Q3 2025 Alcon Inc Earnings Call
Greetings and welcome to the Alcon Q3 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.
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Joining me on today's call or David indicat, our chief executive officer and Tim stonecipher our Chief Financial Officer.
Our actual results may differ materially from those expressed or implied in our forward-looking statements, and as such, you should not place undue reliance on any forward-looking statements. Important factors that could cause our actual results to differ materially from those in our forward-looking statements are included in our Form 20-F, earnings press release, and interim financial report, which are all on file with.
The Securities Exchange Commission and available on their website at sec.gov non-ifrs, Financial measures used by the company may be calculated differently from and may not be comparable to to similar measures used at other companies. These non-ifrs Financial measures should be considered along with, but not as alternatives to the operating performance measures as prescribed for IFRS, please see a Reconciliation between our non-ifrs, measures with directly comparable measures presented in accordance with IFRS and our press release.
For discussion purposes, comments on growth are expressed in constant currency.
I'll begin with surgical equipment where we're seeing clear signs of strength with unity VCS.
As expected. The launch is delivering on its Promise of Greater efficiency and workflow optimization in vitro retinol and cataract procedures.
Surgeons are responding positively to the introduction of 40 FICO technology.
We're investing heavily in training clinical support and workflow integration so that each site can fully realize the benefits of unity. This approach is helping us build durable, momentum and strong customer advocacy and it reflects our long-standing commitment to customer backed Innovation with the surgical Community. We're also gearing up for the launch of unity CS the Standalone cataract version, which will be widely available in the coming months.
Turning to implantable panoptx Pro is proving to be a meaningful differentiator.
it builds on the success of Clarion panoptx, but now with 94% light utilization in half the light scattered compared to its predecessor
These enhancements reflect a significant advancement in Optical design by providing more uninterrupted, light distribution and Greater Image. Contrast,
Importantly, the launch of panoptx pro has is beginning to stabilize market, share Dynamics in the US. Try focal IL category.
Now turning to contact lenses. I was pleased with our results. This quarter as we continue to outpace the market. Our toric modalities in particular, delivered double-digit growth in the quarter and our expanding access gra stigmatic patients.
Toric lenses representing a significant growth opportunity.
This enhances the patient experience as well as supports practice growth and retention for Eye Care. Professionals by expanding access to more stigma asmatic patients,
We continue to see encouraging momentum in the adoption of our multi-dose. Preservative free formulations led by sustained Pro, which we launched in January. These formulations are helping us meet the growing demand for preservative free, artificial tears.
This mechanism of of action directly and rapidly addresses. The core problem in dry eye disease, rather than supplementing for evaporation, or treating the resulting inflammation.
This makes trip tear a meaningful advancement for both prescribers and patients.
While it's still early, the breadth of initial uptake has been very encouraging. Prescribable trying is high and we're seeing adoption for both opthalmologist and optometrists.
To support access and streamline the patient experience. We partnered with an easy to use digital Pharmacy platform to simplify fulfillment. This collaboration is helping patients, start the therapy quickly and conveniently, which is especially important in the early stages of launch.
Now, more broadly, our commitment to Innovation at clinical Excellence was on display at the recent escrs and AO conferences.
We supported over 40 studies reinforcing the value of our Technologies across Cataract and refractive care.
I take a few moments now to highlight 3 topics.
First there was new data on Vivid ATI. Wells, showing strong patient satisfaction. In complex cases like early, AMD and Mild Coryell irregularities
These findings, reinforce these differentiated value proposition in the premium iol segment.
Second. There were time and motion studies, that demonstrated statistically significant efficiency gains with unity VCS compared to the Legacy systems.
With cataract volumes rising and incidents of retinal disease, increasing demand for AIC care is outpacing. The supply of Eye Care Professionals.
These results demonstrate that Unity helps address this imbalance by enabling more efficient procedures and supporting higher patient throughput.
Using a 3 dimensional digital twin of the I Wave light plus achieved 20 12.5 Vision or better in 98% of the cases versus 82% with smile Pro.
It also delivered Superior Precision. A stigmatism, correction and contrast sensitivity.
These results underscore the potential of personalized LASIK to set a new benchmark for refractive surgery and reinforce all kinds of leadership in AIC innovation.
Moving now to market dynamics, Global cataract, procedure volumes grew, approximately 3% in the quarter which is an improvement, but remains below historical averages.
Additionally, Global ATI. Well penetration was up 130 basis points.
Envision care, we estimate that the global contact lens Market group, approximately 4% in the quarter, with a strong US market. Partially offset by weaker growth internationally.
and before I pass it to Tim, I'll I'll briefly comment on our proposed acquisition of star Surgical
We continue to view the transaction as attractive and believe that Alcon is best suited to maximize the value of their implantable column lens.
And we believe that the ICL is complimentary to our refractive, laser business.
So, we like this deal, but it isn't essential to our long-term growth plan.
