. But Ali or Jim, any help on sort of how to model or at least think about TearCare contribution next year either quantitatively would be great, but qualitatively certainly would suffice as well.

Yes, I can take that, and Jim, feel free to jump in as well. Obviously, we're not going to provide 2026 guidance today. As we said in the prepared remarks, we do expect to get back to growth in both segments this next year. So we do see opportunity to grow in both areas.

In terms of TearCare, obviously, we will be coming off of a very small base of revenue. So I would expect the growth rate in TearCare to be significantly larger than the growth rate on our Surgical Glaucoma business just because of the small base that we're coming from.

We do see large opportunity on TearCare as we activate these accounts and we work with accounts to identify patients that need the procedure. There's also this recurring revenue as patients return and need additional treatment. So we see that as a very large growth driver for us next year. Obviously, we won't provide details today on the specifics.

Tom, I'll just add in terms of the model, TearCare is -- it's a unique business model. First of all, it's an interventional procedure that addresses the root underlying cause of disease for millions of patients, but it's not done in the OR. It's done in the office.

The office typically has a much higher throughput profile. Number one, that's theoretically. Number two, we're starting -- we're not starting from a standstill like many new reimbursed launches.

We've been in the market for several years now, which means, a), we have an established base of customers who have already demonstrated a strong product market fit and high throughput. So high-volume procedure.

Reimbursement helps to unlock the scale of this market opportunity. And so to Ali's point before, what prevents companies from realizing significant TAMs? Usually, it's one of the key stakeholders along the way doesn't benefit or isn't completely happy.

In this case, beyond it having high throughput kind of in-office profile with lots of patients lining up at doctors' offices, ophthalmologists and optometrists, everybody benefits. Value accrues to all stakeholders.

Patients, first and foremost, they get immediate improvements and those improvements last as the SAHARA study says, it's a durable improvement in signs and symptoms of disease. Eye care providers benefit.

Number one, they get to offer their patients a better treatment so they have happier patients. Number two, because it's a procedure, there's work in our view associated with that. So some of the economics accrue and that economic value accrues to the provider.

And lastly, and very importantly, payers see value because as we scale this business and there's more scrutiny on a scaled business, payers are going to look and say, what's the value for us? And so the SAHARA 2-year RCT and the budget impact model and the clinical cost utility analysis that we performed and now published tell payers also that adoption of TearCare at scale is still economically beneficial to you.

And so we think there's a tremendous opportunity for those reasons in terms of the business model.

Your next question comes from the line of Joanne Wuensch with Citi.

This is [ Anthony ] on for Joanne. Another on TearCare coverage. How should we think about timing on commercial and MA contracts? Will those be after you sort of get the rest of the MAC? Or should we expect those to layer in along with the other MACs?

Yes. And we are actively engaging with both other MACs as well as commercial payers. We can't speculate on exactly when we will get any of the other coverage policies or payment schedules set up, but we are having good conversations.

Those are continuing. And with both First Coast and Novitas establishing fee schedules and being the first mover there for establishing them, that certainly helps our conversations with other payers.

So it's hard for me to say which will come next. I do think that all of them are progressing appropriately. I will say that the next easy target are the Medicare Advantage plans in the same states as the 2 MACs because there is a requirement for them to cover and match the traditional Medicare plans.

So we are engaging with those Medicare Advantage plans that could also improve our coverage for those beneficiaries as well.

Got it. That's helpful. And then in Surgical Glaucoma, you mentioned some dormant accounts reengaging. Any idea why those have started reengaging this past quarter?

Really, those accounts have been engaging over the last year. So this is something that is not necessarily new, but as we had the LCD uncertainty period where people weren't sure of coverage of OMNI and where that would come out, we did have accounts that went dormant during those periods.

So we have been actively engaging with those additional accounts over the last year as we gained clarity on the new policies put into effect and we've just continued to see progress throughout the year to reengage those accounts and bring them back into an active status.

Another thing to keep in mind, I think I just want to call attention to the focus of our Surgical Glaucoma team. We've been in the MIGS market for a long time.

We have very tenured professionals. We've maintained our focus on this market opportunity at a time when some of the others are losing focus, right? We had a question about one of the disrupted sales forces from one of the players.

