Q2 2024 Bausch + Lomb Corp Earnings Call
Good morning and welcome to Bausch and Lomb's second quarter 2024 earnings call. All participants will be in a listen-only mode.
Operator: Order 2024, Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star, then one on your touch-done phone. To withdraw your question, please press the star, then two. Please note this event is being recorded.
After today's presentation, there will be an opportunity to ask questions.
Operator: To ask a question, you may press the star, then 1 on your touchtone. To withdraw your question, please press the star again. Please note, this event is being recorded. Please go ahead. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information. Non-GAAP reconciliations can be found in the appendix to the presentation posted on our website. Thank you, George. And thank you, everyone, for joining today's call.
George Gadkowski: To ask a question you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to George Gadkowski, Vice President of Investor Relations and Business Insights. Please go ahead.
George Gadkowski: I would now like to turn the conference over to George Gadkowski. Vice President of Investor Relations and Business Insights. Please go ahead.
George Gadkowski: Thank you. Good morning, everyone, and welcome to our second quarter 2024 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer, Mr. Brent Saunders, and Chief Financial Officer, Mr. Sam Eldessouky.
George Gadkowski: Thank you. Good morning, everyone, and welcome to our second quarter 2024 financial results conference call. Participating on today's call are Chairman and Chief Executive Officer Mr. Brent Saunders and Chief Financial Officer Mr. Sam Eldessouky.
George Gadkowski: In addition to this live webcast, a copy of today's live presentation and a replay of this conference call will be available on our website under the Investor Relations section. Before we begin, I would like to remind you that our presentation today contains forward-looking information. We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation, as it contains important information. This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to slide one of the presentation. Non-GAAP recommendations can be found in the appendix to the presentation posted on our website.
Speaker Change: In addition to this live webcast, a copy of today's live presentation and a replay of this conference call will be available on our website under the Investor Relations section.
Speaker Change: Before we begin, I would like to remind you that our presentation today contains forward-looking information.
Speaker Change: We would ask that you take a moment to read the forward-looking legend at the beginning of our presentation as it contains important information.
Speaker Change: This presentation contains non-GAAP financial measures and ratios. For more information about these measures and ratios, please refer to slide 1 of the presentation.
Speaker Change: non-GAAP reconciliations can be found in the appendix to the presentation posted on our website.
George Gadkowski: The financial guidance is in this presentation is effective as of today only.
George Gadkowski: It is our policy to generally not update guidance until the following quarter unless required by law and not to update or affirm guidance other than to broadly disseminate public disclosure.
Speaker Change: The financial guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter, unless required by law, and not to update or affirm guidance other than through broadly disseminated public disclosure. With that, it's my pleasure to turn the call over to Brent.
Brent Saunders: With that, it's my pleasure to turn a call over to Brent. Thank you, George, and thank you everyone for joining today's call. I hope you're enjoying this summer. I'm going to provide a high-level overview of another successful quarter of execution. Sam will do a deeper dive on our performance, and I'll close with my favorite part: highlighting the innovations that will help separate us from the pack and keep us on a path to sustainable long-term, profitable growth. There's no change for three areas of focus, and there won't be. This is our formula for success. Our constant currency revenue growth progression over the past year has been remarkable.
Operator: I hope you're enjoying the summit. Sam will do a deeper dive on our program,highlighting the innovations that will help separate us from the pack and keep us on a path to sustainable long-term profit. SKU rationalization is an ongoing process that will pay dividends, slowly but surely. We're talking about building those capabilities.
Brent Saunders: Thank you, George, and thank you, everyone, for joining today's call. I hope you're enjoying the summer.
Brent Saunders: I'm going to provide a high-level overview of another successful quarter of execution.
Brent Saunders: Sam will do a deeper dive on our performance, and I'll close with my favorite part, highlighting the innovations that will help separate us from the pack and keep us on a path to sustainable, long-term, profitable growth.
Osama A. Eldessouky: There's no change to our three areas of focus, and there won't be. This is our formula for success.
Osama A. Eldessouky: Our constant currency revenue growth progression over the past year has been remarkable.
Brent Saunders: 8% in Q3 2023, 19% in Q4 2023, 20% in Q1 2024, and 20% in the second quarter. What makes it more impressive is our growth continues to come from all businesses and geographies. We're not a one-trick pony to hold into a certain product or category, and we continue to refine what we're selling and where. SKU rationalization is an ongoing process that will pay dividends slowly, but surely. Something that's undoubtedly helping fuel that consistent revenue growth is our relentless focus on selling and operational excellence. We're talking about building those capabilities, but we have now hit a point where it feels like a cultural norm within our walls.
Speaker Change: 8% in Q3 2023, 19% in Q4 2023, 20% in Q1 2024, and 20% in the second quarter.
Speaker Change: What makes it more impressive is our growth continues to come from all businesses and geographies. We're not a one-trick pony beholden to a certain product or category.
Speaker Change: And we continue to refine what we're selling and where. SKU Rationalization is an ongoing process that will pay dividends, slowly but surely.
Speaker Change: Something that's undoubtedly helping fuel that consistent revenue growth is our relentless focus on selling and operational excellence.
Speaker Change: We're talking about building those capabilities.
Speaker Change: But we have now hit a point where it feels like a cultural norm within our walls.
Brent Saunders: Colleagues around the world know that our success is inextricably linked to how we make or source our products and get them in the hands of I care professionals, patients, and consumers. They also know that selling an operational excellence is a long game, and if you're not continuously improving, you're falling behind. In June, we launched Blink Nutri-Tears, a clinically proven nutritional supplement for drives, and just one week later, we announced the US introduction of Bausch and Lomb Infused for an stigmatism, daily disposable contact lenses. Three innovative products across three distinct businesses announced over 12 days. When it comes to being an innovation company, we're walking the walk and doing so with urgency and purpose.
George Gadkowski: Colleagues around the world know that our success is inextricably linked to how we make or source our products. Look no further than the second quarter milestones as proof of our ongoing commitment to innovation. The first premium IOL on the InVista platform and another meaningful step towards being a significant player in the high-margin premium IOL space. A Clinically Proven Nutritional Supplement for Dry Eyes. Three innovative products across three distinct businesses announced over 12 days.
Speaker Change: Colleagues around the world know that our success is inextricably linked to how we make or source our products and get them in the hands of eye care professionals, patients, and consumers.
Speaker Change: They also know that selling and operational excellence is a long game, and if you're not continuously improving, you're falling behind.
Speaker Change: Look no further than the second quarter milestones as proof of our ongoing commitment to innovation.
Speaker Change: In May, Health Canada approved the Invista Envy intraocular lens, the first premium IOL on the Invista platform, and another meaningful step towards being a significant player in the high-margin premium IOL space.
Speaker Change: In June , we launched Blink Nutri Tears, a clinically proven nutritional supplement for dry eyes. And just one week later, we announced the U.S. introduction of Bausch and Lomb infused for astigmatism daily disposable contact lenses.
Speaker Change: Three innovative products across three distinct businesses announced over 12 days.
George Gadkowski: When it comes to being an innovation company, we're walking the walk and doing so with urgency and purpose. These include new product launches, with a flurry of activity expected in the second half of the year and into 2025. Sales execution is another critical component, which we continue to heavily invest in. A prime example is Glimpse, a new proprietary digital sales platform that uses AI and machine learning to provide tailored-made guidance for engaging eye care professionals.
Speaker Change: When it comes to being an innovation company, we're walking the walk and doing so with urgency and purpose.
Brent Saunders: The roadmap slide, a mainstand or earnings presentation, has been given a facelift to coincide with our move into phase two, innovate and execute. That's not to say parts of phase one won't continue, but the majority of our focus is on the five elements of phase two. These include new product launches with a flurry of activity expected in the second half of the year and into 2025. Sales execution is another critical component, which we continue to heavily invest in. A prime example is Glimpse, a new proprietary digital sales platform that uses AIM machine learning to provide tailor-made guidance for engaging eye care professionals.
Speaker Change: The roadmap slide, a mainstay in our earnings presentations, has been given a facelift to coincide with our move into Phase 2, Innovate and Execute.
Speaker Change: That's not to say parts of Phase 1 won't continue, but the majority of our focus is on the five elements of Phase 2.
Speaker Change: These include new product launches, with a flurry of activity expected in the second half of the year and into 2025.
Speaker Change: Sales execution is another critical component which we continue to heavily invest in.
Speaker Change: A prime example is Glimpse, a new proprietary digital sales platform that uses AI and machine learning to provide tailor-made guidance for engaging eye care professionals.
Brent Saunders: We recently trained the US Farm of Salesforce on Glimpse to ensure they're bringing the right message to the right doctor at the right time, and early results are encouraging. Investing in innovation means investing in our people. I mentioned a steady stream of impressive new hires last quarter, which has accelerated. We recently fielded our first colleague engagement survey since 2022, and the results bullied our belief that we were on the right path. Buying from leadership teams is one thing. Buying from 13,000 people around the world is what drives results. The last item I'd flag is least flashy, driving operational efficiencies and margin expansion.
Speaker Change: We recently trained the U.S. Pharmaceutical Salesforce on Glymphs to ensure they're bringing the right message to the right doctor at the right time, and early results are encouraging.
Speaker Change: Investing in innovation means investing in our people.
George Gadkowski: I mentioned a steady stream of impressive new hires last quarter, which has accelerated. We recently fielded our first colleague engagement survey since 2022, and the results buoyed our belief that we're on the right path. My Informed Leadership Team is one.
Speaker Change: I mentioned a steady stream of impressive new hires last quarter, which has accelerated.
Speaker Change: We recently fielded our first colleague engagement survey since 2022, and the results buoyed our belief that we're on the right path.
Speaker Change: Buy-in from leadership teams is one thing, buy-in from 13,000 people around the world is what drives results.
Speaker Change: The last item I'd flag is the least flashy, driving operational efficiencies and margin expansion.
Brent Saunders: One leads to another, and we're leaving no stone unturned as we streamline operations to improve the bottom line. A prime example is our Tampa manufacturing site successfully rolling out a secondary packaging process from my boat that can be completed in a few shifts, as opposed to roughly six days at our contract manufacturing. At the risk of stealing Sam's thunder, I'll cover a few of the financial highlights. It's a good problem to have when you feel like you're repeating yourself each quarter. Once again, impressive year-over-year, Const and currency revenue growth was driven by our holistic strength.
George Gadkowski: One leads to another, and we're leaving no stone unturned as we streamline operations to improve the bottom line, which can be completed in a few shifts as opposed to roughly six days at our contract manufacturer. At the risk of stealing Sam's thunder, I'll cover a few of the financial highlights. It's a good problem to have when you feel like you're repeating yourself each course.
Speaker Change: One leads to another, and we're leaving no stone unturned as we streamline operations to improve the bottom line.
Speaker Change: A prime example is our Tampa manufacturing site successfully rolling out a secondary packaging process for my boat that can be completed in a few shifts as opposed to roughly six days at our contract manufacturing.
Speaker Change: At the risk of stealing Sam's thunder, I'll cover a few of the financial highlights.
Osama A. Eldessouky: It's a good problem to have when you feel like you're repeating yourself each quarter.
Osama A. Eldessouky: Once again, impressive year-over-year constant currency revenue growth was driven by our holistic strength.
Brent Saunders: Look no further than our business segment performance with 9% constant currency revenue growth for Surgical, 11% Provision Care, and 61% for Pharmaceutical. Apsons Idra Revenue, Pharmaceuticals Still Exceeded Expectations With 16% Organic Revenue Growth. Key franchises across our business continue to drive that growth. Three takeaways from the list of products shown.
Osama A. Eldessouky: Look no further than our business segment performance, with 9% constant currency revenue growth per surgical.
George Gadkowski: 11% for vision care and 61% for pharmaceuticals. Despite the absence of IGER revenue, pharmaceuticals still exceeded expectations with 16% organic revenue growth. I'll now turn it over to Sam, who will provide additional.
Osama A. Eldessouky: 11% for vision care and 61% for pharmaceuticals.
Osama A. Eldessouky: Absence of IGER revenue, pharmaceuticals still exceeded expectations with 16% organic revenue growth.
Osama A. Eldessouky: Key franchises across our business continue to drive that growth.
Brent Saunders: It's a global mix; prescription, OTC, contact lens, and surgical products are represented. And we've made clear our intention to invest in each of these products, given opportunities for future growth.
Osama A. Eldessouky: Three takeaways from the list of products shown. It's a global mix. Prescription, OTC, contact lens, and surgical products are represented. And we've made clear our intention to invest in each of these products, given opportunities for future growth.
Sam Eldessouky: I'll now turn it over to Sam, who will provide additional context.
Osama A. Eldessouky: I'll now turn it over to Sam who will provide additional context.
Sam Eldessouky: Thank you, friends, and good morning, everyone. Before we begin, please know that all my comments today will be focused on growth expressed on constant currency bases, unless specifically indicated otherwise. Turning now to our financial results on Slide 7. We are pleased to report another quarter of solid revenue growth across all of our segments, geographies, and key product franchises. We are seeing the broad-based growth momentum in our business continue. To the company revenue 1.216 billion for the quarter reflects growth of 20%. As Brent mentioned, we're executing our strategy on our focused remains on driving selling and operational excellence and prioritizing innovation.
Sam: Thank you, Brent, and good morning, everyone. Before we begin, please know that all my comments today will be focused on growth expressed in constant currency. Turning now to our financial results on slide 16. The steady stream of product launches continues to drive growth, and we're excited about the opportunity ahead of us in the second half of 2020. For the second quarter, currency was a headwind of $27 million, with our daily CyHive leading the way.
Osama A. Eldessouky: Thank you, Brent, and good morning, everyone.
Osama A. Eldessouky: Before we begin, please note that all my comments today will be focused on growth expressed on a constant currency basis, unless specifically indicated otherwise.
Osama A. Eldessouky: Turning now to our financial results on slide 7.
Osama A. Eldessouky: We are pleased to report another quarter of solid revenue growth across all of our segments, geographies, and key product franchises.
Osama A. Eldessouky: We are seeing the broad-based growth momentum in our business continue.
Osama A. Eldessouky: Total company revenue of $1.216 billion for the quarter reflects growth of 20%.
Osama A. Eldessouky: As Brent mentioned, we're executing our strategy, and our focus remains on driving selling and operational excellence.