Last week, we published a presentation, expressing, our perspective, on the upcoming shareholder vote. We believe, our offer represents an attractive premium across multiple measures and creates value for both Alcon and star shareholders.
so to wrap up despite a soft first half, we encouraged by recent signs of improving market conditions,
And the robust performance of our recently. Launched products
I want to thank our Associates around the world. Your dedication and passion continued to drive outcome forward. I'm proud of what we've accomplished together. I'm excited for what's ahead with that. I'll turn it over to Tim, who will walk you through the financials.
Third quarter sales of 2.6 billion were up 5% versus prior year.
In our surgical franchise Revenue was up 5% year-over-year to 1.4 billion.
Implantable sales were $432 million in the quarter, up 2% versus the prior year period.
As David mentioned, we've been very pleased by The Surge in response to the US launch of panoptx pro, which is beginning to stabilize, share Dynamics in an increasingly competitive market.
This growth reflects improving Global cataract procedure volumes as well as price increases.
And Equipment, as we expected, we saw significant acceleration in the third quarter, with sales of 243 million, and growth of 13% driven by the launch of unity VCS.
Turning to Vision Care, third quarter sales of 1.2 billion. Dollars were up 5%.
Contact lens sales were up 5% to 707 million in the quarter primarily driven by product Innovation and price increases.
This growth is partially offset by decline in Legacy products, including Daly's Aqua Comfort plus where we've limited our promotional activity.
Inocula Health, third quarter sales of 462 million were up 6%.
Growth was led by eye drops for dry eye and glaucoma, including sustained Rock latan and initial sales of trip tier which we launched in August.
There was also some pressure resulting from the divestment of certain eye drops to occupation in China, which we will lack in the fourth quarter.
now, moving down the income statement, third quarter core gross margin with 62.9% down 50 basis points year-over-year, mainly driven by incremental tariffs
Core operating margin was 20.2% down 60 basis points. Driven by lower gross margin sales and marketing Investments behind new product launches and increased R&D investment.
Third quarter, interest expense was 51 million broadly in line with last year.
Other Financial income, and expense was a net benefit of $3 million.
The average core tax rate in the first 9 months of the year was 17.4% down from 18.5% in the prior year due to higher discreet tax benefits in the current year.
Core diluted earnings for 79 cents per share in the quarter Down 2 cents versus last year.
Turning to cash, we generated 1.2 billion dollars of free cash flow and the first 9 months of the year compared to 1.3 billion in 2024, primarily due to increased Capital expenditures,
our robust cash generation has enabled us to return 550 million to shareholders and the first 9 months of the year comprised of 384 million, in share repurchases, and 166 million in dividend payments.
Regarding tariffs, we incurred 57 million of tariff, related charges on the first 9 months of the year of this amount. 38 million was recognized and cost of sales and 19 million was recorded on the balance sheet for product. Not yet sold
As we enter the fourth quarter, we expect to see a step up and tariff related charges and cost of sales.
Given tariffs are capitalized into inventory and are only recognized in cost of sales. When the inventory is sold, this creates a timing lag between when the tariff is paid and when it affects profitability.
Due to our inventory cycles, we will start to see the full financial impact in Q4.
We continue to expect a full year impact of approximately a hundred million dollars to cost of sales. And we expect to offset this primarily through foreign exchange as well as operational actions.
Now, moving to our Outlook.
our Outlook assumes that aggregate Eye Care, markets, grow low, single digits for the remainder of the year,
Exchange rates as of the end of October, hold through year end, and the current tariff structure remains in place.
Based on these assumptions and our year to-day performance, we are reaffirming our full year guidance, on all metrics.
R&D is expected to finish toward the high end of our 8 to 10% of sales range which also reflects impact of recent acquisitions. Including Orion.
We maintain our core average tax rate guidance at approximately 18% and our core diluted EPS range of $3.05 to $3.15 reflecting flat to 2% constant currency growth.
Looking to 2026 while we won't formerly guide until February. I'd like to share some color around expected, headwinds and Tailwinds
On Tailwind, we expect continued acceleration from new product launches, including Unity, VCS, and CS, as well as trip tier PanOptix growth.
And precision, 7 among others.
these Innovations should enable Alcon to grow faster than the market and at the same time we'll maintain discipline cost management, so that sales growth, outpaces sgna driving margin expansion, through operating Leverage
On headwinds although we've operationalized some mitigating actions, we expect a net incremental impact from tariffs of roughly 50 to 100 million dollars in 2026 versus 2025.
Which reflects an evolving sales mix as well as our inventory Cycles.
And with regards to investment in 2026, we'll see the full year impact of Orion and initiate. The phase 3, clinical trial early in the year.
Combined, these are expected to pressure core. Operating margin by an incremental 40 basis points.
Beyond that we remain focused on discipline execution, and our confident in our ability to deliver sustainable growth and long-term value for shareholders.
Finally, I'd like to extend my heartfelt, thanks to Associates across the organization for the dedication and hard work. And with that, I'll turn it back to David.
Thanks Jim. Uh to wrap up, I'm encouraged by the progress. We saw across the business in the third quarter.
The successful launch and growing adoption of unity, VCS.
And the early promise of trip, tear, all underscore the strength of our innovation engine.
As we discussed at our Capital markets day remained intently focused on the long term.
