Q1 2026 The Cooper Companies Inc Earnings Call

March 5, 2026

Operator: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2026 CooperCompanies Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Please limit questions to one and one follow-up. To ask a question, simply press star one on your telephone keypad. To withdraw your question, press star one again. It is now my pleasure to turn the call over to Kim Duncan, Vice President of Investor Relations and Risk Management. Please go ahead.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Please limit questions to one, with one follow-up.

Speaker #2: To ask a question, simply press *1 on your telephone keypad. To withdraw your question, press *1 again. It is now my pleasure to turn the call over to Kim Duncan, Vice President of Investor Relations and Risk Management.

Speaker #2: Please go ahead. Good afternoon, and welcome to COOPER COMPANIES' first quarter 2026 earnings conference call. During today's call, we will discuss the results and guidance included in the earnings release, and then use the remaining time for questions.

Kim Duncan: Good afternoon and welcome to CooperCompanies Q1 2026 Earnings Conference Call. During today's call, we will discuss the results and guidance included in the earnings release and then use the remaining time for questions. Our presenters on today's call are Al White, President and Chief Executive Officer, and Brian Andrews, Chief Financial Officer and Treasurer. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements, including statements relating to revenues, EPS, cash flows, interest, FX and tax rates, tariffs, and other financial guidance and expectations, strategic and operational initiatives, market conditions and trends, and product launches and demand. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties.

Speaker #2: Our presenters on today's call are Al White, President and Chief Executive Officer; and Brian Andrews, Chief Financial Officer and Treasurer. Before we begin, I'd like to remind you that this conference call will contain forward-looking statements, including statements relating to revenues, EPS, cash flows, interest, FX and tax rates, tariffs, and other financial guidance and operational initiatives, market conditions and trends, and product launches and demand.

Speaker #2: Forward-looking expectations, strategic and statements depend on assumptions, data, or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption "Forward-Looking Statements" in today's earnings release, and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at CooperCOES.com.

Kim Duncan: Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption Forward-Looking Statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at coopercos.com. Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results under GAAP as well as non-GAAP and refer to the reconciliations provided in our earnings release, which is available on the investor relations section of our website under Quarterly Materials. Should you have any additional questions following the call, please email ir@coopercos.com. Now I'll turn the call over to Al for his opening remarks.

Kim Duncan: Events that could cause our actual results and future actions of the company to differ materially from those described in forward-looking statements are set forth under the caption Forward-Looking Statements in today's earnings release and are described in our SEC filings, including Cooper's Form 10-K and Form 10-Q filings, all of which are available on our website at coopercos.com. Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results under GAAP as well as non-GAAP and refer to the reconciliations provided in our earnings release, which is available on the investor relations section of our website under Quarterly Materials. Should you have any additional questions following the call, please email ir@coopercos.com. AI'll turn the call over to Al for his opening remarks.

Speaker #2: Also, as a reminder, the non-GAAP financial information we will provide on this call is provided as a supplement to our GAAP information. We encourage you to consider our results and refer to the reconciliations provided in our earnings release, which is available on the Investor Relations section of our website under Quarterly Materials.

Speaker #2: GAAP as well as non-GAAP and

Speaker #2: Should you have any additional questions following the call, please email IR@coopercoe.com. And now, I'll turn the call over to Al for his opening remarks.

Speaker #3: Thank you, Kim, and welcome, everyone. We're pleased to report a strong start to the fiscal year, highlighted by product launches, outstanding profitability, and robust cash flow.

Al White: Thank you, Kim. Welcome everyone. We're pleased to report a strong start to the fiscal year, highlighted by product launches, outstanding profitability, and robust cash flow. These results reflect our disciplined execution, combined with the significant synergies we're realizing from last year's reorganization. For today's call, I'll begin with an update on the three key strategic priorities we outlined in December and then move to Q1 results and guidance. First, we remain focused on delivering consistent market share gains for CooperVision. In calendar 2025, we gained share for an 18th consecutive year, and we enter 2026 with the intention of doing so once again. In our Q1, we made meaningful progress with the global rollout of our premium MyDay daily silicone hydrogel portfolio, growing branded sales and executing on private label contracts. Regionally, the Americas and EMEA strengthened and have excellent commercial momentum.

Speaker #3: These

Speaker #3: Results reflect our disciplined execution combined with the significant synergies we're realizing from last year's reorganization. For today's call, I'll begin with an update on the three key strategic priorities we outlined in December, and then move to Q1 results and guidance.

Speaker #3: First, we remain focused on delivering consistent market share gains for CooperVision. In calendar 2025, we gained share for an 18th consecutive year, and we entered 2026 with the intention of doing so once again.

Speaker #3: In our first fiscal quarter, we made meaningful progress with a global rollout of our premium MyDay daily silicon hydrogel portfolio, growing branded sales and executing on private label contracts.

Speaker #3: Regionally, the Americas and EMEA strengthened and have excellent commercial momentum. Japan weighed on our Asia-Pac results, but we're executing on product launches and investing to restore growth in the region.

Al White: Japan weighed on our Asia Pacific results. We're executing on product launches and investing to restore growth in the region. We're also incredibly excited about the early adoption of our MyDay MiSight launches in EMEA and MiSight in Japan. At CooperSurgical, we're encouraged by improving trends in our fertility business and look forward to positive momentum continuing. Second, our commitment to delivering strong earnings and free cash flow through operational excellence was clearly evident this quarter. The organizational changes and IT implementations we completed last year are generating meaningful synergies, providing us with the opportunity to invest in sales and marketing initiatives while still delivering outstanding financial performance. Q1 earnings exceeded the top end of our guidance range, and those earnings translated into a healthy $159 million in free cash flow.

Speaker #3: We're also incredibly excited about the early adoption of our MyDay MySite launches in EMEA and MySite in Japan. At Cooper Surgical, we're encouraged by improving trends in our fertility business and look forward to positive momentum continuing.

Speaker #3: Second, our commitment to delivering strong earnings and free cash flow through operational excellence was clearly evident this quarter. The organizational changes and IT implementations we completed last year are generating meaningful synergies, providing us with the opportunity to invest in sales and marketing initiatives while still delivering outstanding financial performance.

Speaker #3: Q1 earnings exceeded the top end of our guidance range, and those earnings translated into a healthy $159 million in free cash flow. Given our strong start to the year, we're raising guidance for both earnings and free cash flow.

Al White: Given our strong start to the year, we're raising guidance for both earnings and free cash flow. Third, we continue to maintain a disciplined approach to capital allocation. We've entered a multi-year period of consistent earnings and free cash flow growth, and we're deploying capital to high return opportunities. This starts with prioritizing internal investments that drive revenue growth, which we did this past quarter by increasing sales and marketing spend at CooperVision and CooperSurgical in support of product launches and key strategic initiatives across both businesses. We also repurchased $92 million in stock during the quarter, reinforcing our commitment to consistent share repurchases as a core part of our long-term strategy to drive shareholder value, and the remainder of our cash was used to reduce debt. Before reviewing the quarterly details, I want to address the strategic review we announced in December.

Speaker #3: Third, we continue to maintain a disciplined approach to capital allocation. We've entered a multi-year period of consistent earnings and free cash flow growth, and we're deploying capital to high-return opportunities.

Speaker #3: This starts with prioritizing internal investments that drive revenue growth, which we did this past quarter by increasing sales and marketing spend at CooperVision and CooperSurgical in support of product launches and key strategic initiatives across both businesses.

Speaker #3: We also repurchased $92 million in stock during the quarter, reinforcing our commitment to consistent share repurchases as a core part of our long-term strategy to drive shareholder value.

Speaker #3: And the remainder of our cash is used to reduce debt. Before reviewing the quarterly details, I want to address the strategic review we announced in December.

Speaker #3: We understand there are strong investor interests in this process. While we're not in a position to provide an update today given where we are in the process, the review is progressing as planned with active engagement from our Board and advisors.

Al White: We understand there are strong investor interest in this process. While we're not in a position to provide an update today, given where we are in the process, the review is progressing as planned with active engagement from our board and advisors. We will communicate outcomes if we have something definitive to share or when the process is complete. In the meantime, our board and management remain highly focused on maximizing long-term shareholder value. This includes driving organic growth by winning new contracts and strengthening customer relationships, delivering strong earnings and cash flow by leveraging our infrastructure, and deploying a consistent capital allocation strategy that includes share buybacks, and debt paydown. With that, let's move to the Q1 results.

Speaker #3: We will communicate outcomes if we have something definitive to share or when the process is complete. In the meantime, our board and management remain highly focused on maximizing long-term shareholder value.

Speaker #3: This includes driving organic growth by winning new contracts and strengthening customer relationships, delivering strong earnings and cash flow by leveraging our infrastructure, and deploying a consistent capital allocation strategy that includes share buybacks and debt paydown.

Speaker #3: With that, let's move to the Q1 results. Consolidated revenues were $1.024 billion, up 6.2%, or up 2.9% organically. CooperVision reported revenue of $695 million, up 7.6%, or up 3.3% organically, and CooperSurgical delivered revenue of $329 million, up 3.3%, or up 2.2% organically.

Al White: Consolidated revenues were $1.024 billion, up 6.2% or up 2.9% organically. CooperVision reported revenue of $695 million, up 7.6%, or up 3.3% organically. CooperSurgical delivered revenue of $329 million, up 3.3%, or up 2.2% organically. Operating margins improved meaningfully, and non-GAAP earnings grew 20% to $1.10. For CooperVision on an organic basis, torics and multifocals grew 6%, and spheres grew 1%. Daily silicone hydrogel lenses grew 7%, led by double-digit growth in MyDay, while clariti was up slightly. Biofinity and Avaira grew a combined 3%, and MiSight continued its strong growth, up 23%.

Speaker #3: Operating margins improved meaningfully, and non-GAAP earnings grew 20% to $1.10. For CooperVision, on an organic basis, torics and multifocals grew 6%, and spheres grew 1%.

Speaker #3: Daily silicone hydrogel lenses grew 7%, led by double-digit growth in MyDay, while clariti was up slightly. Biofinity and Avaira grew a combined 3%, and MiSight continued its strong growth, up 23%.

Speaker #3: Regionally, the Americas grew 6%, led by strength in daily silicon hydrogel lenses, and EMEA grew 4%, strengthening our number one market position in that region.

Al White: Regionally, the Americas grew 6%, led by strength in daily silicone hydrogel lenses, and EMEA grew 4%, strengthening our number one market position in that region. Asia Pacific declined 4% as execution on new product launches was more than offset by softness in Japan, primarily tied to lower margin older hydrogel products. To accelerate Asia Pacific performance, we've upgraded several leadership roles, increased marketing investments, and are ramping up our new regional distribution center, which is already enhancing customer service with faster fulfillment. We've also recently launched MyDay toric in Taiwan, MiSight in Japan, MyDay MiSight in Australia and New Zealand, and we're increasing regional availability of MyDay multifocal and MyDay toric expanded range. We also have private label launches underway in multiple markets.

Speaker #3: Asia-Pac declined 4% as execution on new product launches was more than offset by softness in Japan, primarily tied to lower-margin, older hydrogel products.

Speaker #3: To accelerate APAC performance, we've upgraded several leadership roles, increased marketing investments, and are ramping up our new regional distribution center, which is already enhancing customer service with faster fulfillment.

Speaker #3: We've also recently launched MyDay toric in Taiwan, MySite in Japan, MyDay MySite in Australia and New Zealand, and we're increasing regional availability of MyDay multifocal and MyDay toric expanded range.

