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COOPER COMPANIES, INC. (COO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY25 delivered modest top-line growth and continued margin expansion with small beats vs S&P Global consensus: revenue $1.0023B vs $0.9952B consensus and non-GAAP EPS $0.96 vs $0.93 consensus; GAAP EPS was $0.44, flat YoY . Revenue Consensus Mean and EPS Consensus Mean from S&P Global: $995.2M*, $0.929*.
  • Guidance raised/tightened: FY25 revenue to $4.107–$4.146B (midpoint up), CVI $2.759–$2.786B (low end up), CSI $1.347–$1.359B (narrowed), and non-GAAP EPS to $4.05–$4.11 (up) .
  • Execution strengths: double-digit growth in daily silicone hydrogel at CooperVision and office & surgical at CooperSurgical; non-GAAP operating margin to 25% (from 24% YoY) on efficiency and leverage .
  • Key watch items: softer fertility (Asia-Pac cycles down; clinics delaying capex), contact lens industry growth trimmed to 4–6% with channel inventory/shorter-supply purchasing pressure; $4M FY25 tariff headwind baked in and potential 2026 EPS pre‑mitigation impact of ~3% if tariffs persist .

What Went Well and What Went Wrong

  • What Went Well

    • Non-GAAP profitability expanded: gross margin 68% (67% LY) and non-GAAP operating margin 25% (24% LY), driven by efficiency gains and mix; non-GAAP EPS up 14% YoY to $0.96 .
    • CVI momentum in premium dailies: “double-digit growth in CooperVision's daily silicone hydrogel portfolio” (MyDay toric/multifocal/EnerGys); management expects acceleration as fitting sets/trials drive Q4 .
    • CSI strength outside fertility: office & surgical up 13% reported (10% organic), Paragard up 18% aided by price increase and new single‑hand inserter .

  • What Went Wrong

    • Fertility softer than expected: Asia-Pac cycles declined; clinics tightening cash and delaying capital purchases; CSI fertility up only 3% reported (2% organic) .
    • Contact lens market recalibration: industry grew ~4% in calendar Q1; COO trimmed market growth view to 4–6% and sees ongoing channel inventory pressure as consumers buy shorter supplies (3–6 months vs annual) .
    • Q3 gating below ranges: management guided that both CVI and CSI organic growth will be below their full‑year organic ranges in Q3, with Q4 “at or above” tops of ranges; MySight free‑trial promotions create a modest Q3 headwind before a stronger Q4 .

Financial Results

  • Consolidated metrics and margins
MetricQ4 2024Q1 2025Q2 2025
Revenue ($M)$1,018.4 $964.7 $1,002.3
GAAP EPS$0.58 $0.52 $0.44
Non-GAAP EPS$1.04 $0.92 $0.96
GAAP Gross Margin %67% 68% 68%
GAAP Operating Margin %19% 19% 18%
Non-GAAP Operating Margin %26% 25% 25%

  • Sequential context: Revenue rose from $964.7M in Q1 to $1,002.3M in Q2; non-GAAP EPS increased from $0.92 to $0.96 .

  • Q2 2025 vs S&P Global consensus

MetricConsensus*Actual
Revenue ($M)$995.2*$1,002.3
Non-GAAP EPS$0.929*$0.96

Values with asterisks (*) retrieved from S&P Global.

Segment breakdown

  • By business unit
Segment Revenue ($M)Q1 2025Q2 2025
CooperVision (CVI)$646.1 $669.6
CooperSurgical (CSI)$318.6 $332.7
  • CVI category detail
CVI ($M)Q1 2025Q2 2025
Toric & Multifocal$319.4 $328.4
Sphere & Other$326.7 $341.2
Total$646.1 $669.6
  • CVI geography detail
CVI Geography ($M)Q1 2025Q2 2025
Americas$270.9 $282.4
EMEA$246.5 $248.6
Asia Pacific$128.7 $138.6
Total$646.1 $669.6
  • CSI category detail
CSI ($M)Q1 2025Q2 2025
Office & Surgical$198.9 $205.8
Fertility$119.7 $126.9
Total$318.6 $332.7

KPIs and cash flow

KPIQ1 2025Q2 2025
Cash from Operations ($M)$190.6 $96.2
Capital Expenditures ($M)$89.4 $78.1
Free Cash Flow ($M)$101.2 $18.1
Share Repurchase ($M / Shares)—$40.6 / ~537.2k shrs (avg $75.60)
Weighted Avg Diluted Shares (M)201.2 200.7
Q2 MySight Revenue—~$25M (up 35% YoY)
Effective Tax Rate (non-GAAP, quarter)14.3% 14.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$4.080–$4.158B $4.107–$4.146B Midpoint raised; range tightened
CVI RevenueFY 2025$2.733–$2.786B $2.759–$2.786B Low end raised
CSI RevenueFY 2025$1.347–$1.372B $1.347–$1.359B Top end lowered; narrowed
Non-GAAP EPSFY 2025$3.94–$4.02 $4.05–$4.11 Raised
Free Cash FlowFY 2025$350–$400M $350–$400M Maintained
FX headwind (Rev/EPS)FY 2025~1.5% / ~4% ~0.5% / ~1% Improved
Tariff headwind (COGS/EPS)FY 2025/26—~$4M COGS FY25; ~3% pre‑mitigation EPS impact in FY26 if unchanged New headwind noted