The markets, we serve are resilient underpinned by powerful demographic and technological trends.
We're investing in operational excellence and R&D so that Alcon continues to lead our industry.
And our long-term vision is anchored in a steady flow of new products, a commitment to innovation, and a deep understanding of our customers.
With our Global reach, dedicated teams and Rich pipeline. I'm confident that Alcon is well, positioned to accelerate growth. Expand patient access and deliver sustainable value to our shareholders.
With that, let's open our line for Q&A.
Thank you.
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And our first question will come from Anthony Petrone with meizuo group.
Uh, thanks, and uh, congratulations here on the quarter. One on Unity and one on just the underlying U.S. market. So on Unity, it looks like the cycle is getting started here. The company has commented in the past that, you know, 10% of the base, that 30,000 bases, sort of had to think about this cycle, but it could be more front-end loaded. So maybe just a little bit on the shape of what that S-curve will look like into 2026.
And then the underlying uh, surgical Market in the US, it's still below normal levels.
You know what were the trends in October when you think about underlying cataract volumes for instance? And what is the
Have a lot different to to say really here, than what we've said at either, The Bernstein conference or the the times, we've talked about this. We have a a 30% or so, or sorry, you know, a 30,000
Lie in the US a fair bit. Um, it was improved overall, a fair bit too globally, so I guess it was 1% growth or so. It was flat in the uh, last quarter, um, total this year. You know, obviously was 3% in the Cataract procedural market, so you know, significant move up relative to uh front half of the year. But again I think we're we're careful right now about what you know 1 data point doesn't make a trend and so let us get into you know the beginning of the year next year. Give you a better number. When we when we look at guide we'll have a a good sense of the full fourth quarter. And I think, you know, if we, if we're seeing what what I think we said, which I've said before is kind of regression of the mean, you know, the, the historical levels should be somewhere around 4% us something around 3%, so we'll see. Um, but I guess that's, that's been our historical View. And Remains What We Believe long term is the trend.
And our next question comes from Ryan Zimmerman with btig.
Uh, good morning and, uh, good afternoon, I guess I'm switching. But, uh, thank you for taking our questions. Uh, David, on the STAR transaction. Um, you know, you guys put out, I think, pretty pointed comments about your views.
About it. I, I guess what I would ask is if, if it were to fall through, um, even after this new go shop, period, you know, you you highlighted a number of alternative, uh, ICL offerings in the market, either coming or in the market. What, why wouldn't 1 of those fit your needs? And I guess, what, in your view, make Star, you know, Stars, technology attractive, other than, you know, they've, they've been in the market. They've had success for some time.
Well, let me um, say that I, you know, I don't have a lot to add to my prepared remarks, because obviously, it's a sensitive period And I'd encourage anybody really who, you know, is interested in detail around this transaction. Have a look at what we posted online. I think, um, you know, we like their product. Uh, we, we like their team a lot. I think it would be a good complimentary business to us. I said, and I know it's, I think it fits nicely with our, our laser business. Um, same customer. Same. You know, we have bigger geographies, we can take care of this. Um, I think more efficiently, um, but there, you know, there there are a limited number of approval approving, uh, icl's. This is a proven 1. It's been in the market a while. Um, I think it has very the material is unique. It's a polymer material and I think, um, directionally a lot of people who've used these products and use other people's products. I think look at it and say, okay, this is well known. And when with, with elective procedures, you want, well known. So what you, what you don't want is to be experimenting with new things now. That doesn't mean somebody can't come up with a great product. Just means it's going to take some time to establish.
The challenge for star is obvious which is, you know, as a as kind of a standalone single Product Company. They're just going to have a difficult and very unlikely path to profitable growth. So you know, ultimately, their shareholders will make a choice between a return to the unaffected, share price, and a long journey with activists and control of that company.
Or they can take a certain generous premium from us but either way we're going to be in a good place so we'll figure that out when we get there but I think directionally we're we're um we we hope that this gets done but as I said in the notes, you know, um if it doesn't we've got a great plan.
Okay, very helpful. And then the second 1 for me, I I, I could be wrong, correct me if I'm wrong but I I think you folded, your hydrous sales force into the broader cataract sales force, or or something. To that effect, may maybe just talk to us about kind of where you stand in surgical luck coming today and and kind of what happens from here. I mean, you've moved earlier in the treatment cycle with, you know, the bulk and product and and some of the drops, but kind of where you, you know, what your outlook is. I'm sorry to go out, come I think would be appreciated. Thank you. Yeah.
No, no. Look, we're bullish on this. I mean, um, let and and I'm I'm going to reframe what you said a little bit. Not because you you it could be understood that way. But it isn't that that's not the circumstance. We have actually expanded the number of people that are going to be selling Hydra. So we have our in our in in theater group is selling both iOS and hydras now. And and remember that's, you know, we had a
We have some really nice white spaces here, you know, we've got, we've got glaucoma, we've got retina, we've got your refractive, um, we are moving towards those spaces, not away from them, so I would be uh, I would miss, I wouldn't misinterpret our attention here, we are going to get bigger in both spaces, both intervention and specially Interventional glaucoma, which we continue to believe is is the way of the future.
