Good afternoon, everyone. Thanks for joining us on day one of the 25th Annual Needham Healthcare Conference. My name is David Saxon. I'm an analyst on the medtech research team here at Needham. With me today, we have the Sight Sciences team, including CEO, Paul Badawi, COO, Alison Bauerlein, and CFO, Jim Rodberg. This afternoon, we'll do a fireside chat. For those of you on the conference portal, there should be a box. You can submit questions. Alternatively, you can feel free to email me any questions you might have, and I'll do my best to fit them in. With that, maybe we'll just jump straight into Q&A. It's been a couple of days since we saw each other in D.C., at ASCRS. I just wanted to get your thoughts on the conference. What was the feedback around the whole interventional approach to both categories, or even just on a product-level basis with what you have going on with OMNI and TearCare? Yeah. Thanks, David. We spent the last three or four days with great engagement with the ophthalmic community. I'd say there's a growing interventional mindset, and there's a growing desire to activate that interventional mindset and perform more interventional procedures on patients that can benefit. You could feel it. There were a lot of great conversations in both of our businesses, interventional glaucoma and interventional dry eye. The mindset in glaucoma, there's a number of new technologies. There's a great opportunity to develop the pseudophakic standalone market. We had great customer engagements around that. We had a specific event around activating intervention. It was a full room, standing room in the back. That was terrific. We had a TearCare-specific event celebrating the early adopters of the reimbursed business model. That was super exciting. I'd say with this increased mindset, we're at a really interesting point strategically in the development of the company. We were born interventional well over a decade ago. We have a mature, compelling interventional glaucoma technology with OMNI. We have a proven interventional dry eye technology with TearCare. There's overlap that's kind of appearing as we commercialize reimbursed TearCare. There's overlap in these two segments. There's a lot of interventional customer overlap. There's a lot of interventional patient overlap. We're at a really interesting point where we are unique that we have two leading interventional technologies and two significant anterior segment diseases with two distinct commercial infrastructures, and we have, because of that, really interesting and unique engagement with our interventional customers. It's a really exciting time at Sight Sciences, and I think that was on total display with really interesting customer engagement over the last three or four days at ASCRS. Yeah. That's great. That was helpful. I wanted to ask, I mean, we go to ASCRS, AGS, AAO. You go to a lot more than I do, obviously. Following these conferences, do you see kind of a meaningful bump in leads and just kind of spreading awareness, or how should we think about these conferences as it relates to traction you're seeing in the market? A little bit of all of the above. Leads happen, training, we have training sessions that we conduct, sales generation. Really, I'd say overall, it's just a great opportunity to engage with our customers more broadly around kind of this strategic mindset of greater intervention, moving from an interventional mindset to activating interventions, again, both in interventional glaucoma and interventional dry eye. It's all of the above. We leverage it to the max throughout the conference, engage very thoughtfully, and then ultimately over time, we get back to the field. That's where it happens. That's where the growth happens. It takes time. After these conferences, over the coming weeks and months, we leverage all of the great interactions we've had over the last three or four days and keep driving intervention forward. Mm-hmm. Okay. Well, maybe let's dive into each of the two businesses. Maybe we'll start on dry eye. Maybe we'll start at a high level as well. Can you just talk about how you view the opportunity maybe on a practice level or a doctor level, in the U.S.? Yeah, happy to, David. Obviously, we view interventional dry eye as a very large opportunity. It's one of the most common reasons that patients visit an eye care provider, and MGD is a significant portion of that market and the driver of those symptoms. We estimate that there are about 19 million diagnosed dry eye patients in the United States, and up to about 86% of them have some form of MGD-associated dry eye. When we look at the moderate to severe patient population within that's about 7 million-8 million patients that are most likely to benefit from a procedural intervention. Right now, most dry eye is not treated with procedural interventions. That's a very small percentage of the category. Most are treated with dry eye drops. Of course, over time, as we can create reimbursement and education, we can really create this new category. In terms of practices, most offices, eye care providers have some level of dry eye treatments. When we look at our highest opportunities and really what the potential is, and we look at current treatments for dry eye disease and different subsets of the population, we have about 6,500 that we would target across the