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Bausch & Lomb Corp (BLCO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $1.281B, up 7% reported and 6% constant currency; adjusted EPS of $0.18. Revenue and adjusted EPS were modestly above Wall Street consensus, and management raised the lower end of FY25 adjusted EBITDA guidance, citing strong execution . Values retrieved from S&P Global for consensus.
  • Broad-based growth led by Pharmaceuticals (MIEBO momentum) and Vision Care; premium IOLs regained traction as enVista/LUX recovery continued post-recall .
  • Margins improved sequentially: Q3 adjusted EBITDA margin excluding IPR&D was 19%, +400 bps q/q, aided by SG&A mix and Vision 27 cost discipline; adjusted cash flow initiatives delivered $161M adjusted CFO and $87M adjusted FCF .
  • FY25 guidance maintained for revenue ($5.05–$5.15B) and raised for adjusted EBITDA ex IPR&D to $870–$910M; FX tailwinds increased to $30M. Investor Day (Nov. 13) and premium IOL recovery are near-term catalysts .

What Went Well and What Went Wrong

What Went Well

  • Pharmaceuticals grew 8% reported (7% cc) on MIEBO adoption; CFO highlighted $84M MIEBO revenue (+33% q/q, +71% y/y TRx +110%) and XIIDRA revenue of $87M with 8% TRx growth .
  • Vision Care rose 8% reported (6% cc), driven by dry eye OTC, eye vitamins, SiHy Daily lenses and Biotrue ONEday; consumer dry eye revenue $113M (+18%) with Blink +36% and Artelac +18% .
  • Premium IOLs regained momentum; enVista/LUX platforms improved with total Invista IOLs at 82% of pre-recall Q1 levels, and EnVista at 91% in September; management emphasized surgeon trust post-recall .

What Went Wrong

  • GAAP net loss of $28M versus prior-year GAAP net income of $4M, driven primarily by a higher tax provision despite stronger operating results .
  • Adjusted gross margin fell 130 bps y/y, reflecting product mix and one-time Invista recall impacts; consumables were flat cc while equipment grew 4% .
  • Cash flow from operations declined y/y to $137M from $154M due to business transformation payments (despite improved operating results) .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$1.196 $1.137 $1.278 $1.281
GAAP EPS ($)$0.01 ($0.60) ($0.18) ($0.08)
Adjusted EPS ($)$0.13 ($0.15) $0.07 $0.18
Operating Income ($USD Millions)$43 ($83) ($11) $95
Adjusted EBITDA ex Acquired IPR&D ($USD Millions)$227 $126 $192 $243

Q3 2025 vs Wall Street consensus (S&P Global):

MetricActual Q3 2025Consensus Q3 2025*
Revenue ($USD)$1,281,000,000 $1,277,820,580*
Adjusted EPS ($)$0.18 0.16085*
EBITDA ($USD)$243,000,000 (company adjusted) 231,787,800*

Values retrieved from S&P Global.

Segment revenue:

Segment ($USD Millions)Q3 2024Q2 2025Q3 2025
Vision Care$684 $753 $736
Surgical$206 $216 $215
Pharmaceuticals$306 $309 $330
Total Revenue$1,196 $1,278 $1,281

KPIs – Cash flow:

KPI ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
Cash Flow from Operations$154 ($25) $35 $137

Q3 2025 operating metrics:

KPIQ3 2025
Adjusted gross margin %61.7%
Adjusted R&D ($USD Millions)$95
Adjusted EBITDA margin ex IPR&D (%)19%
Adjusted cash flow from operations ($USD Millions)$161
Adjusted free cash flow ($USD Millions)$87
Net interest expense ($USD Millions)$98

