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COOPER COMPANIES, INC. (COO)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue $964.7M (+4% y/y; +5% constant currency; +5% organic), GAAP EPS $0.52 and non-GAAP EPS $0.92; gross margin expanded to 68% (non-GAAP 69%) and operating margin to 19% (non-GAAP 25%) .
  • Management slightly raised FY25 non-GAAP EPS guidance floor to $3.94–$4.02 from $3.92–$4.02; consolidated revenue $4.080–$4.158B, CVI $2.733–$2.786B, CSI $1.347–$1.372B maintained .
  • Operational outperformance driven by manufacturing efficiency gains and favorable mix (Americas strength, Biofinity, PARAGARD); free cash flow $101.2M in Q1 with CFO $190.6M and CapEx $89.4M .
  • Catalysts: bolded margin expansion and guidance raise, accelerating MyDay capacity/launches, and private label growth; watch China weakness within CVI and PARAGARD competitive developments .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion exceeded internal expectations, with non-GAAP operating margin up to 25.1% on efficiency gains and mix; tax rate 14.3% and interest expense $25.3M on a non-GAAP basis supported EPS .
  • CVI toric and multifocal revenue +10% y/y; Americas +8% and EMEA +6% drove mix uplift; Biofinity and PARAGARD strength aided corporate margins .
  • Capacity improvements are “running ahead of schedule,” enabling earlier international launch plans (MyDay Energys), expanded MyDay multifocal/toric availability, and planning for MyDay MiSight outside the U.S.; “we’re in excellent shape, driven by strong operational execution” .

What Went Wrong

  • Asia Pacific declined 2% reported (still +3% organic) with management citing specific weakness in China; APAC underperformance versus Americas/EMEA tempered CVI growth .
  • CSI Fertility grew only 1% y/y due to tough comps (Q4 capital equipment strength, Q1 FY24 pull-ins) and IT upgrade timing; management views it as a “blip,” expecting high single-digit to low double-digit growth rest of year .
  • Early-quarter softness tied to channel inventory reductions and competitive activity; CVI growth below some peers in fiscal Q1, with acceleration expected in Q3–Q4 as capacity releases hit .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1,002.8 $1,018.0 $964.7
GAAP EPS ($)$0.52 $0.52 $0.52
Non-GAAP EPS ($)$0.96 $1.04 $0.92
Gross Margin % (GAAP)66% 66.9% 68%
Gross Margin % (Non-GAAP)67% n/a69%
Operating Margin % (GAAP)19% 25.9% 19%
Operating Margin % (Non-GAAP)26% n/a25%
Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
CooperVision (CVI)$675.6 $676.0 $646.1
CooperSurgical (CSI)$327.2 $342.0 $318.6
CVI Category ($USD Millions)Q1 2025y/y ReportedConstant CurrencyOrganic
Toric & Multifocal$319.4 +7% +10% +10%
Sphere, Other$326.7 +1% +3% +3%
Total CVI$646.1 +4% +6% +6%
CVI Geography ($USD Millions)Q1 2025y/y ReportedConstant CurrencyOrganic
Americas$270.9 +7% +8% +8%
EMEA$246.5 +3% +6% +6%
Asia Pacific$128.7 -2% +3% +3%
CSI Category ($USD Millions)Q1 2025y/y ReportedConstant CurrencyOrganic
Office & Surgical$198.9 +4% +4% +2%
Fertility$119.7 +1% +3% +1%
Total CSI$318.6 +3% +4% +2%
KPIsQ1 2025
Cash from Operations ($M)$190.6
Capital Expenditures ($M)$89.4
Free Cash Flow ($M)$101.2
Interest Expense ($M) (GAAP / Non-GAAP)$26.0 / $25.3
Weighted Avg Diluted Shares (M)201.2
Net Debt ($B)$2.44