Sam Eldessouky: The steady stream of product launches continues to drive growth, and we're excited about the opportunity ahead of us in the second half of 2024. For the second quarter, currently with a headwind of 27 million to revenue. Now let's discuss the results in each of our segments. Vision Cares second quarter revenue of 697 million increased by 11%, driven by solid growth in both the consumer and contact lens businesses. The consumer business again demonstrated strong performance with growth of 9% in Q2. We continue to see growth across our key consumer franchises. In the quarter, I vitamins were up 8%, lung 5 grew by 12%, and the consumer dry eye delivered 94 million revenue, an organic growth of 10%.
Brent Saunders: and Prioritizing Innovation.
Brent Saunders: The steady stream of product launches continues to drive growth, and we're excited about the opportunity ahead of us in the second half of 2024.
Brent Saunders: For the second quarter, currency was a headwind of $27 million to revenue.
Brent Saunders: Now let's discuss the results in each of our segments.
Brent Saunders: VisionCare's second quarter revenue of $697 million, increased by 11%, driven by solid growth in both the consumer and contact lens businesses.
Brent Saunders: The consumer business again demonstrated strong performance with growth of 9% in Q2.
Brent Saunders: We continue to see growth across our key consumer franchises.
Brent Saunders: In the quarter, eye vitamins were up 8%, lung fi grew by 12%, and the consumer dry eye delivered $94 million in revenue and organic growth of 10%.
Sam Eldessouky: Contact lens revenue growth was 14%, with strong performance across key brands and geographies. In the quarter, we saw solid growth in both the daily and effort people volumes, with our daily side-high leading the way. We are continuing to see strong momentum in the daily side-high, with 72% growth in the quarter. The daily side-high multifocal launches off to a strong start, and as Brent mentioned, we have recently announced the launch of the daily side-high to expand the product family. Contact lens revenue growth was brought based across markets, with the US up 18% in the quarter, and international up 12%.
Brent Saunders: Contact lens revenue growth was 14% with strong performance across key brands and geographies.
Brent Saunders: In the quarter, we saw solid growth in both the daily and FRP portfolios, with our daily side high leading the way.
Brent Saunders: We are continuing to see a strong momentum in the daily Psi High with 72% growth in the quarter.
Sam: We hope you enjoy the rest of your day. And, as Brent mentioned, we have recently announced the launch of the Daily SciHeights org to expand the product. Contact Lens revenue growth was broad-based across markets. We have resumed a solid growth trajectory in the U.S., with the Lynchburg system upgraded now. Outside the U.S., we saw solid performance across all the regions, which contributed to strong international revenue growth. We're also seeing early positive results from our direct-to-consumer initiative in China, which we recently launched. Consumables, our largest product category, grew in the quarter by $7.
Brent Saunders: The Daily Sight Height Multi-Focal Launch is off to a strong start. And as Brent mentioned, we have recently announced the launch of the Daily Sight Height Torque to expand the product family.
Brent Saunders: Contact lens revenue growth was broad-based across markets.
Brent Saunders: With the U.S. up 18% in the quarter and international up 12%.
Sam Eldessouky: We have resumed a solid growth trajectory in the US, with the Lynchburg system upgrade now behind us. Outside the US, we saw solid performance across all the regions, which contributed to the strong international revenue growth in Q2. We are also seeing early positive results from our direct consumer initiative in China, which we recently launched. Moving now to the surgical segment, second quarter revenue was 209 million, an increase of 9%. In Q2, we saw a broad-based performance with growth in each of our three surgical product categories. Consumables, our largest product category, grew in the quarter by 7%.
Brent Saunders: We have resumed a solid growth trajectory in the U.S. with the Lynchburg system upgrade now behind us.
Speaker Change: Outside the U.S., we saw solid performance across all the regions which contribute to the strong international revenue growth in Q2.
Speaker Change: We're also seeing early positive results from our direct-to-consumer initiative in China, which we recently launched.
Speaker Change: Moving now to the surgical segment. Second quarter revenue was $209 million, an increase of 9%.
Speaker Change: In Q2, we saw broad-based performance with growth in each of our three surgical product categories.
Speaker Change: Consumables, our largest product category, ruined a quarter by 7%.
Sam: Implantables grew 9% in the quarter, with our standard IOLs up 3% and our premium IOLs up 36%. We're also continuing to launch premium products with higher margins, which represents growth of 61% or 16%. Maibu delivered $42 million in revenue in the quarter. Maiba has continued its exceptional launch performance, and we remain committed to making investments to drive strong growth. We will continue to build market access with commercial coverage at about 50%, with investments in direct-to-consumer marketing campaigns.
Speaker Change: Implantables grew 9% in the quarter, with our standard IOLs up 3% and our premium IOLs up 36%.
Speaker Change: Our INVISTA Iowa platform is continuing to perform well, with the INVISTA Aspire lens making a strong early market entry.
Sam Eldessouky: We affect the cadence of Iowa launches to continue with the recent approval of the Investor Envy tri-focal lens in Canada. Revenue from Equipment was up 15%, made driven by Stellaris system sales. Our strategy in the surgical business remains the same. We are delivering growth by focusing on a consistent supply of products or customers, despite absorbing some margin pressure in the near term due to the spot bias which we previously discussed. We're also continuing to launch premium products with higher margins. We expect the steady stream of these launches over the next number of years to continue to drive revenue growth and sustainable margin expansion.
Speaker Change: We expect the cadence of IOL launches to continue, with the recent approval of the Invista Envy trifocal lens in Canada.
Speaker Change: Revenue from equipment was up 15%, mainly driven by Solaris system sales.
Speaker Change: Our strategy in the surgical business remains the same. We are delivering growth by focusing on a consistent supply of products to our customers.
Speaker Change: despite absorbing some margin pressure in the near term due to the spot bias which we previously discussed.
Speaker Change: We're also continuing to launch premium products with higher margins.
Speaker Change: We expect a steady stream of these launches over the next number of years to continue to drive revenue growth and sustainable market expansion.
Sam Eldessouky: Lastly, revenue in the Farmer segment was $300,000,000 for the quarter, which represents growth of 61% or 16% organically. Myboot delivered 42 million in revenue in the quarter. We are pleased with the MyboTRX growth, and we continue to work with IQVIA to address some of the variability in the TRX data. Myboa has continued its exceptional launch performance, and we remain committed to making investments to drive the strong growth. We continue to build market access with commercial coverage at about 50% and Medicare at approximately 30%. Zyder delivered 89 million in revenue in the second quarter. We continue to make steady progress in executing our strategy, with investments in direct-to-consumer marketing campaigns and a field 4-3 alignment earlier in the year.
Speaker Change: Lastly, revenue in the pharma segment was $310 million for the quarter.
Speaker Change: which represents growth of 61% or 16% organically.
Speaker Change: Maibu delivered $42 million in revenue in the quarter.
Speaker Change: We are pleased with the MIBO-TRX growth and will continue to work with IQVIA to address some of the variability in the TRX data.
Speaker Change: MIPA has continued its exceptional launch performance.
Speaker Change: And we remain committed to making investments to drive strong growth.
Speaker Change: We'll continue to build market access with commercial coverage at about 50% and Medicare at approximately 30%.
Speaker Change: Zyder has delivered 89 million in revenue in the second quarter. We continue to make steady progress in executing our strategy.
Speaker Change: with investments in direct-to-consumer marketing campaigns and a field force realignment earlier in the year.
Sam Eldessouky: We have seen improving ZyderTRX trends following the sales 4-3 alignment, and a Change Healthcare cyberattack in the first quarter. Zyder and Myboa together position us as a leader in dry eye disease. As Brent will highlight, our strategy includes key building blocks to expand our leading position and drive long-term growth. Beyond Myboa and ZyderTRX, we also saw strong growth across other parts of the farmer business. Both US generics and international farmer grew by 11%. I had expected, for a landslide, to continue to decline due to a generic entry Q1 of this year. Now, let me walk through some of the key non-GAAP line items on slide aid.
Sam: We have seen improving Xydera TRX trends following the Salesforce 3 Alliance and the healthcare cyber attack. Zajra and Maibu together position us as a leader in dry IT. As Brent will highlight, our strategy includes key building blocks to expand our leading position and drive long-term growth. Beyond Maiba and Zydra, we also saw strong growth across other parts of the pharma business. As expected, Forlanza continues to decline due to a generic entry in Q1 of the year.
Speaker Change: We have seen improving Zydera TRX trends following the Salesforce re-alignment and the changed healthcare cyber attack in the first quarter.
Speaker Change: Zyra and Maibu together position us as a leader in dry eye disease.
Speaker Change: As Brent will highlight, our strategy includes key building blocks to expand our leading position and drive long-term growth.
Brent Saunders: Beyond Maibo and Zydra, we also saw strong growth across other parts of the pharma business.
Brent Saunders: Both US Generics and International Pharma grew by 11%.
Speaker Change: As expected, Forlanza continued to decline due to a generic entry in Q1 of this year.
Brent Saunders: Now let me walk through some of the key non-gap line items on slide 8.
Sam Eldessouky: Adjust the growth margin for the second quarter was 51.9%, which was up 220 basis points compared to Q223. The increase in adjusted growth margin was mainly driven by product mix as we continue our strategy to transition to higher margin products. We also saw strong production output in our contact lens business, contributing to margin efficiencies. This was balanced by pressure driven by the higher inventory cost in source. In the second quarter, we invested 84 million in adjusted R&D, or approximately 7% of revenue. The second quarter adjusted Yvada was 209 million, which represents 20% growth versus Q223.
Sam: Adjust the gross margin for the second quarter. The increase in adjusted gross margin was mainly driven by product mix as we continue our strategy to transition to higher margins. This was balanced by pressure driven by the higher inventory cost in social in the second quarter, or approximately 7% of... Second quarter revenue at Jesse Iveda was $209 million, which represents 20% growth versus Q2 2020. We are raising our full year revenue guidance from a range of $4.6 to $4.7 billion to a range of $4.7 to $4.8 billion.
Brent Saunders: Adjusted gross margin for the second quarter was 61.9%, which was up 220 basis points compared to Q2-23.
Brent Saunders: The increase in adjusted gross margin was mainly driven by product mix as we continue our strategy to transition to higher margin products.
Brent Saunders: We also saw strong production output in our contact lens business, contributing to margin efficiencies.
Brent Saunders: This was balanced weight pressure driven by the higher inventory cost in surgical.
Brent Saunders: In the second quarter, we invested $84 million in adjusted R&D for approximately 7% of revenue.
Brent Saunders: Second quarter Jesse Iveda was $209 million which represents 20% growth versus Q2'23.
Sam Eldessouky: Net interest expense for the quarter was 99 million, and adjusted cash flow from operations was 24 million. Adjusted EPS for the quarter's 13 cents, and finally, CapEx was 72 million.
Brent Saunders: Net interest expense for the quarter was $99 million and adjusted cash flow from operations was $24 million.
Brent Saunders: Adjusted EPS for the quarter was $0.13 and finally CAPEX was $72 million.
Sam Eldessouky: Turning now to our 2024 guidance on Slide 11. We are raising our full year revenue and adjusted Yvada's guidance to reflect the strong and broad-based momentum we're seeing in the business. We are raising our full year revenue guidance from a range of 4.6 to 4.7 billion to a range of 4.7 to 4.8 billion. The updated revenue guidance reflects a range of full-year constant currency growth to a range of approximately 16 to 18%. In our dry eye portfolio, we are raising our guidance for full year Bible revenue from 95 million to a range of 150 to 160 million, which reflects a strong launch performance.
Brent Saunders: Turning now to our 2024 guidance on slide 11.
Brent Saunders: We are raising our full-year revenue and adjust the EBITDA guidance to reflect the strong and broad-based momentum we're seeing in the business.
Brent Saunders: We are raising our full year revenue guidance from a range of $4.6 to $4.7 billion to a range of $4.7 to $4.8 billion.
Sam: The updated Revenue Guidance reflects a raise in 4-year constant currency growth, so a range of approximately 16-18%, which reflects a strong launch, from approximately $400 million to $355 to $365 million. As we head into 2020, there are two factors in Zadar that we'll be watching closely. First, the potential headwind impact of the inflation reduction.
Brent Saunders: The updated revenue guidance reflects a raise of full-year constant currency growth to a range of approximately 16 to 18 percent.
Brent Saunders: In our dry eye portfolio, we are raising our guidance for full year MIBO revenue from $95 million to a range of $150 to $160 million, which reflects a strong launch performance.
Sam Eldessouky: We are updating our previous guidance for Zyder's revenue from approximately 400 million to 355 to 365 million. Our revised Zyder's guidance reflects the Field Force realignment, and the impact of the change Healthcare cyber attack earlier in the year. More recently, we have seen an improvement in Zyder's TRX trends. We continue to see the growth prospects and the synergistic benefits of having my one Zyder and one portfolio. As we head into 2025, two factors on Zyder that will be watching closely. First, are the potential headwind impact of the Inflation Reduction Act, though it's too early to quantify it this time.
Brent Saunders: We are updating our previous guidance for ZYDRA revenue from approximately $400 million to $355 to $365 million.
Brent Saunders: Our revised ZYDRA guidance reflects the field force realignment and the impact of the changed healthcare cyber attack earlier in the year.
Brent Saunders: More recently, we have seen an improvement in ZYDR-TRX strengths.
Brent Saunders: We continue to see the growth prospects and the synergistic benefits of having MyGo and ZYDRA in one portfolio.
Brent Saunders: As we head into 2025,
Brent Saunders: Two factors in Zadar that we'll be watching closely.
Brent Saunders: First, are the potential headwind impacts of the Inflation Reduction Act, though it's too early to quantify it this time.
Sam Eldessouky: And second, bouncing our strategy to drive TRX growth while ensuring we have access to coverage to help plans for as many patients as possible. For the full year, we continue to expect currency headwinds of approximately 90 million to revenue. Shifting digestive EBITDA, we are raising our full year adjusted EBITDA guidance from a range of 840 to 890 million to a range of 850 to 900 million, to reflect the strong business performance. We have made significant investments across our portfolio and in our product launches. The strategy is paying off, and the business continues to deliver robust and broad-based growth.
Sam: And second, balancing our strategy to drive TRX growth while ensuring we have access to coverage through health plans for as many patients as possible. We are raising our full-year adjusted EBITDA to reflect the strong business. We have made significant investments across our portfolio and in our product line. As Brent has previously highlighted, [inaudible] In terms of the other key assumptions underlying our guidance, as noted last week, we are raising our expectation for adjusted gross margin to a range of 62 to 62.5, compared to our previous guidance of 62%.