United States. Obviously, not all of those are in areas where we have fee schedules established, but about 6,500 that we would say are target practices across the U.S. Okay. Just to clarify, the 6,500, is that a mix between ophthalmologists and optometrists? Ophthalmologists. Okay. Yes, that's it. Any rough estimate on that mix between specialties? I don't have that at my fingertips what the mix split is between those right now. In our early adoption phase, we are more heavily weighted towards ophthalmic practices because we are focused on the traditional Medicare fee-for-service population, and that's better treated through the ophthalmic practices. Over time, the larger opportunity is optometry practices, but we need a much more density of commercial payers to target that patient population or that provider population. Okay. That's helpful. And just on that last point, just wondering the mix between Medicare versus commercial across the maybe either 19 million diagnosed or the seven to eight million moderate to severe. Yeah. It is a heavier weighting than our glaucoma business, which is obviously more heavily weighted towards Medicare. Here, about 70% is the estimate of commercial, and then 30% would be Medicare, and then that Medicare is split between Medicare Advantage and traditional Medicare fee-for-service. Commercial is the larger portion of the opportunity because most patients are just under 65. That is the driver there. Of course, near term, as we said, Medicare is an important part because that's where we have fee schedules established, so there's a clear path for payment and helps build this reimbursed model within the practice. Mm-hmm. I will say that there is differences in prevalence, though. While there's about a 6% overall prevalence of dry eye disease in the general population, within the Medicare-aged population, there's about a 15% prevalence. While it is a smaller portion of the just overall market, given just the population spread, there is still a significant number of Medicare beneficiaries that have dry eye disease, and that has created good synergies across our interventional glaucoma team. Mm-hmm. Okay. A little off-script, but just in the Medicare population, I think we've talked in the past about TearCare being a potentially good procedure to do before cataract. Just given that you're in two MACs and Medicare, how are you thinking about that opportunity to ride along? It wouldn't be combo cataract, but attachment, I guess, to cataract with TearCare. Yeah, it's a great question, David, and it's something that we're looking at studying and making sure that we understand the benefits of TearCare prior to a cataract or a MIGS procedure and how that may improve the ocular surface. That's the real question is do you get better measurements, and is there benefits to treating the ocular surface prior to surgery? We still need to wait for a clinical validation of that, but I think there is natural belief in the industry that there could be benefits. Of course, we do know that glaucoma drops and other eye drops cause ocular surface challenges for patients. Being a part of that solution for the glaucoma patients and for patients that need cataract surgery would be a great outcome. That is something we'll continue to study and look at and hopefully have data to support over time. Mm-hmm. Okay. David, I would just add from a customer mindset, those high-volume ophthalmic practices, they're seeing lots of Medicare-age patients, and there's lots of dry eye disease, as Alison mentioned. There's lots of cataracts. There's lots of glaucoma. Once those surgeons have adopted an interventional mindset, they're happy to perform interventions for each of those three leading diseases of the anterior segment. There's just very natural customer synergy, and we're starting to see more and more of that the more we're out in the field. Yeah. I guess just on that point, glaucoma has IG, interventional glaucoma, for those who aren't familiar. Is there anything similar on the dry eye side? It's historically been drops. When you think about this interventional approach, which specialty or opportunity offers the path of least resistance? Yeah. I think, David, in the near term, comprehensive ophthalmology practices are the most reasonable starting point because they have that Medicare density, and they have established medical billing workflow. Over time, optometry, of course, they see a lot of dry eye patients and could be an attractive call point for us as we expand market access and simplify the process. From a practical standpoint, we're helping both right now, ODs and MDs, building out their practice workflow, identifying patients, confirming benefits, and integrating that treatment path into their overall clinic workflow. I think we don't yet know exactly how that mix will shake out over time, but I think there's opportunities in both call points. Mm-hmm. Okay. In some cases, there's both in the same practice. Those might be the best early adopters, the collaborative care practices, where you've got a high-volume ophthalmic surgeon who's seeing tons of dry eye, glaucoma, cataracts. Maybe they're not the ones who are going to be performing the TearCare procedure, but they're seeing lots of it. They want to adopt it. They're used to billing Medicare, and so they'll integrate TearCare in, but