Cooper Companies Posts 15% EPS Gain

Key Points

• Revenue growth slowed sharply, with organic sales rising just 2% in Q3 FY2025, down from 7% in Q2, and came in below expectations.

• Margins improved, with non-GAAP EPS climbing 15% to $1.10, supported by cost controls and operational gains.

• Management lowered full-year revenue guidance for FY2025, reflecting ongoing operational discipline and margin focus.

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Cooper Companies (NASDAQ:COO), a global medical device maker specializing in vision care and women’s health, reported its third quarter fiscal 2025 results on August 27, 2025. The results highlighted a notable slowdown in underlying sales growth, with revenue of $1,060.3 million (GAAP), coming in below market expectations. Organic revenue growth cooled to 2% from 7% in the prior quarter. On the other hand, non-GAAP profitability outpaced expectations, with non-GAAP earnings per share reaching $1.10, a 15% year-over-year gain in non-GAAP EPS. Gross margin climbed to 67% on a non-GAAP basis, a 1.0 percentage point improvement in non-GAAP gross margin. Despite subdued top-line growth, management raised full-year non-GAAP EPS guidance while tightening revenue forecasts, citing operational efficiency and cost controls as key drivers for improved profitability this period.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.

Business Overview and Key Priorities

Cooper Companies operates two main business lines: CooperVision, which produces specialized contact lenses, and CooperSurgical, which focuses on women’s health products such as surgical devices and fertility treatments. The company is known for innovation in eye care, especially daily disposable lenses using materials like silicone hydrogel, and in launching products for managing conditions such as myopia in children.

Recent efforts have centered on expanding high-value product offerings and entering new geographic and clinical markets. The company stresses product innovation and market expansion, regularly integrating new acquisitions and launching advanced lenses. Key success factors for its business include ongoing innovation, navigating regulatory requirements, and strategic investments in both vision and women’s health businesses.

Quarter Highlights: Revenue Slowdown, Margin Gains, and Segment Detail

The company’s revenue (GAAP) reached $1,060.3 million, with growth of 6% compared to the same period last year. However, that growth masks a sharp slowdown in underlying demand: organic revenue growth, which strips out currency effects and acquisitions, was just 2%, compared to 7% in the prior quarter.

Profitability was a relative bright spot. Non-GAAP earnings per share of $1.10 represented a 15% increase from last year, with margin gains driven by ongoing cost management and efficiency improvements. Non-GAAP gross margin was 67%, a 1.0 percentage point increase, while non-GAAP operating margin held steady at 26%. Charge-offs from a product line exit in the surgical business—totaling $15.8 million—tempered reported margins and GAAP earnings, but underlying operational results improved.

The CooperVision business delivered GAAP revenue of $718.4 million, up 6% year over year. Growth within this segment was uneven: sales of toric and multifocal lenses, which are advanced contact lenses addressing astigmatism and other complex vision issues, rose 10% reported and 6% organically. However, traditional sphere and other lens sales were essentially flat or down organically, and the Asia Pacific region saw a 5% organic decline, despite double-digit gains in EMEA and modest growth in the Americas. The MiSight daily lens for myopia management continued to expand, but the company noted that recent free trial promotions delayed some revenue until future quarters.

CooperSurgical posted GAAP revenue of $341.9 million, an increase of 4% year over year. Growth was modest, with the office and surgical portfolio up just 1% organically, supported by acquisitions but weighed down by the exit of older product lines. The fertility products segment grew 3% organically in the prior quarter, but overall market conditions in Asia Pacific remained challenging, with delayed spending at clinics impacting sales conversion and visibility.

Operationally, the quarter included several material, one-time items. The company recorded a $27.2 million GAAP charge for product line exits in CooperSurgical, and invested $0.7 million toward compliance with new European Union medical device regulations. These items lowered reported margins, but were excluded from non-GAAP profit measures. Share buybacks were ongoing, with $52.1 million in shares repurchased.

Cooper Companies’ Product Families: Innovation and Expansion

CooperVision’s core strength is in its daily silicone hydrogel contact lenses, such as MyDay. The MyDay lens family includes several specialized products, with a focus on comfort and vision correction for astigmatic patients (toric lenses) or those with presbyopia (multifocal lenses). MiSight, the first daily disposable lens approved by the U.S. Food and Drug Administration (FDA) for slowing the progression of myopia in children, is another focal product mentioned in earnings commentary as a driver of future revenue, with an expected rebound in sales as trial promotions are phased out.

CooperSurgical’s main offerings span surgical devices and treatments aimed at fertility clinics and women’s health offices. The surgical segment’s growth was partly offset by the recent exit of select legacy products, as well as ongoing integration of newly-acquired assets from Cook Medical. Fertility-related products, while expanding globally, have faced headwinds recently in Asia Pacific markets, largely due to patient demand and clinic spending delays. Expansion of advanced surgical and fertility offerings remains a key part of the company’s planned growth strategy.

Outlook and What to Watch Ahead

For Q4 FY2025, management projects total revenue in the $1,049–$1,069 million range, representing 2–4% expected organic growth. CooperVision revenue is expected between $700–$713 million, while CooperSurgical is forecast at $350–$356 million. Full year guidance for revenue was trimmed to $4,076–$4,096 million, with expected organic growth lowered from 5–6% earlier in the year to a range of 4–4.5%. At the same time, management raised its full-year non-GAAP EPS outlook to $4.08–$4.12, citing stronger margin performance. The company attributes the softer revenue view to persistent inventory destocking and lackluster market growth, especially in its vision business and fertility segment.

Looking ahead, investors may wish to monitor the pace at which new product launches like MyDay and MiSight convert trial activity into sustainable sales growth, along with trends in demand from Asia Pacific and EMEA. Margins and cash generation remain a bright spot, but questions persist regarding the sustainability of earnings growth without a meaningful recovery in underlying sales.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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