Speaker #3: We also have private label launches underway in multiple markets, and in Japan, we'll be launching the full Clarity family later this year, with the addition of both a toric and multifocal, providing a competitively priced, full-family silicone hydrogel upgrade path for the large base of hydrogel wearers in that market.

Al White: In Japan, we'll be launching the full clariti family later this year with the addition of both a toric and multifocal, providing a competitively priced full family silicone hydrogel upgrade path for the large base of hydrogel wearers in that market. While we expect Asia Pacific to remain down in Q2 due to declining legacy hydrogel sales, we are confident the region will return to growth in fiscal Q3 given all of our launch activity. Turning to products, our daily silicone hydrogel portfolio continues to perform well, with MyDay leading the way through expanding customer partnerships, broader availability, and ongoing launches. Our premium priced offerings delivered its strongest performance, led by MyDay multifocal, Energys, and torics, all growing over 15%. Particular strength was seen with MyDay multifocal as its rollout continues to gain momentum.

Speaker #3: While we expect Asia-Pac to remain down in Q2 due to declining legacy hydrogel sales, we are confident the region will return to growth in fiscal Q3, given all of our launch activity.

Speaker #3: Turning to products, our daily silicone hydrogel portfolio continues to perform well, with MyDay leading the way through expanding customer partnerships, broader availability, and ongoing launches.

Speaker #3: Our premium-priced offerings delivered the strongest performance, led by

Speaker #1: By my day . Multifocal energies and talks all growing over 15% . Particular strength was seen with my day multifocal as its rollout continues to gain momentum .

Speaker #1: Our premium MyEnergies also posted strong growth, driven by its innovative Digital Boost technology designed to provide maximum comfort in today's heavy digital world.

Al White: Our premium MyDay Energys also posted strong growth driven by its innovative DigitalBoost technology designed to provide maximum comfort in today's heavy digital world. This product will be launched shortly in Europe, and we look forward to the boost it'll provide in that region. MyDay toric, which offers the broadest SKU range in the category and is powered by the same leading toric design in our Biofinity toric, continued delivering exceptional growth. We also closed additional MyDay key customer contracts and private label partnerships this past quarter across all three regions. For the clariti product family, it grew modestly, led by the ongoing launch of our new multifocal in the Americas. This multifocal has the same next generation optical design as MyDay, meaning an easy fit lens with consistent performance across different lighting conditions, distances, and patient profiles.

Speaker #1: This product will be launched shortly in Europe, and we look forward to the boost that will provide in that region. MyDay toric, which offers the broadest skew range in the category and is powered by the same leading toric design in our Biofinity toric, continued delivering exceptional growth.

Speaker #1: We also closed additional My Day key customer contracts and private label partnerships this past quarter . Across all three regions , for the clarity product family , it grew modestly , led by the ongoing launch of our new multifocal in the Americas .

Speaker #1: This multifocal has the same next generation optical design as my day , meaning an easy fit lens with consistent performance across different lighting conditions , distances , and patient profiles .

Speaker #1: So, we expect strong performance as we launch across EMEA and APAC later this year. Turning to myopia control, my eyesight grew 23% to 28 million.

Al White: We expect strong performance as we launch across EMEA and APAC later this year. Turning to myopia control, MiSight grew 23% to $28 million. Momentum is building with our latest innovation, MyDay MiSight, launching in EMEA in January to an extremely positive reception, thanks to the combination of proven myopia control efficacy and the all-day comfort of a premium silicone hydrogel lens. We also launched MiSight in Japan in February and are seeing a similar enthusiastic response. Japan is one of the world's most significant vision care markets, and with an estimated 77% of elementary school children being myopic, it represents a substantial opportunity for MiSight. We're supporting these launches with our most comprehensive professional engagement programs to date, highlighted by major conference engagement, high impact regional launch events, extensive KOL education, and media initiatives reaching tens of thousands of eye care professionals.

Speaker #1: Momentum is building with our latest innovation , Midas My Sight . Launching in EMEA in January to an extremely positive reception thanks to the combination of proven myopia control , efficacy and the all day comfort of a premium silicone hydrogel lens .

Speaker #1: We also launched MiSight in Japan in February and are seeing a similar enthusiastic response. Japan is one of the world's most significant vision markets.

Speaker #1: Care markets , and with an estimated 77% of elementary school children being myopic , it represents a substantial opportunity for misight We're supporting these launches with our most comprehensive professional engagement programs to date , highlighted by major conference engagement , high impact regional launch events , events .

Speaker #1: Extensive coal education and media initiative initiatives reaching tens of thousands of eye care professionals. These efforts are driving very strong clinician activation rates, reinforcing our confidence that our early momentum will continue.

Al White: These efforts are driving very strong clinician activation rates, reinforcing our confidence that our early momentum will continue as MyDay MiSight expands in EMEA, across Asia Pacific, and into Canada. MiSight remains the only FDA-approved contact lens for myopia control and the first and only lens approved for myopia control in both Japan and China. We're also continuing to invest heavy in myopia control R&D and have several exciting breakthrough innovations underway, which further supports our confidence in MiSight's ability to deliver consistent long-term, robust growth. To conclude on CooperVision, let me highlight our performance relative to market. This is calendar quarter data, so apples to apples with our competitors. In calendar Q4, we grew 10% and the market grew 6%.

Speaker #1: As myopia management with MiSight expands in EMEA, across Asia-PAC, and into Canada, MiSight remains the only FDA-approved contact lens for myopia control and is the first and only lens approved for myopia control in both Japan and China.

Speaker #1: We're also continuing to invest heavily in myopia control , R&D , and have several exciting breakthrough innovations underway , which further supports our confidence in my sites ability to deliver consistent , long term , robust growth .

Speaker #1: To conclude on Coopervision , let me highlight our performance relative to the market . This is calendar quarter . Data . So apples to apples with our competitors in calendar Q4 , we grew 10% and the market grew 6% .

Speaker #1: For the full calendar year 2025, this translated into 6% CooperVision growth versus the market at 5%, marking our 18th consecutive year of market share gains.

Al White: For the full calendar year of 2025, this translated into 6% CooperVision growth versus the market at 5%, marking our 18th consecutive year of market share gains. Turning to CooperSurgical, we delivered quarterly revenue of $329 million, up 3% or up 2.2% organically. Fertility revenues were $127 million, up 3% organically. Growth was driven by strong global genomics performance, supported by continued commercial and operational execution across product launches, new clinical wins, and expansions within existing accounts. We also saw solid results in consumables led by media, ZyMōt, our sperm separation device that helps optimize fertility procedures, and RI Witness, our automated lab tracking system. These gains were partially offset by softness in the Middle East and lower equipment installations. Importantly, we are now seeing early but clear signs of recovery in the fertility market.

Speaker #1: Turning to Coopersurgical . We delivered quarterly revenue of 329 million , up 3% or up 2.2% organically . Fertility revenues were 127 million , up 3% organically .

Speaker #1: Growth was driven by strong global genomics performance, supported by continued commercial and operational execution across product launches, new clinical wins, and expansions within existing accounts.

Speaker #1: We also saw solid results in consumables, led by media Zymo, our sperm separation device that helps optimize for fertility procedures, and Witness, our automated lab tracking system.

Speaker #1: These gains were partially offset by softness in the Middle East and lower equipment installations. Importantly, we are now seeing early but clear signs of recovery in the fertility market. As we move through the first quarter, results steadily improved, supported by solid execution on contract wins and new product launches, as well as strengthening underlying market trends.

Al White: As we moved through Q1, results steadily improved, supported by solid execution on contract wins and new product launches, as well as strengthening underlying market trends. This momentum positions us well for continued improvement through the remainder of the year, though developments in the Middle East, where we hold a leading market position, remain a source of uncertainty. For the fertility market overall, the product and services segments that we operate in had delivered strong growth for many years before slowing in late 2024. While several factors contributed to the deceleration, the industry is now recovering, driven by renewed clinic interest in adopting new technologies, along with improving cycles in the US and several European countries. A rapid rebound is unlikely, we anticipate steady improvement as we annualize last year's pressures and underlying activity normalizes.

Speaker #1: This momentum positions us well for continued improvement through the remainder of the year, though developments in the Middle East, where we hold a leading market position, remain a source of uncertainty for the fertility market.

Speaker #1: Overall , the product and services segment that we operate in had delivered strong growth for many years before slowing in late 2024 . While several factors contributed to the deceleration , the industry is now recovering , driven by renewed clinical interest in adopting new technologies along with improving cycles in the US and several European countries .

Speaker #1: Although a rapid rebound is unlikely , we anticipate steady improvement as we . Annualize last year's pressures and underlying activity in normalizes . Moving to office and surgical sales were 202 million , up 2% organically .

Al White: Moving to office and surgical, sales were $202 million, up 2% organically. Medical devices grew 6%, driven by strong performance in our surgical OBGYN portfolio, led by our uterine manipulators and related products, and continued momentum in our specialty surgical products, including our innovative single-use lighted cordless surgical retractors. This was partially offset by softness in some legacy medical devices and Paragard declining 7%, which was expected against a difficult comp tied primarily to last year's launch of the new single-hand inserter. To conclude, I want to recognize and thank our Cooper team for their dedication to operational excellence, investing in sales and marketing to drive organic growth while maintaining disciplined cost control and continuing to build a streamlined and technologically efficient company is no easy task. Thank you to the entire team. With that, I'll turn the call over to Brian.

Speaker #1: Medical devices grew 6% , driven by strong performance in our surgical ob gyn portfolio led by our uterine manipulators and related products , and continued momentum in our specialty surgical products , including our innovative single use lighted cordless surgical retractors This was partially offset by softness in some legacy medical devices and Paragard declining 7% , which was expected against a difficult comp tied primarily to last year's launch of the new single Inserter .

Speaker #1: To conclude, I want to recognize and thank our Cooper team for their dedication to operational excellence. Investing in sales and marketing to drive organic growth while maintaining disciplined cost control and continuing to build a streamlined and technologically efficient company is no easy task.

Speaker #1: So, thank you to the entire team. And with that, I'll turn the call over to Brian.

Speaker #2: Thank you . And good afternoon , everyone . Most of my commentary will be on a non-GAAP basis , so please refer to today's earnings release for a reconciliation of GAAP to non-GAAP results for our first fiscal quarter .

Brian Andrews: Thank you, Al, and good afternoon, everyone. Most of my commentary will be on a non-GAAP basis. Please refer to today's earnings release for a reconciliation of GAAP to non-GAAP results. For our Q1 fiscal quarter, consolidated revenue was $1.024 billion, up 6.2% year-over-year and up 2.9% organically. Gross margin was 68.1%, exceeding expectations driven primarily by a lighter mix of low-margin Asia Pacific revenue at CooperVision. Excluding the impact of tariffs, gross margin would have been essentially flat. Operating expenses rose only modestly and improved as a percentage of sales, declining from 43.6% to 41.2% year-over-year, reflecting the benefits of the reorganization executed in fiscal Q4 of last year.

Speaker #2: Consolidated revenue was 1.024 billion , up 6.2% year over year and up 2.9% organically . Gross margin was 68.1% , exceeding expectations , driven primarily by a lighter mix of low margin asia-pac revenue at Coopervision .

Speaker #2: Excluding the impact of tariffs, gross margin would have been essentially flat. Operating expenses rose only modestly and improved as a percentage of sales, declining from 43.6% to 41.2% year over year, reflecting the benefits of the reorganization executed in fiscal Q4 of last year.

Speaker #2: These efficiencies stem from the structural changes we've made as we transition to a smaller, more efficient organization that leverages technology, including AI, to automate work and optimize shared services.