Other companies might be prioritizing other products with the same sales reps. We have a proven Surgical Glaucoma team with proven long-term relationships with MIGS surgeons. And I think you're starting to see the results of that focus over the long term come through in 2025 and we obviously expect that to continue and translate into real growth in 2026.

Your next question comes from the line of Adam Maeder with Piper Sandler.

Congrats on the progress and welcome, Jim and Ali, congrats on the new role. Two from me. I guess the first one on the P&L. You all have done a really nice job with expense management this year.

And you further, I think, recently announced the plan to reduce OpEx by $12 million on an annual basis. So really, I guess the question is, how do we think about the OpEx line in our model next year? Just any qualitative or quantitative color would be appreciated. And then I had a follow-up.

Yes. At this time, we won't -- we're not going to give any 2026 guidance, but we are really proud of the work we've done on OpEx. The team has been extremely disciplined over the last year to 2 years here and really have driven a lot of OpEx savings throughout the P&L.

And you can see in the reduction here in the guidance, it's impressive, the OpEx adjustments and improvements we've made. And one thing I'll call out about the reduction in force is that a lot of those costs were general and administrative costs and not commercial and sales impacting costs. So that's important to note, too, I think.

Okay. Understood. That's helpful. We'll stay tuned for more color there. And I guess for the follow-up, I think this is for Ali, but it's on TearCare.

And just trying to, I guess, better understand the strategy to kind of build, I would say, more awareness around the TearCare therapy. Are you at a point now where it really kind of makes sense to make those market development investments?

Do you wait for additional payers to come on board? Clearly, it's a big opportunity to go after, but would love to hear about the strategy to get those patients into the funnel.

Happy to take that question and it's a great one. So first, I would highlight the fact that we've been in the market with TearCare for multiple years now. We've sold 1,500 hubs into accounts that are trained on TearCare and we've done over 70,000 procedures in the model.

So already, we do have a good base of awareness on the TearCare procedure and the benefits of the TearCare procedure to patients.

Of course, we do need to continue to expand that knowledge base, expand the customer base. As we've said, there is 6,500 optometrists and ophthalmologists that we will be targeting as part of our overall approach to the market.

And of those, a large subset of them are in these areas that we can go target and work with to really start seeing increased utilization of the technology. So that is our high-level plan.

We do have a small sales team in place. We have been starting to grow that team as we look to -- as we've had these fee schedules established and that will continue in 2026 in a targeted manner.

We are now kind of from a commercial perspective trying to increase density in the states that we already have these fee schedules established. So payers that would be complementary to those states, so we can increase density with those customers. But we are also looking at expanding into other MAC jurisdictions as well.

So really, the focus is both increasing the payer coverage and payment schedules at the same time as really driving customer engagement in these markets.

I will say that naturally, this is one of the most common reasons that somebody goes to their eye care provider is because they are experiencing dry eye symptoms. So the problem is well understood by our customers and they are seeking better treatment options.

And TearCare has been proven effective in the SAHARA study versus RESTASIS. And we are really hoping to continue to educate providers on the benefits of TearCare and how this can fit into their overall dry eye treatment paradigm. So we're very excited about that as is our providers who have expressed strong interest in learning more.

Your next question comes from the line of Justin Wang with Morgan Stanley.

Filling in for Patrick. I just want to touch a little bit more on the momentum of achieving coverage density on TearCare. I mean, with Novitas and First Coast setting the precedent for Medicare fee-for-service and how exactly has this influenced the tone of conversations with other payers, both commercial and government?

And so I appreciate that some payers just didn't want to be the first out there. But now that that's out of the way, how should we be thinking about the cadence for future decisions going forward?

Yes. Great question, Justin. And we are continuing to have those conversations. I will say that it is important for somebody to step up and be the one to establish these first payment schedules at these appropriate fee schedule amounts. And so we were very happy to get across the finish line with First Coast and Novitas.

The conversations have continued with payers. I will say, in the world of payer discussions, 3 weeks is a very short time frame, but we have had engagement with both commercial and MAC within this time.

And there has been strong interest to understand how First Coast and Novitas came to these decisions and what their next step should be in understanding the clinical value of the TearCare procedure and also the health economic value.

