Financial Data and Key Metrics Changes - Consolidated revenues increased by 4.6% year over year, reaching a record of $1.065 billion, with organic growth of 3.4% [9][19] - Non-GAAP earnings per share (EPS) grew by 11% to $1.15, marking the eighth consecutive quarter of beating consensus earnings expectations [7][19] - Free cash flow for Q4 was reported at $150 million, exceeding expectations, with a target of over $2.2 billion in free cash flow from fiscal 2026 to 2028 [7][23] Business Line Data and Key Metrics Changes - CooperVision reported revenue of $710 million, up 4.9% year over year, with organic growth of 3.2% [10][19] - CooperSurgical achieved quarterly revenue of $356 million, up 4% or 3.9% organically, driven by solid execution [14][19] - MyDay lenses showed strong growth, particularly in toric and multifocal categories, while clariti lenses experienced a decline of approximately 2% [10][28] Market Data and Key Metrics Changes - The Americas region grew by 5%, driven by daily silicone hydrogel lenses, while EMEA grew by 3% [11] - Asia-Pacific remained flat, with a significant 28% decline in China attributed to weakness in low-margin e-commerce channels [11][50] - The overall contact lens market is trending towards premium offerings, benefiting the MyDay portfolio [10][11] Company Strategy and Development Direction - The company is focused on consistent market share gains for CooperVision, with an emphasis on the MyDay Premium Daily Silicone Hydrogel Lens portfolio [6][9] - A strategic review has been initiated to explore opportunities for unlocking long-term shareholder value, including potential separation of business units [9][38][79] - The board has authorized an increase in the share repurchase plan to $2 billion, reinforcing the commitment to returning capital to shareholders [8][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2026, expecting strong revenue growth driven by MyDay sales and new private label contracts [17][53] - The company anticipates a conservative approach to guidance, particularly in the fertility segment, while remaining optimistic about long-term growth in that market [15][56] - Management highlighted the importance of maintaining fiscal responsibility and not chasing revenues at all costs, particularly in challenging markets like China [50][51] Other Important Information - The company has successfully remediated material weaknesses related to IT controls from fiscal 2024 [24] - Significant cost savings from recent reorganization efforts are expected to enhance profitability and cash flow [20][23] Q&A Session Summary Question: Clariti product line performance - Clariti was down a couple of percent this quarter, approaching $400 million in annualized revenue, with ongoing efforts to reposition the product [27][28] Question: Strategic review timeline and thoughts on separation - A strategic review is underway, with updates expected in the next earnings call, and management's position on potential separation remains unchanged [37][38][41] Question: Market growth assumptions for 2026 - The market is expected to grow at 4%-5%, with pricing power anticipated to remain stable [43][45] Question: Asia-Pacific market dynamics - Asia-Pacific faced challenges due to low-margin e-commerce channels, but management expects less detriment in fiscal 2026 [49][50] Question: Free cash flow outlook - The increase in free cash flow is driven by consistent performance and reduced capital expenditures, with expectations of over $2.2 billion in free cash flow from fiscal 2026 to 2028 [56][59] Question: Product pipeline and innovation - The company is excited about upcoming product launches, including MyDay and MiSight, which are expected to drive growth [90][91]

Core Insights - The Cooper Companies, Inc. (COO) is experiencing growth driven by CooperVision's premium lens migration and MiSight's leadership in myopia management, alongside CooperSurgical's women's health and fertility portfolio [1][4][5] - Despite long-term growth opportunities, near-term performance is challenged by channel volatility, private-label transition risks, softness in the Asia-Pacific region, and tariff/foreign exchange pressures [1][10][11] Financial Performance - COO's shares have declined by 27.5% year-to-date, contrasting with a 2.8% decline in the industry and a 14.4% increase in the S&P 500 Index [2] - The company has a market capitalization of $13.55 billion, with an estimated bottom line improvement of 9.3% over the next five years [2] - COO's earnings have beaten estimates in three of the last four quarters, with an average surprise of 2.51% [2] Growth Drivers - Premium product migration is a key growth driver, with CooperVision shifting users from lower-margin clariti lenses to premium silicone hydrogel daily lenses, particularly the MyDay family, which is experiencing double-digit growth [4] - MiSight, the only FDA-approved daily lens to slow myopia progression, presents a multibillion-dollar growth opportunity, supported by recurring revenues from annual fits and upcoming launches in various regions [5][6] - CooperSurgical diversifies COO's revenue streams by focusing on fertility and women's health, targeting a growing market due to later maternal age and rising IVF demand [7] Challenges - The transition from clariti to MyDay has led to near-term revenue volatility, with organic growth dropping to nearly 2% despite solid demand [8] - Execution risks include potential rollout delays, slower adoption of fitting sets, and capacity strains, which could lead to backorders and affect revenue consistency [9] - The Asia-Pacific region, particularly China, poses growth challenges due to a significant decline in e-commerce sales and increased local competition [10] Outlook - The Zacks Consensus Estimate for fiscal 2025 revenues is $4.09 billion, indicating a growth of 5.1% from the previous year, with adjusted EPS expected to improve by 10.8% [12] - COO anticipates a $4 million tariff impact on fiscal 2025 COGS and a 3% EPS headwind in fiscal 2026 if tariffs remain unchanged, alongside exposure to global supply chain shifts and foreign exchange fluctuations [11]

Core Viewpoint - The Cooper Companies, Inc. is set to release its second-quarter fiscal 2025 results on May 9, with expectations of revenue growth and improved earnings compared to the previous year [1] Group 1: Financial Performance - The Zacks Consensus Estimate for revenues is $982 million, reflecting a 5.4% increase from the same quarter last year [1] - The consensus estimate for earnings is 92 cents per share, indicating an 8.2% improvement from the prior-year period [1] - The gross margin improved to 69% in the first quarter, with expectations for further expansion in the upcoming quarter due to higher production levels and cost control initiatives [8] - Operating income grew 16.2% in the first quarter and is anticipated to gain 10-12% in fiscal 2025, suggesting stability in the second quarter [9] Group 2: Segment Performance - Cooper Companies operates under two main segments: CooperVision (CVI) and CooperSurgical (CSI), both of which have shown strength in recent quarters [2] - The CVI segment experienced solid growth driven by strong demand for silicone hydrogel daily lenses, particularly MyDay, with an expected organic growth of 6.5-8.5% for the full year [4] - The myopia management business, particularly MiSight, is projected to grow approximately 40% for fiscal 2025, supported by expansion in key markets [5] - Within the CSI segment, the fertility business posted 1% growth (3% organically) in the last reported quarter, with expectations for high single-digit growth in the fiscal second quarter [6][7] Group 3: Market Trends and Challenges - The quarterly results are expected to follow seasonal trends, with a lighter start compared to the last two reported quarters [2] - Supply constraints for MyDay lenses are noted as a limiting factor that may have impacted second-quarter performance [3] - Foreign exchange is anticipated to be a headwind, potentially impacting EPS by 4% for fiscal 2025 [9]