Thank you.
And we'll go next to Graham Doyle with UBS.
Hi. Thank you for taking my questions. This is kavya in for Graeme, um, just to couple please. Uh, first is, do you accept to exit the year at a 7% plus, um, Topline growth? Why isn't that a good starting point uh, when we're thinking about next year? And then, um, the second question is just on equipment again. So, at a recent conference, you outlined targets for next year, implying 50%, volume growth. Is that a sensible starting point for next year, for the half of equipment that is driven by Unity. Thank you.
Um, look, I I think we're not going to come at too much on on next year till next year. Um, and I think the, the reason we give a range of course, is because, you know, these are assumptions. We're making about the trajectory and the market and, and we'll see. Um, so, you know, I think the, uh, the obvious obvious opportunity here is to be at the high end of that. If it doesn't happen, it won't be a surprise to us, you know, we're looking to just try and do as much as we can right now. Um, and think about the long term.
So we've been very careful about Unity, VCS in particular, because it really at this point is so far out in front of every other piece of equipment that's in its class. We just don't have to rush because the worst case scenario is somebody's going to buy 1 of our other pieces of equipment. So I think what you're going to see next year in equipment is a robust year. Um, I think it will Accelerate from this year for sure. Um, but I wouldn't want to venture a percentage, guess until we really get through this year and get into a place where we're really guiding with some certainty around the assumptions. So, uh, let me do that for you in February.
Okay.
We'll go next to.
Great. Hey guys, thanks for taking the questions. Um, first one just on Unity. You know, I know it's early, but, uh, can you talk a bit about, I guess, how placements are trending relative to initial expectations, and then maybe how the order book is building compared to those expectations as well?
Sure. Tom, I mean, uh, it's kind of as expected, I think, you know, we gave um, some expectations recently at a conference, I think we're on those. Um, our order book, we don't comment on directionally, it's been very healthy. We, you know, we could ship a lot more if we chose to, we are, we are being clear about our attention to train these very carefully. Um, and make sure people realize the benefits of them. I mean, the, the basic idea here is, is, we're trying to get more efficiency in the O, and to do that.
You have to work with both the surgeon and the staff. And what you have to really do is begin to think about. Well, if I did 20 cataracts in a day, could I do 21 and how would I do that? It has to do a lot more with the turn of the room, the the, you know, the priming of the machine, the transfer of setting. So everything moves smoothly, the priming of the, of, the of the hand piece. There's a, there's a, a great deal of detail in this. But what we're getting and what we demonstrated at the data, we showed at the Academy is we're getting more surgeries in a day. And that's a beautiful thing for the surgeons. And, you know, and for patients, who, who need the surgery. So I think we're patient on this. Um, I I can tell you that we're right on track with what we expected and you know, our our book is very strong.
Got it, that's great. And then, um, Tim maybe for you, um, appreciate the comments on kind of the inputs to margins next year between tariffs Orion Etc. But can you touch a bit on sort of how we should be thinking about, underlying op margin expansion next year? Um, I think, in the past, you've talked about 150 bips 2 H, 255 by our math is tracking towards closer to 50 to 75 bibs for Q closer to to 100 bits. Just curious. If there's any refined thinking on sort of what models should be contemplating on underlying margin expansion. Going into next year or what gives you the confidence in that 150 bips plus. Thanks.
So, you know, given all of that, that's what you're seeing this year and and the margin pressure. I still believe if you if you normalize it and you look at historical improvements, you know we're kind of in the 150, 200 basis point uh margin Improvement, I believe we can continue to do that. Um and if you assume that then you know we do have incremental pressure. As I said in my prepared remarks on, uh, on terrorists, we do have some incremental pressure on a full year of Orion, so but net net. We'd expect to continue to get nice margin expansion next year.
Got it, thanks.
And our next question comes from Matt mix with Barkley's.
Hey, thanks so much for taking our questions. Um,
question on, on tariffs, you mentioned
Be capitalized tax expense.
Moving through the CNL. Uh, I know you're not giving a ton of color on a 26 but, um, you know, on on the gross margin line, any, any directionally be, you know, the effect of that, uh, through to expect kind of a flatter of those margins offset by by some of the other, uh, you know, operating changes you're making or or does the FX
Kind of offset that in the gross profit line uh and then just 1 quick follow up on on iOS.
Yeah, listen, we'll get we'll give you more color on 26. Uh, when we get to the February call, but um, when you think about gross margin again, we're going to have a incremental 50 to 100 million dollars of pressure. That's going to show up in your gross margin line uh for next year. Um and that's basically driven by that. We've got a full year impact of the margins. We're not going to have the FX benefit that we had this year but we do have a lot of operational actions that are going to help mitigate some of that pressure. Um so I sort of think about it in that 50 to 100 million dollar range and then they're going to be some other things that you're going to see in the gross margin. Right? You can see a mix impact. You're going to see some other things. So um we'll give you more color in 26 when we get there.
