• Consolidated Revenue: $965 million, up 4% year over year and up 5% organically.
• CooperVision Revenue: $646 million, up 4% and up 6% organically.
• CooperSurgical Revenue: $319 million, up 3% and up 2% organically.
• Gross Margin: 68.7%, up from 67.3%.
• Operating Margin: 25.1%, with operating income up 6.5%.
• Non-GAAP EPS: $0.92, up 7.4% or up 14.2% excluding FX.
• Free Cash Flow: $101 million with CapEx of $89 million.
• Net Debt: Decreased to $2.44 billion with a leverage ratio of 1.91 times.
• Myopia Management Growth: 20% with MiSight up 27%.
• Daily Silicone Hydrogel Lenses Growth: MyDay and clariti grew 9%.
• Fertility Revenue: $120 million, up 1%.
• Office and Surgical Products Revenue: $199 million, up 4% or up 2% organically.
• Fiscal 2025 Revenue Guidance: $4.08 billion to $4.158 billion, up 6% to 8% organically.
• Fiscal 2025 Non-GAAP EPS Guidance: $3.94 to $4.02, up 7% to 9% or up 11% to 13% excluding FX.
• Free Cash Flow Guidance: $350 million to $400 million.

• Warning! GuruFocus has detected 2 Warning Sign with COO.

Release Date: March 06, 2025

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

Positive Points

• The Cooper Companies Inc (NASDAQ:COO) reported record Q1 revenues and earnings, with consolidated revenues of $965 million, up 4% year over year and 5% organically.
• CooperVision's MyDay product line is experiencing strong demand, with torics, multifocals, and Energys performing well, and capacity expansion running ahead of schedule.
• The company's myopia management portfolio grew 20%, with MiSight up 27%, and plans are underway for the international launch of MyDay MiSight.
• CooperSurgical's revenues were slightly ahead of internal expectations, with a strong pipeline of planned equipment installations and advancements in reproductive genetic testing.
• The company is seeing efficiency gains and mix improvements, resulting in a consolidated gross margin increase to 68.7% from 67.3%.

Negative Points

• The Cooper Companies Inc (NASDAQ:COO) faced challenges in China, where business declined year over year, impacting overall performance.
• Fertility revenues posted only a 1% increase, which was below expectations due to unique items and a tough comparison from the previous year.
• The company experienced a soft start to the quarter with channel inventory contraction, although it returned to normal levels later.
• There are ongoing concerns about potential competitive impacts on Paragard due to the approval of a new non-hormonal IUD.
• The company is still facing some production constraints with MyDay, although improvements are being made, and full resolution is expected by fiscal 2026.

Q & A Highlights

Q: Are there markets where MyDay is not currently available, and can you re-enter these markets to drive growth? A: Albert White, President and CEO, confirmed that there are indeed markets where MyDay is not currently available, and re-entering these markets or increasing product availability in existing accounts could lead to significant sales growth.

Q: Why was CooperVision's growth below peers in fiscal Q1, and how do you plan to accelerate growth? A: Albert White explained that the quarter started slow due to channel inventory reductions and competitor activities but picked up with strong January and February performances. He expressed optimism for Q2 and expects better growth in Q3 and Q4 as MyDay production increases.

Q: What is the impact of the new non-hormonal IUD approval on Paragard, and what is the guidance for Paragard? A: Albert White stated that Paragard is expected to be flat to slightly up or down this year. The new competitor has hurdles, such as less efficacy and a shorter duration, and CooperCompanies is well-positioned with Paragard's strong team and product advantages.

Q: Can you provide insights into the gross margin performance and its sustainability? A: Brian Andrews, CFO, attributed the strong gross margin to efficiency gains from higher production in existing facilities, better overhead absorption, and favorable product and regional mix. He expects these efficiency gains to continue throughout the year.

Q: What are the expectations for MyDay MiSight, and how does it fit into the growth strategy? A: Albert White mentioned that MyDay MiSight is in early launch planning stages, with regulatory work needed in various markets. The product is expected to launch in fiscal 2026, offering a premium option in the myopia management market, potentially including a toric version.

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