Brent Saunders: And second, balancing our strategy to drive TRX growth while ensuring we have access to coverage through health plans for as many patients as possible.
Brent Saunders: For the full year, we continue to expect currency headwinds of approximately $90 million to revenue.
Brent Saunders: Shifting to Adjusted EBITDA.
Brent Saunders: We are raising our full-year adjusted EBITDA guidance from a range of $840 million to $890 million to a range of $850 million to $900 million to reflect a strong business performance.
Brent Saunders: We have made significant investments across our portfolio and in our product launches.
Brent Saunders: The strategy is paying off, and the business continues to deliver robust and broad-based growth.
Sam Eldessouky: As Brent has previously highlighted, the investments we're making today will maximize the potential of our portfolio in the future. Our launch products, including My Go, have a long runway, and we expect there will be an important driver of sustainable growth and margin expansion for many years to come. In terms of the other key assumptions underlying our guidance as no last quarter, we are raising our expectation for adjusted growth margin to a range of 62 to 62.5% compared to our previous guidance of 62%. And we continue to expect investments R&D to be about 7 to 8% over.
Brent Saunders: As Brent has previously highlighted,
Brent Saunders: The investments we're making today will maximize the potential of our portfolio in the future. Our launch products, including MyBuild, have a long runway, and we expect it will be an important driver of sustainable growth and margin expansion for many years to come.
Speaker Change: In terms of the other key assumptions underlying our guidance, as noted last quarter,
Speaker Change: We are raising our expectation for adjusted gross margin to a range of 62 to 62.5% compared to our previous guidance of 62%.
Speaker Change: And we continue to expect investments in R&D to be about 7-8% of revenue.
Sam Eldessouky: Revenue. As we have previously discussed, we expect to enter into collaboration agreements with external partners to drive pipeline innovation. In the quarter, we absorb now our adjusted EBIDA approximately 3 million of IPR&D charges released such agreements. As we look forward, we anticipate entering into additional agreements in the second half of 2024. It should be noted, as I previously mentioned, that any IPR&D charges related to these agreements are not included in our adjusted EBIDA guidance. We continue to expect interest expense to be approximately 385 million for the full year. We will continue to modify the actions on interest rates for the remainder of 2024.
Speaker Change: As we have previously discussed, we expect to enter into collaboration agreements with external partners to drive pipeline innovation.
Speaker Change: In the quarter, we absorbed in our adjusted EBITDA approximately $3 million of IPR&D charges related to such agreements.
Sam: As we look forward, we anticipate entering into additional agreements in the second half of 2021. It should be noted, as I previously mentioned, that there are many, many, many, many, many, Any IPR&D charges related to these agreements are not included in our adjusting.
Speaker Change: As we look forward, we anticipate entering into additional agreements in the second half of 2024.
Speaker Change: It should be noted, as I previously mentioned, that any IPR&D charges related to these agreements are not included in our Adjusted Eva Diagrams.
Speaker Change: We continue to expect interest expense to be approximately $385 million for the full year.
Speaker Change: We will continue to monitor Fed actions on interest rates for the remainder of 2024.
Sam Eldessouky: We expect our adjusted tax rate to be roughly 15%, and full year capics is expected to be approximately 215 million.
Speaker Change: We expect our adjusted tax rate to be roughly 15%.
Sam: And full year CAPEX is expected to be approximately $215 million. We continue to expand those offerings, the most recent example being the June launch of Blink Neutral. They're excited to have a new clinically proven treatment option that could be particularly appealing for patients who may be adverse to eye drops. New direct-to-consumer campaigns for both medications will be underway soon, which will drive awareness and action, especially when coupled with our unbranded efforts.
Speaker Change: And full year CAPEX is expected to be approximately $215 million.
Sam Eldessouky: To summarize, we're very pleased with the performance in the quarter. The business continues to deliver strong and broad-based growth. We expect the momentum to drive solid performance in the second half of 2024. And position the business for a strong year of revenue growth and future margin expansion.
Speaker Change: To summarize, we're very pleased with the performance in the quarter. The business continues to deliver strong and broad-based growth. We expect the momentum to drive solid performance in the second half of 2024.
Speaker Change: and position the business for a strong year of revenue growth and future margin expansion.
Brent Saunders: And now I'll turn the back to Brent. Thanks, Sam. Now let's focus on the future.
Speaker Change: And now I'll turn the call back to Brent.
Brent Saunders: Thanks, Sam. Now let's focus on the future.
Brent Saunders: We recently launched an unbranded dry-eyed education campaign in the US to help drive awareness of a massively underdiagnosed and under-treated condition, which continues to worsen based on environmental factors and an age in population. In fact, approximately 150 million US adults experience occasional or frequent symptoms of dry eye. And around 38 million are living with dry eye disease. The goal of the campaign is to help facilitate discussions with eye care professionals who can recommend treatment options from OTC solutions to pharmaceutical interventions as appropriate. No company offers more of these options than Bouchon Law, and it's not up for debate.
Speaker Change: We recently launched an unbranded dry eye education campaign in the U.S. to help drive awareness of massively underdiagnosed and undertreated condition which continues to worsen based on environmental factors and an aging population.
Speaker Change: In fact, approximately 150 million U.S. adults experience occasional or frequent symptoms of dry eye.
Speaker Change: and around 38 million are living with dry eye disease.
Speaker Change: The goal of the campaign is to help facilitate discussions with eye care professionals who can recommend treatment options from OTC solutions to pharmaceutical interventions as appropriate.
Speaker Change: No company offers more of these options than Bausch and Lomb, and it's not up for debate.
Brent Saunders: We continue to expand those offerings, the most recent example being the June launch of Blink Nutri-Tears. While it's too early to report consumer uptake, the reaction from eye care professionals speaks volumes. They're excited to have a new, funnically proven treatment option that could be particularly appealing for patients who may be at birth to eye drops. My Bones Hydra are the flagship products in our dry eye portfolio and understandably generate quite a bit of interest.
Speaker Change: We continue to expand those offerings, the most recent example being the June launch of Blink Nutri Tears.
Speaker Change: While it's too early to report consumer uptake, the reaction from eye care professionals speaks volumes.
Speaker Change: They're excited to have a new clinically proven treatment option that could be particularly appealing for patients who may be adverse to eye drops.
Speaker Change: Mybo and Zydra are the flagship products in our dry eye portfolio and understandably generate quite a bit of interest.
Brent Saunders: Sam covered second quarter performance and updated expectations for both, but let me highlight a few building blocks for long-term growth. New direct-to-consumer campaigns for both medications will be underway soon, which will drive awareness and action, especially when coupled with our unbranded efforts. We shared our willingness to invest in marketing these products, which you'll see reflected in the quality and reach of each campaign. Perhaps more important than reaching consumers is continuing to show prescribers why in Zydra are the preferred treatment options for evaporative and inflammatory dry eye disease, respectively. With our sales force as the primary vehicle, we'll tout new data in creative and engaging ways as we turn conversions and new starts into greater market share.
Osama A. Eldessouky: Sam covered second quarter performance and updated expectations for both, but let me highlight a few building blocks for long-term growth.
Speaker Change: New direct-to-consumer campaigns for both medications will be underway soon, which will drive awareness and action, especially when coupled with our unbranded efforts.
Speaker Change: We shared our willingness to invest in marketing these products, which you'll see reflected in the quality and reach of each campaign.
Speaker Change: Perhaps more important than reaching consumers is continuing to show prescribers why Mibo and Zydra are the preferred treatment options for evaporative and inflammatory dry eye disease, respectively.
Speaker Change: With our sales force as the primary vehicle, we'll tout new data in creative and engaging ways as we turn conversions and new starts into greater market share.
Brent Saunders: As dry eye awareness increases, so does our leading position in the category, seemingly unlimited potential. And hopefully, at a steady put, as an infused wearer, I've told anyone who will listen how comfortable these lenses are, and I've quickly noticed a difference from other options. But don't take my word for it; instead, look at the numbers. In the last year we've averaged approximately 60% revenue growth in our daily side high portfolio, including 67% in the second quarter; we're 72% on a constant currency basis. We're making believers out of customers and patients with each fitting, and that's clearly reflected in our performance.
Sam: As dry eye awareness increases, so does our leading position in the category with seemingly unlimited potential. As an infused wearer, I've told anyone who will listen how comfortable these lenses are and how quickly you notice a difference from other options.
Speaker Change: As dry eye awareness increases, so does our leading position in the category with seemingly unlimited potential.
Speaker Change: We've rounded out our infused product line with the recent launch of Toric Leads in the U.S. And we will continue to expand our daily CyHi offerings globally at a steady foot.
Speaker Change: As an infused wearer, I've told anyone who will listen how comfortable these lenses are and how quickly you notice a difference from other options.
Sam: But don't take my word for it; instead, look at the numbers. In the last year, we've averaged approximately 60% revenue growth in our daily Sci-Hide portfolio, including 67% in the second quarter or 72% on a constant currency basis. We're making believers out of customers and patients with each fitting, and that's clearly reflected in our performance. And continuing that theme, growth is spread around the globe, with 18% constant currency revenue growth in the U.S. and 12% internationally.
Speaker Change: But don't take my word for it. Instead, look at the numbers. In the last year, we've averaged approximately 60% revenue growth in our daily CIHI portfolio, including 67% in the second quarter, or 72% on a constant currency basis.
Speaker Change: We're making believers out of customers and patients with each fitting, and that's clearly reflected in our performance.
Brent Saunders: That performance isn't solely relying on daily side high uptake; however, not by a long shot. We've maintained steady growth in our frequent replacement lens business as well, which help you'll 14% constant currency growth in our overall lens portfolio. And continuing that theme, growth is spread around the globe with 18% constant currency revenue growth in the US and 12% internationally.
Speaker Change: That performance isn't solely reliant on daily psi-high uptake, however, not by a long shot.
Speaker Change: We've maintained steady growth in our frequent replacement lens business as well, which helped fuel 14% constant currency growth in our overall lens portfolio.
Speaker Change: and continuing esteem growth is spread around the globe with 18% constant currency revenue growth in the U.S. and 12% internationally.
Brent Saunders: We expect that growth will be augmented with the fall launch of Opal, our new digital marketplace for eye care professionals and their patients to make it easier to access vision care products in the United States. Death taxes and consistent revenue growth from our consumer business. While there are certainly no guarantees when it comes to sales, we plan to maintain our industry leadership in this category by staying on offense to address evolving consumer needs. While established products like Lumify continue to outperform expectations, we've leveraged brand awareness and popularity with an eye toward the future.
Sam: We expect that growth will be augmented with the fall launch of OPAL, our new digital marketplace for eye care professionals and their patients that makes it easier to access vision care products in the United States, death, taxes, and consistent revenue growth from our consumer base, while established products like Lumify continue to outperform expectations. We've leveraged brand awareness and popularity with an eye toward the future. The prime example is the upcoming launch of Lumify preservative-free eye drops, which we believe will appeal to an important subset of consumers.
Speaker Change: We expect that growth will be augmented with the fall launch of OPAL, our new digital marketplace for eye care professionals and their patients that make it easier to access vision care products in the United States.
Speaker Change: Death, taxes, and consistent revenue growth from our consumer business.
Speaker Change: While there are certainly no guarantees when it comes to sales, we plan to maintain our industry leadership in this category by staying on offense to address evolving consumer needs.
Speaker Change: While established products like Lumify continue to outperform expectations.
Speaker Change: We've leveraged brand awareness and popularity with an eye toward the future. A prime example is the upcoming launch of Lumify preservative-free eyedrops, which we believe will appeal to an important subset of consumers.
Brent Saunders: Our prime example is the upcoming launch of Lumify Preservative Free iDrops, which we believe will appeal to an important subset of consumers. Where we sell is another critical component of maintaining our current trajectory in the consumer business. Steady growth products like Artifact continue geographic expansion in Europe and the Middle East. And there are pending approvals to introduce Lumify in additional countries around the world.
Sam: Where We Sell is another critical component of maintaining our current trajectory in the consumer business. Steady growth products like Artefact have continued geographic expansion in Europe and the Middle East, and there are pending approvals to introduce Lumify in additional countries around the world. When Dr. Adam Buszczak implanted the first Invista lens in Canada on June 5th, it was the latest step in a critical transition for our surgical business.
Speaker Change: Where We Sell is another critical component of maintaining our current trajectory in the consumer business.
Speaker Change: Steady growth products like Artilac continued geographic expansion in Europe and the Middle East.
Speaker Change: And there are pending approvals to introduce Lumify in additional countries around the world.
Brent Saunders: When Dr. Adam Busechek implanted the first investor lens in Canada on June 5, it was the latest step in a critical transition for our surgical business. I've spoken about the importance of being a player in the high margin premium my all category, and that you milestone served as an important reminder of our intent. I've shared our role at Cadence previously, but it's worth repeating. We expect envy to be available in the US later this year. That's a question I frequently get at industry meetings, and anxious ophthalmologist is a positive sign from a business perspective. at least.
Speaker Change: When Dr. Adam Buszczak implanted the first Invista lens in Canada on June 5th, it was the latest step in a critical transition for our surgical business.
George Gadkowski: I've spoken about the importance of being a player in the high-margin, premium IOL category. That's a question I frequently get at industry meetings. An anxious ophthalmologist is a positive sign from a business perspective. We're playing to win in the premium ILO. We close with a launch slide to drive home the point we've been making. Over the past year, we've had a steady drumbeat of new product launches that not only cut across our business but also align with where eye health is heading. In other words...
Speaker Change: I've spoken about the importance of being a player in the high margin premium IOL category.
Speaker Change: And that June milestone served as an important reminder of our intent.
Speaker Change: I've shared our rollout cadence previously, but it's worth repeating.
Speaker Change: We expect Envy to be available in the U.S. later this year. That's a question I frequently get at industry meetings. An anxious ophthalmologist is a positive sign, from a business perspective at least.
Brent Saunders: In 2025 we planned to launch Lux Light brand in Europe and were nearing first patient status in a clinical study for him this to be on, an extended death of Focus IOL with an expected US launch in 2026. We're planning to win in the premium IOL space, and we will invest accordingly in product development, manufacturing, and sales.
