Summary of The Cooper Companies (COO) FY Conference Call - June 05, 2025 Company Overview - The Cooper Companies is a global medical device company with approximately two-thirds of its business in contact lenses and one-third in women's health, primarily focusing on fertility [3][4] - The company operates in over 30 countries with a revenue mix of more than half generated outside the U.S. [5] Core Business Insights - Cooper is a leader in the fertility market, with 40% of its surgical business related to fertility [4] - The company is experiencing secular growth trends in both vision and surgical segments, with a commitment to growing faster than the market [7][8] - CooperVision is projected to grow by 6-7% this year, while the market is expected to grow by 4-6% [8] Financial Performance and Guidance - The company aims for gross margin and operating margin expansion, despite facing foreign exchange (FX) headwinds since 2019 [9] - Free cash flow is projected to be between $350 million and $400 million, with a goal to improve free cash flow margin over the coming years [10][11] - The company has a history of consistent growth, with the exception of 2020 during COVID-19 [7] Market Dynamics - The contact lens market grew by 7% last year, with a fourth-quarter growth of 9%, but the company believes the actual growth is closer to 6% due to inventory dynamics [12][13] - Competitors like J&J and Alcon reported mid-single-digit growth, leading Cooper to adjust its market growth expectations to 4-6% [14] - Fitting activity remains strong, with consumers preferring premium products, particularly in the MyDay portfolio [17][20] Product Innovations - Cooper offers a differentiated portfolio, including myopia control products that are unique in the market [6] - The MyDay product line includes a wide range of toric and multifocal lenses, with the recent launch of Energous, which provides a digital boost for myopic users [23][24] - The company plans to launch MiSight, a myopia control lens, in Europe next year, which is expected to drive significant growth [25][30] Strategic Initiatives - Cooper is focusing on expanding its production capacity and improving operational efficiencies to leverage past investments [48][50] - The company is prioritizing free cash flow towards debt reduction and has engaged in stock buybacks due to perceived undervaluation [51][52] - The surgical segment is expected to see mid-single-digit growth as the fertility market rebounds [58][59] Future Outlook - The company anticipates that the contact lens market will continue to grow at 4-6% next year, with CooperVision expected to outperform this growth [57] - The surgical business is also projected to recover, contributing to overall revenue growth [59] - Cooper is optimistic about the potential for increased free cash flow due to reduced capital expenditures and improved operational performance [61][62] Additional Insights - The company is actively working on integrating its surgical and vision businesses to drive better margin expansion [49] - There is a focus on educating healthcare professionals and consumers about myopia control products, particularly in new markets like Japan [39][40] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic direction, market dynamics, and financial outlook.