So I will say that interest has continued to strengthen as we've gotten past those publications. And we do feel good that First Coast and Novitas will be the first of many, not just the first.

I'm showing no further questions at this time. I would now like to hand the call back to Paul Badawi for closing remarks.

Thank you for attending today's call. We appreciate your interest in Sight Sciences and we look forward to updating you on our progress in the future. Thank you.

Thank you. This does conclude the program. You may now disconnect.

Awesome. Thank you so much. Welcome, everybody, Morgan Stanley's Global Healthcare Conference Day 3. The best bit, disclaimers, morganstanley.com/research disclosures. It's a very exciting website, so I recommend everybody goes there. But what is good fun is having the Sight team. So massive thanks to Paul and Ali, CEO and CFO, respectively, for joining. Thanks for coming.

Thanks for having us.

I mean, why don't we start about like quite big picture, the MIGS market overall and I guess, interventional glaucoma. There's been a lot of noise around the LCD and payment changes and things like that. What's your vision for how you think this market as a steady state midterm can grow at and look like?

I'll start off. And Ali, do you want to follow on? Generally, look, glaucoma remains a very serious problem in eye care. Glaucoma is the world's leading cause of irreversible blindness. Patients need more interventional, minimally invasive, or less invasive, options to control the disease. And MIGS has done -- it's made great progress in terms of improving clinical outcomes for patients. There's a number of interventional approaches beyond MIGS that are very exciting. So while there's a headwind this year with the LCDs, we think that headwind will lap in Q4.

Patient visits continue growing. We expect the MIGS market to return to growth in 2026. We're proud of how we've been performing in that market despite the headwind. I think our commercial team has done a nice job. We're focused on making sure that we're in the best position possible at the end of this year, so that when the MIGS market does return to growth, we're in a strong position to capture as much of that growth as possible.

So it's an exciting category. There's a headwind this year. But generally, as a category, it's a serious disease. It's a growing problem. It will continue to be a serious disease, and patients will continue to need better and better options to allow eye care providers to intervene earlier. And so we're happy to be playing a very meaningful role in the minimally invasive, or interventional glaucoma market. And that's with OMNI today. We have SION as well. And we have a number of exciting pipeline projects that we're working on also.

For people who are maybe less familiar with glaucoma, there's a lot that goes into it, right? It -- almost you have like hypersensitivity, diabetes, aging, there's a lot of like structural drivers. Is there any way we shouldn't expect to see like rates of glaucoma in totality in pretty much every market just growing pretty consistently?

Unfortunately, we expect it to continue to be a highly prevalent problematic disease. Now again, what can we do about that? We can continue to innovate and develop better and better technologies, less invasive approaches that are as effective or more effective than the invasive alternatives. And ultimately, if we can do that well as an industry, obviously, we want to do it better than anyone else here at Sight Sciences. But as an industry, if we can keep doing that, we'll continue improving care for patients. And that's ultimately what this is all about.

Sometimes glaucoma reminds me also of like hypersensitivity in that there's a bunch of different technologies. But we have to throw all of them at the patient because a lot of the time, it's either progressive or the compliance is bad or frankly, you need a whole range of technologies simultaneously really to get the IOP down and to manage the patient. From your perspective, we've got things like laser, we've got things like MIGS itself, drops. If you cast your mind forward, do you think we're always going to need all of those tools? Or do you think there might be a stage where one of them gets good enough to manage the disease on its own or we just going to need them?

I think over time, we should have leading interventional approaches for every single patient. So instead of topical eyedrops for that patient that first presents with high pressure, where you -- you don't necessarily want to go straight to surgery. Well, it should be an interventional means of delivery of medication, as opposed to relying on the patient with daily compliance and ocular surface issues. So I think over time, we will have several best-in-class sustained release interventions.

We will have a higher utilization of SLT laser. As an early intervention, we will have a broader array of MIGS approaches that match the disease severity or the patient. And then hopefully, we'll have more efficacious but less invasive end stage alternatives. And so I think the future of glaucoma treatment is bright for eye care providers. I do think it will look more and more interventional over time.