Okay, and then just um there are some competitions. It's been 1 of the challenges. Maybe volume growth has been another. Um it seems like things are kind of improving here a little bit. Um,
Competition, as you as, you know, is expected to kind of heat up a little more next year. So, um, you know, given that this year was a tough year, uh, is next year.
Kind of an easier here or you, or do you expect this kind of battle on those 2 fronts to to continue? Um, you know, through, you know, longitude, you know, that's Pro and additional data on vividity.
Um, or other factors that could kind of help you move the needle on or kind of stabilize care, and, and maybe move the needle on volumes, thanks.
Yeah Matt let me give you some some context I think that may help. I mean look I I think you know as I've said in the past the next couple years are going to be very difficult competitively. I think there's just a you know it's just not going to be a big growth driver for us because there's just a lot of entrance as you as you correctly, point out. Now that said let me make a couple of really positive remarks. I think you know we've lived also through some slower Market which I think is you know not a sustainable idea for a long period of time because there's just too many cataracts out there. The second 1 is is that the ATI will penetration was up 130.08% quite a lot in markets where we have the majority of the ATI. So in the us where we still have the vast majority of the Hils, you know that that's really what helps us is. The is the penetration moving up. Um, you
Think that, um, somewhere between, um, the products that we are. We have in our launching, the API will penetration, and some improvement in the markets. It's going to be tough uh because there's going to be a lot of competition, but I think well, whether through it I think we, you know, have a solid, you know, performance this quarter. I'd like to see us somewhere right around market growth, you know, going forward.
Thanks so much.
And David Saxon with Neiman company has our next question.
Oh great. Uh, thanks for taking my questions. Uh, David and Tim. So, maybe I'll start on the contact lens market. So I think, um, you know, the US kind of drove that 4% growth. So, you know, would you consider the US market kind of in that normal 4 to 6 range? And then what's driving that International weakness and then relative to, uh, the dacp comments? I mean, I'm guessing kind of, you're in the later Innings of converting That Base. Um, so maybe talk about how you think about the mix. Uh, benefit, you could see going forward relative to to what you've seen historically.
Yeah. Really good questions. David. Thank you. Um a couple of comments on on the on the global market. Look, it's, you know, globally. It's still at the normal in the normal range just at the low end of a 4 percent, right? We've always said, kind of mid single digits and the US was was, you know, considerably better than that. And and the international market considerably lower than that. But, you know, I think really, what's happening? Internationally is Japan is really struggling has for a while. Um, I think it was negative, it might have been flat. I can't remember quite, uh, right off the top of my head, but, um, that's a big Market, you're and Europe to be fair. Europe, wasn't, you know, super strong either. So I think it was below kind of historical averages. So, I mean, I, I think some of that is, is just, um, you know, a little bit of product, um,
I would just say lack of new product flow in, in those markets, we're just getting some things in those markets right now that we're excited about. So I think, you know, we should see, you know, I expect to see kind of normal market growth going forward, but the US, um, you know, I think in particular, has you know, this 6% growth that we saw in the US was a, was a nice effort. But you see still see some of that being given back and a significant amount of price rebating to Consumer. So, um, my my sense of where we're going is that, um, the Branded products that do really well are going to build the international market. The Branded products in the US that have been around for a stretch will continue to do well, but I think you got some newer ones in there that are fighting on price that may hold uh some of the share movement that we have back just a little bit as we go forward on. Dacp the
This is, is certainly benefiting us on a, uh, on a gross margin basis. Um, it doesn't really help us a ton on the, on a share level, but it, um, it does help us at the margin level, so, we're trading that into P1, we're trading it into, uh, dacp or sorry the dt1. But, um, but the overall share in the US in Daly's is challenged by competition significantly and price competition in particular.
Okay, um, thanks for that. And then maybe you just saw on trips here. I mean, per IQ via it seems like the TRX is are, um, kind of ramping more gradually than, than what we saw with the another launch a couple years ago from a competitor. So maybe just talk about that launched, how it compares to kind of your internal expectations and and how we think about, uh, how we should think about that ramp, uh, heading into next year. Thanks so much.
Yeah, look trip. Tier is going really well. Um as I said in the in the notes, you know the Eye Care Community is very excited and we're pleased with the amount of trial and uptake across the potential. Prescribing base. You know, perhaps most encouraging is that patients are playing back the unique efficacy of this mechanism. It it's it's not a supplement to the lipid layer. It's not an anti-inflammatory which you know, again, it's going right at the kind of basic mechanism to create tiers and that's that is the very core of the disorder. So I mean we're very excited about what's happening there. I I I think you got to be careful with the audited data because the audited data source does not capture the third party that we're
Cautious about what's in there right now.
Okay, that's super helpful. Thank you.
And moving next to Veronica, do.
Was City Group.