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Contact lens market & channel inventorySolid market; late‑Q4 softness incl. U.S./China; guide market 5–7% Market 5–7%; channel inventory contraction early quarter normalized; distribution dynamics noted Industry +4% in cal Q1; market now 4–6%; consumers buying shorter supplies; ongoing destock pressure Moderating growth; tighter inventory
PricingPricing offsets inflation; sustainability into FY25 2–3% global price; COO mid‑upper of range; no pushback Pricing “sound”; evaluating tariff‑linked price actions Supportive
Capacity & launches (MyDay)Expanding capacity; MyDay leading growth Capacity ahead of schedule; more availability; potential earlier launches Aggressive fitting sets/trials; expecting Q4 acceleration Improving
Myopia management (MySight)Target ~40% FY25 growth; marketing momentum ~40% FY25; MyDay MiSight planning (FY26); JV glasses traction Q2 $25M (+35%); free‑trial promos create Q3 headwind then stronger Q4; Japan & MyDay MiSight planned early 2026 Building; near‑term promo headwind
FertilityDouble-digit Q4; strong macro underpinnings Q1 “blip”; expecting high single to low double digits rest of year Softer; Asia-Pac cycles down; capex delays; market low single digits Softening near term
Tariffs & FXFY25 FX headwind 1.5%/4%; no mfg in CN/MX/CA —FX headwind now ~0.5%/1%; ~$4M tariff headwind in FY25; possible 3% FY26 EPS pre‑mitigation FX improving; tariffs emerging
ChinaPocket of softness in CVI late Q4 CVI down; <5% of rev; myopia JV strong CVI roughly flat; MySight down slightly in China Stabilizing

Management Commentary

  • “This was another solid quarter driven by double-digit growth in CooperVision's daily silicone hydrogel portfolio and CooperSurgical's office and surgical portfolio.” — Al White, CEO .
  • “With improved capacity, we're back to being aggressive… increasing availability of our multifocal and extended toric ranges… expect this to accelerate revenue growth starting in fiscal Q4.” .
  • “Fertility… overall growth was lower than expected due primarily to market softness… Asia-Pac where fertility cycles continued to decline… clinics managing cash tighter.” .
  • “We're tightening and raising [revenue] at the midpoint… offset by lower organic growth rates that corresponds to a reduction in our market growth assumptions for contact lenses and fertility.” .
  • “For earnings, we're raising our non-GAAP EPS guidance to $4.05–$4.11… expect free cash flow… $350M–$400M.” — Brian Andrews, CFO .

Q&A Highlights

  • Channel inventory and demand: Mgmt sees ongoing inventory tightening across distributors/retailers/consumers buying shorter supplies (3–6 months vs annual), masking healthy fit data; April was best month YTD, but single months can be noisy .
  • Market growth recalibration: Contact lens market trimmed to 4–6% for the year (from 5–7%) after ~4% growth in calendar Q1; COO still targets 6–7% CVI organic growth, implying share gains .
  • Tariffs: ~$4M FY25 COGS headwind included; if unchanged, ~3% pre‑mitigation EPS impact in FY26; evaluating pricing, supply chain flow, and manufacturing shifts as mitigation .
  • Fertility outlook: Softer near term (Asia-Pac, capex timing), but mgmt expects better H2 vs H1; donor business and Witness consumables strong; long‑term drivers intact .
  • MySight promo strategy: Free initial 1–3 months to reduce fitting barriers; modest Q3 revenue headwind but expected stronger Q4; ~90% retention post‑trial .

Estimates Context

  • Q2 FY25 results modestly beat S&P Global consensus: Revenue $1,002.3M vs $995.2M* (+$7.1M) and non‑GAAP EPS $0.96 vs $0.929* (+$0.03). 16 EPS estimates and 14 revenue estimates informed consensus* . Values with asterisks (*) retrieved from S&P Global.
  • Guidance implies upward EPS revisions and slightly higher reported revenue midpoint, but management also reduced organic growth assumptions for CVI/CSI and flagged Q3 gating below ranges, likely pulling Street models toward stronger Q4 weighting .

Key Takeaways for Investors

  • Execution remains solid with margin expansion and a small revenue/EPS beat; FY25 EPS guidance raised to $4.05–$4.11, suggesting upward estimate revisions despite trimmed organic growth assumptions for end‑markets .
  • Near-term setup is H2‑weighted: Management flagged Q3 organic growth below ranges and Q4 at/above top ends, aided by MyDay/Multi/Toric availability and MySight post‑promotion acceleration .
  • Watch fertility: Asia-Pac cycle softness and delayed capex pressured CSI; mgmt expects improvement later in the year but models should reflect low‑single digit market growth near term .
  • Pricing/FX/tariffs: Pricing is “sound”; FX headwind improved to ~0.5% rev / ~1% EPS; ~$4M FY25 tariff headwind included and evaluating mitigations if 2026 tariffs persist (~3% pre‑mitigation EPS impact) .
  • CVI share gains should persist: premium daily SiHy (MyDay) and myopia portfolio (MySight) continue to lead; private label growing slightly faster than branded, supporting volume resilience .
  • Cash and capital allocation: FY25 FCF guide $350–$400M intact; Q2 saw $40.6M buyback with $215.8M remaining authorization, while deleveraging remains priority .
  • Risks: Continued channel destocking, fertility market softness, and tariff policy trajectory; offset by strong product cycle, capacity expansion, and operational leverage .

Values with asterisks (*) retrieved from S&P Global.