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$5.050B–$5.150B $5.050B–$5.150B Maintained
Adjusted EBITDA ex IPR&D (non-GAAP)FY 2025$860M–$910M $870M–$910M Raised lower end
FX Tailwinds – RevenueFY 2025$25M $30M Increased
FX Tailwinds – Adj. EBITDA ex IPR&DFY 2025Nominal Nominal Maintained
Adjusted gross margin %FY 2025~61.5% ~61.5% Maintained
R&D investment (% of revenue)FY 2025~7.5% ~7.5% Maintained
Interest expenseFY 2025~$375M ~$375M Maintained
Adjusted tax rateFY 2025~15% ~15% Maintained
CapExFY 2025~$295M ~$295M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Dry eye (MIEBO/XIIDRA)MIEBO momentum, XIIDRA gross-to-net headwinds (Q1); dry eye TTM revenue ~$1B, XIIDRA acquisition context (Q2) MIEBO $84M revenue (+33% q/q), TRx +110%; XIIDRA $87M, TRx +8%; combo-therapy rationale discussed Accelerating
Premium IOLs (enVista/LUX)enVista recall impact; return to market initiated (Q1) Recovery: Invista IOLs at 82% of pre-recall Q1; EnVista 91% in Sept; growing premium mix Recovering
Contact lenses (SiHy Daily)Growth in Daily SiHy, ULTRA, Biotrue ONEday (Q1/Q2) Daily SiHy +24%; U.S. +9%, International +4%; sustained outperformance vs market Strong, above market
Consumer eye careArtelac, LUMIFY, Blink growth (Q1/Q2) Lumify consumption +14% (timing of Costco promo); Blink +36%, Artelac +18%; Eye vitamins +11% Positive; timing effects
Tariffs/macroGuidance excluded tariff changes given fluidity (Q1) Assumes offset of 2025 tariff impacts; China consumer mixed, Singles Day watchpoint Manageable; monitored
SG&A/margin discipline (Vision 27)Transformation costs; SG&A adjustments (Q1/Q2) SG&A as % revenue ~40%, -290 bps seq; +400 bps sequential EBITDA margin expansion Improving
GenericsQ1/Q2 pressure from U.S. generics Sequential improvement; opportunistic focus for plant absorption/profitability Stabilizing
Capital allocationQ2 refinancing extended maturities Deleveraging priority; North Star is investment grade; tuck-ins/R&D considered Balance sheet focus

Management Commentary

  • “We’re delivering on the vision we laid out in 2023, with a base business engine that continues to hum and steady introduction of innovative products across categories.” – Brent Saunders, CEO .
  • “Q3 adjusted EBITDA margin excluding acquired IPR&D was 19%, which represents a sequential increase of 400 basis points… we are maintaining revenue guidance and raising the lower end of adjusted EBITDA guidance.” – Sam Eldessouky, CFO .
  • “Total Invista IOL sales in Q3 reached 82% of Q1 pre-recall levels, with EnVista at 91% in September… trust we developed in how we handled [the recall] was on full display.” – Brent Saunders .
  • “Tariff policy remains fluid… our updated guidance assumes we will be able to offset the impact of tariffs in 2025.” – Sam Eldessouky .

Q&A Highlights

  • Financial Excellence pillar: Margin expansion and cash conversion are core; Vision 27 projects span SG&A discipline, mix improvements, and manufacturing efficiencies; PMO driving hundreds of initiatives .
  • Dry eye strategy: Strong MIEBO/XIIDRA adoption; clinical rationale for combination therapy to address multifactorial disease; coverage ~70% for both products .
  • Surgical trajectory: Premium IOL recovery faster than expected; consignment nearing full restoration; sequential premium IOL up strongly .
  • Tariffs and macro: 2025 offset assumed; 2026 to be monitored given policy fluidity; China consumer mixed with Singles Day a key datapoint .
  • Capital allocation: Deleveraging priority toward investment-grade profile; evaluate tuck-in M&A and R&D/IP investments; strong adjusted cash generation foundation .

Estimates Context

  • Q3 actuals vs consensus: Revenue $1.281B vs $1.2788B*; adjusted EPS $0.18 vs $0.161*; both modest beats . Values retrieved from S&P Global.
  • EBITDA definitional nuance: Company-reported adjusted EBITDA was $243M, above S&P Global EBITDA consensus of $231.8M*, while S&P’s “actual” EBITDA basis registered $189M*, reflecting different methodology; investors should anchor valuation/margin analysis on company’s non-GAAP definitions used for guidance . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Execution strength: Revenue and adjusted EPS modestly topped consensus, with sequential margin and cash conversion inflecting positively; FY25 adjusted EBITDA ex IPR&D range raised at the low end .
  • Pharmaceuticals momentum: MIEBO/TRx growth and XIIDRA stability underpin mid-teens U.S. branded pharma growth, with combination therapy a medium-term market-expansion lever .
  • Vision Care resilience: Daily SiHy and consumer franchises (Blink, Artelac, Eye Vitamins) continue to outgrow market; monitor LUMIFY sell-in timing effects .
  • Premium IOL recovery: EnVista/LUX traction post-recall should support mix-driven margin tailwinds into Q4; consignment normalization a near-term support .
  • Margin roadmap: Vision 27 SG&A/mix initiatives and manufacturing improvements position for sustained margin expansion; watch adjusted gross margin trajectory and SG&A mix through 2026 .
  • Cash discipline and leverage: Adjusted CFO/FCF progress plus deleveraging focus (investment-grade North Star) improve balance sheet resilience; interest expense guidance ~$375M in FY25 .
  • Near-term catalysts: Nov. 13 Investor Day (pipeline reveals, three-year plan) and continued premium IOL ramp; tariff developments remain a swing factor but presumed offset for FY25 .

Values retrieved from S&P Global.