Speaker Change: In 2025, we plan to launch Lux Lightbrand in Europe and we're nearing first patient status in a clinical study for Invista Beyond, an extended depth-of-focus ILL, with an expected U.S. launch in 2026.
Speaker Change: We're playing to win in the premium IOL space, and we will invest accordingly in product development, manufacturing, and sales.
Brent Saunders: We close with a launch slide to drive home the point we've been making. Over the past year, we've had a steady drumbeat of new product launches that not only cut across our businesses but also line with where I help his head in. In other words, these aren't launches for the sake of filling shelves or pharmacy inventory. Rather, we're addressing unmet needs and improving products that care professionals, patients, and consumers have come to rely on. That steady drumbeat continues in the second half of the year and into 2025, which is why excitement about our future continues to build, both internally and externally.
Speaker Change: We close with a launch slide to drive home the point we've been making. Over the past year, we've had a steady drumbeat of new product launches that not only cut across our businesses, but also align with where eye health is heading.
George Gadkowski: These aren't launches for the sake of filling shelves or pharmacy inventory. Rather, we're addressing unmet needs and improving products that eye care professionals, patients, and consumers have come to rely on. That steady drum beat continues in the second half of the year and into 2025, which is why excitement about our future continues to build, both internally and externally. Significant work remains to realize our full potential, but the path forward is clear.
Speaker Change: In other words, these aren't launches for the sake of filling shelves or pharmacy inventory. Rather, we're addressing unmet needs and improving products that eye care professionals, patients, and consumers have come to rely on.
Speaker Change: That steady drumbeat continues in the second half of the year and into 2025, which is why excitement about our future continues to build, both internally and externally.
Brent Saunders: Significant work remains to realize our full potential, but the path forward is clear.
Speaker Change: Significant work remains to realize our full potential, but the path forward is clear.
Operator: Operator, let's open the line for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you were using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two.
Speaker Change: Operator, let's open the line for questions.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone.
Speaker Change: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Operator: If you are using a speakerphone, please pick up your handset before pressing the button. To withdraw your question, please press star then 2. Alright, great. Good morning, everyone. I guess I'll start a bit. Maybe for Brent, you know, the quarter was drawn all around. www.kenhub.com You know, you've been CEO for a little bit more than a year now. I just wanted to hear, from your perspective, how
Speaker Change: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Operator: At this time, we will pause momentarily to assemble or roster.
Jung Lee: The first question today is coming from Jung Lee from Jeffries. Jung, your line is live. All right, great.
Speaker Change: And the first question today is coming from Xuyang Li from Jeffreys. Xuyang, your line is live.
Brent Saunders: Morning, everyone, and thanks for taking our questions. I guess I'll start a bit high level, maybe for Brent. The quota was drawn all around beats on the top line, but you also called out really broad strength across segments, geographies, key products. You know, you've been CEO for a little bit more than a year now. I guess I wanted to hear from your perspective how this pays a call to turn around, but maybe a rejuvenation has been versus expectations when you've joined. What's going better than expected? What can still use some more attention? Your thoughts on the sustainability of this broad-based growth and, you know, can you maintain the double-digit growth profile in 2025?
Xuyang Li: All right, great.
Xuyang Li: Morning everyone and thanks for taking our questions. I guess I'll start a bit high-level, maybe for Brent. You know, the quota was strong all around, beats on the top line, but you also called out, you know, really broad strength across segments, geographies, key products.
Speaker Change: You know, you've been CEO for a little bit more than a year now, I just wanted to hear from your perspective how this
Speaker Change: I hate to call it a turnaround, but maybe a rejuvenation has been.
Speaker Change: vs. expectations when you joined, what's going better than expected, what can still use some more attention, your thoughts on the sustainability of this broad-based growth, and can you maintain the double-digit growth profile in 2025?
Brent Saunders: Yeah, so thank you for the question. So you're right. I think there is a turnaround or slash rejuvenation happening inside our company. I've commented on this before, but I do think that, you know, where we are today, our strategy is absolutely working. We are focused on, you know, relentlessly. I think it's the word I'd like to use on execution, sales, execution, and sales excellence, launch excellence, and operational excellence. And both of those are paying huge dividends. When you get 13,000 people around the world, all moving in the same direction with enthusiasm and motivation, with clear direction, you know, really good things happen.
Brenton L. Saunders: I hate to call it a turnaround, but maybe a rejuvenation. Yeah, so, thank you for the question. So So you're right, I think there is a turnaround or slash rejuvenation happening inside our company. I, I've commented on this before, but I do think that where we are today, our strategy is absolutely working. It's a proof point that you see the focus on execution around the world and in every business unit we have. And, you know, from my point of view, where we stand today, it's absolutely sustainable, right?
Speaker Change: Yeah, so thank you for the question. So you're right, I think there is a turnaround or slash rejuvenation happening inside our company. I've commented on this before, but I do think that where we are today, our strategy is absolutely working.
Speaker Change: We are focused on, you know, relentlessly, I think is the word I like to use, on execution.
Speaker Change: Sales Execution and Sales Excellence, Launch Excellence, and Operational Excellence.
Speaker Change: and and both of those are paying huge dividends when you get 13,000 people around the world all all moving in the same direction with enthusiasm and motivation with clear direction
Brent Saunders: And I think that that's a testament. And, you know, as you said, it's holistic, right? So just some constant currency numbers. I'll just rattle off as a proof point here, right? Overall, constant currency, top-line 20% growth; lens, up 14, consumer, up 9, surgical up 9, farm up 61, organic 16. In terms of regions, US up 31, Asia up 7, Europe up 10, Turkey, Middle East Africa up 29, Latin up 31, and Canada up 16. And so, you know, I think it's just a proof point that you see the focus on execution around the globe and in every business unit we have.
Speaker Change: You know, really good things happen and I think that that's a testament, you know, as you said, it's holistic, right? So just some constant currency numbers. I'll just rattle off as a proof point here, right overall constant currency top line 20% growth
Speaker Change: Lens up 14, Consumer up 9, Surgical up 9, Pharma up 61, Organic 16.
Speaker Change: In terms of regions, U.S. up 31, Asia up 7, Europe up 10, Turkey, Middle East, Africa up 29, LATAM up 31, and Canada up 16. And so, you know, I think it's just a
Speaker Change: It's a proof point that you see the focus on execution around the globe and in every business unit we have. And from my point of view, where we stand today, it's absolutely sustainable. Once you create a culture of executional excellence...
Brent Saunders: From my point of view, where we stand today, it's absolutely sustainable. Once you create a culture of institutional excellence and you continue to work at it and reinforce it, in my career, it's proven that that can be a real driver for the future. As we move into this next phase of our strategy of building innovation and continuing to support the new product launches, there's a long tail on these products. These are products that, in some cases, have a decade of patent protection and, in other cases, are consumer brands that last forever or contact lens brands that have a great holding power for decades or more.
Brenton L. Saunders: Once you create a culture of executional excellence and you continue to work at it and reinforce it, I think, you know, in my career, it's proven that that can be a real driver for the future. As we move into this next phase of our strategy of building innovation and continuing to support new product launches, you know, there's a long tail on these products. These are products that, in some cases, you know, have a decade of patent protection. In other cases, they're consumer brands that last forever or contact lens brands that have a great holding power for decades or more.
Speaker Change: and you continue to work at it and reinforce it, I think, you know, in my career it's proven that that can be a real driver for the future.
Speaker Change: As we move into this next phase of our strategy of building innovation and continuing to support the new product launches, you know, there's a long tail on these products. These are products that...
Speaker Change: In some cases, you know, have a decade of patent protection, in other cases are consumer brands that last forever or contact lens brands that have a great holding power for decades or more, and so there's a lot of durability in the portfolio, and I'm excited for the future.
Brenton L. Saunders: And so there's a lot of durability in the portfolio, and I'm excited for the future. Again, I'll end with, I think we have a great strategy and our team around the world is executing, and that's a great combination to have. Some of the other recently launched eye drugs were impacted by summer seasonality.
Brent Saunders: There's a lot of durability in the portfolio, and I'm excited for the future.
Brent Saunders: Again, I think we have a great strategy, and our team around the world is executing, and that's a great combination to have.
Speaker Change: Again, you know, I'll end with, I think we have a great strategy and our team around the world is executing and that's a great combination to have.
Jung Lee: I appreciate that. I guess for the follow-up just on the Bible performance, 50% sequential growth, fairly above our expectations. We started to see a noticeable uptick in weekly scripts in June.
Speaker Change: Alright, great, appreciate that. I guess for the follow-up, just on the MIBO performance, you know, 50% sequential growth.
Speaker Change: Certainly above our expectations.
Speaker Change: I mean, we started to see a noticeable uptick in weekly
Brent Saunders: It's impressive during the summer, while some of the other recently launched hydrogs were impacted by the summer seasonality. Our ECP checks have been really positive on the Bible.
Speaker Change: Scripts in June .
Speaker Change: It's impressive during the summer while some of the other recently launched eye drugs were impacted by the summer seasonality.
Sam: Our ECP checks have been really positive and amicable. Can you maybe talk a little bit about the performance in the second quarter? Outperforming your internal expectations, the guidance increase, maybe talk a little bit about trends and refills and how the integrated sales team is. Sure, yeah, as I mentioned in the first quarter, we integrated the field force, and then just a few weeks ago, we launched Glymphs, our new AI-based tool for the U.S. pharmaceutical field force, and honestly, I give a lot of credit to the team.
Brent Saunders: Can you maybe talk a little bit about the performance in the second quarter? Is it outperforming your internal expectations, the guidance increase? Maybe talk a little bit about trends and refills and how the integrated sales team is doing?
Speaker Change: Our ECP checks have been really positive, amiable. Can you maybe talk a little bit about the performance in the second quarter, outperforming your internal expectations, the guidance increase? Maybe talk a little bit about trends and refills and how the integrated sales team is doing.
Brent Saunders: Sure. As I mentioned in the first quarter, we integrated the field force, and then just a few weeks ago we launched Glimpses, our new AI-based tool for the US Pharmacy Field Force. Honestly, a lot of credit to the team. I think really strong execution in our pharmaceutical team in the United States. I'm very proud of what they're doing.
Speaker Change: Sure, yeah, so, you know, as I mentioned, in the first quarter, we...
Speaker Change: We integrated the field force.
Sam: I think really strong execution by our pharmaceutical team in the United States, very proud of what they're doing, but Maibo, I think, has great potential for the long term for us. You know, we've obviously significantly exceeded our revenue forecast for the year, and I would say we can call up peak sales as well. I see this now, you know, three quarters into the launch. It's hard to call an exact peak sales, but, you know, I would see it well over $500 million at this point. Peak sales. Very excited about that, and look, we were just starting, three quarters in, right?
Speaker Change: And honestly, a lot of credit to the team, I think. Really strong execution in our pharmaceutical team in the United States. Very proud of what they're doing. But Maibo, I think, has great potential for the long term for us.
Brent Saunders: But my bow, I think, has a great potential for the long term for us. We caught up, obviously, significantly our revenue forecast for the year. I would say we can call up peak sales as well. I see this now in three quarters until launch. It's hard to call them exact peak sales, but I would see it well over 500 million at this point, peak sales. I'm very excited about that. Look, we're just starting three quarters in. We still have to gain more managed care access. The team is making a great progress in three quarters to have roughly 50 percent commercial coverage and about what 32 percent Medicare coverage is pretty impressive for three quarters.
Speaker Change: You know, we caught up, obviously, significantly.
Speaker Change: Our revenue forecast for the year, you know, I would say we can call up peak sales as well. I see this now.
Speaker Change: You know, three quarters into the launch, it's hard to call an exact peak sales, but you know, I would see it well over $500 million at this point, peak sales.
Speaker Change: So, I'm very excited about that.
Speaker Change: And look, we're just starting. Three quarters in, right? We still have to gain more managed care access. The team's making great progress. And three quarters to have roughly...
Sam: We still have to gain more managed care access, and the team's making great progress in three quarters to have roughly 50% commercial coverage and about 32% Medicare coverage, pretty impressive for three quarters. I suspect those numbers will decline next year, and we'll continue to focus on execution, and so I think we have a long runway here and a great product and great ECP, you know, support behind it. All right, thank you very much.
Speaker Change: 50% commercial coverage and about, what, 32%?
Brent Saunders: I suspect those numbers to decline next year, and we'll continue to focus on execution. I think a long runway here and a great product and great ECP support behind.
Speaker Change: I suspect those numbers to decline next year and we'll continue to focus on execution. And so I think a long runway here and a great product and great ECP support behind it.
Patrick Wood: Thank you. The next question is coming from Patrick Wood from Morgan Stanley. Patrick, your line of slides. Amazing. Thank you so much for taking it. It's a busy morning, so I'll keep it to kind of one holistically, which is obviously launches going very well. The pipeline for age 2 and 25 sounds pretty stalked. You know, the guide implies slightly very good but slightly slower growth in the second half. A is that just the function of prudence. There's a lot of unknowns in the world, et cetera, et cetera, given the build of the innovation. And then B just maybe slightly more strategically on the launches.
Operator: Thank you. The next question is coming from Patrick Wood from Morgan Stanley. Patrick, your line is live. Amazing. Thank you so much for taking it.
Speaker Change: Thank you. The next question is coming from Patrick Wood from Morgan Stanley . Patrick, your line is live.
George Gadkowski: It's a busy morning. So I'll keep it to kind of one holistically, which is, you know, obviously, launch is going very well, the pipeline for H2 and 25 sounds pretty stocked. You know, the guide implies slightly very good but slightly slower growth in the second half. Is that just a function of, you know, prudence, there's a lot of unknowns in the world, etc, etc.
Patrick Wood: Amazing. Thank you so much for taking it. It's a busy morning, so I'll keep it to kind of one holistically, which is, you know, obviously,
Speaker Change: Launch is going very well. The pipeline for H2N25 sounds pretty stocked. You know, the guide implies slightly, very good, but slightly slower growth in the second half.
Speaker Change: A, is that just a function of, you know, prudence, there's a lot of unknowns in the world, etc., etc., given the build of the innovation?
George Gadkowski: Given the build of the innovation, and then B, just maybe slightly more strategically on the, you know, the launches, what have been some of your key learnings you've had from the first wave, the stuff that's stuck out, that's going to make you approach, what are you going to change in, you know, the market approach for the sort of the next wave in the second half and 25, or just more of the, Yeah, so let me answer the I'll turn it over to Sam for the first part, Patrick.