Brian Andrews: These efficiencies stem from the structural changes we've made as we transition to a smaller, more efficient organization that leverages technology, including AI, to automate work and optimize shared services. The impact of these efforts was particularly evident at CooperSurgical, where expenses decreased year-over-year. Operating income increased a healthy 13.9%, resulting in a 26.9% margin. Interest expense was $22.4 million. The effective tax rate was 15.1%. Non-GAAP EPS grew 20% to $1.10, with roughly 197 million average shares outstanding. Free cash flow was very strong at $159 million, with CapEx of $102 million.

Speaker #2: The impact of these efforts was particularly evident at CooperSurgical, where expenses decreased year over year. Operating income increased a healthy 13.9%, resulting in a 26.9% margin.

Speaker #2: Interest expense was 22.4 million , and the effective tax rate was 15.1% . non-GAAP EPs grew 20% to $1 . $0.10 , with roughly 197 million average shares outstanding .

Speaker #2: Free cash flow was very strong at 159 million , with CapEx of 102 million . We deployed this cash by repurchasing 1.1 million shares of stock for $92 million , making the 50 the making the final $50 million payment related to our 2023 Cooke acquisition and applying the remaining balance towards reducing net debt to 2.4 billion .

Brian Andrews: We deployed this cash by repurchasing 1.1 million shares of stock for $92 million, making the final $50 million payment related to our 2023 Cook acquisition and applying the remaining balance towards reducing net debt to $2.4 billion. Lastly, in February, we addressed our $1.5 billion term loan maturing in December 2026 by amending and extending $950 million for another 5 years to February 2031. The remaining $550 million will be repaid in December 2026 when it matures, using our strong free cash flow and ample revolver avail capacity. Moving to full-year fiscal 2026 guidance.

Speaker #2: Lastly, in February, we addressed our $1.5 billion term loan maturing in December 2026 by amending and extending $950 million for another five years to February 2031.

Speaker #2: The remaining 550 million will be repaid in December 2026 , when it matures , using our strong free cash flow and ample revolver available capacity Moving to full year fiscal 2026 guidance , our revenue expectations are essentially unchanged , with consolidated revenues of roughly 4.3 to 4.35 billion , reflecting organic growth of roughly four and a half to 5.5% .

Brian Andrews: Our revenue expectations are essentially unchanged, with consolidated revenues of roughly $4.3 to 4.35 billion, reflecting organic growth of roughly 4.5% to 5.5%. CooperVision revenue is expected to be in the range of $2.9 to 2.93 billion, up 4.5% to 5.5% organically, and CooperSurgical is expected to be in the range of $1.4 to 1.41 billion, up 4% to 5% organically. For earnings, we're raising guidance to $4.58 to 4.66, reflecting our Q1 beat and stronger expected operational performance. Regarding tariffs, our estimate of approximately $24 million remains the same for the year.

Speaker #2: CooperVision revenue is expected to be in the range of $2.9 to $2.93 billion, up four and a half to five and a half percent organically, and CooperSurgical is expected to be in the range of $1.4 to $1.41 billion, up four to five percent organically for earnings.

Speaker #2: We're raising guidance to $4.58 to $4.66. Reflecting our Q1 beat and stronger expected operational performance regarding tariffs, our estimate of approximately $24 million remains the same for the quarter.

Speaker #2: Our expectations on interest expense and tax remain unchanged, with interest expense around $85 million and the effective tax rate between 15% and 16%.

Al White: Our expectations on interest expense and tax remain unchanged, with interest expense around $85 million and the effective tax rate between 15% and 16%. Turning to cash flow. Our cash conversion rate continues to improve, we're increasing our fiscal 26 free cash flow outlook to $600 to $625 million. For fiscal 26 through 2028, we continue to expect to generate more than $2.2 billion of free cash flow, driven by higher operating profits, improving working capital performance, and lower CapEx. From a capital deployment standpoint, our priorities remain unchanged. We're investing in growth and innovation, repurchasing shares, and reducing debt. To conclude, I'm proud of the operational excellence we're seeing across the organization. We're optimizing and leveraging prior investments in numerous areas, including IT, distribution, HR, and finance.

Brian Andrews: Our expectations on interest expense and tax remain unchanged, with interest expense around $85 million and the effective tax rate between 15% and 16%. Turning to cash flow. Our cash conversion rate continues to improve, we're increasing our fiscal 26 free cash flow outlook to $600 to $625 million. For fiscal 26 through 2028, we continue to expect to generate more than $2.2 billion of free cash flow, driven by higher operating profits, improving working capital performance, and lower CapEx. From a capital deployment standpoint, our priorities remain unchanged. We're investing in growth and innovation, repurchasing shares, and reducing debt. To conclude, I'm proud of the operational excellence we're seeing across the organization. We're optimizing and leveraging prior investments in numerous areas, including IT, distribution, HR, and finance.

Speaker #2: Turning to cash flow, our cash conversion rate continues to improve, and we're increasing our fiscal 2026 free cash flow outlook to $600 to $625 million for fiscal 2026 through 2028.

Speaker #2: We continue to expect to generate more than $2.2 billion of free cash flow, driven by higher operating profits, improving year-over-year working capital performance, and lower CapEx. From a capital deployment standpoint, our priorities remain unchanged.

Speaker #2: We're investing in growth and innovation, repurchasing shares, and reducing debt. To conclude, I'm proud of the operational excellence we're seeing across the organization.

Speaker #2: We're optimizing and leveraging prior investments in numerous areas , including IT distribution , HR , and finance , and we're increasingly applying AI enabled tools to streamline areas such as marketing , planning , forecasting and support functions .

Al White: We're increasingly applying AI-enabled tools to streamline areas such as marketing, planning, forecasting, and support functions. Our reorganization efforts are delivering meaningful synergies, and the results are evident. Looking ahead, we have additional opportunities to further optimize the way we work. With our multi-year CapEx cycle winding down, our manufacturing teams are now evaluating ways to capitalize on the next-generation production improvements developed over the past several years. Early planning is underway, and while this work will take time, the results have the potential to be material. In the meantime, we'll continue driving efficiencies by leveraging technology while consistently investing in initiatives to support sustainable organic growth. With that, I will turn the call over to the operator for questions.

Brian Andrews: We're increasingly applying AI-enabled tools to streamline areas such as marketing, planning, forecasting, and support functions. Our reorganization efforts are delivering meaningful synergies, and the results are evident. Looking ahead, we have additional opportunities to further optimize the way we work. With our multi-year CapEx cycle winding down, our manufacturing teams are now evaluating ways to capitalize on the next-generation production improvements developed over the past several years. Early planning is underway, and while this work will take time, the results have the potential to be material. In the meantime, we'll continue driving efficiencies by leveraging technology while consistently investing in initiatives to support sustainable organic growth. With that, I will turn the call over to the operator for questions.

Speaker #2: Our reorganization efforts are delivering meaningful synergies , and the results are evident . Looking ahead , we have additional opportunities to further optimize the way we work with our multi-year CapEx cycle winding down our manufacturing teams are now evaluating ways to capitalize on the next generation production improvements developed over the past several years .

Speaker #2: Early planning is underway , and while this work will take time , the results have the potential to be material . In the meantime , we'll continue driving efficiencies by leveraging technology while consistently investing in initiatives to support sustainable organic growth .

Speaker #2: And with that, I will turn the call over to the operator for questions.

Speaker #3: Once again , to ask a question , please press star one on your telephone keypad . And as a reminder , we do ask that you limit questions to one and one follow up Our first question comes from the line of Jeff Johnson with Baird .

Operator: Once again, to ask a question, please press star 1 on your telephone keypad. As a reminder, we do ask that you limit questions to 1 and 1 follow-up. Our first question comes from the line of Jeff Johnson with Baird. Please go ahead.

Speaker #3: Please go ahead

Speaker #4: Thank you guys . Good afternoon . I guess with the question . First question , let me just kind of back out and go more higher , higher level .

Jeff Johnson: Thank you, guys. Good afternoon. I guess as a first question, let me just kind of back out and go more higher level. Al, I mean, you reported a 10% calendar Q4 number. I think over the last three quarters, you've been about 3 and a half percent for CVI. One, can you reconcile that 10% number versus the last few quarters at 3%? Just what's different in the number you're citing there versus what we see in your CVI organic growth results? Then one follow-up question. Thanks.

Speaker #4: I mean, you reported a 10% calendar for Q number. I think over the last three quarters you've been about 3%, 3.5% for CVI.

Speaker #4: So, one, can you reconcile that 10% number versus the last few quarters at three? Just, what's different in the number you're citing?

Speaker #4: There versus what we see in your CVI organic growth results? And then one follow-up question.

Speaker #1: Sure . Yeah . I knew we were going to get that one . It's literally just a matter of the months . And shipment of products .

Al White: Sure. Yeah, I knew we were gonna get that one. It's literally just a matter of the months and shipment of products. We had had a weak November and December of 2024, and we had a really strong January of 2025. Just when you comped against that, the way that the shipments worked, it resulted in a really strong calendar Q4 for us.

Speaker #1: So we had had a week November . In December of 2024 . And we had a really strong January of 2025 . So just when you comp against that , the way that the shipments worked , it resulted in , an a strong calendar , Q4 for us

Speaker #4: All right . Fair enough . And I guess again , maybe I'll zoom even further out . And apologies for the feedback , but you know , you've been talking about kind of getting back to market growth above market growth , at least as you report CVI , you know , how is that plan going so far ?

Jeff Johnson: All right. Fair enough. I guess, again, maybe I'll zoom even further out, and apologies for the feedback. You know, you've been talking about kind of getting back to market growth, above market growth, at least as you report CVI. You know, how is that plan going so far? Maybe update us on the MyDay, you know, clariti to MyDay transition. Just in general, it still feels like your results are maybe lagging the market here a little bit relative to some of your peers. How do you feel like you're doing in kind of getting back up and into above market over the next couple of quarters? Thank you.

Speaker #4: Maybe update us on the my day . You know , clarity to my day transition just in general . It still feels like your results are maybe lagging the market here a little bit relative to some of your peers .

Speaker #4: So how do you feel like you're doing in kind of getting back up into above market over the next couple of quarters? Thank you. Yep, yep.

Speaker #1: Great question Jeff . You know , I'll break that up a couple different ways . I mean , if I look at the Americas , we're doing well .

Al White: Yep. Yep. Great question, Jeff. you know, I'll break that up a couple different ways. I mean, if I look at the Americas, we're doing well. The US had a good quarter. We're gaining a lot of traction. We've got product launches and a lot of activity. The team's doing a fantastic job. I would say we're in good shape with the Americas. When I look at EMEA, again, in good shape there. We took a step forward this quarter against last one, we've won a number of contracts there. We have a number of product launches going on. I would say we have better visibility for that market right now to improving sales.

Speaker #1: The US had a good quarter. We're gaining a lot of traction. We've got product launches and a lot of activity. The team's doing a fantastic job.

Speaker #1: So I would say we're in good shape with the Americas. When I look at EMEA, again, in good shape there. We took a step forward this quarter against last one.

Speaker #1: But we've won a number of contracts there. We have a number of product launches going on, and I would say we have better visibility for that market right now to improving sales.

Speaker #1: So I feel pretty good about the momentum that we have in the Americas and the momentum that we have in EMEA right now associated with MyDay and Clarity.

