On August 12, STAAR Surgical (NASDAQ:STAA) reported results for the quarter ended July 3 that flipped the script from a year earlier. Net sales jumped 111% year over year to $93.5 million, and the company that lost money in the same quarter of 2025 turned in $8.1 million of net income instead. It is the kind of number that grabs headlines, but most of the swing traces back to one region. China sales more than doubled to $52.3 million, and new CEO Warren Foust used the moment to lay out a longer-term plan for turning a single product line into a platform.
China Comes Roaring Back
The clearest story in the quarter is China, which now makes up more than half of STAAR’s revenue and grew more than 100% from a year ago, plus another 10% sequentially. Much of that came from EVO+, a lens variant launched earlier in the year, which pushed both procedure volume and average selling prices higher as patients shifted toward pricier toric lenses. Management says China sales have decoupled from the broader Chinese refractive surgical market, evidence that STAAR is taking share from laser-based procedures rather than just riding a bigger wave. With ICL procedures still only a low double-digit percentage of refractive surgeries in China, that leaves a long runway if the trend holds.
The rest of the business held up too. Sales outside China rose 6% to $41.2 million, with the Americas up 12% on growing US market share and EMEA excluding the Middle East also up 12%. Gross margin improved to 74.5% from 74.0%, helped by the end of costly manufacturing ramp-up in Switzerland. STAAR ended the quarter with $181.5 million in cash and no debt, up from $163.9 million three months earlier, giving it room to keep investing in its ERP system and next-generation products without raising capital.
The Comparison Gets Complicated
That 111% growth figure needs context. A year earlier, STAAR shipped only minimal quantities to China while distributors worked down excess inventory, which means the second quarter of 2025 was an unusually weak baseline rather than a normal one. The third quarter ahead brings its own asterisk. STAAR booked a one-time $25.9 million order in the third quarter of 2025, so management is asking investors to compare against an adjusted base of $68.8 million rather than the reported $94.7 million, and the fourth quarter, historically STAAR’s smallest, is used mainly for planning the following year.
Costs are climbing in places too. Tariffs on US-manufactured lenses sold into China are still weighing on margins, a headwind that will not fully clear until all China-bound product is made in Switzerland by the end of 2026. Per-unit manufacturing costs also rose because some lenses sold this quarter were produced back when factory volumes were lower. General and administrative expenses increased due to amortization tied to the new ERP system, and selling and marketing costs rose due to severance from a restructuring of the global marketing team. Meanwhile EMEA sales overall slipped 1% because of ongoing disruption in the Middle East, even as the rest of the region grew double digits. And Foust, who only became permanent CEO after six months as interim co-CEO, is still searching for a new Chief Technology Officer to run the innovation push he is promising.
What The Smart Money Sees
The number of hedge funds holding STAAR fell from 26 to 24 in the most recent quarter, a modest pullback in institutional conviction even as the business turned profitable. Short interest sits at 17.73% of the float, a heavy amount of skepticism for a stock that just posted its best first half of adjusted EBITDA in company history. As of September 11, the stock trades at 51.55 times forward earnings, a multiple that assumes the China rebound and margin gains keep compounding for years. Few names carry both a crowded short position and a growth multiple like that. It leaves the market seemingly torn between the turnaround story and doubts about how much of it is a one-time comparison effect.
The Real Test Ahead
STAAR heads into the second half of 2026 with a stronger balance sheet and a China business that looks like it is taking real share rather than just refilling depleted shelves. Whether that holds up once the comparisons get harder is the open question, especially with tariffs, ERP costs, and a leadership transition still working through the numbers. EVO+ adoption and market share gains would need to keep showing up in China even as the easy year-over-year comparisons fade for the recent momentum to prove durable.
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