How do you -- sort of last one on the big picture market. How do you think about the patient journey and a chunk of these patients are often type 2 diabetic. It's often an asymptomatic condition. Again, compliance with drops is not always great. How do you think they enter the more active interventional funnel, if you like? Is it loved ones sort of kicking them to do it? Is there a sort of moment where like they haven't realized it? How do you feel like the patients come to you?

Yes. I think what drives a lot of it. The patients trust their doctors. Obviously, family relationships has an influence, but the doctor-patient relationship certainly in ophthalmology, I think in most areas of medicine, but certainly in ophthalmology is a very strong one. Patients do tend to listen to their doctors' recommendations. And so I think from our perspective, from industry's perspective, we need to continue educating our surgeon customers that earlier intervention is better. We need to continue generating clinical data that helps them definitively believe that and understand that.

The education piece is critical, and I think it's happening now. I think interventional glaucoma, you go to any major glaucoma conference, there's a whole lot of talk around interventional glaucoma. And by the way, we want to lead the way in creating the interventional dry eye category, right? And we're doing a lot of work there, but we're not stopping with glaucoma. But I think the more that we can truly make eye care providers believe that earlier intervention is better, and I do it on a regular basis. We think that's the best way to get more interventional care to patients.

Yes, we have a lot on dry eye, don't worry.

Really. [ I am a novice on ] that.

I mean Q2 was actually pretty strong from the surgical glaucoma standpoint. I mean Ali to your perspective, how durable do you think the drivers behind that are?

Yes. We're really proud of the results that we had in both the first and second quarter. We're competing effectively in a dynamic MIGS environment. We believe that's because OMNI is an important part of the treatment paradigm. It's comprehensive procedure. It addresses all three areas of resistance. And when you can only choose 1 MIGS, it's a natural choice for patients where you want to see high efficacy in the procedure. So we're really proud of that. We saw -- obviously, we knew coming into this year that we would have some headwinds associated with the MIGS restrictions that were put into effect last November. But we think that we're executing effectively here.

We're continuing to engage with our accounts. We're seeing all-time record in number of ordering accounts, increasing sequential utilization up 12%. And overall, our surgical glaucoma revenue was down mid-single digits, which is substantially better than the 15% headwind associated with the multiple MIGS restrictions. So we're really proud of our second quarter performance and we think our team has done a great job in this environment.

Clear. It was a great result. I'm going to ask an unfair and unanswerable question, which is a great combo. Why do you think -- what is with the MACs and Medicare's constant fiddling with glaucoma as a category? It's not a massive cost line for them compared to others. It seems bizarre. It's not like people are hugely overearning. Like I know it's kind of an answer, I've always got this question. I don't know how to answer it.

It's -- yes. I mean, it's been tricky over the years to say the least, lots of surprises. I think we understand the attention when a category is fast growing. MIGS has been one of the fastest-growing segments in ophthalmology for many years. It is -- I mean there is a need, a clinical need for more effective, less invasive treatments. Eye care providers and ophthalmic surgeons have adopted those technologies clearly. And so it's been an attractive growing market. With that growth comes scrutiny. And I think people are trying to figure out payers, even surgeons are trying to figure out what are the best approaches.

And so for example, with the LCDs and multiple MIGS, you can see surgeons saying, I'd rather take two minimally invasive approaches that might add up to the efficacy of the invasive approach but have a much better safety and complication profile, right? Hence, the multiple MIGS. Now we obviously believe in growing multiple mechanisms of action in disease, OMNI is indicated to perform two procedures, canaloplasty followed by trabeculotomy. So we subscribe to that thesis of doing more minimally invasive procedures can maybe get you close to the efficacy of an invasive procedure.

That being said, payers are looking at this maybe in saying, we see very robust evidence on each of these individual modalities. But where is the evidence on the combinations of these modalities being significantly better than any one. Now in the ideal world, you leave it up to the surgeon, right and their best discretion for what that patient needs. What will help, for example, on the multiple MIGS, I think, is more clinical evidence showing that multiple procedures are superior to one. Obviously, we want to continue generating more and more compelling clinical evidence with OMNI showing that the combination of canaloplasty with trabeculotomy, is a leader in efficacy profile.