Al White: I feel pretty good about the momentum that we have in the Americas and the momentum that we have in EMEA right now associated with MyDay and clariti, frankly. I go to Asia Pacific as kind of the third one, the results there, right, have been a little tough for us. That's the area that we need to get figured out and get back to kind of our old traditional growth rates and we'll be in fantastic shape. As I mentioned, we're doing a lot of stuff to drive growth in Asia Pacific. We did see success kind of in a number of areas where we've had problems. We've stabilized when it comes to a lot of the e-commerce stuff that we talked about. We've stabilized the China business.

Speaker #1: Frankly . And then I go to Asia PAC is kind of the third one . And and the results , there , right .

Speaker #1: It has been a little tough for us, and that's the area that we need to get figured out and get back to kind of our old, traditional growth rates.

Speaker #1: And we'll be in fantastic shape . As I mentioned , we're doing a lot of stuff to drive growth in Asia . We did see success kind of in a number of areas where we've had problems .

Speaker #1: We've stabilized when it comes to a lot of the e-commerce stuff that we talked about , we've stabilized the China business . We had a changeover , a number of some personnel , a number of leadership positions .

Al White: We had a changeover, a number of some personnel, a number of leadership positions, so we're in good shape in a number of countries. The one that we kinda have left right now is Japan, and I can target that down to, like, Japan older hydrogel products, where some of our competitors are taking some share. We have not caved on price or anything along those lines. I think we're gonna continue to have a little bit of pressure in Japan with traditional hydrogels again in next quarter because I think that the region will probably be down because of it.

Speaker #1: So we're in good shape in a number of countries. The one that we kind of have left right now is Japan. And I can target that down to, like, Japan.

Speaker #1: Older hydrogel products, where some of our competitors are, are taking some share. We have not caved on price or anything along those lines.

Speaker #1: So I think we're going to continue to have a little bit of pressure in Japan , with traditional hydrogels . Again , in this next quarter , because I think that the region will probably be down because of it .

Speaker #1: But then all of that success , the stuff that I'm talking about , all those product launches in Asia-pac , the success of executing on those private label contracts , all of that kind of stuff , the transition point on that happens in Q3 , and you're going to have Asia PAC growing again .

Al White: All of that success, the stuff that I'm talking about, all those product launches in Asia Pacific, the success of executing on those private label contracts, all of that kind of stuff, the transition point on that happens in Q3. You're gonna have Asia Pacific growing again. Another one where I would say we had a number of points over the last year, and just a lot better, a lot clearer visibility right now on where those challenges are and where the successes are gonna come from. I think Q2, fiscal Q2 ends up being a step up, certainly from this quarter. As I've said all along, like, we'll be back to rolling in Q3 and Q4.

Speaker #1: So another one where, I would say, we had a number of points over the last year, and just a lot better, a lot clearer visibility right now.

Speaker #1: On where those challenges are . And where the successes are going to come from . So I think Q2 and fiscal Q2 ends up being a step up .

Speaker #1: Certainly from this quarter. And then, as I've said all along, we'll be back to rolling in Q3 and Q4.

Speaker #3: And from Wells Fargo, our next question comes from the line of Larry Biegelsen. Please go ahead.

Operator: From Wells Fargo, our next question comes from the line of Larry Biegelsen. Please go ahead.

Speaker #5: All right . That was a new pronunciation . Thanks for taking the question . Hey , you know , we heard your comments about the Middle East and IVF .

Larry Biegelsen: All right. That was a new pronunciation. Thanks for taking the question. Hey, Al, you know, we heard your comments about the Middle East and IVF. Maybe you could just level set us on what your exposure is there and how your, you know, how you're thinking the war might impact your business. I have one follow-up.

Speaker #5: Maybe you could just level set us on what your exposure is there, and how you're, you know, how you're thinking the war might impact your business.

Speaker #5: And I had one follow-up.

Speaker #1: Sure . Yeah . To put some numbers around that kind of for us on a consolidated basis , the Middle East is about 2% of our sales .

Al White: Sure. Yeah, to put some numbers around that, kind of for us on a consolidated basis, the Middle East is about 2% of our sales. A lot of it is distributor, obviously, the Middle East is a very large region. It won't have that much of an impact on us other than it could impact fertility because there's a decent amount of fertility business. We're number one in that region. We have good strength there. It's just a matter of us being able to get products there. I mean, women are obviously still going through fertility treatment and so forth there. We have to be able to get product in. If that situation extends for a period of time, it'll be more challenging for us.

Speaker #1: A lot of it is distributor. And obviously, the Middle East is a very large region. So it won't have that much of an impact on us, other than it could impact fertility, because there's a decent amount of fertility business.

Speaker #1: We're number one in that region. We have good strength there, so it's just a matter of us being able to get products there.

Speaker #1: I mean, women are obviously still going through fertility treatment and so forth there. We have to be able to get product in.

Speaker #1: So if that , if that situation extends for a period of time , it'll be more , more challenging for us . We even with that , we're still we have a lot of good momentum in fertility .

Al White: Even with that, we have a lot of good momentum in fertility, and I think we'll still improve quarter-over-quarter. That's kind of the one question mark, otherwise I'd even be more bullish on fertility.

Speaker #1: And I think we still will still improve quarter over quarter . But that's kind of the one question mark . Otherwise , I'd even be more bullish on fertility .

Speaker #5: Thanks . And Brian , the margins were really strong in Q1 . Just remind us how we should think about the phasing for the year , how you're thinking about , I guess , the tariffs you said no change , but in light of this recent Supreme Court ruling , if that's if that stood , would there be upside on tariffs ?

Larry Biegelsen: Thanks. Brian, the margins were really strong in Q1. Just remind us how we should think about the phasing for the year, how you're thinking about the I guess the tariffs, you said no change. In light of this recent Supreme Court ruling, if that stood, would there be upside on tariffs? Thanks for taking the question.

Speaker #5: Thanks for taking the question .

Speaker #2: Sure , Larry . I'll start with the second part of your question , at least as it relates to tariffs . We've assumed $24 million in the year .

Brian Andrews: Sure, Larry. I'll start with the second part of your question, at least as it relates to tariffs. We've assumed $24 million in the year. That's what we assumed as of the last guidance. We're gonna sit tight. Obviously, we capitalize and release the impact of tariffs 4 months later. Any change to tariff rules or guidelines or whatever takes effect won't impact us until later in the year. You know, a 10% tariff makes very little impact. It's pretty similar to the $24 million. I'd assume that if it goes up to 15%, you know, that could be, you know, somewhere upwards of like $4 million. For now, we're, you know... The 10% is what it is, and that's what we factored in the guidance.

Speaker #2: That's what we assumed as of the last guidance. We're going to sit tight. Obviously, we capitalize and release the impact of tariffs.

Speaker #2: Four months later. So any change to tariff rules or guidelines or whatever takes effect won't impact us until later in the year.

Speaker #2: But , you know , a 10% tariff makes very little impact . It's pretty similar to the 24 million . So I would assume that if it goes up to 15% , you know , that could be , you know , somewhere upwards of like $4 million .

Speaker #2: But for now , we're just we're , you know , it's the 10% is , is is what it is . And that's what we factored into guidance as it relates to operating margins .

Brian Andrews: As it relates to operating margins, yeah, I mean, it's the same story that we've been talking about from, you know, exiting last quarter. You know, we're getting really durable savings from the synergies and the elimination of fixed costs from the reorganization that we talked about in Q4. We're leveraging prior investment activity, and we're being really disciplined. You know, we're scrutinizing all non-revenue generating expenses, particularly, you know, the back office, and we're investing in sales and marketing.

Speaker #2: Yeah . I mean it's it's a it's the same story that we've been talking about from , you know , exiting last quarter .

Speaker #2: You know, we're getting really durable savings from the synergies and the elimination of fixed costs from the reorganization that we talked about in Q4.

Speaker #2: We're leveraging prior investment activity , and we're being really disciplined . You know , we're we're scrutinizing all non generating expenses , particularly , you know , the back office .

Speaker #2: And we're investing in sales and marketing . So the drop through in operating margins was good in Q1 . And I would expect as you know , I would expect you're going to continue to see , you know , stronger operating performance , which is why , frankly , we raised our guidance .

Brian Andrews: The drop-through in operating margins was good in Q1. I would expect as it would, you know, you're gonna continue to see, you know, stronger operating performance, which is why, frankly, we raised our guidance, you know, $0.13 at the bottom end and $0.10 at the midpoint, you know, based on stronger operating performance. I'm not gonna get into gating at this moment.

Speaker #2: You know , $0.13 at the bottom end and $0.10 at the midpoint . You know , based on stronger operating performance . But I'm not going to get into gating at this moment .

Speaker #5: All right. Thanks, Brian.

Larry Biegelsen: All right. Thanks, Brian.

Speaker #2: Yep

Brian Andrews: Yep.

Speaker #3: And from Piper Sandler, our next question comes from the line of Jason Bednar. Please go ahead.

Operator: From Piper Sandler, our next question comes from the line of Jason Bednar. Please go ahead.

Speaker #6: Hey good afternoon . Thanks for taking the questions . I actually want to pick up on the line of questioning that Jeff had , but , you know , as far as the competitive landscape as it stands today and your share position , maybe talk about al new fit activity across the quarter .

Al White: Hey, good afternoon. Thanks for taking the questions. I actually wanna pick up on the line of questioning that Jeff had. You know, as far as your, the competitive landscape as it stands today and your share position, maybe talk about, Al, new fit activity across the quarter. Just what are you seeing in the data when you look at your performance versus peers, if you can break it down dailies versus monthlies? Sure. If I look at new fit activities, it probably hasn't really changed that much. At the end of the day, right now, we're taking wearers, so the fit activity continues to put us in a good position. Now you have a whole lot of other variables that go into it, I would say.

Jason Bednar: Hey, good afternoon. Thanks for taking the questions. I actually wanna pick up on the line of questioning that Jeff had. You know, as far as your, the competitive landscape as it stands today and your share position, maybe talk about, Al, new fit activity across the quarter. Just what are you seeing in the data when you look at your performance versus peers, if you can break it down dailies versus monthlies?

Speaker #6: Just what are you seeing in the data when you look at your performance versus peers? If you can, break it down: dailies versus monthlies.

Al White: Sure. If I look at new fit activities, it probably hasn't really changed that much. At the end of the day, right now, we're taking wearers, so the fit activity continues to put us in a good position. Now you have a whole lot of other variables that go into it, I would say. If I narrowed down to just new fit activity, whether it's dailies or FRPs, we are taking wearers in both of those. We did this past quarter. I feel good about that as kind of continuing to be a good indicator of the future.

Speaker #1: Sure . If I look at new fit activities , it probably hasn't really changed that much . At the end of the day , right now , we're taking where's so the fit activity continues to put us in a good position .

Speaker #1: Now you have a whole lot of other variables that go into it . I would say , but if I narrowed down to just new fit activity , whether dailies or FRP , we are taking wears in both of those .

Al White: If I narrowed down to just new fit activity, whether it's dailies or FRPs, we are taking wearers in both of those. We did this past quarter. I feel good about that as kind of continuing to be a good indicator of the future.

Speaker #1: We did this past quarter, so I feel good about that as kind of continuing to be a good indicator of the future.

Speaker #6: Okay . All right . And then as a follow up It really seems like industry pricing dynamics have calmed down , at least relative to where we were last year .

Larry Biegelsen: Okay. All right. As a follow-up, it really seems like industry pricing dynamics have calmed down, at least relative to where we were last year. You know, it sounds like the latest round of increases here, you know, the last few months are sticking, should be good for all the players out there. How are you thinking about future list price increases and managing these discussions with wholesalers and docs, especially as I think back, we went through multiple increases the past few years, usually like 2 increases a year. Do you think the market can absorb more than one price increase a year without negatively affecting demand here going forward?