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY 2025$4.080–$4.158B $4.080–$4.158B Maintained
CVI RevenueFY 2025$2.733–$2.786B $2.733–$2.786B Maintained
CSI RevenueFY 2025$1.347–$1.372B $1.347–$1.372B Maintained
Non-GAAP EPSFY 2025$3.92–$4.02 $3.94–$4.02 Raised floor
Free Cash FlowFY 2025$350–$400M $350–$400M Maintained
Effective Tax RateFY 2025Slightly >15% Not updated on Q1 call (quarter was 14.3%) Maintained outlook
Interest ExpenseFY 2025≈$90M No Fed changes assumed; largely unchanged Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Manufacturing efficiency & marginsQ3: efficiency gains and mix driving GM 66%/67% non-GAAP ; Q4: GM 66.9%, OI margin 25.9% with SG&A leverage Efficiency gains, Americas mix, Biofinity/PARAGARD lift drove GM/OI; margins expected higher y/y each quarter Improving
MyDay capacity & launchesQ4: demand > capacity; capacity expansion ongoing Capacity ahead of schedule; accelerated launches (MyDay Energys), expanded multifocal/toric, planning MyDay MiSight ex-U.S. Improving supply; accelerating H2
Myopia management (MiSight/SightGlass)Q4: ~40% FY25 growth target; strong media campaigns; JV progress MiSight targeted ~40% FY25 without MyDay MiSight; SGV China showing “dramatic increases” (JV below OI line) Strengthening; FY26 product adds
Regional trends (China/APAC)Q4: pockets of softness incl. China APAC down reported; China declines specific to CVI core; remediation underway Mixed; work-in-progress
Pricing/tariffs/macroQ4: pricing offsets inflation; tariff exposure limited (no manufacturing in China/Mexico/Canada) Global pricing +2–3% net; tariffs not impacting currently Supportive pricing; limited tariff risk
CSI Fertility & office/surgicalQ3: Fertility +6% reported; office/surgical +11% reported ; Q4: Fertility +15% reported Q1: Fertility +1% (comp blip); office/surgical +4%; FY25 organic 4–6% CSI maintained Near-term pause; outlook intact
PARAGARD competitionQ4: -10% in quarter; FY25 flat ± a few percent Q1: +12% driven by channel fill/price; new low-copper IUD (shorter 3-yr label) seen as manageable Volatile quarterly; FY view stable

Management Commentary

  • “We’re off to a strong start… met our expectations for revenues and exceeded expectations for margins, earnings and free cash flow… moving up international launch dates for MyDay Energys… increasing availability of our MyDay multifocal and extended toric ranges” — Albert White, CEO .
  • “Consolidated operating income was up 6.5%… operating margin to 25.1%… FX was $0.06 negative… Free cash flow was $101M… Net debt decreased to $2.44B… we’re raising our non-GAAP EPS guidance range slightly” — Brian Andrews, CFO .
  • On gross margins: “Efficiency gains… better utilization… product mix advantages… strong Biofinity sales and… PARAGARD sales… story around gross margins is going to be a good one for this year” — CFO .

Q&A Highlights

  • CVI acceleration: Capacity constraints easing; re-entry/expansion into markets/accounts with pent-up MyDay demand; greater acceleration expected in Q3–Q4 .
  • China dynamics: APAC softness largely China-specific to core CVI; JV myopia products grew; remediation efforts underway; China <5% of consolidated revenue .
  • PARAGARD competitive outlook: New non-hormonal IUD has shorter label and lower copper; FY25 PARAGARD expected -2% to +2%; focus on execution and new single-hand inserter .
  • Fertility growth cadence: Q1 blip from Q4 capital pull-forward and prior-year comp; backlog for installations strengthened; expectation to return to high single-digit to low double-digit growth .
  • Pricing and inventory: Contact lens pricing +2–3% net without notable pushback; some distributors tightening inventory; limited destock risk given contractual minimums .

Estimates Context

  • Wall Street consensus from S&P Global for Q1 2025 EPS and revenue was unavailable due to a provider request-limit error; therefore, we are unable to present vs-consensus comparisons for this quarter. Values would be retrieved from S&P Global when access is available.

Key Takeaways for Investors

  • Margin thesis strengthening: Non-GAAP OI margin at 25% and management expects y/y gross margin gains across 2025 driven by manufacturing efficiencies and mix; this supports EPS guidance raise despite FX headwinds .
  • H2 CVI acceleration setup: MyDay capacity/availability improving with broadened toric/multifocal and Energys launches; expect stronger CVI growth in Q3–Q4 on capacity release and mix .
  • Watch China/APAC normalization: APAC reported decline tied to China; remediation underway; Americas/EMEA strength offsets; monitor APAC trajectory as capacity improves .
  • CSI recovery path: Fertility’s weak Q1 is comp-related; backlog and demand across consumables/genomics/donor services support re-acceleration; office/surgical growth to improve off easier comps .
  • PARAGARD volatility but stable FY view: Q1 uplift from channel fill/price; management expects full-year in a tight -2% to +2% band; competitor entry seen as manageable given labeling/efficacy differences .
  • Free cash flow and deleveraging: FY25 FCF targeted at $350–$400M; Q1 FCF $101M; net debt at $2.44B with leverage ~1.91x bank-defined; capital allocation favors debt reduction .
  • Near-term trading angle: Focus on margin beats and guidance floor raise as positive, balanced against APAC/China softness and lack of consensus comparison; updates on MyDay capacity and product launches (Energys, multifocal/toric, MyDay MiSight planning) are likely stock-moving narrative drivers .