The relentless neediness of payers for clinical evidence is matched only by my 3-year-old. It's wild. Maybe OMNI Edge, if we could touch on that. For those who are less familiar with that as a platform, a little bit of background, how are you finding the rollout and everything like that? And how much is incremental relative to replacement, so to speak?

We're excited about OMNI Edge and the adoption to date, a background on it, where we've been innovating the OMNI platform. Well, predicates to OMNI since 2015 time frame, OMNI arrived. They launched it in 2018. We've obviously been iterating on the OMNI platform and trying to make it better and better, listening to the market, listening to our surgeons. We partner closely with our surgeon customers to take their feedback and try to embed it into the technology and give them something even more either efficacious, safe or user-friendly.

With OMNI Edge, it's -- the primary difference is an increase in the volume of viscoelastic delivered. So the first procedure I mentioned, canaloplasty, is a catheterization of an obstructed vessel in the eye that's ultimately leading to high pressure. We allow our surgeons to go and catheterize that vessel and dilate it with a viscosurgical gel. It's kind of like balloon angioplasty for the eye for glaucoma. And we've been increasing over time steadily, carefully because we want to make sure we're preserving the safety profile. You don't want to overshoot too quickly.

So we've been steadily increasing the volume of gel or dilation that we offer our surgeons, and this one is a leap. It's almost a doubling of the dilation effect. And so far, surgeon feedback has been great where surgeons are adopting it very nicely and providing lots of feedback. We expect it to be our leading product in due course. A lot of it is existing OMNI surgeons. There's -- it's a competitive market. We've created a category, naturally, others will come in and do their best to replicate. We think that we are many years ahead in terms of our technology, and we're not sitting idle. We're continuing to move our technology forward.

Edge is one example of that. We have other iterations in development that we are excited to be announcing over time but expect a steady stream of OMNI platform innovations and us staying well ahead of the competition and offering surgeons the best interventional glaucoma canaloplasty and trabeculotomy treatment.

It's interesting you bring on competition. It's a funny market because it's kind of a 2-horse race and from a mix standpoint, when I think about it that way. And actually, even some very well-funded competitors with massive reach coming in have been spectacular failures. Why do you think that is? Is it like surgeon loyalty and just familiarity and confidence like because it's really been you and one other player dominating the space.

I think it's many factors. I think surgeon relationships, but many players, I think, do that sufficiently well. Your technology, how do you assess the technology? Well, I think some might tend to overly rely on this product has slightly better efficacy than that product, okay? Well, that's important. But that's one of the considerations when we assess technology and how -- when we assess ourselves and how well we're doing in terms of what we're offering to our customers, we obsess over safety. We obsess over efficacy, we obsess over usability. And I think for a number of -- whether that's in glaucoma MIGS or in other areas, either in ophthalmology or in medicine, you might ace one of those things, but if you don't ace the others, or you don't get at least high marks on the others, despite tremendous efficacy, you might not become a standard as you may have thought based on the efficacy profile.

So all of those things are critically important. I think we've done very well with OMNI. We think it has a very good safety profile. We think it has a leading efficacy profile in the MIGS category. Usability, do not underestimate the importance of usability. Take an iPhone, right? People love their smartphones, like, love their iPhones. Probably mainly to the usability. They love to use it. It's reliable. We try to do that. We try to approach our technology development that way, not just on the glaucoma side, but also with TearCare. It also has -- gets very high marks for its usability. So I think the combination of those things, coupled with commercial excellence, and our team's ability to develop very strong relationships with our customers that are long-lasting, technology plus relationships makes for a good competition.

Also phones, I can just scroll through stuff and have that hollow empty feeling inside of it. We got to hit on dry eye because it's just such a -- it's just like -- it's a really interesting space in general, still horrifically treated in the sense that it's functionally untreated despite some therapeutics that are obviously in the market at the moment and some OTC solutions. Maybe for those less familiar, give people a little bit of a background around TearCare, how you see it fitting into the paradigm?

Yes. We started the TearCare journey over a decade ago. So we saw a need just like OMNI, I think our approach to product development, or what we believe is optimal product development, or technologies that we can equip our eye care provider customers with, to ideally allow them to intervene -- not just intervene, but intervene at the root underlying cause of disease. So with glaucoma, that's with intervening in the conventional outflow pathway doing so comprehensively.