Jason Bednar: Okay. All right. As a follow-up, it really seems like industry pricing dynamics have calmed down, at least relative to where we were last year. You know, it sounds like the latest round of increases here, you know, the last few months are sticking, should be good for all the players out there. How are you thinking about future list price increases and managing these discussions with wholesalers and docs, especially as I think back, we went through multiple increases the past few years, usually like 2 increases a year. Do you think the market can absorb more than one price increase a year without negatively affecting demand here going forward?

Speaker #6: You know , it sounds like the latest round of increases here . You know , the last few months are sticking . Should be good for all the players out there .

Speaker #6: How are you thinking about future list price increases and managing these discussions with with wholesalers and docs , especially as I think back we went through multiple increases in the past few years , usually like two increases a year .

Speaker #6: Do you think the market can absorb more than one price increase a year without negatively affecting demand? You're going forward.

Speaker #1: Yeah , well , I do because of the technology that's coming out . I mean , we are launching as an industry . We're launching new products , really innovative products .

Al White: Well, I do because of the technology that's coming out. I mean, we are launching, as an industry, we're launching new products, really innovative products. We have some great ones ourselves. I mean, there's nothing more innovative in the contact lens industry today than MyDay MiSight that's launching out there. The multifocals that we're launching are great products. Energys is a great product. I know some of our competitors have some products out there that they're launching at good price points. Consumers are willing to pay for that high quality, and contact lenses are not particularly expensive at the end of the day. The positive pricing that you're picking up on in your comment is true. I'm happy about or I feel positive about pricing in the marketplace right now.

Speaker #1: We have some great ones ourselves . I mean , there's nothing more innovative in the contact lens industry today than my day , my site that's launching out there .

Speaker #1: But the multifocals that we're launching are great products. Energous is a great product. I know some of our competitors have some products out there that they're launching at good price points.

Speaker #1: So consumers are willing to pay for that high quality, and contact lenses are not particularly expensive at the end of the day.

Speaker #1: So the positive pricing that you're picking up on, on your comment, is true. I'm happy about, or I feel positive about, pricing in the marketplace right now.

Speaker #1: The only reason I'd put a little caveat on that is, it's still an Asia pack. There are definitely markets in Asia where there's some pretty competitive pricing out there.

Al White: The only region I'd put a little caveat on that is still in Asia Pacific. There's definitely markets in Asia Pacific where there's some pretty competitive pricing out there. Yeah, generally speaking, I'd say pricing is positive right now and it's appropriate given the technologies that are rolling into the marketplace.

Speaker #1: But yeah , generally speaking , I'd say pricing . Pricing is positive right now . And it's appropriate given the technologies that are rolling into the marketplace .

Speaker #6: Fair enough . Thank you

Brian Andrews: All right. Fair enough. Thank you.

Jason Bednar: All right. Fair enough. Thank you.

Speaker #3: I'm from Stiefel. Our next question comes from the line of John Bloch. Please go ahead.

Operator: From Stifel, our next question comes from the line of Jon Block. Please go ahead.

Speaker #2: Great. Thanks, guys. Good.

Jon Block: Great. Thanks, guys. Good evening. You know, the CVI number, I think I heard you at 3 percent. It was a bit below expectations, even the bottom end of the midpoint. Like, we gave that guidance call at, you know, first or second week in December. Maybe just talk to us. Again, it was slightly below, but, like, what deviated from expectations relative to when you gave it? It would seem to suggest that maybe January was a little bit weaker than your expect. Can you give us any color on how things trended into February? Yeah, sorry for the awful feedback.

Speaker #7: Good evening . You know , the CBI number ? I think I heard you had three , three precisely . It was a bit below expectations .

Speaker #7: Even the bottom end of the midpoint . You gave that guidance . Call it , you know , first or second week in December .

Speaker #7: So, maybe just talk to us again. It was slightly below, but what deviated from expectations relative to when you gave it?

Speaker #7: And it would seem to suggest that maybe January was a little bit weaker than you expected. So, can you give us any color on how things trended into February?

Speaker #7: And yeah, sorry for the awful feedback.

Speaker #1: Yeah . No , you're right John , because we were looking at Asia PAC being essentially flat for the quarter , kind of similar to what we did in Q4 .

Al White: Yeah, no. You're right, Jon, because we were looking at Asia Pacific being essentially flat for the quarter, kind of similar to what we did in Q4, that would have meant CooperVision consolidated growth would have been like, you know, 4.3%, something like that. You're right, it was 3.3%. That delta was very specific and very targeted, if you will, to what happened in Japan on those legacy products. I mean, we started seeing it some in December, we definitely saw that activity in January. That's what happened. That's where it picked up. I thought that, frankly, the momentum we have with all the product launches and activity and everything would overcome that.

Speaker #1: And that would have that would have meant Coopervision consolidated growth would have been like , you know , four , three , something like that .

Speaker #1: And you're right , it was 3.3 . So that Delta was very specific and very targeted . If you will , to what happened in Japan on those legacy products .

Speaker #1: I mean , we started seeing it some in December , and then we definitely saw that activity in January . So that's that's what happened .

Speaker #1: That's where it picked up. I thought that, frankly, the momentum we had with all the product launches, launches, and activity and everything would overcome that.

Speaker #1: But yeah , that was a decent hit for us as we rolled through December and January . You're right . And and that's why I said I think Asia PAC will probably be down one more quarter before all the positive energy that we have kind of overwhelms that , if you will .

Al White: Yeah, that was a decent hit for us as we rolled through December and January. You're right. That's why I said I think Asia Pacific will probably be down one more quarter before all the positive energy that we have kind of overwhelms that, if you will.

Speaker #7: Okay . Fair enough . And second one , you know , I apologize in advance for sort of the boring question . But Brian , when I look at the ad backs in the quarter , almost half of the ad backs were from like a hit from natural causes and litigation , which is just a little uncommon and didn't seem to be the case in prior quarters .

Jon Block: Okay. fair enough. Second one, you know, apologies in advance for sort of the boring question, but Brian, when I look at the add backs in the quarter, almost half of the add backs were from, like, a hit from natural causes and litigation, which is, you know, just a little uncommon and didn't seem to be the case in prior quarters. Any color on, you know, what you can give around the add backs, if you can elaborate a bit. Thank you.

Speaker #7: So, any color you can give around the add-backs—if you can elaborate a bit, that would be great. Thank you.

Speaker #2: John , I think you're talking about just in the other category where we where we break out . I think it was 6.7 million was related to other legal related matters .

Brian Andrews: John, I think you're talking about just in the other category where we break out, I think it was $6.7 million was related to other legal related matters. I mean, we don't. Our stance is not typically to talk about, you know, what legal matters are going on. We obviously have insurance for a number of things, but there are some things that we don't have insurance on where we're defending ourselves or we're, you know, we've got some legal related matters that show up. You know, it's a little bit higher this quarter, but not too atypical from, you know, years past.

Speaker #2: I mean , we don't our our stance is not typically to talk about , you know , what legal matters are going on .

Speaker #2: We obviously have insurance for a number of things , but there are some things that we don't have insurance on whether we're defending ourselves or we're or we're you know , we've got some legal related matters that that show up .

Speaker #2: So , you know , it's a little bit higher this quarter . But not not too atypical from , from , you know , years past .

Speaker #7: Okay. Fair enough. Thanks, guys.

Jon Block: Okay. Fair enough. Thanks, guys.

Speaker #3: From Jefferies. Our next question is from Young Lee. Please go ahead.

Operator: From Jefferies, our next question is from Young Li. Please go ahead.

Young Li: All right, great. Thanks for taking the question. I guess to start, I was wondering if you could talk a little bit about, you know, give us an update on sort of how the supply dynamics have impacted your ability to win new contracts in the quarter.

Speaker #8: All right . Great . Thanks for taking the questions . I guess to start , I was wondering if you could talk a little bit about , you know , there's an update on sort of how the supply dynamics have impacted your ability to win a new contract in the quarter

Speaker #2: Supply, supply dynamics, that.

Al White: Supply.

Brian Andrews: Supply dynamics.

Al White: Impacted your ability to win. Oh, for supply, you're probably referencing some of the MyDay capacity. We don't have those issues anymore. I would say that when it comes to supply constraints, manufacturing or supply constraints or logistic challenges, I am very happy to say those are in the rear view window now. We don't have those challenges anymore. That's not impacting us.

Speaker #9: Impacted your ability to win?

Speaker #1: Oh , for for supply . You probably referencing some of the my day capacity . We don't have those issues anymore . So I would say that when it comes to supply constraints , manufacturing or supply constraints are logistic challenges .

Speaker #1: I very happy to say those are in the rear view window . Now , we don't have those challenges anymore . So that that's not impacting us

Speaker #8: Yeah . Apologies for the sound quality . Don't think you heard the question fully , but I was just wondering if , you know , you were able to win more new contracts this quarter , just given the improvement in supply .

Young Li: Yeah, apologies for the sound quality. Don't think you heard the question fully, but I was just wondering if, you know, you were able to win more new contracts this quarter, just given the improvement in supply.

Speaker #1: Oh , I got you . I got you . The answer to that is yes . Yes , we did win a number of new contracts .

Al White: Oh, I got you. I got you. The answer to that is yes. Yes. We did win a number of new contracts. As a matter of fact, we won them in all three regions. They were definitely MyDay related. We won a bunch kind of last year and as we were exiting last year. We've continued to expand relationships and partnerships and win additional MyDay business. Yeah, we have.

Speaker #1: As a matter of fact , we want them in all three regions . And they were definitely my day related . So we won .

Speaker #1: We won a bunch kind of last year . And as we were exiting last year , but we've continued to expand relationships and partnerships and and win additional my day business .

Speaker #1: So yeah , we have

Speaker #8: Okay, great. Very helpful. And then, I guess to follow up, I wanted to get a little bit of color and an update on Paragard.

Young Li: Okay, great. Very helpful. Then, I guess, to follow up, wanted to get a little bit of color and update on Paragard. You know, it's a high margin business, although, you know, we know about the volume pricing dynamics. Are there any incremental updates from the competitive front, just given the, you know, potential for impact on the profitability side?

Speaker #8: You know , it's a high margin business , although , you know , we know about the volume and pricing dynamics . Any are there any incremental updates from the competitive front just given the , you know , potential for impact on the profitability side ?

Speaker #1: I would say no. Updates, as far as I'm aware, on that licensing agreement you referenced on the competitive side have not closed.

Al White: I would say no updates. As far as I'm aware of that licensing agreement that you're referencing on the competitive side had not closed. I don't have any updates or any details on any of that. I think for us, Paragard was -7% for the quarter. We're still expecting that to be flat to up a little bit for this, for this fiscal year. Then we'll see how that plays. If that deal actually does happen, then we'll get some color on, you know, their launch plans and so forth. Right now, I don't want to speculate on any of that.

Speaker #1: So I don't I don't have any updates or any details on any of that . I think for us , Paragard was minus seven for the quarter .

Speaker #1: We're still expecting that to be flat to up a little bit for this for this fiscal year . And then we'll see . We'll see how that plays .

Speaker #1: If that deal actually does happen, and then we'll get some color on, you know, their launch plans and so forth.

Speaker #1: But right now, I don't want to speculate on any of that.

Speaker #8: Okay . Thank you

Young Li: Okay. Thank you.

Speaker #3: And from Barclays, our next question is coming from the line of Matt Miksic. Please go ahead.

Al White: Yeah.

Operator: From Barclays, our next question is coming from the line of Matt Miksic. Please go ahead.