Brent Saunders: What have been some of your key learnings you've had from the first wave, the stuff that stuck out that's going to make you approach what are you going to change in the market approach for the sort of the next wave in the second half and 25 or just more the same. Yes, let me answer the second part of the question.
Brent Saunders: I'll turn it over to Sam for the first part, Patrick. Look, I think we're in a constant learning mode and adjusting techniques and the different levers to pool. You know, I think with some of these launches, we're so early that there's a lot yet to do that's take a big one like my bow. The team's been working on some really, I think, impressive creative ads. We plan to launch that somewhere closer to the fourth quarter. And you know, turning on a DTC for my, but we'll be a big, a big lever. When I look at blank new treat ears, right?
Speaker Change: Yes, let me answer the second part of the question and I'll turn it over to Sam for the first part, Patrick.
George Gadkowski: Look, I think we're in a constant learning mode and adjusting techniques and the different levers to pull. You know, I think with some of these launches, we're so early that there's a lot yet to do. Let's take a big one like Maibo.
Osama A. Eldessouky: Look, I think we're in a constant learning mode.
Osama A. Eldessouky: and adjusting techniques and...
Osama A. Eldessouky: The different levers to pull, you know, I think with some of these launches, we're so early that there's a lot yet to do. Let's take a big one like Maibo. The team's been working on some really, I think, impressive creative ads.
George Gadkowski: The team's been working on some really, I think, impressive creative ads. We plan to launch that somewhere closer to the fourth quarter. And, you know, turning on DTC for Maibo will be a big, a big lever.
Osama A. Eldessouky: We plan to launch that somewhere closer to the fourth quarter. And turning on DTC for MIBA will be a big...
George Gadkowski: When I look at Blink NutriTiers, right, we're just in the phase of stocking at retailers, and there is a lot of excitement among the retail community, the ECP community as we get the data out. And this is, you know, great learning. We're using our medical affairs team and also our pharma dry-eye sales force to make sure that eye care professionals are aware of the clinically proven formula that we have in Blink Nu
Brent Saunders: We're just in the phase of stocking at retailers. A lot of excitement among the retail community, the ECP community, as we get the data out. And here's, you know, a great learning. We're using our medical affairs team and also our, our, our, our pharma dry, I sales force to, to, to make sure that ECPs are aware of the clinically proven formula that we have in, and, but new treat ears. Now we got to turn it over to the consumer teams to drive consumption. And so that, that technique of working across businesses is, is something that hasn't happened in, at Fashion Lawman a long time.
Osama A. Eldessouky: A big lover. When I look at Blink Nutri Tears, right, we're just in the phase of stocking at retailers. A lot of excitement among the retail community.
Osama A. Eldessouky: of the clinically proven formula that we have in plug nutritiers. Now we've got to turn it over to the consumer teams to drive consumption.
George Gadkowski: Now we've got to turn it over to the consumer teams to drive consumption. And so that technique of working across businesses is something that hasn't happened at Bausch and Lomb for a long time, and people here are really embracing it. And so there's a lot of cross learning between consumer and pharma, pharma and surgical, and pharma and vision care. So there's just a lot of great work being done. I'm very proud of the team. We are constantly learning and improving as we go. But Sam, do you want to take the first part? Good morning, Patrick.
Speaker Change: And so that technique of working across businesses is...
Brent Saunders: And, and people here are really embracing it. And, and so there's a lot of cross learnings between consumer and pharma, pharma, insurgable, pharma and, and, and, and, and vision care. So there's just, just, just a lot of great work being done. I'm, I'm very proud of the team. So constantly learning and improving as we go.
Sam Eldessouky: But Sam, you want to take the first part? Sure.
Osama A. Eldessouky: Constantly learning and improving as we go. But Sam, you want to take the first part? Sure, and good morning, Patrick. When you think about Q2 for us, constant currency was about 20%. Think about it organically for Q2, that was about 10%.
Sam Eldessouky: Good morning, Patrick. When you think about Q2 for us, constant currency was about 20%. Think about it organically for Q2. That was about 10%. And then you think about our, sort of guidance that we updated this morning. And sort of what does that imply for the second half? Well, if you take midpoint of the guidance to the high end of the range of the guys that suggest anywhere between 9% to 10% for the second half in terms of implied. So, again, we're seeing the momentum that we've seen in Q2 that continues with us on balance.
Sam: When you think about Q2 for us, constant currency was about 20 percent. But think about it organically, and that was about 10 percent. And then you think about our sort of guidance that we updated this morning and sort of what that imply for the second half. Well, if you take the midpoint of the guidance to the high end of the range of the guidance, that suggests anywhere between 9 to 10 percent for the second half in terms of implied.
Speaker Change: and then you think about our sort of guidance that we updated this morning and sort of what does that imply for the second half. If you take midpoint of the guidance
Sam: So, again, we're seeing the momentum that we saw in Q2 that continues with us on balance. As you know, the guidance has multiple outcomes, and we're balanced with our view in terms of the guidance between the first half and the second half.
Speaker Change: So again, we're seeing the momentum that we've seen in Q2 that continues with us on balance. As you know, the guidance have multiple outcomes and we're balanced with our view in terms of the guidance between first half and second half.
Sam Eldessouky: As you know, the guidance have multiple outcomes. And we're balanced with our view in terms of the guys between first half and second half. Love it.
Sam Eldessouky: Thanks for questions, guys. Thank you.
Speaker Change: Love it. Thanks for the questions, guys.
Operator: Thanks for the questions, guys. Thank you. The next question is coming from Craig Bijou from Bank of America. Craig, your line is live. Good morning, guys.
Craig Bijou: The next question is coming from Craig Bijou from Bank of America.
Craig Bijou: Craig, your line is live.
Brent Saunders: Good morning, guys. Thanks for taking the question. I guess I want to start with maybe just some of the strong performance in the contact lens business and the equipment business, specifically on the surgical side and maybe some of the drivers there and specifically on contact lenses. Can you just talk about the market growth, what you're seeing with some of the new launches and how are you taking a new fit share there? Yeah, so I'm very impressed with the team's execution on the contact lens. Really, really strong growth. On a constant currency basis, 18% in the US and 12% internationally.
Operator: Thanks for taking the question. I guess I want to start with maybe just some of the strong performance in the contact lens business and the equipment business, specifically on the surgical side, and maybe some of the drivers there. And specifically on contact lenses, can you just talk about the market growth?
Sam: You know, what you're seeing with some of the new launches, Daily Sci-Highs, and, you know, how are you taking, you know, new fit share there? Yeah, so, I'm very impressed with the team's execution on the contact lens. Really, really strong growth, you know, on a concurrency basis, 18% in the US and 12% internationally. So we see it across all regions.
Speaker Change: What you're seeing with some of the new launches, Daily Sci-Highs, and you know, how are you taking, you know, new fit share there?
Speaker Change: Yeah, so, you know, I'm very impressed with the team's execution on the contact lens.
Speaker Change: really, really strong growth, you know, on a concurrency basis, 18% in the U.S. and 12% internationally, so we see it across all regions.
Sam: When you look at lens growth, you see Sci-Hi up 72%, and the FRP portfolio up 13%. And so, you know, great execution in a balanced way across the portfolio. And look, the way I see it is, as we focus on execution, we start taking share. You're talking about a market that's still growing in the mid single digits; we're growing faster than the market. And so, you know, we are taking share, but it's hard to pinpoint exactly where that share is coming from.
Brent Saunders: So we see it across all regions. When you look at lens growth, you see sci-high up 72%, the FRP portfolio up 13%, and so great execution in a balanced way across the portfolio. And look, so the way I see it is, as we focus on execution, we start taking share. You're talking about a market that's still growing in the mid-single digits. We're growing faster than the market, and so we are taking share. It's hard to pinpoint exactly where that share is coming from, but you see it happening. I think the good news is when you have a product like Infuse, and you continue to launch the modalities around the world.
Speaker Change: When you look at lens growth, you see SiHi up 72%.
Speaker Change: The FRP portfolio up 13%.
Speaker Change: And so, you know, great execution in a balanced way across the portfolio.
Speaker Change: And look, so the way I see it is, as we focus on execution, we start taking share, you're talking about a market that's still growing in the mid-single digits.
Speaker Change: We're growing faster than the market, and so, you know, we are taking share. It's hard to pinpoint exactly where that share is coming from.
Sam: But, you know, you see it happening. I think the good news is when you have a product like Infuse, and you continue to launch the modalities around the world, right? We're just launching, for example, in the US, TORQ. And the reception is truly outstanding, right? An easy fit, it fits on the eye really quickly, it saves time for the ECP and the chair, and then great vision outcomes.
Speaker Change: But, you know, you see it happening. I think the good news is when you have a product like Infuse, right, and you continue to launch the modalities around the world, right, we're just launching, for example, in the U.S., the Torque.
Brent Saunders: We're just launching, for example, on the US, the TORC, and the reception is truly outstanding, right? An easy fit. It fits on the eye really quick. It saves time for the ECP and the chair, and then great vision outcomes. So exactly what you want to hear, and that's exciting. And even more exciting for me in contact lenses is R&D; continues to, it's an area where we have great strength and internal R&D. And we're working on multiple projects on multiple new platforms for the future. So I see a very bright future for us in contact lenses, and it's a combination of great products, great execution, and continued innovation, and that's the formula for success for us.
Speaker Change: And the reception is truly outstanding, right? An easy fit, it fits on the eye really quick, it saves time for the ECP and the chair. And then great vision outcomes, so exactly what you want to hear. And that's exciting.
Sam: So, exactly what you want to hear. And that's exciting. And, you know, even more exciting for me in contact lenses is R&D continues to, it's an area where we have great strength in internal R&D. And we're working on multiple projects or on multiple new platforms for the future. So I see a very bright future for us in contact lenses.
Speaker Change: You know, even more exciting for me in contact lenses is R&D, continues to, it's an area where we have great strength in internal R&D, and we're working on multiple projects on multiple new platforms for the future. So I see a very bright future for us in contact lenses.
Sam: And, you know, it's a combination of great products, great execution, and continued innovation. And that's the formula for success for us.
Speaker Change: It's a combination of great products, great execution, and continued innovation, and that's the formula for success for us.
Sam Eldessouky: Great, and if I can also ask on you updated, or you raised your EBITDA guidance slightly along with the revenue guidance, but I think the implied margin may be a little bit lower than what you saw or what you guided to previously.
Sam: And if I can also ask you, you updated or raised your EBITDA guidance slightly along with the revenue guidance, but I think the implied margin may be a little bit lower than, Skaw, or what you guided to previously. So can you just help us understand the EBITDA margin opportunity that you have for the rest of the year, potential upside, and maybe even any comments on 25 would be great. Thanks. Yeah, so let me start and then I'll turn it over to Sam.
Speaker Change: Great, and if I can also ask on...
Speaker Change: You updated or you raised your EBITDA guidance slightly, along with the revenue guidance, but I think the implied margin may be a little bit lower than what you...
Brent Saunders: So can you just help us understand the EBITDA margin opportunity that you have for the rest of the year, potential upside, and maybe even any comments on 25 would be great. Thank you. Yeah, so let me start them, and I'll turn over to Sam. But I think one thing I would just remind you of. We have consistently said that 24 and 25 are years of launches, and we're going to invest behind the launches, particularly with so many of these products having long, durable lives ahead of them to make sure that they get off on the right trajectory.
Speaker Change: or what you guided to previously. So can you just help us understand, you know, the EBITDA margin opportunity that you have for the rest of the year, potential upside, and then maybe even any comments on 25 would be great. Thank you.
Brenton L. Saunders: But, you know, I think one thing I would just remind you of. We have consistently said that 24 and 25 are years of launches. And we're going to invest behind the launches, particularly with so many of these products having long, durable lives ahead of them, to make sure that they get off on the right trajectory. So, you know, when you look at the big launches, like Maibo, you see great execution. And, you know, when you see fire, you want to pull gasoline on it to continue to bend the curve upward.
Speaker Change: But you know, I think one thing I would just remind you of, we have consistently said that 24 and 25 are years of launches.
Speaker Change: And we're going to invest behind the launches, particularly with so many of these products having long, durable lives ahead of them.
Sam Eldessouky: So when you look at the big launches like my bow, you see great execution, and when you see fire, you want to pull gasoline on it to continue to bend the curve upward. We're seeing great uptake of Infuse around the world. We continue to invest behind new modality launches and continued execution. We're investing in a huge new DTC platform that we're going to launch in September in the U.S. called Opal, really in a best in class consumer ECP portal. It will really be, I think, a great addition to our team there. Williams are our new tool for the pharma team that potentially could be rolled out to other businesses as we execute around it.
Speaker Change: to make sure that they get off on the right trajectory. So, you know, when you look at the big launches like Maibo, you see great execution and, you know...
Brenton L. Saunders: We're seeing great uptake of Infuse around the world, and we continue to invest in new modality launches and continued execution. We're investing in a huge new DTC platform that we're going to launch in September in the US called Opal, really, you know, a best-in-class consumer ECP portal. It will really be, I think, a great addition to our team there. Glymphs are our new tool for the pharma team that could potentially be rolled out to other businesses as we execute around it.
Speaker Change: When you see fire, you want to put gasoline on it to continue to bend the curve upward.
Speaker Change: We're seeing great...
Speaker Change: Uptake of Infuse around the world, we continue to invest behind new modality launches and continued execution.
Speaker Change: We're investing in a huge new DTC platform that we're going to launch in September in the U.S. called Opal. Really, you know, best in class.
Speaker Change: Consumer ECP Portal. It will really be, I think, a great addition to our team there. Glymphs are our new tool for the pharma team that potentially could be rolled out to other businesses as we execute around it.
Brenton L. Saunders: And so a lot of investment behind products, even Blink NutriCheers wasn't in the plan, you know, we went from concept to launch in about six months. And we see a huge potential in Blink NutriCheers as well. So a lot of investment in launches, and the payoff comes in the later years. And I think that's the right thing to do for this business. But Sam?
Brent Saunders: And so a lot of investment behind products, even Blink Nutri-Tears wasn't in plan. You know, we went from concept to launch in about six months, and we see a huge potential in Blink Nutri-Tears as well. So a lot of investment at launches, and the payoff comes in the out years. And I think that's the right thing to do for this business.