If you look at dry eye, you can look at the disease through that same lens that we looked at the glaucoma category through. We said, what is causing the majority of this disease? What is the underlying problem for the majority of patients? And it's actually not tear insufficiency. The average person would believe a condition called dry eye is the result of not producing enough tears. Well, in reality, the majority of patients and the majority of dry eye patients produce plenty of tears. The problem is those tears are evaporating too quickly. So then you say, well, why are they evaporating too quickly? You trace that back to the meibomian glands, which are oil-producing glands in your eyelids.

We have 20 to 30 of these oil-producing glands in each of 120 to 150 glands across all 4 eyelids. When those glands are healthy, they're producing a liquid oil called meibum. It's got olive oil-like consistency. With disease, with hormones, with screen time, this is becoming a societal problem where you're staring at screens and your oil is not getting expressed from the gland, it's sitting around, and it begins to inspissate and harden. So it moves from a healthy liquid olive oil like state to mild, moderate dry eye might be like toothpaste. It turns into like a toothpaste. And then in advanced dry eye, this oil hardens altogether. And once it's hardened in the advanced state, no oil is being expressed from the glands. There's no oil coating your tears. Again, when they're healthy, this oil layer on your tears keeps the tear around for a sufficiently long period of time. Without that oil, the tears evaporate immediately.

So we said we -- the world needs a safe, efficacious and usable interventional technology for the root underlying cause of the majority of dry eye disease, which is meibomian gland disease. Until over a decade ago, we set out to develop what has become TearCare. TearCare, I think today, now with 2 RCTs completed, including a 2-year RCT showing superiority to the standard of care and also showing a very significant durability of treatment effect, I think is now the most clinically proven interventional procedure for dry eye. We needed to generate very significant and robust clinical evidence to truly create this category, which to us means providing patients with reimbursed access to treatments. Today, this category doesn't have reimbursement for interventional procedures.

To create a significant new category, you need really compelling clinical evidence. We spoke with payers many years ago around the need for patient access to a treatment like TearCare and what clinical evidence would be necessary to support reimbursement. So the protocol that was designed, which we call SAHARA or SAHARA RCT was informed by conversations with payers. And we wanted to go head-to-head with the standard of care. It's the best thing you can do from a payer perspective and ideally beat it. We did at our 6-month endpoint on superior on our primary science endpoint of care breakup time, clinically and statistically significant improvement in every sign and every symptom at 6 months and at 12 months and at 24 months.

So now all 3 phases have been published. We have health economics publications in hand, a budget impact model, a cost futility analysis. We have an updated RVU analysis. All of those deliverables serve as the foundation for very healthy payer conversations. So we are right now in the midst of quality payer conversations. We are working to get something -- a policy across the finish line. It's impossible to control when. We are doing everything we can from a top-down and a bottoms-up strategic approach. We've said we're aiming for 2025 policy wins. We're in September. Might we get something done this year? We hope we're still working towards that, but we ultimately can't control the exact timing.

Having a better mousetrap is always helpful. And dry eye -- it's a funny category because historically on the therapeutic side, there's been always no cannibalization at all between any of the therapeutics and each other, which I think speaks to how few patients are actually getting any kind of treatment, right?

Correct? Correct. I think it's significantly under-treated. And I hope that we can change that with reimbursed patient access to treatments, Again, that treat the underlying cause of disease. Our existing TearCare customers have so much conviction in the technology and the clinical outcomes, the patients get immediate significant effects and those effects last. And now we've proven that through the SAHARA 3-stage RCT to further drive that conviction.

And so again, to create reimbursement in a category that lacks it. You need a lot of clinical evidence, you also need a lot of conviction from influential eye care providers. And thankfully, we have that conviction and our customers that we enjoy very strong relationships with are helping us with those payer engagements.

Maybe it might be worth for you just to make sure we didn't skip any steps explaining how TearCare works. It's a little different from taking drops and something like that. For what it's worth, some of the feedback we got, I still -- I apologize, I still actually haven't had a treatment done yet. But we had heard that we need to change that.

