Medical lens company STAAR Surgical (NASDAQ: STAA) reported Q3 2026 results topping the market’s revenue expectations, but revenue fell by 12% year on year to $83.41 million. Its GAAP profit of $0.11 per share was significantly above analysts’ consensus estimates.
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STAAR Surgical (STAA) Q3 2026 highlights:
- Revenue $83.41 million vs S&P analysts’ consensus estimates of $78.17 million (12% year-on-year decline, 6.7% beat)
- EPS (GAAP) $0.11 vs analysts’ consensus estimates of $0.05 (significant beat)
- Adjusted EBITDA $14.36 million vs analysts’ consensus estimates of $12.02 million (17.2% margin, 19.5% beat)
- Operating margin 6.5%, down from 19.5% in the same quarter last year
- Free cash flow margin 31.6%, up from 1.9% in the same quarter last year
- Market capitalization $1.26 billion
“Our record nine-month performance keeps us firmly on track to deliver strong full-year GAAP net income with free cash flow and a debt-free balance sheet,” said Deborah Andrews, Executive Vice President and Chief Financial Officer. “Temporary gross margin pressures are expected to abate beginning in the fourth quarter, while China seasonality should moderate revenue and earnings, but not free cash flow.”
Revenue growth
A company’s long-term performance is an indicator of its overall quality. Any business can deliver a good quarter or two, but the best consistently grow over the long term. STAAR Surgical’s revenue grew at a decent 8.6% compounded annual growth rate over the last five years. Its growth was slightly above that of the average healthcare company and shows its offerings resonate with customers.
Long-term growth matters most, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. STAAR Surgical’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 1.9% over the last two years. 
This quarter, STAAR Surgical’s revenue fell by 12% year on year to $83.41 million but beat Wall Street’s consensus estimates by 6.7%.
Looking ahead, sell-side analysts expect revenue to grow 9.5% over the next 12 months, according to S&P, an improvement versus the last two years. This projection is noteworthy and implies its newer products and services will drive better revenue performance.
Adjusted operating margin
STAAR Surgical was roughly breakeven when averaging the last five years of quarterly operating profits, a poor showing for a healthcare business.
Analyzing the trend in its profitability, STAAR Surgical’s adjusted operating margin decreased by 16.1 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 5.6 percentage points. Performance was poor over both periods, showing its expenses were rising and it couldn’t pass those costs on to its customers.
In Q3, STAAR Surgical generated an adjusted operating margin of 13.2%, down 6.4 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings per share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.
STAAR Surgical’s EPS declined by 72.1% annually over the last five years while its revenue grew by 8.6%. This indicates the company became less profitable on a per-share basis as it expanded.
A closer look at STAAR Surgical’s earnings helps explain its performance. As noted earlier, STAAR Surgical’s adjusted operating margin declined by 16.1 percentage points over the last five years. Its share count also grew by 3.7%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. 
In Q3, STAAR Surgical reported EPS of $0.11, down from $0.18 in the same quarter last year. Despite falling year on year, EPS comfortably exceeded analysts’ consensus estimates. Over the next 12 months, Wall Street expects STAAR Surgical’s full-year EPS to grow 65,594% from $0 to $0.51, according to S&P.
Key takeaways from STAAR Surgical’s Q3 results
STAAR Surgical delivered a solid quarter, with revenue beating Wall Street’s consensus estimates by a wide margin and EPS also topping analysts’ consensus expectations. Those beats were key positives in the results. Shares remained flat at $27.16 immediately after the release.
To assess STAAR Surgical at its current price, it’s important to consider its valuation, business qualities and latest quarterly results. For more, read the full research report here (it’s free).