Speaker Change: And so a lot of investment behind products. Even Blink NutriCheers wasn't in plan. You know, we went from concept to launch in about six months.
Speaker Change: and we see a huge potential in Blink-Nutri-Tears as well.
Sam Eldessouky: But Sam, and Craig is the one that maybe I'll start just repeating a bit of what Brent said, because it's very important to reflect on it, which is from the beginning of 24, we outlined what's our strategy and the theme of 24 for us, which is rebuilding up on sustainable growth, because we're playing the long game here. So we're thinking about how you can take the launches, the products that we have. We have a long runway ahead of them and how you invest in them to be able to drive the top line growth and drive margin as we go forward and that margin to be a sustainable margin.
Sam: Yeah, and Craig is the one that maybe I'll start just repeating a bit of what Brent said, because it's very important to reflect on it, which is, from the beginning of 24, we outlined what our strategy and the theme of 24 for us are, which is really building on sustainable growth because we're playing the long game here. So we're thinking about how you can take the launches, the products that we have, they have a long runway ahead of them, and how you invest in them to be able to drive top-line growth and drive margin as we go forward.
Speaker Change: From the beginning of 24, we outlined what's our strategy and the theme of 24 for us, which is really building up on sustainable growth, because we're playing the long game here. So we're thinking about how you can take the launches, the products that we have, they have a long runway ahead of them, and how you invest in them to be able to drive the top line growth.
Sam: And that margin to be a sustainable margin. So when you now reflect on what we have done with our guidance, when you think about our guidance right now, midpoint, and I'll focus on midpoint, so just roughly about 18.4%, even our margin, that's relatively compared to what we had before, was roughly about 18.5, 18.6. So I call it still within the range of about sort of the same range of how we're still thinking.
Sam Eldessouky: So when you now reflect on what we have done with our guidance, when you think about our guidance trying to now midpoint and I'll focus on midpoint, suggest roughly about 18.4% even with our margin. That's relatively compared to what we had before, roughly about 18.5, 18.6. So I call it still within the range of about sort of the same range of how we're still thinking, so we're in the grand scheme of things on a larger view. We're still holding what our strategy and what our view is from top line and even on margin for 24.
Speaker Change: So when you now reflect on what we have done with our guidance, when you think about our guidance right now, midpoint, and I'll focus on midpoint, so just roughly about 18.4% EWDM.
Speaker Change: That's relatively compared to what we had before. It was roughly about 18.5, 18.6. So it's, I call it still within the range of about sort of the same range of how we're still thinking.
Sam: So, in the grand scheme of things, on a larger view, we're still holding what our strategy and what our view is from the top line and even on margin for 24. Thank you. The next question will come from Joanne Wuensch from Citibank. Joanne, your line is live.
Speaker Change: In the grand scheme of things, on a larger view, we're still holding what our strategy and what our view is from top line and even on margin for 24.
Joanne Wuensch: Thank you.
Anthony: The next question will come from Joanne Wuensch from City Bank. Joanne, your line is live. Excuse me. Hey, good morning.
Speaker Change: Thank you. The next question will come from Joanne Wuensch from Citibank. Joanne, your line is live.
Anthony: This is Anthony on for Joanne. Can you guys hear me? Yes. Awesome.
Speaker Change: Good morning, this is Anthony on for July . Can you guys hear me?
Operator: Yes. I want to start with just the ZYDRA launch and guidance. Can you maybe talk about how the ZYDRA launch is rolling out? And then I saw you lowered the ZYDRA guidance.
Anthony: I want to start with just the Zydera launching guidance. Can you just maybe talk about how the Zydera launch is rolling out? And then I saw you lower Zyder guidance.
Speaker Change: Yes.
Anthony: Awesome. I want to start with just the Zydra launch and guidance. Can you just maybe talk about...
Sam: Can you maybe just go into a little bit more detail about what your expectations are for the second half? And is any of the lower guidance potentially cannibalized from the launch of MIBO? Yeah, so great question. Look, Zydra is a very important part of our leadership in dry eye. I think having both, strategically having both Maibo and Zydra, is incredibly important and drives a lot of the early success of Maibo, having an established player like Zydra across the board.
Brent Saunders: Can you maybe just go into a little bit more detail into what your expectations are in the second half? And is any of the lower guidance potentially cannibalization from the launch of my bow? Yes, so great question. Zydera is a very important part of our leadership in dry eye. I think having both strategically, having both my bow and Zydera is incredibly important and drives a lot of the early success of my bow of having the established player like Zydera across the board. That being said, we did have kind of a stop-start situation in the first quarter with the change health care.
Anthony: Rolling out, and then I saw you lowered CIDR guidance. Can you maybe just go into a little bit more detail into what your expectations are in the second half? And is any of the lower guidance potentially cannibalization from the launch of MIBO?
Speaker Change: Yes, so, great question. Well, Xydra is a very important...
Speaker Change: Part of our leadership in Dry Eye.
Speaker Change: I think having both, strategically having both Maibo and Zydra is...
Speaker Change: is incredibly important and drives a lot of the early success of Maibo, having the established player like Zydra across the board. That being said, you know, we did have a kind of a stop-start situation in the first quarter with the change healthcare.
Sam: That being said, you know, we did have a kind of a stop-start situation in the first quarter with the change to healthcare. And, you know, that's an environmental, you know, outside of our control situation. I think the team did a great job getting new co-pays and vendors on board very quickly within about two weeks or so and getting back to focus. And, you know, we're recovering from that reset that happened in the first quarter.
Brent Saunders: And that's an environmental, you know, outside of our control situation. I think the team did a great job in getting new co-pay and vendors on board very quickly, within about two weeks or so, and getting back to focus. And, you know, we're recovering from that reset that happened in the first quarter. But if you look at what happened in the second quarter, I saw great stabilization of scripts, TRX. You see growth starting if you followed IQV data. July was a good year over year growth month. And we expect that to continue in the third quarter.
Speaker Change: and, you know...
Speaker Change: That's an environmental, you know, outside of our control situation. I think the team did a great job in getting new co-pay and
Speaker Change: Vendors on board very quickly within about two weeks or so and getting back to focus and you know we're recovering from that reset that happened in the first quarter but if you look at what happened in the second quarter I saw great stabilization of scripts.
Sam: But if you look at what happened in the second quarter, I saw great stabilization of Scripps and TRX. You see growth starting if you follow the IQVIA data. July was a good year-over-year growth month, and we expect that to continue in the third quarter.
Speaker Change: TRX, you see growth starting if you follow IQVIA data, July was a good year-over-year growth month.
Sam: So, you know, Zydra, our goal is TRX growth. I think when we did the deal, we talked about mid-single-digit growth. I think that's right on a TRX basis.
Brent Saunders: So, you know, Zydera, our goal is TRX growth. I think we, when we did the deal, talked about mid single digit growth. I think that's right on a TRX basis. And as you look forward, you know, we have to continue to think about some unknowns like the Inflation Reduction Act in 25 and continued, you know, pressure for managed care. But that being said, I see a long runway for TRX growth. In terms of cannibalization, I don't think that's an issue. What you see happening since my will launched is the market is expanding about 10% expansion of the market.
Speaker Change: And we expect that to continue in the third quarter, so...
Speaker Change: You know, Zydra, our goal is TRX growth, I think when we did the deal we talked about
Sam: And as we look forward, you know, we have to continue to think about some unknowns, like the Inflation Reduction Act in 2025 and continued pressure on managed care. But that being said, I see a long runway for TRX growth. In terms of cannibalization, I don't think that's an issue.
Speaker Change: mid-single-digit growth. I think that's right on a TRX basis.
Speaker Change: And as you look forward, you know, we have to continue to think about...
Speaker Change: Some unknowns, like the Inflation Reduction Act in 2025.
Speaker Change: and continued, you know, pressure for managed care, but that being said I see a long runway for TRX growth. In terms of cannibalization, I don't think that's an issue. What you see happening since MyVote launched is the market is expanding.
Sam: What you see happening since MIBO launched is the market is expanding, about 10% of the market. And that's exactly what we wanted to see. And so we think that the market has a lot of opportunity to continue to grow. You know, we already gave you the numbers. It's a massive market with very undertreated penetration. And as a leader across prescription options and OTC options, you know, we are uniquely positioned to really kind of push and drive market expansion. And, you know, I talked about DTC. That's one great tool to do it.
Brent Saunders: And that's exactly what we wanted to see. And so we think that the market has a lot of opportunity to continue to grow. You know, we already gave you the numbers. It's a massive market of very under treated penetration. And as a leader across prescription options and OTC options, you know, we are uniquely positioned to really kind of push and drive market expansion. And, you know, I talked DTC. That's one great tool to do it. But you're going to see new and improved DTC from Zydera starting in about a month. And then you're going to see DTC for my start in the early fourth quarter.
Speaker Change: about 10% expansion of the market, and that's exactly what we wanted to see. And so we think that market has a lot of opportunity to continue to grow. You know, we already gave you the numbers. It's a massive market of very undertreated...
Speaker Change: penetration and as the leader across prescription options and OTC options you know we are uniquely positioned to really kind of push and drive market expansion and
Sam: But you're going to see new and improved DTC from Zydra starting in about a month. And then you're going to see DTC for MIBO start in the early fourth quarter. And then, of course, we're considering continuing to push OTC. We have Blink on Air and then maybe potentially even Blink Nutri-Tier.
Speaker Change: You know, I talked DTC, that's one great tool to do it, but you're going to see new and improved DTC from Zyder starting in about a month.
Speaker Change: And then you're going to see DTC for Maiba start in the early fourth quarter. And then of course, you know, we're considering continuing pushing OTC. We have Blink on air, and then maybe potentially even Blink Nutri-Tier. So I think we have a lot of opportunity to hit a lot of different...
Brent Saunders: And then, of course, you know, we're considering continuing to push OTC. We have a link on air. And then maybe potentially even blink nutrient here. So I think we have a lot of opportunity to hit a lot of different consumers and patients where they consume and pay attention to media across the spectrum. And so strategically, I don't think we could be positioned any better to really drive market growth here.
Sam: So I think we have a lot of opportunity to reach a lot of different consumers and patients where they consume and pay attention to media across the spectrum. And so, strategically, I don't think we could be positioned any better to really drive market growth here. Great, very helpful. And second, can you just talk about your expectations for margin cadence in the back half of the year, gross and operating? Yeah, I think we're going to be, as you think about it again, look at what we did in the first half.
Speaker Change: consumers and patients where they where they consume and pay attention to media across the spectrum and so I strategically I don't think we could be positioned any better to really drive market growth here.
Brent Saunders: Great, very helpful.
Sam Eldessouky: And a second, can you just talk about your expectations from margin data and some of the back half of the year, gross and operating? Yeah, I think what we're going to be, as you think about, again, look at what we've performed the first half. First half roughly our margins are about just 17%. As you think about the second half with the guidance and the midpoint, that suggests we have an acceleration of margin.
Speaker Change: Great, very helpful. And second, can you just talk about your expectations for margin cadence in the back half of the year, gross and operating?
Sam: First half, roughly, our margins are by just shy of 17%. As you think about the second half, with the guidance and the midpoint, that suggests we have an excellent margin. Just a fact that I would talk about is probably seasonality, and just as a good reminder to everyone about seasonality, because we talked through that before on previous calls. We start low in the beginning of the year, Q1 is our lowest, Q4 is our highest, and as you think about it for this year specifically, with the season, how we're actually lining up our launches and the investments behind launches.
Speaker Change: Yeah, I...
Speaker Change: I think what we're going to be, as you think about, again, look at what we performed in the first half. First half, roughly, our margins are by just shy of 17%. As you think about the second half, with the guidance and the midpoint, that suggests we have an acceleration margin.
Sam Eldessouky: Just the fact that I would talk about is probably seasonality, and just it's a good reminder of everyone for seasonality because we talked through that before in previous calls. We start low in the beginning of the year. Q1 is our lowest; Q4 is our highest.
Speaker Change: Just a fact that I would talk about is probably seasonality and just a good reminder of everyone for seasonality because we talked through that before in previous calls.
Speaker Change: We start low in the beginning of the year. Q1 is our lowest. Q4 is our highest. And as you think about it for this year specifically, would this...
Sam Eldessouky: And as you think about it for this year specifically, would this how we're actually lining up our launches and the investments behind launches, we're probably going to see a much more emphasized Q4, as you're thinking about Q3 and Q4 for the second half for us. But you always have to, how do you start with the 2023 as the starting point of the guidance? Got it. Thank you.
Sam: We're probably going to see a much more emphasized Q4 as we think about Q3 and Q4 for the second half for us. But you always have to, I'll have you start with 2023 as the starting point of the decadence.
Speaker Change: How we're actually lining up our launches and the investments behind launches. We're probably going to see a much more emphasized Q4 as we think about Q3 and Q4 for the second half for us.
Speaker Change: But you always have to, I'll have you start with 2023 as the starting point of the decadence.
Operator: Got it. Thank you. Thank you. The next question is coming from Robbie Marcus from J.P. Morgan. Robbie, your line is live.
Sam: And Robbie, if I may add to what just Brent said also, what you think about our margin. And again, it's back to how we set up 24. We set up 24 with a focus on ensuring that we have sustainable top-line growth and steady margin improvement as we go forward. And if you reflect back on 23 to 24, we had a steady improvement in terms of margin year over year. I think that's going to be the same philosophy as we start thinking through this in terms of making sure, especially given the fact that many of the assets that we're investing in have a long runway ahead of them.
Robbie Marcus: The next question is coming from Robbie Marcus from JP Morgan. Robbie, your line is live. Oh great. Nice quarter. Thanks for taking the questions. I wanted to circle back to your comments you just made about margin and the heavy investment ahead. Should our expectation after that be that any of, you know, much of the top line upside, you'll be delivering in 24 and 25 is going to be reinvested into this heavy investment period, or is there a commitment to, you know, be able to absorb the investment and let the top line upside drop through the bottom line?
Speaker Change: Thank you. The next question is coming from Robbie Marcus from J.P. Morgan. Robbie, your line is live.