Speaker #10: Great . Thanks so much . I hope this is coming through okay . But one question just following up on the market , you know , there was some kind of unusual trajectories during last year in terms of the market based on your best guess and what you saw .

Matt Miksic: Great. Thanks so much. Hope this is coming through okay. One question just, following up on the market. You know, there was some kind of unusual trajectory during last year in terms of the market. Based on your best guess and what you saw, I guess, entering and exiting Q4 on account information, do you think that's, you know, improving now? Do you think we're stable? Any further color on what the ups and downs were from last year? I have one follow-up.

Speaker #10: I guess entering and exiting Q4 on a calendar basis . Do you think that's , you know , improving now ? Do you think we're stable any any further color on what the ups and downs were from last year ?

Speaker #10: And then I have one follow-up.

Speaker #11: Yeah, I think—I think.

Al White: Yeah. I think I would say we're at least stable, if not improving a little bit. We did have, as a contact lens industry, a softer year last year, but, it's at least stable. The reason I say improving as I sit here, think about it at the top of my head, right, is because of pricing that somebody asked about earlier. You know, I've kind of looked at the market and said, "Hey, about 1%'s gonna come from price, about 1% will come from wares, and then you'll have all the other stuff, the shift to dailies and so forth that's happening that'll drive it." That 1% that coming from price, I would certainly stand by that, and it could be potentially a little bit better than that.

Speaker #1: I would say we're at least stable . If not improving a little bit . We did have as a contact lens industry , a softer year last year , but the it's at least stable .

Speaker #1: The reason I say improving, as I sit here and think about it off the top of my head, right, is because of pricing that somebody asked about earlier.

Speaker #1: You know, I have kind of marked it and said, hey, about 1% is going to come from price, about 1% will come from where's.

Speaker #1: And then you'll have all the other stuff . The shift to dailies and and so forth , that's happening . That'll drive it .

Speaker #1: That 1% that's coming from price, I would certainly stand by that. And it could be potentially a little bit better than that.

Speaker #1: So I do think the the market is well positioned for a decent year . I would be like a rebound of what it was years ago , but it's going to be a better year , I think , in 2025 than it was in 2024 .

Al White: I do think the market is well positioned for a decent year. That would be like a rebound of what it was years ago, but it's gonna be a better year, I think, in 2025 than it was in 2024.

Speaker #10: Got it . And then just a follow up on some of the dynamics that are driving growth this next quarter . And the quarter after you mentioned Japan down this quarter , improving , you know , by the third fiscal quarter , I think how how do you how should we think about the impact of some of these ?

Matt Miksic: Got it. Just a follow-up on some of the dynamics that are kind of real this next quarter and the quarter after. You mentioned Japan down this quarter, improving, you know, by the Q3 fiscal quarter, I think. How should we think about the impact of some of these, the private label engagements, contracts that you announced and mentioned that you were able to close some more? When do those, or do we notice those coming in this year? Do they just kind of filter in and support sustainable growth? I mean, how to think about it?

Speaker #10: The private label engagements that you contract, that you announced and mentioned that you were able to close some more—when do those, or do we notice those this year?

Speaker #10: Do they just kind of filter in and support sustainable growth ? I mean , how to think about because it just seemed like there was a there was a quite a number of them that you signed .

Matt Miksic: It just seemed like there was a quite a number of them that you signed, and I'm just wondering if that's something we're gonna notice as we get into the middle and back half of this year. Thanks.

Speaker #10: And I'm just wondering if that's something we're going to notice as you get into the middle of the back half of this year.

Speaker #10: Thanks .

Speaker #1: Yep , yep . Good question . And yes , we are executing on those private label contracts and a number of branded contracts that we've won .

Al White: Yep, yep. A good question. Yes, we are executing on those private label contracts and a number of branded contracts that we won, and you will see those as we progress through the year. They got masked this quarter because of what happened in Japan, as I was saying, otherwise we would have been kind of 4 3, somewhere 4 4, somewhere around there. We are executing and doing well on those contracts. The way I see it playing out is we continue to execute on those contracts and we have good visibility on that. That's gonna result in a better Q2. As I've said all along, it's gonna be Q3 and Q4 is when all those contracts and those launches really start coming together for us.

Speaker #1: And you will see those as we progress through the year. They got masked this quarter because of what happened in Japan. As I was saying.

Speaker #1: Otherwise we would have been kind of four , three somewhere , four four , somewhere around there . But we are executing and doing well on those contracts .

Speaker #1: So, the way I see it playing out is we continue to execute on those contracts, and we have good visibility on that. That's going to result in a better Q2.

Speaker #1: But as I've said all along, it's going to be Q3 and Q4 when all those contracts and those launches really start coming together for us.

Speaker #1: So I just think that we kind of have one more quarter behind us of some of the challenges that we were dealing with, and we have one more quarter here, and the quarter that we're in, where we have some residual challenges in Asia-Pac. Still, putting up a step in the right direction in Q4, but then we get back to kind of the supervision of old.

Al White: I just think that we kind of have 1 more quarter behind us of some of the challenges that we were dealing with, and we have 1 more quarter here in the quarter that we're in, where we have some residual challenges in Asia Pacific. Still putting up a step in the right direction in Q4, but then we get back to kind of the CooperVision of old and the more consistent, solid revenue growth rates in Q3 moving forward.

Speaker #1: And the more consistent, solid revenue growth rates in Q3. Moving forward.

Speaker #10: Great . Thank you .

Matt Miksic: Great. Thank you.

Speaker #12: Yeah .

Al White: Yeah.

Speaker #3: Our next question comes from Bank of America, from the line of Travis Stade. Please go ahead.

Operator: Our next question comes from Bank of America from the line of Travis Steed. Please go ahead.

Speaker #13: Hey , thanks for the question . I guess the first question I have is on kind of Q2 revenue , kind of where you want the street to shake out and kind of the cadence for for revenue growth for total company and Coopervision and Coopersurgical .

Travis Steed: Hey, thanks for the question. I guess the first question I have is on kind of Q2 revenue, kind of where you want the street to shake out and kind of the cadence for revenue growth for total company and CooperVision and CooperSurgical. We heard the comments on Japan, if there's any other dynamics that you'd point to that we should model for Q2.

Speaker #13: We heard the comments on Japan, and if there's any other dynamics that you'd point to that we should model for Q2.

Speaker #1: Well , I think , you know , if I looked at it that way , I'd say we'll probably have another good quarter .

Al White: Well, I think, you know, if I looked at it that way, I'd say we'll probably have another good quarter. I would expect in the Americas. I would expect EMEA to be a little bit better than it was this quarter, and Asia Pac is the question mark to me. You know, it'll be down a little bit in total. I would assume that the Q2 results, you know, are a little bit better than what we did here. I would look at surgical pretty similar. You know, fertility should be a little bit better, even with some Middle East risk out there. The rest of that business is humming along fairly well. I would think CooperSurgical will post a little bit better sequential quarter than what they did in Q1.

Speaker #1: I would expect in the Americas. I would expect EMEA to be a little bit better than it was this quarter. And Asia-Pac is the question mark to me.

Speaker #1: You know , it'll be down a little bit in total . So I would assume that the Q2 results , you know , are a little bit better than what we did here .

Speaker #1: I would look at surgical pretty similar. You know, fertility should be a little bit better, even with some Middle East risk out there.

Speaker #1: And the rest of that business is humming along fairly well. So, I would think Cooper will post a little bit better sequential quarter than what they did in Q1.

Speaker #13: Thank you . On the second question , I wanted to ask on the strategic review , you when when do you expect that to be complete ?

Travis Steed: Good. Thank you. On the second question I wanted to ask on the strategic review, you know, when do you expect that to be complete? You know, what's the goal for the outcome? Anything else you could kind of say on the strategic review would be helpful.

Speaker #13: What's the goal for the outcome? And anything else you could kind of say on the strategic review would be helpful.

Al White: Sure. There's really not much else I can add on that. I mean, we announced that we were doing that kind of formally, if you will, beginning of December, went through the holidays and so forth. We're very active on it right now with our advisors and the board and so forth. I don't wanna comment or say anything right now. It probably wouldn't be appropriate to go into any details until we get some concrete information. I'll hold off on that one, but certainly provide updates when we can.

Speaker #1: Sure . There's really not much else I can add on that . I mean , we announced that we were doing that kind of formally , if you will be of December and went through the holidays and so forth , and we're we're very active on it right now with our advisors and the board and so forth .

Speaker #1: So, I don't want to comment or say anything right now. It probably wouldn't be appropriate to go into any details until we get some concrete information.

Speaker #1: So I'll hold off on that one, but certainly provide updates when we can.

Speaker #13: Okay. That's fair. Just wanted to ask. Thank you.

Travis Steed: Okay, that's fair. Just wanted to ask. Thank you.

Speaker #12: Yep

Al White: Yep.

Speaker #3: Our next question comes from Mizuho Group, from the line of Anthony Petrone. Please go ahead.

Operator: Our next question comes from Mizuho Group from the line of Anthony Petrone. Please go ahead.

Speaker #14: Thanks, and good evening, everyone. Maybe one on private—one on private label, and then one on my day. My sight on private label.

Anthony Petrone: Thanks, good evening, everyone. Maybe one on private label and then one on MyDay, MiSight. On private label, I don't know if you can share this, Al or Brian, but, you know, what was the percent of private label exiting last fiscal year? With the addition of these new private label contracts, you know, where can that increase to? Is that, you know, margin neutral? Is it a margin drag, or can it be accretive to margins? I'll have the one quick follow-up on MiSight.

Speaker #14: I don't know if you can share this, Alan or Brian, but do you know what was the percent of private label exiting last fiscal year?

Speaker #14: And what the addition of these new private label contracts , you know , where can that increase to ? And is that , you know , margin neutral ?

Speaker #14: Is it a margin drag, or can it be accretive to margins? I'll have one quick follow-up on my side.

Speaker #1: Yeah . So our private label was running for quite a while . About a third of our revenues . It's a little bit higher than that .

Al White: Yeah. Our private label was running for quite a while, about a third of our revenues. It's a little bit higher than that. We don't break out the specific numbers. It's a little bit higher than that. It is still kind of trending along there. We actually had a pretty good quarter with branded sales. We're seeing a little bit more success now winning some contracts and business around branded sales. I wouldn't highlight too much with respect to that one. Margin wise, we have a tendency to look at things at an operating margin level. I know the operating margin on those are fairly similar. From that perspective, it doesn't make too big of a difference. It could make a little difference on gross margins.

Speaker #1: We don't break out the specific numbers. It's a little bit higher than that, and it's still kind of trending along there.

Speaker #1: We actually had a pretty good quarter with branded sales, and we're seeing a little bit more success now, winning some contracts and business around branded sales.

Speaker #1: So I wouldn't highlight too much with respect to that one. Margin-wise, we have a tendency to look at things at an operating margin level, and I know the operating margin on those are fairly similar.

Speaker #1: So from that perspective , it doesn't make too big of a difference . It could make a little difference on gross margins if we those contracts come through , they'll put a little pressure on gross margins .

Al White: If those contracts come through, they'll put a little pressure on gross margins probably as we move to the back half of the year.

Speaker #1: Probably as we move to the back half of the year.

Speaker #14: And then on my my day , my site , Japan , maybe . Can you can you size that in terms of the number of target practices you're going after ?

Anthony Petrone: On MyDay MiSight Japan, maybe can you size that in terms of the number of target practices you're going after? Like, how many sites are you looking to penetrate? What is the, you know, the market size in dollar of for MiSight in Japan?

