BLCO — Bausch + Lomb Corporation

Summary of Bausch + Lomb Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $1.405 billion, up 7% year-over-year.
• Full Year Revenue: $5.101 billion, up 5% (6% excluding enVista recall).
• Adjusted EBITDA: $330 million in Q4, up 27% year-over-year; full year adjusted EBITDA was $891 million.
• Adjusted EBITDA Margin: 23.5% in Q4, highest since IPO; full year margin at 17.5%.
• Adjusted EPS: $0.32 for Q4 and $0.51 for the full year; Q4 adjusted EPS excluding a noncash charge was $0.40.
• Cash Flow: Adjusted cash flow from operations was $152 million in Q4 and $381 million for the full year.

2. Strategic Updates and Business Highlights

• Dry Eye Portfolio: Miebo generated $112 million in Q4, with 111% year-over-year growth; peak sales potential now expected to exceed $600 million.
• Surgical Segment: Revenue growth of 6% in Q4 when excluding enVista recall; premium IOLs grew 20% in Q4.
• Vision Care: Revenue of $778 million in Q4, driven by contact lenses and consumer products like LUMIFY and Blink.
• Pipeline Progress: Upcoming launches include PreserVision AREDS3 and Blink Triple Care; CE mark submission for seeLYRA expected soon.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to be between $5.375 billion and $5.475 billion, reflecting 5% to 7% constant currency growth.
• Adjusted EBITDA Guidance: Projected to be between $1 billion and $1.05 billion, with a margin of approximately 19% at the midpoint.
• R&D Investment: Expected to be 7.5% to 8% of revenue in 2026.
• Seasonality: Anticipated that Q1 will be the weakest quarter, with Q4 being the strongest, particularly influenced by the dry eye franchise.

4. Bad News, Challenges, or Points of Concern

• Competitive Pressures: Increased competition in contact lenses and IOLs, with new entrants in the market.
• Xiidra Performance: Expected slower TRx growth due to pricing pressures and IRA impacts, although net revenue is anticipated to grow.
• Gross Margin Concerns: Q4 gross margin was slightly softer than expected, impacted by tariffs and increased R&D spending.
• Market Dynamics: The recall of enVista continues to have lingering effects on the monofocal lens market, requiring time to regain lost business.

5. Notable Q&A Insights

• Execution Focus: Management emphasized the importance of execution and structural improvements in the P&L, indicating that Q4 results reflect a foundational change in operations.
• Miebo Insights: The strong performance of Miebo was attributed to effective marketing and execution strategies, with expectations for continued growth.
• Xiidra Strategy: The company plans to balance affordability with long-term investment in Xiidra, anticipating a slower growth trajectory in prescriptions but improved net pricing.
• Debt Management: Discussions around the company's debt and interest expenses highlighted ongoing efforts to manage financial obligations effectively.
• Float Concerns: Management acknowledged investor concerns regarding stock float and indicated that BHC plans to sell shares in the future, although no specific timeline was provided.

Overall, Bausch + Lomb reported a strong Q4 2025, showcasing significant growth and operational improvements, while also navigating competitive challenges and market dynamics as they look ahead to 2026.