maybe the optometrist in this collaborative care practice is the physician performing the procedure. All right. Maybe just turning to reimbursement. Right now you're in First Coast and Novitas with TearCare reimbursement. Can you talk about what you're doing in those jurisdictions to drive utilization in existing accounts and then kind of spreading the word to get new adoption? Yeah. It's really been a balanced approach there, both working with the existing customers that had previously bought SmartHubs and also activating new accounts. In the fourth quarter, we had about 80 customers that ordered, and about 30 of them were new and about 50 were existing TearCare customers. It's really both is the short-term answer. A big part of that early work has just been getting accounts comfortable with claims submissions and payments, supporting the staff training to make sure that you can turn this into a repeatable workflow. We have a small sales team, and so of course, we have to prioritize within that what accounts are the highest opportunities so we can leverage our sales force appropriately. Yeah. Just on that point, I think the two jurisdictions cover about 13 states. Uh-huh. If I'm not mistaken. Yes. How many reps do you have across those 13 states currently, and kind of where do you need to be longer term once commercial rolls in and whatnot, to really be at full representation? Yeah, it's a great question, and we're still in the early stages of that as well. We ended the year with six dry eye sales reps and four Therapy Development Specialists, which are kind of the clinic workflow reps that are supporting those. We will continue to add to that in 2026. We've already added some. We will continue to do that. We are focused on kind of being efficient before we significantly scale that team. We haven't put a specific target on what full coverage means for those 13 states, because frankly, it also depends on what other density we have with other payers in those states as we pursue different types of practices. We do think that it would justify multiple sales reps and TDs per state. If you look at it right now, Florida is a natural market to think about. Florida, we have one sales rep currently, and of course, you could easily see Florida supporting four or five. Same with Texas, another opportunity where we have two reps in Texas and the ability to continue to scale that team. Still very much in the early stages here. We will approach this in kind of a phased way to make sure we do this appropriately. There is a lot of opportunity to add reps and have those reps produce great, relatively quick ROI on that investment. As we get more confident that that is repeatable, we will continue to accelerate that spend. Yeah. Okay. You guys have talked about 200 OMNI accounts in those First Coast and Novitas jurisdictions. You just talked about the TearCare reps. I guess, what are the OMNI reps or interventional glaucoma reps doing? Are they responsible for anything or are they kind of supporting more OMNI? I guess that's what they're paid on, right? Yeah. We have two separate sales team, but there is meaningful synergies between those two markets. The reps are working closely together in those 13 states to identify accounts that would be appropriate for TearCare and having a warm handoff and an introduction there. That cross-selling is an important part, and we can leverage that existing relationship. We haven't called out specific traction of those accounts, but we are seeing good, solid adoption, and those are really the accounts we see as the highest priority, those comprehensive ophthalmology practices already having a relationship with Sight Sciences, ordering OMNI, where this could really be additive to their businesses. Mm-hmm. All right. Just on the commercial side, at this point, how would you frame the commercial coverage as it relates to doctors' willingness to adopt TearCare at this point? Is Medicare enough in looking specifically at First Coast and Novitas, or is that a meaningful barrier at this point? Yeah. Commercial coverage is a meaningful factor. It's one of the first questions that accounts ask is what payers can cover TearCare. That reimbursement density is important as we scale. Right now, the accounts that are adopting are the early adopters. They're the true believers in reimbursed procedural dry eye. They're willing to work with us as coverage builds, and they have some level of decent traditional Medicare density to have it make sense in their business. Even in First Coast and Novitas, and again, this is maybe 15% of their total business, they still have to look for those opportunities. They can, of course, offer it as a cash pay as well to others, but most of them do still have a large commercial or non-Medicare mix. It is really important that we expand coverage over time. Even with that, we've seen really great adoption because it just shows how prevalent dry eye is. Even though we can only really address a portion of the market, they are building their practices, building a workflow, having TearCare-specific training day or days in the office, and being able to show some level of consistent workflow in their practice. Okay. That's helpful. Maybe shifting gears to dry eye guidance. By my math, it implies somewhere around 5,500-7,500 TearCare cases for the year. You did over 700, I