Robbie Marcus: Oh, great. Nice quarter. Thanks for taking the questions. Brent, I wanted to circle back to your
Robbie Marcus: comments you just made about margin and the heavy investment ahead. Should our expectation after that be that any of, you know, much of the top line upside you'll be delivering in 24 and 25 is going to be reinvested into this
Speaker Change: Heavy investment period or is there a commitment to You know be able to absorb the investment and let the top line upside drop through the bottom line
Brent Saunders: And I have a follow up. Thanks. Yeah. No, great question. And no, it's not; the plan is not to put all the upside into reinvestment. It's to have a steady cadence of improved margins as we continue to appropriately invest behind each of these launches. And so, you know, every investment that we make, Sam and I do a very careful ROI analysis. We look at each one in great detail and spend considerable amount of time thinking through the return. And so, you know, my view is, you know, we run this company for our stakeholders, particularly our shareholders.
Speaker Change: And I have a follow-up. Thanks.
Speaker Change: Yeah, no, great question. And no, it's not, the plan is not to put all the upside into reinvestment. It's to have a steady cadence of improved margins.
Speaker Change: as we continue to appropriately invest.
Speaker Change: behind each of these launches.
Speaker Change: Sam and I do a very careful ROI analysis. We look at each one.
Speaker Change: in great detail and spend considerable amount of time.
Osama A. Eldessouky: Thinking through the return and so...
Speaker Change: My view is we run this company for our stakeholders, particularly our shareholders.
Sam Eldessouky: And so we want to make sure every investment is done appropriately with the right point of view and the right metrics and KAPIs around each one. And so, absolutely, we're committed to margin improvement over time. Very important part of our strategy is both revenue growth and margin expansion on a sustainable basis for the long term. And so, absolutely want to make sure that we do that the right way.
Speaker Change: And so we want to make sure every investment is done appropriately, with the right point of view, and the right metrics and KPIs around each one.
Speaker Change: Absolutely, we're committed to margin improvement over time. A very important part of our strategy is both revenue growth and margin expansion on a sustainable basis for the long term and so absolutely want to make sure that we we do that the right way.
Sam Eldessouky: And Robbie, if I may add to what just Ben says also is, you, you think about our margin, and again, it's back to how we set up 24. We set up 24 with the focus on ensuring that we have a sustainable top line growth and steady margin improvement as we go forward. And if you're reflect back in 23 to 24, we have a steady improvement in terms of margin year over year. I think that's going to be the same philosophy as we start thinking through this in terms of making sure, giving, especially giving the fact that many of the assets that we're investing in have a long runway ahead of them.
Speaker Change: And Robbie, if I may add...
Robbie Marcus: to do what just Brent said also is, you are...
Speaker Change: If you think about our margin, and again it's back to how we set up 24, we set up 24 with a focus on ensuring that we have a sustainable top line growth and a steady margin improvement as we go forward. And if you reflect back in 23 to 24, we have a steady improvement in terms of margin year over year.
Speaker Change: I think that's going to be the same philosophy as we start thinking through this in terms of...
Speaker Change: making sure giving especially giving the fact that many of the assets that we're investing in have a long runway ahead of them.
Sam: So maximizing the value of those assets is a key driver for us, so making sure that we continue to drive the value of those assets and maintain that steady growth and margin. And maybe as a follow-up to that, free cash flow was minus $48 million in the quarter. How do we think about cash flow for the full year here and any color on what we should expect in terms of free cash flow conversion into next year? Thanks.
Sam Eldessouky: So, maximizing the value of the assets is a key driver for us. So, make sure that we continue to drive the value of the assets and intend that steady growth and margin.
Speaker Change: So, maximizing the value of those assets is a key driver for us, so making sure that we continue to drive the value of those assets and maintain that steady growth and margin.
Robbie Marcus: Great. And maybe as a follow-up to that, free cash flow was minus $48 million in the quarter. How do we think about cash flow for the full year here, and any color on what we should expect in terms of free cash flow conversion into next year?
Speaker Change: Great. And maybe as a follow-up to that, free cash flow was minus $48 million in the quarter.
Speaker Change: How do we think about cash flow for the full year here and any color on what we should expect in terms of free cash flow conversion into next year? Thanks.
Sam Eldessouky: Thanks. Yeah. So, as I mentioned before, when you think about our results for the core, especially the first half, where and growth more than usually when you're in growth mode, you're tend to be more of a use of working after other source of a working capital. Those are benefits are a casual. So, just to give you as a reference, since December to June, our working capital is a consumption of roughly about 250 million. That's constantly all accounts of working capital. And that's really feeding the growth. So, that's one element that we have to keep in mind.
Sam: Yeah, so as I mentioned before, when you think about our results for the quarter and especially the first half, we're in growth mode. And usually, when you're in growth mode, you tend to be more of a user of working capital rather than a source of working capital, such as benefits or cash flow. So just to give you as a reference, since December to June, our working capital consumption has been roughly about $350 million. That's all the accounts of working capital.
Speaker Change: Yeah, so as I mentioned before when you think about our results for the quarter especially the first half, we're in growth mode and usually when you're in growth mode you tend to be more of a use of working capital rather a source of a working capital. Those are the benefits of a cash flow.
Speaker Change: So just to give you as a reference, since December to June , our working capital is a consumption of roughly about $350 million. That's all accounts of working capital.
Sam: And that's really feeding the growth. So that's one element that we have to keep in mind. The other part is inventory. Inventory is also an area where we use it as a lever to be able to manage through supply challenges that we talked about through 23. And the inventory right now, we're seeing roughly about a billion dollars in inventory. That's a little bit higher than what we would like it to be. But I think that again, it's the lever that we're using to be able to make sure that we have a steady supply of our products. On that, you're right.
Speaker Change: And that's really feeding the growth, so that's one element that we have to keep in mind.
Sam Eldessouky: The other part is the inventory. Inventory is also an area where we use as a lever to be able to manage through supply challenges that we talked about through 23, and the inventory right now. We're seeing roughly about a billion-dollar inventory. That's a little bit higher than what we would like it to be. But I think that's again, it's the lover that we're using to be able to make sure that we have a steady supply of our products. So, when you think about overall from that year, you're right; when you think about cash flow, we use today.
Speaker Change: The other part is the inventory. Inventory is also an area where we use as a lever to be able to manage through supply challenges that we talked about through 23. And the inventory right now, we're seeing roughly about a billion dollars of inventory. That's a little bit higher than what we would like it to be. But I think that, again, is the lever that we're using to be able to make sure that we have a steady supply of our products.
Sam: When you think about cash flow, year-to-date, it was roughly $72 million. We're running, from a free cash flow perspective, we're running at this point on a negative. When I think about it for the full year, we're probably going to be break-even to a slight negative.
Speaker Change: So when you think about overall, um...
Speaker Change: From that, you're right, when you think about cash flow, year-to-date, it was roughly about $72 million. We're running, from a free cash flow perspective, we're running, at this point, on a negative. When I think about it for the full year, we're probably going to be a break-even to a slight negative.
Sam Eldessouky: It was roughly about 72 million. We're running from a free cash flow perspective. We're running at this point on a negative. When I think about for the full year, we're probably going to be a break even to a slight negative.
Sam: One of the key things that we're also doing is accelerating our thinking around CapEx. You've seen the growth that we're talking about in the daily side high and in our lens business. We're accelerating that growth to continue to think about our capacity and what we will need for 28 and beyond. We're making those investments as we speak here today. I think that's going to have a certain level of impact on the cash flow for this year.
Sam Eldessouky: One of the key things that we also doing is accelerating our think around capex. You've seen the growth that we're talking about in the daily side high. And in our lens business, we're accelerating that growth to continue to think about our capacity on what we will need for 28 and beyond. So, we're going to be able to do that. We're doing this investment as we speak here today. So, I think that's going to have a level of impact on the cash flow for this year.
Speaker Change: One of the key things that we're also doing is accelerating our thinking around CAPEX.
Speaker Change: You've seen the growth that we're talking about in the daily Psi High and in our Lens business. And we're accelerating that growth to continue to think about...
Speaker Change: Our capacity and what we will need for 28th and beyond. So we're doing those investments as we speak here today. So I think that's going to have a level of impact on the cash flow for this year. I could just add, Robbie, I think, you know,
Brenton L. Saunders: I could just add, Robbie, on strategy. We talked about earlier in the call whether this is a turnaround or rejuvenation, but one of the most important tenets we put in place was to make sure we could service our customers. Eye care professionals around the world rely on us, and particularly, I'll point out surgical where we had the most work to do. If you're a cataract surgeon and you're expecting to do surgery in the morning, and we can't deliver the product, or we can't make the tools that you need to do that surgery, you could lose that customer forever and break that trust.
Brent Saunders: I can just add, Robbie, I think on strategy, we talked about earlier in the call whether this is a turnaround or rejuvenation. But one of the most important tenants we put in place was to make sure we could service our customers. I care professionals around the world rely on us. And particularly in a point out surgical where we had the most work to do. If you're a cataract surgeon and you're expecting to do surgery in the morning, and we can't deliver you the product or we can't make the tools that you need to do that surgery, you can lose that customer forever and break that trust.
Robbie Marcus: On strategy, you know, we talked about earlier in the call whether this is a turnaround or rejuvenation, but...
Speaker Change: One of the most important tenets we put in place was to make sure we could service our customers.
Speaker Change: or we can't make the tools that you need to do that surgery, you could lose that customer forever and break that trust. And so we intentionally chose to pick...
Brent Saunders: And so, we intentionally chose to pick in the short-term service in our customer first and build inventory to make sure we can get products in our customers' hands. And as we work through that, that was a use of cash. As we work through that, we expect that to abate over time. But it was absolutely the right thing to do because you can see the growth in the surgical business finally pulling through. And I'm really proud of what the team's been able to do now that we're not dealing with daily out-of-stocks or unavailable products. And so unlocking that was important; it was detrimental to cash, but it's short-term, and we should come out of that in a year or two.
Brenton L. Saunders: We intentionally chose to pick in the short term, servicing our customers first and building inventory to make sure we can get products in our customers' hands. As we work through that, that was a use of cash. As we work through that, we expect that to abate over time. It was absolutely the right thing to do, because you can see the growth in the surgical business finally coming through. I'm really proud of what the team has been able to do now that we're not dealing with daily out-of-stocks or unavailable products. Unlocking that was important.
Speaker Change: In the short term, servicing our customer first and building inventory to make sure we can get products in our customers' hands.
Speaker Change: And as we work through that, that was a use of cash, right, as we work through that, we expect that to abate over time. But it was absolutely the right thing to do because you can see the growth.
Speaker Change: in the surgical business finally pulling through and I'm really proud of what the team has been able to do now that we're not dealing with daily out-of-stocks or unavailable products.
Operator: It was detrimental to cash, but it's short term, and we should come out of that in a year or two. Very helpful. Thanks a lot.
Robbie Marcus: Very helpful. Thanks a lot.
Douglas Miehm: Thank you. The next question is coming from Douglas Miehm, from RBC Capital Markets. Douglas, your line is live. Thanks very much. I just want to circle back to Maibo. A couple of things there. I believe it was mentioned that you're keeping an eye on IQVN.
Speaker Change: Very helpful. Thanks a lot.
Operator: Thank you. The next question is coming from Douglas Miehm from RBC Capital Markets. Douglas, your line is live. Thank you very much. I just want to circle back to Maibo.
Speaker Change: Thank you. The next question is coming from Douglas Miehm from RBC Capital Markets. Douglas, your line is live.
Operator: A couple of things there. I believe it was mentioned that, given some of the strength that we've seen in early July, when you talked about potential readjustments, and the second thing with respect to Maiba, was just, is there any update on... a philosophical question for Brent. Especially given the quality of the execution this year, especially with Maibo and a few other things.
Douglas Miehm: Thanks very much. I just want to circle back to Maibo. A couple of things there. I believe it was mentioned that...
Douglas Miehm: I just want to know, given some of the strengths that we've seen in early July, where there's been a significant pick-up, when you talked about potential readjustment, are you suggesting that those numbers may be a little ahead of themselves, and maybe you could expand on that? And the second thing with respect to Maibo was just, is there any update on potential sampling that you're contemplating for the drug as part of that DPC contribution or introduction in Q4? Yes, so thank you.
Douglas Miehm: You're keeping an eye on IQV, and I just want to know, given...
Speaker Change: You know, some of the strengths that we've seen in early July , where there's been a significant pickup. When you talked about potential readjustment, are you suggesting that those numbers may be a little ahead of themselves, and maybe you could expand on that? And the second thing...
Speaker Change: With respect to MIBO, is there any update on potential sampling that you're contemplating for the drug as part of that DTC contribution or introduction in Q4?
Brent Saunders: Let me answer the second part of the question. The sample was finally approved by the FDA. A little delay there. They asked for a little extension. They didn't ask. They told us they needed an extension, but we did finally get it approved, and we expect that to roll out this fall. So good news on the sample. With respect to IQVN, I think there are some adjustments to be made on Maibo. I think SIDRA; they're pretty good. But on Maibo, they're still working out how to best track it, and I expect there'll be some adjustments there.
Speaker Change: Yes, so thank you. Let me answer the second part of the question.
Speaker Change: The sample was finally approved by the FDA. A little delay there. They asked for a little extension.
Douglas Miehm: And, well, they didn't ask, they told us they needed an extension, but we did finally get it approved.
Douglas Miehm: and we expect that to roll out this fall.
Douglas Miehm: Good news, good news on the sample.
Speaker Change: With respect to IQVIA, I think there are some adjustments to be made on Maiba, I think Zydra, they're pretty good.
Douglas Miehm: But on Maibo, they're still working out how to best track it, and I expect...
Sam Eldessouky: But Sam, you want to cover that in a little more detail? Good morning, Diana.
Osama A. Eldessouky: There'll be some adjustments there, but Sam, you want to cover that in a little more detail? Good morning, Doug, and let me add a little bit more color here. In general, you always get a little bit of variability, but when you... Overall, what we've been seeing in my room, and you're also tracking this, you're seeing a positive trend.
Sam Eldessouky: Let me add a little bit more color here. In general, you always get a little bit of variability, but when you, overall, what we've been seeing in Maibo, and you've also tracking this, you're seeing a positive trend for the Maibo sort of TRX instance launch. And if you go back to the beginning of this year, even going back to Q4 last year, we're averaging about 6,000 TRX per week. You've seen that in Q1 go up to about 10.8, and Q2 is about 15,000.
Speaker Change: for the MIBO TRX assistance launch. And if you go back to the beginning of this year, even going back to Q4 of last year, we're averaging about 6,000 TRX per week. You've seen that in Q1 go up to about 10.8.