Um, hi David. Hi, Tim thanks so much for taking my questions. I will keep it to 2 please. Um 1 just want to get your flavor. I've seen lots of questions around unity and whether that's tracking in line with expectations, but there is a number of other products driving growth this quarter. So just would love to get your high level thoughts and want how you feel about the trip to your update relative to what you were looking at and hoping for this early on and I think David you've touched upon Pro but maybe just a similar question. Um and if I can relate it to that I might have missed it but um what your PC market share in the US was was in the um in the third quarter and how that moved to sequentially. And then 1 for Tim I guess if I look at the full year guide, the the exit range for the fourth quarter, still pretty wide. I think, you know, the technically mathematically the guy that implies 5 to 9% um organic sales growth for the fourth quarter to. I'm just curious if you have a
A point there where you feel more comfortable, giving everything that you see. Um, at this point in time. Thank you, guys.
Veronica, let me try and break your two questions into the four that you asked. Um, just kidding. Fair enough. Um, uh, the, uh,
Look the trip tier growth. I just commented on, it's been it's it's better than expectations for us out the gate. I think we've got a lot of trial, and I think we're just kind of excited about, um, the patient responds right now because we knew the product was going to, you know, have a little bite to it. But you know what's exciting to hear is that this thing really works. And and, and when you talk about efficacy, that works, um, you know, all I drops have a little bit of that bite to them. So, you know, we're, we're excited about that balance that we're hearing back from the patients. And the doctors that says, you know, this is really working. And, you know, we like what we see, um, you know, there's more to come we're early. So I should be a little, you know, careful about that and circumspect on it. But, you know, I think in terms of uptake and breath of prescribing and all the things that we look at metric-wise, um, doing very well. Um, on Pro, I would just say, um, panoptx pro has has done really well, um, better than we expected in many ways because we, at some level, you know, we, we had a certain amount of of Consignments we thought would take over. We kind of ran out of them. I think, somewhere along in the third quarter, it couldn't ship some to the, to the
Land market, which we were trying to get on a little bit sooner. I think we're just getting them out now. Um, so I think, you know, we've been excited about the people who once they've tried it, they really like it and, and they're describing back to us exactly what we had hoped for which is look, less, light scatter and less, you know, and more light usage. So um, a little bit of kind of clarity at distance. Seems to be the the common language we're hearing. So the qualitative is good. The um you know, the stability of the share quarter to quarter. We we had a you know, it's very hard to read this because remember that there was a, you know, there was a recall by 1 of our competitors in the second quarter. It bounced back in the third, you've got a little bit of of noise in there, you know, from, uh, some slowdown in some of the other competitors. So, but generally speaking, you know, our share is very good. Um, it's well above. Uh, we have the vast majority. Well, we have a significant majority of of the uh, the PCI oil market and the majority of the, the whole of the hn I want market. I'll just add 1 other thing which is we grew. Share all
All over the world in Tok and we grew share all over the world in um, in, you know, just normal monofocal business. So when you look at the, the kind of unit volumes for us, right now, we look solid all over the implantable business, um, pciol is still going to be just for balance, you know, a very significant competitive fight all over the world. We just, we just like our chances better uh, today. And and we're doing well, um, Q4 exit rate. I'm going to leave that to him. Yeah, yeah, yeah. Hey Veronica. Thanks for the question. Yeah, it is a wider range than we typically have. I
Would say the thing it's a little different this year is the challenge we've had in calling the markets as well as the the new product launches and and how those are going to do. So, you know, I would say our base case is sort of at that midpoint, if markets are a little bit softer and launches don't go as well as we anticipate, then, you know, that would be at the lower end as the markets, come back roaring back and the launches continued to do really, really well, that's how you get to the higher end but the base case is really more towards the midpoint
Brilliant. Thanks guys.
And our next question comes from. Larry biegelsen with Wells Fargo.
So that's about the Foe and Beto is about half of equipment sales and how is the rest of equipment sales trending, you know, in 25 and and 26 just just so that, you know, our our estimates aren't complete guesses and I had 1 follow up.
Well, look on the mix. Um, the mix is moving around right now. I would say the mix is, you know, we really haven't tried to sell much cataract right now. So I'm not sure, I can give you a lot of Direction on it right now. Larry, um, we've sold mostly VCS units this year. Uh, we sold a few CS lately, um, but we sold for a period of time, we had a, we had a orientation that there was going to be a much higher demand for CS then VCS we are, we are finding out that particularly in a number of markets that people really want both machines because they're, it creates an efficiency that I think is, is unique. Um, I I don't have a really good number for you to give you right there. Um, the remainder of the equipment, I would just say, is, is really pretty positive. I mean we've got, uh, we're just getting started with the latest, I think, you know, I, I'm, I'm encouraged about that. That's all going to be new for next year. Um, the, the Voyager thing is is, is really I think we just kind of gotten the most of the world.