think, in the fourth quarter with really only half a quarter. I think that those announcements were in October. Yeah. The First Coast and Novitas, I should say. Maybe can you help us understand or frame kind of the sequential cadence and ramp over the year for TearCare? Yeah. David, I can take that one. We are expecting a sequential ramp of revenue throughout 2026 and throughout the quarters there. As a reminder, our guide was $1 million in Q1. As we ramp and scale throughout the year, onboard additional reps, and focus on adding new customers as well as increasing utilization with existing accounts, we would expect that to grow throughout each quarter. If you remember, our revenue is both a mix of the SmartHub as well as SmartLids. In that guidance, we have not assumed additional reimbursement wins in our revenue guidance, but we continue to actively engage with both commercial and MAC payers. Mm-hmm. Okay. David, what I would just add to that is we think it's really important. We're really early in this process. Let's set prudent and achievable guidance for dry eye and give us an opportunity to go execute. Commercial infrastructure is a limiting capacity. Density of covered lives and expansion of covered lives is also a limitation here. This is an incredible opportunity, even with just this existing 10.4 million covered lives in First Coast and Novitas, we estimate 700,000 or so patients have moderate to severe MGD within that population. There is an incredible opportunity that we need to build and execute, but we want to build for the long term here. We want to set reasonable guidance, and then we'll continue to execute throughout the year and provide updates as we go. Mm-hmm. All right. Just to add one final thought to Jim and Ali's comments. Having launched OMNI in 2018-2019 timeframe and now launching reimbursed TearCare, I'll say this. The effectiveness from day one of the TearCare sales force, and we had a great OMNI launch, very good launch in medtech. That said, the TearCare launch and the results the team is generating, the efficiency, the scale-up, how fast they get to certain revenue milestones is really interesting. Even though we're talking about guidance and being prudent, I can say when you look into how they're performing and how the reps are ramping and the efficiency of this business model, it's really interesting. Mm-hmm. Okay. Great. Well, maybe we'll turn to glaucoma, and hopefully get to some more financial stuff for Jim. Maybe just in terms of MIGS penetration, it's been around for, I guess, 2012, right? Where are we in terms of penetration at this point? I think there's 4 million-5 million cataract cases, something like, I've heard, 350,000 MIGS cases. I guess, are those numbers in line with what you have and what gets penetration meaningfully higher? Yeah, David. I think those are close, fair. Maybe slightly higher, but in the right ZIP code. What gets the MIGS penetration higher? Having deeper utilization in combo cataract, having more of those patients who have glaucoma and are undergoing a cataract procedure actually get a MIGS. There's a lot of room for growth there. Getting more cataract surgeons who aren't performing MIGS to perform MIGS, there's a lot of growth opportunity there. Lastly, the standalone market development. That was a big focus of our efforts here at ASCRS. A lot of excitement around it. I mentioned an event we had around activating intervention. It was attended panelists, including a surgeon who loves OMNI and loves TearCare, office administrators. It takes a village to develop this market, everyone coming together to identify those patients that could benefit from an intervention. We've made investments this year in commercial infrastructure. We have about a half a dozen folks who are spending their time entirely on market development of the pseudophakic standalone opportunity. There's a lot of good energy there. We developed the protocol last year. We spent years of education with clinical data in standalone, developing that interventional mindset. I think that's pretty well-established right now. Now we need to move, as I mentioned before, to activating that interventional mindset and actually doing procedures on more patients that could benefit. We learned that if we follow something that's tried and true in ophthalmology, you mentioned the 4 million-5 million cataract cases, well, there's a workflow that's well-established. It's called a cataract consultation. Mm. Right? You bring a patient who needs cataract surgery back, a dedicated appointment to have a consultation around all of the different options for cataract surgery, and you put in place a surgical plan. The patient leaves that appointment with a surgical plan in place. We've modeled our interventional glaucoma market development exercise after that cataract consultation, so we have an interventional glaucoma evaluation appointment. When our customers bring back patients who could benefit from an interventional glaucoma procedure, and they bring them in for this interventional glaucoma consultation, an appointment dedicated to that, the numbers are really interesting in terms of turning those visits into an IG procedure. A lot of those are OMNI, not all of them. We convert a lot into SLT, maybe other MIGS, maybe a sustained release, rising tide. It's in everyone's interest, and