We heard?

Yes. Yes, we generally got the feedback. It's like procedurally extremely pleasant as quickly as that sounds. But maybe just delineate to people like what the actual treatment is.

So it's an in-office treatment. The first stage of the treatment -- or first you discuss the treatment with your eye care provider. And assuming you want to proceed, eye care provider will affix 4 therapeutic adhesively applied eyelid-worn devices to each of your 4 eyelids, software sensor controlled. We need to elevate the temperature to the maximum FDA allowable temperature and hold it there. So we're trying to thread a needle on a single degree, get the temperature on the tarsal plate of the eyelid up to 45 degrees Celsius, 113 degrees Fahrenheit. You can't overshoot because then you're going to have skin safety issues. You can't undershoot because then you're going to have efficacy issues.

So it needs to be a very smart system that's talking to the controller many, many times a second to get to that -- to thread that needle on that single degree. Get it up to 45, 15 minutes of pushing this max temp into the glands, melting all of those obstructions, again, through conformable, wearable, flexible, thin, sub-millimeter thin, but very smart devices that can melt all of the oil obstructions in each of the 20 to 30 glands in each of your eyelids. So that's 15 minutes of thorough melting within the eyelid. And then after the melting, the eye care provider at the slit lamp will work with the patient.

We have a single-use clearance assistant that allows the eye care provider to go zone by zone on each eyelid to maximally express and clear this diseased oil that's now in its melted phase, clear all of it. That's the aha moment for doctors, by the way, when they see the significant evacuation of what was once hardened disease meibum that's now been melted and is getting expressed. It's got a different color than it should. In fact, we give treatments at conferences. We can do one for you in public.

I am on for it.

Our team insisted I do one at the last conference. So that was quite the experience. You had one also, right?

Yes.

But that's the aha moment when they see the volume of diseased meibum with just a little bit of pressure because we've melted it so well. When it's being evacuated from the gland, they know that the patient is going to have immediate symptoms and signs improvements and the data says that they will be durable.

Of course, it is satisfying in that way.

Yes, yes. So it melts everything in all four eyelids that once we have 15-minute session with all 4 devices affixed to the eyelids. And then lid by lid, zone by zone, 5 to 10 minutes, clearance of each eyelid.

And how are you thinking about -- because we'll get back to the payers and coverage on that side in a second. But assuming that all goes, how are you thinking about sort of patient activation? Because you kind of -- there's a word-of-mouth component, there's maybe an awareness like whether it's advertising or like how are you thinking about like getting that awareness out there?

Yes. So first of all, I think it's important to understand that this is the #1 reason people go to their eye care provider is because of dry eye symptoms. So this is a large patient population. There are over 19 million diagnosed with dry eye disease in the United States. And there's another 19 million undiagnosed patients. So this is a huge problem.

People have experienced pain and discomfort and go seek treatment from their eye care provider. And that's very common. So having that eye care provider, first and foremost, identify that they have dry eye disease, and then identify that they have gland blockages that would benefit from a TearCare procedure. So identifying the root cause of what's causing their dry eye disease, and then with reimbursement being able to provide them a treatment pathway.

Right now, their options are to prescribe drops. And that's, first of all, there's compliance adherence issues with patients doing drops. Two times a day, four times a day depending on the drop, it is significant. But patients are doing it because they are seeking an option that will help with the issues that they're experiencing and the symptoms. So providing the ECP with another option, I think anybody when thinking about the options of, okay, a doctor tells you, you can do a drop 2 or 4 times a day, or you can do a procedure right now, we'll take about an hour in the office. You do that once a year, or maybe twice a year, depending on severity. Most patients are going to pick the procedural intervention and particularly because it is a pleasant experience. As you said, it's not something that is a surgical procedure. It's a quick intervention in the office with this hour process.

So that's really compelling for patients. It's also very compelling for eye care providers. You think about it. This is the #1 reason people come into their office, and most of the time, they write a prescription associated with that. They aren't participating in the economics of that treatment approach. With the procedural intervention where they actually have to do work, they actually can participate in the economics as well. And as we proved in our budget impact analysis and cost utility analysis this saves the payer money too. So it's really an incentive for patients, it's an incentive for providers and payers. And that's fantastic.