Kind of glaucoma specialty area World. Kind of technically onto this notion that you know you should start with SLT. That was Job, 1, that we did this year, I think you're going to see a real uptake of of Voyager as we move into next year. We've had pretty good run of it this year, but I think as we convert a new sales force to do both of those next year, you should see the latest and Voyager do well, uh, and contribute quite a little bit. And then I think, lastly, I, I would, I would say that the, um, uh, you know, our, our, our biometer still does well, our microscope does well. Uh, we've got some new stuff coming that we'll talk about, you know, in January. So I I'd probably say, um, we're we're going to have a good year next year and Equipment. You hit refractive. Oh I did. Oh Wave light plus. Yeah, you're a good point. Um and wave light plus you I you know I think what was you know most exciting about whether that plus this year has been, you know, the ability to kind of refresh the market on how important Lasik is and importantly, how much we can improve it. So, you know, when you talk about, you know, the the percentage that we can get to 2012 and a half or better is is really
Is really unique. And, you know, and obviously we're, you know, we're targeting, you know, 1 of our competitors. You know, that has a competitive procedure, but, you know, frankly you just can't do better than the installed base of lasic machines. We've got once you get our, our, our New Wave, light plus product in. So, that's done pretty well. And a little bit better than expectations this year. Again relatively small part of our business but but really, you know, cool and on the front edge of of what we're trying to do in Cataract refractive.
That's helpful, just 1 follow up on contact lenses David. Um, is there any consumer element here? Um, you know, if we look at kind of the year-over-year change in growth, I know at at at Bears, you talked about, you know, just less price. Um, but but, you know, there's been a pretty big change in in the last year or 2 in the contact lens market growth in Japan. You just talked about, you know, uh, a lack of new product flow. But is there a consumer element here? Where consumers are stretching lenses? Buying less bulk, any anything, uh, else. You, you can add, thank you.
you know, I
I have to, I mean, I'd have to think about that a little more than I have. But I I I think there is always some, you know, we've always known that there was some consumer effect in here whether or not it's really affecting this Market. I mean, the data would be, you know, just depends on what data you're looking at. I mean, I think if you think about the um, the moving annual total on the contact lens Market is, you know, as of third quarter was 5%. So right in the center of what we would call the normal range, mid single digits, um, it's been 4 for a couple of quarters, you know, that is easily explainable by the lack of price that went into the market this year, relative to Prior years, and we were catching up, you know, we, we we had a lot of inflation through coid almost everybody took, you know, a significant amount of price in 23 and 24. And I think 25 people just, I think are taking a little bit of a breather. Give the consumer some room. Um, but typically, as we as we've kind of regressed it, you don't see a lot of change in
In consumption or, you know, trade-up, we've looked at it, you know, in the '09 recession. We've looked at it before and tried to correlate it with consumers. It's not highly correlated. Let me say it that way, but I wouldn't say it's not correlated.
All right. Thank you.
Moving on to Jeff Johnson with beard.
Centurion. Uh, in the past. At 1 point, we had heard it was going to be 20 to 30%. Then we heard maybe it was coming in a little lower than that. Just how can we model maybe or think about the price premium on the newer technology?
Well, look, I mean, uh, VCS is less price. I think is a is 185,000, um, you know, we've we've given some discounting but not much. Um, and I think you can do the math off of the base, uh, 2 products. Um, there is a premium to the Box itself and there's a premium to the, um, to the, uh, packs as we go through it. Um, it does depend on, you know, how big the customer is, and what they're buying and, and what the commitments are, and how long the contracts are. So, you know, it's a little tricky, but early on, I would just say that the ASP, um, on the product is is exactly or better where we then where we expect it. So we don't see any challenge with with pricing right now. Um so I would I would be thinking about it as you know pretty much as we've described in the past. You know probably a you know a 10 to 20% premium on on the on the procedure.
All right, that's helpful. Thank you. And then just over on crypto here. Uh you know, can that product be profitable next year or will DTC spending maybe push profitability on that product into 2027 and when when it's being sold today, through blinkrx, when you get it on the fully reimbursed commercial plans. Uh, do you start recognizing more revenue and and maybe that's an ignorant question and it's something I should know, but the pricing on blink.
RX is pretty aggressive right now and that's a good thing. Uh but when you go to a fully reimbursed on the p&l, will you start recognizing even more than Revenue per patient or per box of uh, vials? Thanks.
Well, look um, first on the, on the profitability and DTC. I mean, we we we won't begin to run DTC on trip tier until we have sufficient reimbursement for patients that it is that it makes good sense. So, you know, I I don't know, uh, and I haven't really looked at the the, the product level, you know, pnl. Um, but I what I'd say is that we don't really expect to be fully reimbursed at at kind of peak until 27. So, um, I I would be thinking modestly about DTC for next year and I would, you know, maybe it happens. Maybe it doesn't really just depends on the pace of reimbursement, um, you know, through the third party we're using with, you know, um, which you've correctly identified, I would say, just, you know, we um, we do pay them for their service. Um, and we will recognize more Revenue once it comes into our hands. But um, that is a, you know, that's just, that's more of just uh, exiting that relationship and you know, taking it up in in a normal way. Um, once we get through the, the kind of heavy lifting that they do to get the reimbursement,
The the uh prior off the you know all the work that they do to kind of get this available and then ship it to the patient's home. So all that you know is a is a service that that is very useful in the in the early days but helpful um not forever.
Understood, thank you.
Young, are you there?
Gary, we can move on to the next.
Okay, Jack Reynolds with RBC, please go ahead.
Hi there. Thanks for taking the question. Uh, had a couple please first. Uh, is on PCI oil. Penetration could you talk about the the penetration uh in the US uh versus year. And I guess versus APAC. If you've got that that that that data as well. Um, and are you kind of hating? How are you seeing pricing uh developed uh, in in Europe?