ultimately, we're here. It's all about the patient, but we're getting a lot of OMNI conversions, standalone OMNI utilization out of that. Those are the drivers that would increase penetration. Yeah Both in combination cataract as well as standalone. Okay. I think what you just said relates more to standalone. Is that right, or do you have initiatives ongoing on the combo side as well? Yeah, I think the combo cataract is better established at this point, David. Yeah We obviously continue there. We continue engaging with our customers, not only taking share, but also driving increased utilization and market expansion, getting new surgeons to perform MIGS and combo cataract. Yes, we've been focused in combo cataract, and we continue to be focused. It's a really important part of the MIGS market overall. The new efforts, the market development efforts, we're making investments, specific investments there. I mentioned the half dozen market development managers. It's a great team. Some of our top reps chose those roles. Imagine that. The top reps who really understand the opportunity and are doing a great job in combo cataract have chosen to switch over to do standalone market development, and so it's a very interesting time. We expect this year to generate enough interesting KPIs on how they're performing so that we can accelerate in 2027. Okay. Maybe shifting gears to guidance for glaucoma, the interventional glaucoma business. It's 2%-7% growth. How should we think about the building blocks in terms of number of ordering facilities versus increasing utilization? Yeah. Thanks, David. As we look at 2026, our growth, we expect it to come from a balance of drivers, and one of the main focus areas is increasing ordering accounts throughout the year, whether that's through reengaging dormant accounts or adding new accounts. That continues to be a focus, and then having healthy utilization within all of those accounts. In addition, what Paul just described around market development around standalone, while we don't expect that to reach a point of inflection here in 2026, it's a foundational year for those building blocks, and it is something that we believe in long term and expect incremental growth here in 2026, and then additional growth as we go forward. Finally, as Paul mentioned, we'll continue to compete and focus in the combo cataract market, both expanding and taking share. Okay. Yeah. All right. You have a couple different iterations of OMNI. We have Ergo. That was the first one. You just rolled Edge maybe a year or so ago. Ultra's expected later this year, I believe. Maybe first, what's the approximate mix between Ergo and Edge, and once Ultra comes out, where do you think mix eventually settles out between the three? Yeah. We haven't provided exact mix percentages on Edge versus Ergo. What I will say is we've been very diligent in converting accounts to Edge. There is a place in accounts for Ergo as well, but accounts can be certainly drawn towards Edge with the attributes that product has. Edge continues to be a larger percentage of the mix, and as we get closer to launching Ultra and the attributes coming with that product, over time, likely expect to have Ultra and Edge and likely sunset Ergo at some point. Okay. That's helpful. On the competitive side, so there's a competitor who folded their MIGS device into a different sales force over the weekend. I was hearing they're having some supply issues. Have you benefited from that to date? How are you thinking about that opportunity? Yeah, David, especially in combo cataract, MIGS is a competitive market. It's been competitive, again, since we launched in 2018. I think we've done a great job competing effectively. Does a specific issue change our trajectory? Hard to say right now. You can count on this. We're active in the market. We're active with our customers. We're making sure that any patient that can benefit from a comprehensive procedure like OMNI, implant-free, comprehensive, proven, gets that procedure. We're showing up in the market as we always do, highly competitive and effective. We'll see how the results play out. Okay. On SION, I know OMNI is the kind of workhorse for interventional glaucoma, but maybe an update there. I think last year we talked about, and it was kind of a $mid-single-digit million product. Is that kind of a good way to think about it still? Where do you kind of see that product fitting into the portfolio? I think it has some benefits in a certain kind of category within the market, but would love to just get updated thoughts on SION. Yeah. As you know, OMNI is our flagship MIGS product. It's highly comprehensive, addresses all three sources of outflow resistance, does so circumferentially for up to 360 degrees. It is definitely our flagship. SION, which performs goniotomy, a more minimalist procedure, it has a role in the market. It's an easier procedure. It's faster. It's simpler. Today, it has good economics. It's got a role in the MIGS market. We like to have an offering. It allows us to early adopters in MIGS. Goniotomy is kind of the training wheels in MIGS, so it allows us to partner with a new MIGS surgeon, begin developing that relationship, that close Sight Sciences relationship, obviously over time. The goal, the desire would be to elevate that partnership and move the customer along to a portfolio