Speaker #14: Like, how many sites are you looking to penetrate, and what is the, you know, the market size and dollars for my site in Japan?

Speaker #1: Yeah . So just to be clear on that one , like the product that got launched in Japan was just my site , the regular my site , because it took us like three years to get regulatory approval on that .

Al White: Yeah. Just to be clear on that one, like the product that got launched in Japan was just MiSight, the regular MiSight, because it took us, like, 3 years to get regulatory approval on that. MyDay MiSight is in multiple European countries right now. We just launched it in like Australia, New Zealand, and South Africa, I think. Japan is the kind of the traditional, if you will, MiSight. Yeah, as I mentioned on the call, it's like 77% of kids are myopic, so there's still a big opportunity there. It's really hard to gauge the size of that market, and to put numbers out associated with it. I will say we are super aggressive there right now, and I'm crazy happy to say that the product's being received really well. That's an ophthalmology market rather than an optometrist.

Speaker #1: So my day , my site is in multiple European countries right now . We just launched it like Australia , New Zealand , South Africa .

Speaker #1: I think , but Japan is the kind of the traditional , if you will , my site . Yeah . As I mentioned on the call , it's like 77% of kids are myopic .

Speaker #1: So there's still a big opportunity there. It's really hard to gauge the size of that market and to put numbers out associated with it.

Speaker #1: But I will say we are super aggressive there right now, and I’m crazy happy to say that the product’s being received really well.

Speaker #1: That's an ophthalmology market, rather than an optometrist. So you have a marketplace of doctors who look at clinical data, and they understand clinical data.

Al White: You have a marketplace of doctors who look at clinical data, and they understand clinical data. When you have that kind of combination of a lot of myopic kids and professionals who understand clinical data, a product like MiSight is gonna do really well there. I think that, you know, I talked about 20% to 25% growth from MiSight this year, and we did 23, and I would certainly be comfortable saying 20% to 25% again or higher based on the success that we're seeing early indications on MyDay MiSight and MiSight in Japan.

Speaker #1: And when you have that kind of combination of a lot of myopic kids and professionals who understand clinical data, a product like MySight is going to do really well there.

Speaker #1: So I think that , you know , I talked about 20 to 25% growth from my site this year , and we did 23 , and I would certainly be comfortable saying 20 to 25 again or higher based on the success that we're seeing .

Speaker #1: Early indications on my day, my site, and my site in Japan.

Speaker #14: Thank you

Anthony Petrone: Thank you.

Speaker #3: Our next question comes from the line of BNP Paribas, from the line of Tie. Please go ahead.

Operator: Our next question comes from the line of BNP Paribas. From the line of Navann Ty. Please go ahead.

Speaker #15: Hi . Good evening . Thanks for taking my questions . One on Coopervision . If you could discuss my site again , solid performance in light of the stylist entering the market .

Navann Ty: Hi. Good evening. Thanks for taking my questions. One on CooperVision, if you could discuss MiSight, again, solid performance in light of the Stellest entering the market. My second question is on the CooperSurgical, your fertility pure-play peer had supportive market comments. What are you seeing in IVF cycles across the US, EMEA, and APAC? Thank you.

Speaker #15: And my second question is on the CooperSurgical—your fertility pure play peer had supportive market comments. So, what are you seeing in IVF cycles across the US, EMEA, and APAC?

Speaker #15: Thank you .

Speaker #1: Sure, I think that with that, I'll touch on the first one, which was the less activity here in the US. That is going to turn out to be a positive for us.

Al White: Sure. I'll touch on the first one, which was the Stellest activity here in the US. That is going to turn out to be a positive for us. There is a lot more interest in myopia control, pediatric myopia issues, and the education that's coming because of Stellest and the attention that the optical community is now putting on myopia control is quite a bit more than it was when it was just us pushing it. There's gonna be some push and pull from that because obviously younger kids are gonna move into glasses much quicker.

Speaker #1: There's a lot more interest in myopia control, pediatric myopia, myopia, myopia issues, and the education that's coming because of stylists and the attention that the optical community is now putting on myopia control. It's quite a bit more than it was when it was just us pushing it.

Speaker #1: So there's going to be some push and pull from that, because obviously younger kids are going to move into glasses quicker.

Speaker #1: But you know , when you look at especially 11 and 12 year olds who are in sports or any activities or anything else concerned about their looks or whatever , like we're seeing an increasing amount of fit activity when it comes to kids in that 10 to 12 age in the US market .

Al White: You know, when you look at especially 11 and 12-year-olds who are in sports or any activities or anything else concerned about their looks or whatever, like we're seeing an increasing amount of fit activity when it comes to kids in that 10 to 12 age in the US market. I think at the end of the day, that's gonna be a positive for us long term. I even think this year it's not gonna be detrimental to us where I thought that it might be at one point. I'm happy that product's in the market, I'm happy with what they're doing, and I'm happy with the promotional activity that's out there educating the marketplace.

Speaker #1: So I think, at the end of the day, that's going to be a positive for us long term. And I even think this year it's not going to be detrimental to us.

Speaker #1: Where I thought that it might be at one point. So I'm happy that the product's in the market, I'm happy with what they're doing, and I'm happy with the promotional activity that's out there educating the marketplace on the fertility side of things.

Al White: On the fertility side of things, yeah, as I mentioned, you know, I think the risk of the downside that was there and kind of that market continuing to trend down, I would take that off the table because we are seeing positives in the fertility industry now. We're seeing improving IVF cycles in the US. We're seeing improving IVF cycles in some of the European countries. We're seeing fertility clinics starting to look at upgrades and so forth as new technology comes out, new equipment comes out. I would say that we're gonna continue to see the fertility industry get a little bit better. I don't see, like, a fast, huge ramp up or something like that. I would say the downside is kind of taken off the table, and I would say stabilization to improvement is what we're seeing right now.

Speaker #1: Yeah , as I mentioned , you know , the I think the risk of the downside that was there and kind of that market continuing to trend down , I would take that off the table because we are seeing positives in the fertility industry now .

Speaker #1: We're seeing improving IVF cycles in the US. We're seeing improving IVF cycles in some of the European countries. We're seeing fertility clinics starting to look at upgrades and so forth as new technology comes out, new equipment comes out.

Speaker #1: So I would say that we're going to continue to see the fertility industry get a little bit better . I don't see like a fast , huge ramp up or something like that , but I would say the downside is kind of taken off the table and I would say stabilization to improvement is what we're seeing right now .

Speaker #15: Thanks for the color .

Navann Ty: Thanks for the color.

Speaker #12: Yep

Al White: Yep.

Speaker #3: And from William Blair, our next question comes from the line of Stephen Lichtman. Please go ahead.

Operator: Line from William Blair. Our next question comes from the line of Steve Lichtman. Please go ahead.

Speaker #16: Thank you . Hi , guys . How you mentioned reinvestment in myopia control . And it sounds like on the R&D side , can you talk about the opportunities you see to build on the Mycite platform from an innovation perspective ?

Steve Lichtman: Thank you. Hi, guys. Al, you mentioned reinvestment in myopia control, and it sounds like on the R&D side. Can you talk about the opportunities you see, you know, to build on the MiSight platform from an innovation perspective? Then I have a quick follow-up on free cash flow.

Speaker #16: And then I have a quick follow-up on free cash flow.

Speaker #2: Sure .

Speaker #1: There's some there's some really exciting stuff there . I mean , one is that we need to get a my day , my psych talk out into the marketplace .

Al White: Sure. There's some, there's some really exciting stuff there. I mean, one is that, we need to get a MyDay MiSight toric out into the marketplace. That is one of the products that the optical community really wants. We're doing a lot of work on that right now. That's a positive. We have kind of like a MiSight 2, if you will, that we're working on to even get better efficacy. We've also got some really cool, exciting stuff when you look at like, combinations with atropine and so forth that have the potential to really, really help kids that are not reacting to kind of regular or traditional treatment. Yeah, you're right.

Speaker #1: That is one of the products that the optical community really wants. So we're doing a lot of work on that right now.

Speaker #1: That's a positive. We have kind of like a Mycite 2, if you will, that we're working on to even get better efficacy.

Speaker #1: We've also got some , some really cool , exciting stuff . When you look at like combinations with atropine and so forth that are that have the potential to , to really , really help kids that are not reacting to kind of regular or traditional treatment .

Speaker #1: So yeah , you're right . We're spending a decent amount of money in R&D on , on my site right now or myopia control in general .

Al White: We're spending a decent amount of money in R&D on MiSight right now or myopia control in general. We're gonna continue to spend that because this is a great market. I mean, we have opportunity to have that product continuing to grow a solid 20% plus for, like, years and years and years and years. Yeah, we're investing in that pretty decently.

Speaker #1: And we're going to continue to spend that because this is a great market. I mean, we have the opportunity to have that product continue and to grow a solid 20% plus for years and years and years and years.

Speaker #1: So, yeah, we're investing in that pretty, pretty decently.

Speaker #16: Great . Thanks , Alan . And Brian . The upside you're seeing on free cash flow this year and the raised guidance is that coming from higher operating margin , better working capital management .

Robbie Marcus: Great. Thanks, Al White. Brian Andrews, is the upside you're seeing on free cash flow this year and the raised guidance, is that coming from higher operating margin, better working capital management, maybe all the above? You know, what's exceeding your initial expectations heading into the fiscal year?

Speaker #16: Maybe all of the above were exceeding your initial expectations heading into the fiscal year.

Speaker #2: Hi Steve . Yeah , thanks for the question . Really , all of the above . We're we're seeing stronger operating performance . And I talked I touched on that earlier , but we're collecting better .

Brian Andrews: Hi, Steve. Yeah, thanks for the question. Really all of the above. We're seeing stronger operating performance and I touched on that earlier. We're collecting better, you know, we're building inventory more smartly. I guess smartly, if that's a word. We're building inventory in a more efficient manner. Yeah, FX is helping a little bit, it's really just a combination of the operating performance and better working capital. Obviously, the lower CapEx helps too.

Speaker #2: You know, we're building inventory more smartly—I guess smartly, if that's a word. But we're building inventory in a more efficient manner.

Speaker #2: And you know, FX is helping a little bit, but it's really just a combination of the operating performance and better working capital.

Speaker #2: Obviously, the lower CapEx helps too.

Speaker #16: Great . Thanks , guys

Robbie Marcus: Great. Thanks, guys.

Speaker #3: Our next question comes from the line of Joanne Wojcik with you . Sorry , from Citibank . Please go ahead .

Operator: Our next question comes from the line of Joanne Wuensch, sorry, from Citibank. Please go ahead.

Speaker #17: I was fascinated to hear how my last name was going to get printed out. Good evening, and thanks for taking the question.

Joanne Wuensch: I was fascinated to hear how my last name was gonna be pronounced. Good evening, and thanks for taking the question. A fundamental one and a bigger picture one, please. Foreign exchange, what are you dialing in with all of the shifting US dollar given the macro environment? Then my second question, I'll just put it on right up front. How are you thinking about CSI revenue improving throughout the year? What are the drivers or levers that we can pull on that one or we can see you pull? Thank you.

Speaker #17: A fundamental one and a bigger picture . One please . Foreign exchange . What are you dialing in with ? All of the shifting US dollar ?

Speaker #17: Given the macro environment ? And then my second question , I'll just put it on right up front . How are you thinking about CSI revenue improving throughout the year ?

Speaker #17: What are the drivers or levers that we can pull on that one, or we can see you pull? Thank you.

Speaker #1: I'll answer the second one and I'll let Brian answer the first one . So on the CSI side of things , we'll have like Paragard , which was down seven , we'll finish the year kind of flat to up a little bit .

