Iridex Corp (NASDAQ:IRIX) Reports Mixed Q3 2025 Results, Stock Falls Over 13% on Earnings Miss

Iridex Corporation (NASDAQ:IRIX) reported its financial results for the third quarter of 2025, delivering a mixed performance that fell short of analyst expectations on the top line while showing significant operational improvements. The market's immediate reaction was sharply negative, with the stock declining over 13% in after-hours trading following the announcement.

Earnings and Revenue Versus Estimates

The company's performance for the quarter ended September 27, 2025, presented a complex picture where operational progress conflicted with financial targets.

• Revenue: $12.5 million reported versus $13.36 million estimated
• Earnings Per Share (EPS): -$0.09 reported versus -$0.0612 estimated

Both key metrics missed analyst consensus, with revenue coming in approximately 6.5% below expectations. The earnings per share loss was notably wider than what the market had anticipated, contributing to the negative investor sentiment observed in the after-hours session.

Operational Highlights and Cost Management

Despite the earnings miss, the press release highlighted several positive operational trends and cost-control achievements under CEO Patrick Mercer's leadership. The company achieved its fourth consecutive quarter of year-over-year revenue growth, with total revenue increasing 8% from $11.6 million in the same quarter last year.

Key product performance included:

• Cyclo G6 product family revenue grew 13% year-over-year to $3.5 million
• Retina product revenue increased 4% year-over-year to $6.7 million
• The company sold 14,900 Cyclo G6 probes compared to 13,600 in the prior year quarter
• Operating expenses were reduced by 12% compared to the third quarter of 2024

The company's gross margin of 32.1% represented a decrease from 37.3% in the prior year period, primarily driven by a one-time, non-cash $0.8 million inventory write-down charge.

Financial Position and Forward Outlook

Iridex reported cash and cash equivalents of $5.6 million as of September 27, 2025, representing a reduction of $1.2 million during the quarter. The company's net loss improved to $1.6 million, or $0.09 per share, compared to a net loss of $1.9 million, or $0.12 per share, in the same period last year.

Management provided an optimistic outlook, stating they expect to achieve cash flow breakeven in the fourth quarter and positive adjusted EBITDA for the full year 2025. This guidance appears ambitious when compared to analyst estimates for the full year, which project an EPS of -$0.275 and sales of $53.35 million.

Market Reaction and Analysis

The significant after-hours decline suggests investors focused more heavily on the earnings and revenue misses rather than the operational improvements and cost reduction achievements. The wider-than-expected loss per share, combined with revenue falling short of estimates, likely triggered concerns about the company's near-term profitability trajectory despite management's positive commentary about the company's reduced cost structure and path to adjusted EBITDA positivity.

For investors seeking more detailed earnings information and future estimates, additional data is available through the company's earnings and estimates page.

Disclaimer: This article provides financial analysis for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.