Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Management successfully transitioned back to independent operations following the termination of the Alcon merger, focusing on rebuilding commercial momentum and long-term sustainability.
Revenue growth of 18% was primarily driven by a 23% increase in procedure revenue, reflecting higher utilization of the ALLY system across the expanding installed base. The company achieved its strongest adjusted EBITDA to date, attributed to operating leverage gained as recurring revenue reached 83% of total revenue. U.S. procedure market share expanded to 24.1%, driven by system installations in 'femto-naive' accounts that previously did not perform laser-assisted cataract surgery.
The ALLY system now represents nearly half of the global installed base, which management views as a critical milestone for securing high-margin recurring revenue streams. Strategic focus remains consistent, centered on supporting surgeon partners through education and training to drive utilization and expand the installed base. Management expects a seasonal dip in third-quarter procedure volumes due to extended summer holidays in Europe and vacations in the United States.
Operating expenses are projected to trend modestly higher toward historical levels as the company reinvests in its commercial organization and growth initiatives. The company is targeting Europe as a key growth market, initiating a direct presence at the ESCRS meeting to drive international interest in the ALLY platform. Future gross margin stability is expected to be supported by the continued shift toward recurring revenue, which carries higher margins than capital equipment sales.
Management anticipates a multi-quarter process to fully re-accelerate international distributor relationships that were paused during the merger period. Gross margin of 59% included a $1.1 million one-time benefit from a tariff refund; excluding this, the normalized gross margin was 52%. The company ended the quarter with a backlog of 13 ALLY systems, providing visibility into near-term placements despite construction delays at some customer facilities.
High interest rates continue to impact the purchasing behavior of private equity-backed practices, which are often highly leveraged and sensitive to capital costs. The transition of legacy LENSAR Laser System (LLS) users to the ALLY platform may cause temporary fluctuations in capital expenditure revenue. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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