Sam Eldessouky: When you think about what we have seen recently, my comments and my prepared remarks were focused mainly on the last couple of weeks. What we've seen is a sharp increase on the TRXs for IQVN. And we know that there's a little bit of sort of variability there. I think that the team is worth still working through with IQVN to be able to just reconcile and work out the differences. But, as we've seen that trending, we always tend to trend without a follow and steady positive growth. What we've seen in the last couple of weeks, which you noticed as well, is a very sharp increase in IQVN that we're still trying to work through.
Speaker Change: And Q2 is about $15,000. When you think about what we have seen recently, and my comments and my prepared remarks was focused mainly on the last couple of weeks, what we've seen is a sharp...
Speaker Change: increase on the TRXs for IQVIA.
Speaker Change: And we know that there's a little bit of variability there. I think that the team is still working through the IQVA to be able to just reconcile and work out the differences. But as we've seen the trending, we always tend to trend sort of without a follow and a steady positive growth.
Speaker Change: What we've seen in the last couple of weeks, which you noticed as well, is a very sharp increase in IQ that we're still trying to work through.
Douglas Miehm: Okay, excellent.
Brent Saunders: Maybe, as a follow-up, this is a more philosophical question for Brent.
Brent Saunders: Okay, excellent. Maybe as a follow-up, this is a more philosophical question for Brent. When you think about the company having an 11% float right now and trading at a fairly material discount,
Brent Saunders: When you think about the company having an 11% float right now and training at a fairly material discount, especially given the quality of the execution this year, especially with MIBO and a few other things, what can you talk to us about the opportunity for there ultimately being 100% float in this company at some point. Yeah, great question. You know, I say this to our team on a regular basis: here is let's focus on what we can control, and what we can control is our own execution. And so, you know, I think I'm not going to reach numbers to you.
Speaker Change: Especially given the quality of the execution this year, especially with Maibo and a few other things.
Brenton L. Saunders: Can you talk to us about... Yeah, great question. I say this to our team on a regular basis here: let's focus on what we can control, and what we can control is our own execution. And so, you know, I think I'm not going to read numbers to you.
Speaker Change #104: What can you talk to us about the opportunity for there ultimately being 100% float in this company at some point?
Brent Saunders: Yeah, great question. You know, I say this to our team on a regular basis here, is let's focus on what we can control, and what we can control is our own execution. And so, you know, I think you, I'm not going to read numbers to you, I think it's...
Brenton L. Saunders: I think this quarter, the first quarter, and the second quarter, I think clearly demonstrate that the team is heeding that advice and focusing on execution. Clearly, when you look at the float and the separation, it is frustrating, but I try not to spend much time thinking about something out of my control.
Brent Saunders: I think it's this quarter, first quarter, second quarter. I think clearly demonstrate that the team is heating that device. Advice and focusing on execution. Clearly, when you look at the float and the separation, it is frustrating; but I try not to spend much time thinking about something out of my control. And, you know, my expectation is that we will see that happen, but I can't pinpoint a timeline for when it will happen. But I'm confident it will. Thank you.
Speaker Change: This first quarter, second quarter, I think clearly demonstrate that the team is heeding that advice and focusing on execution. Clearly, when you look at the float and the separation, it is...
Operator: And, you know, my expectation is that we will see that happen, but I can't pinpoint a timeline for when it will happen, but I'm confident it will. Thank you. The next question is coming from Matt Miksic from Barclays. Matt, your line is live. Great, thanks so much. Can you hear me okay?
Speaker Change #107: frustrating but I try not to spend much time thinking about something I out of my control and you know my expectation is that we will see that happen but but I can't pinpoint a timeline for when it will happen but I'm confident it will
Matt Miksic: The next question is coming from Matt Miksic from Barclays. Matt, your line is live. Great. Thanks so much. Can you hear me? Okay. Let's go ahead. Yes. Yeah, terrific. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. The next question is coming from Matt Miksic from Barclays. Matt, your line is live.
Matthew Stephan Miksic: Great, thanks so much. Can you hear me okay?
Operator: Go ahead. Terrific. Thank you. So, a couple of follow-ups. First, on contact lenses, I guess just maybe to try to get an update on just where you are in terms of dailies, in terms of mix, or market penetration, or how long this can run. And then I have one follow-up.
Matt Miksic: So a couple of follow ups. First on contact lenses. I guess just maybe to try to get an update on just where you are in terms of dailies, in terms of mix or market penetration, or, you know, how long this can run and one follow up. Thanks. Yeah. So, you know, I mentioned before the daily. Well, I think it was in the data. The daily portfolio was up about 16% in the quarter. You know, the key driver of growth for us in dailies is the sihigh impuse or ultra one day outside the US. And I think you know, to be fair, we're still in very early innings.
Speaker Change #100: Go ahead. Yes.
Matthew Stephan Miksic: Terrific, thank you. So, a couple of follow-ups.
Matthew Stephan Miksic: First on contact lenses, I guess just maybe to try to get an update.
Speaker Change: on just where you are in terms of dailies, in terms of mix or market penetration, or how long this can run. And I have one follow-up.
Sam: Yeah, so, you know, I mentioned before the daily, well, I think it was in the data, the daily portfolio was up about 16% in the quarter. The key driver of growth for us in dailies is the Sci-Hi, Infuse, or Ultra One Day outside the U.S. And I think, to be fair, we're still in the very early innings. If it were a baseball game, maybe we're in the second inning of driving growth there, right?
Speaker Change: Yeah, so, you know, I mentioned before the daily, well, I think it was in the data, the daily portfolio was up about 16% in the quarter.
Speaker Change: You know, the key driver of growth for us in dailies is the Sci-Hi infuse or Ultra One Day outside the U.S.
Speaker Change #105: And I think, you know, to be fair, we're still in very early innings. If it were a baseball game, maybe we're in the second inning of driving growth there, right? We're still launching...
Brent Saunders: If we're a baseball game, maybe we're in the second inning of driving growth there. Right. We're still launching the modalities around the world. The US is the lead market for that product. And we're just launching the torque literally in the last few days. And we still have, you know, another modality to go, which is the multifocal torque. But what we see is just tremendous enthusiasm for that lens from both consumers and ECPs. You know, we still have, you know, a huge, long runway to launch these modalities around the world. We continue to invest behind our execution.
Sam: We're still launching the modalities around the world. The U.S. is the lead market for that product, and we've just launched the TORQ in the last few days. And we still have, you know, another modality to go, which is the multifocal TORQ. But what we see is just tremendous enthusiasm for that lens from both consumers and eye care professionals. You know, we still have, you know, a huge, long runway to launch these modalities around the world.
Speaker Change: The modalities around the world The US is the lead market for that product and we're just launching the Torque literally in the last few days
Speaker Change: and we still have you know another modality to go which is the multifocal torque but what we see is is just tremendous you know enthusiasm for that lens from both
Speaker Change: consumers and ECPs.
Speaker Change: You know, we still have, you know, a huge long runway to launch these modalities around the world. We continue to invest behind our execution.
Sam: We continue to invest behind our execution. We did a tremendous investment in China around a new direct-to-consumer portal and an ability to sell in that country. And the team there has done an amazing job. I'm very proud of our China team. We're about to launch our DTC-ECP portal, OPAL, in the U.S. in just a few weeks. And I previewed it.
Brent Saunders: We did a tremendous investment in China around a new direct consumer portal and ability to sell on that country. And it's the team there has done an amazing job. I've been very proud of our China team. We're about to launch our DTC, ECP portal, Opal in the US in just a few weeks. And I previewed it. It is, it is an absolute, you know, slick, beautiful consumer interface. Super simple. And we tested it with ECPs. We designed by by purpose with customers and sales reps working together. And it's going to be a really exciting one.
Speaker Change: We did a tremendous investment in China around a new direct-to-consumer portal.
Speaker Change: And the ability to sell in that country and it's the team there has done a...
Speaker Change: An amazing job, I'm very proud of our China team.
Sam: It is an absolute slick, beautiful consumer interface, super simple, and we've tested it with ECPs. We designed it by purpose with customers and sales reps working together, and it's going to be a really exciting launch. So, in the long way of saying, super early innings, and a long runway to go, and a lot of growth to come, to sort of ramp up the ramp to higher growth and a greater share position in some of those key parts of the surgical market. Yeah, absolutely.
Speaker Change: We're about to launch our DTC-ECP portal, OPAL, in the U.S. in just a few weeks. And I previewed it. It is a absolute, you know, slick...
Speaker Change: Beautiful consumer interface, super simple.
Speaker Change: And we've tested it with ECPs, we designed by...
Speaker Change: by purpose with customers and sales reps.
Brent Saunders: So long way of saying super early innings and a long runway to go and a lot of growth to come. That's super helpful.
Speaker Change: working together.
Speaker Change: And it's going to be a really exciting launch. So long way of saying super early innings and a long runway to go and a lot of growth to come.
Brent Saunders: And then just maybe on surgical, you know, you had a pretty steady product flow there and plan for getting deeper into advanced technology lenses. Maybe if you talk about what other types of strategies you can employ, whether it's on the enabling technology side or in terms of the portfolio to sort of amp up the ramp to higher growth and greater share position as some of those key parts of the surgical market. Thanks so much. Yeah, absolutely. Surgical is a real priority. I think when you look at execution on the 7th, but you know, the real basic strategy is to build relationships around placing equipment and then drive through implantables and consumables.
Speaker Change #101: That's super helpful. And then just maybe on surgical, you know, you had a pretty steady product flow there and, you know, plan for getting deeper into advanced technology lenses. Maybe if you talk about what other types of
Speaker Change #102: strategies you can employ, whether it's on the enabling technology side or, you know, in terms of the portfolio.
Speaker Change #102: to sort of amp up, you know, the ramp to higher growth and, you know, sort of greater share position in some of those key parts of the surgical market. Thanks so much.
Brenton L. Saunders: Surgical is a real priority. I think when you look at execution in the quarter, on a constant currency basis, equipment up 15, implantables up 9, and consumables up 7. But, you know, the real basic strategy is to build relationships around placing equipment and then drive through implantables and consumables. And what has hindered us in the past has been, perhaps, not being able to place equipment because of part shortages and others, and we've solved that.
Speaker Change: Yeah, absolutely. Surgical is a real priority. I think when you look at execution, the quarter
Speaker Change #103: A constant currency basis, equipment up 15 and plantables up 9 and consumables up 7.
Speaker Change: But, you know, the real basic strategy is to build relationships around placing equipment and then drive through implantables and consumables. And what what has hindered us in the past has been perhaps
Brent Saunders: And what has hindered us in the past has been perhaps, you know, not being able to place equipment because of part shortages and others. And we've solved that. And so now we can get equipment out the door. We're continuing to innovate, particularly around Stolaris. And we have a lot of really important work and innovation happening there, and more features and functionality for surgeons, which is really important. And so seeing that equipment grow gives me great hope that the second part of the strategy is going to work well, which is moving from monopocal lenses to the premium IOLs.
Brenton L. Saunders: And so now we can get equipment out the door. We're continuing to innovate, particularly around Solaris, and we have a lot of really important work and innovation happening there and more features and functionality for surgeons, which is really important. And so seeing that equipment grow gives me great hope that the second part of the strategy is going to work well, which is moving from monofocal lenses to premium IOLs. And we saw great growth of premium IOLs in the quarter. Sam, the number was in the premium like 36% growth.
Speaker Change: which is really important and so seeing that equipment grow gives me great hope that the second part of the strategy is going to work well which is moving from
Brent Saunders: And we saw great growth of the premium IOLs. And in the quarter of Sam, the number was in premium like 30, 36% growth. You know, when you look at a spire, which is our monopocal plus, and when it's a monopocal, great reception early adoption just launched. The torque, which is premium, is being incredibly well received. Our Lux platform outside the US is off to a really strong early start. Our tri-focal was just approved in Canada. And we're waiting for approval very soon here in the US in this half of the year. And the eatoff lenses is the study is just beginning.
Brenton L. Saunders: You know, when you look at Aspire, which is our monofocal plus, and it's a monofocal with great reception, early adoption just launched. The TORC, which is premium, is being incredibly well-received. Our LUX platform outside the U.S. is off to a really strong early start. Our trifocal was just approved in Canada, and we're waiting for approval very soon here in the U.S. this half of the year. And the EDOF lenses. The study is just beginning, and we expect that launch in 26.
Speaker Change #106: Great reception, early adoption, just launched.
Speaker Change: The torque, which is premium, is being incredibly well-received.
Speaker Change: Our LUX platform outside the U.S. is off to a really strong early start.
Speaker Change: Our trifocal was just approved in Canada.
Speaker Change: And the EDOF lens is, the study is just beginning, and we expect that launch in 2026. So, we're lining up, you know...
Brent Saunders: And we expect that launch in 26. So we're lining up, you know, all the right aspects to service our surgical customers around the world with great innovation on the come. And so, you know, I see that business as really important. We continue to look at other areas of innovation across the surgical platform to drive, you know, future growth. And, you know, I remain pretty excited about the business. Well, great.
Brenton L. Saunders: So we're lining up, you know, all the right aspects to service our surgical customers around the world with great innovation on the horizon. And so, you know, I see that business as really important. We continue to look at other areas of innovation across the surgical platform to drive future growth. And, you know, I remain pretty excited about the business. Now, over to you, Brent, for closing remarks.
Speaker Change: with great innovation on the come.
Speaker Change: And so, you know, I see that business as really important. We continue to look at other areas of innovation across the surgical platform to drive, you know, future growth and, you know, I remain pretty excited about the business.
Matt Miksic: Thank you for taking the questions.
Operator: Thank you. That's also our interview.
Operator: That was the last one. Yes, correct.
Brent Saunders: Over to you, Brent, for closing remarks. Great. Well, thank you all for participating in the call. Another quick call out to our team around the world for a great delivery of great execution, great focus, and great service to our customers around the world. And we look forward to continuing to drive momentum in this business and keep you all updated as we proceed. Thank you.
Speaker Change: Over to you, Brent, for closing remarks.
Brent Saunders: Great focus and great service to our customers around the world. And we look forward to continuing to drive momentum in this business and keep you all updated as we proceed. Thank you.
Operator: Thank you; this conference has now concluded. Thank you for attending today's presentation.
Brent Saunders: Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: You may now disconnect.
Speaker Change #108: Copyright OSHO is a registered Trademark of OSHO International Foundation