Um, and then kind of coming back to cataracts, uh, kind of more generally, um, because I was actually dropped off the call, uh, when, when the Q&A started. So I think I missed a bit of your first answer, but could you just reflect kind of on what you think drove the weakness earlier in the year? Kind of do you have any better visibility on what what the cause of that was and then therefore kind of what's driving? The kind of the more positive Q3
Um, kind of beyond the mean reversion aspect, is there anything kind of fundamental driving that? And then, what are you seeing so far in Q4?
Large volume influx from our vbp win last year. So they on a quarter on quarter basis, they were down quite a lot in penetration, but, you know, I wouldn't overread that. That was, that's really, um, just just holding back. So what you're seeing, I think is is a good bit of competition and promotion driving the market to, to use more PCI oils. And, um, and that's a good thing for everybody. Um, and so we're, you know, we're excited about that, um, on the um,
on the
the pricing. Uh what was the pricing question I think in Europe. Oh pricing element in Europe, you know, it the pricing element in Europe is is obviously, you know, probably the lowest in the world or near near it. Um, so uh, I think we watched that very carefully because you it probably portends pricing around the world, but but only once you get all of the players, you know, in as you do in Europe. So you know my sense is that it's probably bottomed out. Um, but it's hard to know, uh, what I think is is good news, is that, um, pricing around the world is held pretty stable. Um, and you know, I think our our, as we introduce new products, we are able to get a little price. So if you think about Pro on panoptx, you know, we're obviously bringing it in at a slight premium depend Optics, uh, which gives us some flexibility around, um, you know, the the, the core pricing, you know, model that we have. So, you know, I think,
The stable, but generally declining over time will be the answer.
Um, I meant just on the on the Cataract volume piece, kind of any any color you could share their
Oh yeah, you know I mean look I mean there's a thousand ideas on on cataract volume and what it is. Like here's here's what we're certain of, there's some certainties that we can say 1 is there's way more cataracts today than there. There was last year um and there are fewer surgeons in the world at least in the United States and in Europe than there were last year, uh, by a little bit. So, there is a productivity challenge that has generally improved every year and there was a pause in productivity. Now, why was there a positive productivity? I don't know. The short version is, is it could have been staff. It could have been, you know, consumers didn't want to go in, I don't think so. You know, it could be, um, you know, a general younger docs taking over for older docs, who sold their practices, that's definitely part of it. Uh, could be private Equity dynamics that have taken over practices in the US. Um, we've kind of collected, a lot of those ideas thrown them into a bucket and said, look, this is going to revert to the mean generally because
Is there's too many cataracts to deny that kind of service. We will figure out a way, it'll be more days in surgery by the surgeons and probably people picking up their in-office work. As a consequence, that could be a collaboration with other professionals, uh, other other kinds of of Eye Care Professionals and but there's going to have to be a pickup in productivity. I think that's naturally driven by the folks who own these practices, naturally driven by the private Equity Group. So I I think it comes back to the mean and I would 1 day we'll know the the secret answer to that 1 but I've been trying at it for about 2 years and I've been wrong. So I I'll just give you the bucket of it. Lets you pick
Okay, that that's great, thank you. Um, I mean can I just squeeze on about 1 last 1? Um,
On Unity. Uh, so I'm not going to ask that placements, but I'm I was just wondering in the, in the accounts where you have made a placement.
Are you seeing a higher pull through of consumables? Kind of, are you seeing that kind of date that efficiency gain, uh, being being utilized by by surgeons?
Um, so I'm not, I'm not sure. Um, I'm I'm, I wouldn't expect it to be higher per se, um, because in the beginning, especially, you know, in the first what has it been 6 months, 9 months. Um, you know, we're, we're getting these guys trained and moving if, if anything, it's probably a little bit slower. Um, but I think what, what you get to, when you get up to speed, is, is a faster throughput for the facilities. So, I think we're in a good place, you know?
The long run but I wouldn't, I wouldn't worry too much about it in the near term.
Cool.
Thanks so much.
Next to David.
JP Morgan.
There you go. Thanks for the questions. Uh firstly just on panoptx Pro. Just wondered what sort of price premium you're actually achieving if that's in line with your expectations and whether you'd actually change your panoptx pricing at all. Uh and then secondly just on just wanted to check if there have been any stocking in either uh open Optics Pro or in ocular health, thanks.
Uh, when you say stock, are you talking about the third third quarter?
Yeah, exactly.
With a with a belief that we can do that. Um obviously the customers will speak and we'll find out. We're kind of, you know, we're still only maybe what are we 6 months into this thing? So um we'll see where that that pans out or not so to speak.
Thanks.
And this now concludes our question and answer session, I would like to turn the floor. Back over to Dan Cravens for closing comments.
All right. Well thank you, everybody again for joining us today. If you have any follow-up questions, feel free to reach out to Allen triangle myself or investor questions, or corporate Communications team for any media questions. Thanks again.
Ladies and gentlemen, thank you for.
lines and have a wonderful day.