• Total Revenue: $1.196 billion for the third quarter, reflecting 19% growth and 10% organic growth.
• Vision Care Revenue: $684 million, a 6% increase driven by growth in consumer and contact lens portfolios.
• Contact Lens Revenue Growth: 12% with strong performance across modalities and geographies.
• Surgical Segment Revenue: $206 million, an increase of 12%.
• Pharmaceutical Segment Revenue: $306 million, representing 76% growth and 25% organic growth.
• Adjusted Gross Margin: 63%, up 170 basis points compared to Q3 2023.
• Adjusted EBITDA: $227 million, a 21% growth versus Q3 2023.
• Adjusted EPS: $0.17 excluding acquired IPR&D $0.13 including IPR&D investments.
• Cash Flow from Operations: $159 million in the third quarter.
• Full-Year Revenue Guidance: Raised to $4.725 billion to $4.825 billion.
• Full-Year Miebo Revenue Guidance: Increased to $165 million to $170 million.

• Warning! GuruFocus has detected 8 Warning Signs with BLCO.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bausch & Lomb Corp (NYSE:BLCO) reported a strong revenue growth of 19% on a constant currency basis and 10% on an organic basis for the third quarter.
• The company's vision care segment saw a 6% increase in revenue, driven by growth in both consumer and contact lens portfolios.
• The surgical business experienced a 12% constant currency revenue growth, with significant contributions from consumables and premium IOLs.
• BLCO's pharmaceutical segment achieved a 76% constant currency revenue growth, with Miebo and Xiidra playing key roles.
• The company is investing in digital capabilities, such as the Opal e-commerce marketplace, to enhance customer experience and streamline operations.

Negative Points

• Currency fluctuations posed a $5 million headwind to revenue in the third quarter.
• The eye vitamins franchise experienced a 9% decline due to disruptions in the US drugstore channel and retailer inventory rebalancing.
• The Inflation Reduction Act and rebate discussions are anticipated to be headwinds for Xiidra sales in 2025.
• Despite strong revenue growth, adjusted EBITDA guidance has remained steady, indicating that topline strength has not fully translated to the P&L.
• The company is in a significant investment phase, which may impact short-term profitability as it focuses on launching new products.

Q & A Highlights

Q: What has been the biggest factor in Bausch & Lomb's recent success, and how do you plan to balance investment in product launches with margin growth? A: Brent Saunders, CEO, emphasized the importance of a clear strategy focused on sales excellence, operational excellence, and innovation. The company's relentless focus on execution has driven broad-based performance, with significant growth in contact lenses and other segments. Balancing investment in product launches with margin growth is crucial, as seen with products like Miebo, where early investment is critical for long-term profitability.

Q: Can you discuss the sustainability of growth in the dry eye portfolio and potential for adding new OTC products? A: Brent Saunders highlighted the strategic importance of the dry eye portfolio, noting strong performance in both OTC and prescription products. The company sees a large untapped market, with significant potential for growth in both OTC and prescription segments. The strategy is to address the disease holistically, and there is potential for adding new OTC products to the portfolio.

Q: How is the premium daily SiHy contact lens portfolio performing, and what are your thoughts on the US consumer market? A: The premium daily SiHy portfolio is performing exceptionally well, with a long runway for growth as the full portfolio rolls out globally. The company is also maintaining growth in older product lines. Regarding the US consumer market, despite some retail destocking, consumption remains strong, and the company is optimistic about continued growth.

Q: Can you explain the guidance for Q4 and expectations for 2025, particularly regarding Xiidra? A: Sam Eldessouky, CFO, explained that the guidance reflects a balanced view, with expected organic growth of around 10% for Q4. The company is not providing specific guidance for 2025 yet, but acknowledges potential headwinds for Xiidra from the Inflation Reduction Act and rebate discussions. The focus remains on driving volume growth.

Q: What is the expected impact of DTC efforts for Xiidra and Miebo, and how are they being positioned to clinicians? A: Brent Saunders noted that early results from DTC efforts for Xiidra are promising, with strong sales growth. The Miebo campaign is still too early to assess, but expectations are high. Clinicians are being educated on the distinct mechanisms of action for Xiidra and Miebo, with a focus on providing comprehensive treatment options for dry eye.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.