That's what -- when you have something that really has high adoption, when you can be a win for all of the players that are impacted by this, and that's what we're hoping to achieve with TearCare, with the appropriate reimbursed access to the technology. So from our perspective, it really comes from the patient going into the office, seeking care and ECP prescribing the appropriate treatment for that patient.

Could there over time, you see with a lot of dry eye drops, MIEBO has done a ton of consumer advertising. We love that in the sense that it's driving awareness of MGD. That is something that is not well understood by the community and patients. And so that awareness, I think, will help when people are then understanding they have MGD, and then what are the treatment solutions there. Could there potentially be a direct-to-consumer play at some point? It's certainly possible, but we need coverage density before we would consider those types of investments.

In the meantime, let's not forget once we secure reimbursement, we have spent years in the market, not necessarily driving revenue, but training dry eye specialists across the country on the procedure. We have over 1,500 smart hubs out there that have been sold. These are from eye care providers that have already demonstrated a desire to begin treating MGD as a treatment modality for their dry eye patients. So those 1,500 installed hubs already have access to plenty of patients. We need to turn them back on with coverage policies.

Yes. It's actually, to your point, Mike, that was sort of why I was hinting at the lack of cannibalization is actually because of that co-effects of MIEBO was one of the things. I get a lot of feedback that I'm terrible on my job. But one of the ways that I know I'm bad is actually just hearing you reference it. It reminds me of another company that added $4 billion of market cap for a surgical procedure that reduces the number of drops that you have to take. Like I never made that analogy between the 2 in my head, but it's kind of interesting thinking about it that way. So like on the discussion with the payers, SAHARA, that helps a lot. Like what's the feedback been? Like how are they thinking about coverage? Is it harder because it just looks a bit different? Like what are the conversations?

I'd say the feedback on the SAHARA RCT has been very positive, not surprising, again, because we didn't conduct the study or design the protocol blind. We talked to payers and a variety of medical directors, some ophthalmologists, some not ophthalmologists to make sure we understood what they would need to see to support coverage. So the feedback to SAHARA Stage 1, Stage 2 and now Stage 3, the 24 months has only recently been published. That is also very compelling and being very well received. We also have the economics piece, which obviously, payers don't announce that, that matters a lot. But I mean, the economics matters to everybody.

We have the budget impact model, which is compelling and also the cost utility analysis, which tells a very clear story to payers that not only is this more clinically effective, but it also is more economically appealing. So the feedback has been positive. In terms of timing, we would have loved to have had a policy win by now. Why have we not -- look, we're trying to do something new in a big new category. I mean there's a reason why we had to run and wanted to run such an aggressive rigorous RCT. You cover dry eye. You've seen the RCTs. They're usually 1 month or 3 months in feedback. And the control arm isn't the gold standard therapeutic.

It's usually against -- and I'm not criticizing the other RCTs. I'm trying to shine a spotlight on how rigorous the SAHARA RCT is because it needs to be. Most of the other comparator arms in RCTs are against vehicle or saline. So we randomized against the therapeutic gold standard, and we didn't give RESTASIS one week to work or a month to work, we had to ensure compliance. We randomized against twice daily RESTASIS compliant for 6 months straight. Rigorous RCT, but we knew we needed to bring to payers to create reimbursement in a category that affects a lot of patients, this level of rigor.

So ideally show superiority. We've done that on our primary signs endpoint. We've shown clinical and statistical significance on all signs and all symptoms, and we've shown durability of treatment effect. This is exactly the kind of clinical information payers need to see. Why don't they have a policy immediately? Creating a new category, the timing -- these things take time. We feel good. We're making progress. When will we get that first win? Again, we're working on a 2025 win. We've had quality conversations. The data has been very well received. How do we get it across the finish line? That's what we're working on.

There are people with jobs and time and I mean, a lot going on, so it takes time.

I mean that doesn't help either from a Medicare perspective, there's a lot going on with Medicare and the MACs and they're generally behind also. So that has also been one factor.

It's a great place to finish. Paul and Ali, thank you so much for doing this.

Yes. Thank you.

Thank you.

Great discussion. I appreciate it.

Thanks.