approach that includes OMNI and moving to more OMNI over time. Okay. All right. There's a number of programs I think in the pipeline on the glaucoma side that we don't really talk about a lot. Maybe just a sneak peek, what are you guys working on? What are you most excited about? What are the near-term milestones we should be looking for? Yeah, as a public growth medtech company, we're evaluated on the here and now. Yeah. We're obviously always improving. We talked a bit about always improving our existing product. We talked a bit about OMNI Ultra. We're looking forward to getting that out to the market this year. We're working on a next generation of TearCare, which we're excited about bringing that out in due course. That's the iterating, always iterating and improving and staying well ahead of the market and well ahead of competitive entrants that come behind us as we create these markets. We always want to be staying ahead. We're doing that in terms of pipeline, next generations of our existing products. We've been working on some really interesting pipeline. We'll talk more about it in due course, but we're building, David, an interventional eyecare company. As I started this call, we have a great technology in interventional glaucoma. With OMNI, we have a great technology in interventional dry eye with TearCare. Those are going to be two great interventional businesses. Over time, we want to develop additional interventions and equip our commercial infrastructure with additional interventions in glaucoma and dry eye. If you can imagine sustained release, a portfolio in glaucoma and dry eye, it's procedural Rx in both of those categories. We've been working on it for some time. As we get closer to human trials, we'll begin talking more about it, but we're super encouraged by kind of the pre-human work and the animal data that we're seeing. Yeah. Okay. I think you mentioned a next-gen TearCare. Any sense for what the improvement would be? We haven't talked specifically about that yet, David. All right. I think we'll get a little closer to launch before we. Yeah Talk about the specifics. That's fair. All right. Jim, maybe turning to some financial questions. Gross margins have been really strong despite tariffs. Last year, there was a lot of talk about just moving manufacturing outside of China. Maybe give us an update there and how we should think about the cadence of kind of moving that manufacturing as it relates to how we should think about gross margins. Yeah, that's right, David. We are working on adding additional manufacturing sites outside of China. That's both part of our manufacturing diversification strategy, and also it can help to offset any country-specific risks, like tariffs we saw in 2025. Progressing nicely. Expect to have production here in 2026 at multiple locations outside of our current offering, our current manufacturing. As we think about margins, it doesn't really have a material impact on our gross margins. We've got very healthy gross margins and expect to continue that. This strategy is at first here focused on OMNI in 2026. Okay. For dry eye, understanding it's early in the reimbursement story, when that business scales, how should we think about gross margins even directionally relative to OMNI or interventional glaucoma? Yeah. We expect to see very strong gross margins in dry eye, similar to what we see in glaucoma. Over time, we would expect dry eye to get to 80%+ margins. Obviously, that takes some scale and some volume. It also, thinking about average reimbursement rates going forward, we're already starting to see that improvement in dry eye gross margin, and we'll only expect those to continue to increase over time as we get to higher volumes. All right. On the free cash flow side, so I think cash usage moderated over 2025, but was slightly up relative to 2024. For 2026, how are you thinking about free cash flow or cash usage, particularly as you invest behind TearCare and even on the IG side? Yeah. We used about $28 million of cash in 2025. As we look ahead to 2026, we expect to improve upon that here in 2026. There'll be some seasonality. Q1, Q2 tend to be our highest cash usage quarters. Even with the guidance we put out on our spend and investments, we'll take a very diligent approach, as we've always done, to our spend and to our investments. Overall, expect to improve our cash flow usage in 2026 from 2025. Okay, great. All right. Well, we have about a minute left. Maybe I'll leave it open to you if there's anything you want to leave investors with. Yeah. I would just say it's a really exciting time in ophthalmology as the ophthalmic community at large embraces intervention. Patients deserve and can benefit from earlier intervention when there's safe, effective technologies that are minimally invasive or non-invasive. It allows our customers to intervene earlier, and that mindset is here. It's now. It was on full display at ASCRS, and that mindset's turning into action. We're one of the key players in making that happen, and we're very excited about the continued engagement with our customers to drive more and more intervention as we build out a leading interventional eye care company. Great. All right. Well, Paul, Alison, and Jim, thanks so much for joining us, and thanks for everyone who tuned in. Really appreciate it. Thank you, David. Thank you.