Al White: I'll answer the second one, and I'll let Brian answer the first one. On the CSI side of things, we'll have like PowerGuard, which was down 7. We'll finish the year kind of flat to up a little bit. I think Q2 will be another quarter because of the comp, where it'll probably be down a little bit. Then we'll have a good, like, back half of the year with that product. When I think about like the medical devices, boy, our specialty surgical team is killer. Those guys are just doing a fantastic job. I think we'll continue to have strength there.

Speaker #1: So I think Q2 will be another year because or another quarter because of the comp where it'll probably be down a little bit , but then we'll have a good back half of the year with that product .

Speaker #1: When I think about like the medical devices , boy , our our specialty surgical team is killer . Those guys are just do a fantastic job .

Speaker #1: So I think we'll continue to have strength there . And then as I was mentioning on fertility , you know , just better visibility , more comfort and that that market is is at least stabilized and arguably trending up is going to put some improving growth rates on that .

Al White: As I was mentioning on fertility, you know, just better visibility, more comfort in that that market is at least stabilized and arguably, you know, trending up, is gonna put some improving growth rates on that. I think Q2 is better. I think, frankly, Q3 is better than Q2 for CooperSurgical. Just kind of progressing along with improvements, probably somewhat similar to vision, where the best quarter will be the Q3, Q4.

Speaker #1: So I think Q2 is better . I think frankly , Q3 is better than Q2 for Coopersurgical . So just kind of progressing along with improvements , probably somewhat similar to vision , where the best quarter will be the Q3 , Q4 .

Speaker #2: Hi Joanne . So the FX question as we as we were exiting last week , we were sitting , you know , we were sitting more favorable relative to last guidance on FX , but obviously with the the Middle East conflict , you know , the dollar is strengthened .

Brian Andrews: Hi, Joanne. I'll take the FX question. As we were exiting last week, we were sitting, you know, more favorable relative to last guidance on FX. Obviously, with the Middle East conflict, you know, the dollar strengthened. As we thought about and as we set the guidance ranges for this earnings call, we took up the revenue ranges by $6 million of vision and $1 million of surgical reflecting, you know, FX. You know, really, we kept the range pretty similar to the range from last earnings call. You know, it's a little bit conservative.

Speaker #2: And so, as we thought about and as we set the guidance ranges for this, for this earnings call, we took up the revenue ranges by $6 million.

Speaker #2: Division and $1 million of surgical reflecting FX. But, you know, really we kept the rates pretty similar to the rates from the last earnings call.

Speaker #2: You know, it's a little bit conservative. So, you know, really we're looking at a headwind or a tailwind to revenues of roughly 1%.

Brian Andrews: you know, really we're looking at a headwind or, sorry, a tailwind to revenues of roughly 1% and also a tailwind to EPS of roughly 1%. Very, very similar to the last call.

Speaker #2: And also a tailwind to EPS of roughly 1%. So very, very similar to the last call.

Speaker #18: Thank you

Joanne Wuensch: Thank you.

Speaker #3: Our next question comes from J.P. Morgan, from the line of Robbie Marcus. Please go ahead.

Operator: Our next question comes from J.P. Morgan from the line of Robbie Marcus. Please go ahead.

Speaker #19: Oh great . Thanks for taking the questions . Two for me . First , I wanted to get your thoughts . First quarter organic growth .

Robbie Marcus: Great. Thanks for taking the questions. Two for me. First, Al, wanted to get your thoughts. Q1 organic growth missed on COO guide and overall. It sounds like Q2 will still be maybe a little weaker than original expectations due to Asia Pacific. You talked about Q3 and Q4 and a lot of the private label drive in Q4, and you didn't flow that all through in the original guidance. How are you thinking about sort of the conservatism of the guide now with the slower start to the year? Does the slower start maybe take some of the upside off the table as you left the guidance the same?

Speaker #19: Missed on CVI guide, and overall, it sounds like the second quarter will still be maybe a little weaker than original expectations due to Asia-Pac.

Speaker #19: You talked about third and fourth quarter, and a lot of the private label drive in fourth quarter, and you didn't flow that all through in the original guidance.

Speaker #19: How are you thinking about, sort of, the conservatism of the guide now with the slower start to the year? And does the slower start maybe take some of the upside off the table as you left the guidance the same?

Speaker #1: I would I would characterize that honestly the exact same , because where we had that softness in Japan that I talked about , I mean , I can pinpoint that softness and talk about what happened there .

Al White: I would characterize it honestly, the exact same, because where we had that softness in Japan that I talked about, I mean, I can pinpoint that softness and talk about what happened there. And we have good visibility around what happened and how we're correcting that. We have more strength in the Americas and more strength in EMEA than I would have said back in December. I guess, I mean, I'd net that out and say, Yeah, we came in below our range and where we wanted to come in in fiscal Q1. I would say that America's stronger than when we gave that guidance in December. EMEA's stronger than when we gave that guidance in December.

Speaker #1: And we have good, good, good visibility around what happened and how we're correcting that. But we have more strength in the Americas and more strength in EMEA than I would have said back in December.

Speaker #1: So I guess , I mean , I'd net that out and say , yeah , we came in below our range and where we wanted to come in in fiscal Q1 , but I would say that America's stronger than when we gave that guidance in December .

Speaker #1: EMEA stronger than when we gave that guidance in December. Asia-Pac probably pretty similar to where we gave that guidance because of a net positive of contract execution and product launches and wins, offset by kind of the negative of the stuff I talked about.

Al White: Asia Pacific, probably pretty similar to where we gave that guidance because of a net positive of contract execution and product launches and wins, offset by kind of the negative of the stuff I talked about. Net-net, I would put the odds of us being able to post a good year and so forth and success in the back half, pretty similar to what we had in December.

Speaker #1: So net net , I would I would put the odds of us being able to post a good quarter , good year . And so forth and success in the back half pretty similar to what we had in December .

Speaker #19: Great . I wanted to go back to the question on the Paragard competitor . I realize deal hasn't closed yet , and you're not ready to , you know , to to talk about the competitiveness here .

Robbie Marcus: Great. I wanted to go back to the question on the PowerGuard competitor. I realize deal hasn't closed yet and you're not ready to, you know, to talk about the competitiveness here, but I'm guessing that wasn't included in the guidance. You know, did you include any competitive threats like that in the guidance for the year? I guess that's the question as we think about it. Thanks a lot.

Speaker #19: But I'm guessing that wasn't included in the guidance. So, you know, did you include any competitive threats like that in the guidance for the year?

Speaker #19: I guess that's the question as we think about it. Thanks a lot.

Speaker #1: Yeah . So when we gave initial guidance , I can't remember I thought I mentioned it on the December call . But when we gave the initial guidance we assumed a negative impact because of the competitive launch and that it would happen at the end of this year .

Al White: Yeah. When we gave initial guidance, I can't remember, I thought I mentioned it on the December call, but when we gave the initial guidance, we assumed a negative impact because of the competitive launch and that it would happen at the end of this year. It's probably more likely that we will not have a negative impact, meaning that was a little conservative. We'll see. I don't know. I mean, that thing hasn't closed, and we're in March already of our year, so we're working obviously, you know, well into our year at this point in time. We'll see. To confirm, yes, we had included that in the initial guidance of assuming kind of flat, up just a little bit.

Speaker #1: It's probably more likely that we will not have a negative impact, meaning that was a little conservative, but we'll see. I don't know.

Speaker #1: I mean, that thing hasn't closed and we're in March already of our year. So we're working obviously, you know, well into our year at this point in time.

Speaker #1: So we'll see. But to confirm, yes, we had included that in the initial guidance of assuming kind of flat to up just a little bit.

Speaker #19: Perfect. Appreciate you taking the questions.

Brett Fishbin: Perfect. Appreciate you taking the questions.

Speaker #12: Yep

Al White: Yep.

Speaker #3: From KeyBanc Capital Markets. Our next question is from Brett Fishbein. Please go ahead.

Operator: From KeyBanc Capital Markets, our next question is from Brett Fishbin. Please go ahead.

Speaker #20: All right . Thank you for fitting me in . Hopefully there's not too much feedback . Just wanted to circle back on the one Q operating margin performance , which I think you noted in the press release , was better than expected .

Brett Fishbin: All right. Thank you for fitting me in. Hopefully, there's not too much feedback. Just wanted to circle back on the Q1 operating margin performance, which I think you noted in the press release was better than expected and obviously is a top priority this year. Was just hoping you could unpack a little bit in terms of what went better than you thought, and why you were able to call the operating margins as exceeding expectations this quarter.

Speaker #20: And obviously, it's a top priority this year. I was just hoping you could unpack a little bit in terms of what went better than you thought and why—why you were able to call the operating margins as exceeding expectations this quarter.

Speaker #1: The financial details , of course , a big part of that was just good , solid execution . I mean , we did all that work in Q4 we knew the team was going to do a good job with it .

Al White: All the financial details, of course. A big part of that was just good, solid execution. I mean, we did all that work in Q4, and we knew the team was going to do a good job with it, and they have. Like, organizationally, we just done a really nice job. I would kind of highlight AI, and I hate to sound like, you know, 1 more person talking about it, but the reality is that our organization has embraced it. This isn't our organization like all of a sudden right now getting on and training and everyone's going to train on it and so forth. This is our organization embraced it last summer, and we started implementing that stuff as we were going through the year, and we're seeing the positives come out of that type of work.

Speaker #1: And and they have like organizationally , we've just done a really nice job . I would kind of highlight a AI , and I hate to sound like , you know , one more person talking about it , but the reality is that our organization has embraced it and this isn't our organization .

Speaker #1: Like all of a sudden right now , getting on and training and everyone's going to train on it and so forth . This is our organization embraced it last summer , and we started implementing that stuff as we were going through the year .

Speaker #1: And we're seeing the positives come out of that type of work. The technology advancements at Cooper are fantastic. I'm super happy, and we have a lot more to do.

Al White: The technology advancements at Cooper are fantastic. I'm super happy, and we have a lot more to do. This isn't a one-quarter thing. We saw some of it certainly in Q4. We're seeing those improvements in Q1, and we're gonna continue to see the use of technology and AI advancements being positive to us on our operating margins as we move through this year.

Speaker #1: This isn't a one quarter thing , so we saw some of it certainly in Q4 . We're seeing those improvements in Q1 , and we're going to continue to see the use of technology and AI advancements be a positive to us on our operating margins as we move through this year .

Speaker #2: Yeah , and I guess not much to add to what al just said . I mean , we we talked about , you know , in Q4 , we grew opex .

Brian Andrews: Yeah. I guess not much to add to what Al just said. I mean, we talked about, you know, in Q4, we grew OpEx. It was basically flat year-over-year. Here again in Q1, OpEx was roughly flat year-over-year. You know, there's a lot that we're doing to drive, you know, synergies and efficiencies, leveraging prior investment activity. We're just really being, you know, very disciplined about, you know, fixed costs in the back office. We wanna leverage IT. We're doing that much, much more than ever before, as Al talked about. You know, this is just great operational execution. Al talked about it, and I talked about it in our prepared remarks, and I expect that to continue through the year.

Speaker #2: It was basically flat year over year . And then here again in Q1 , opex was roughly flat year over year . So , you know , there's a lot that we're doing to to drive , you know , synergies and efficiencies , leveraging prior investment activity .

Speaker #2: And we're just really being, you know, very disciplined about fixed costs in the back office. And so we want to leverage it.

Speaker #2: We're doing that much, much more than ever before, as Al talked about. And you know, this is just great operational execution.

Speaker #2: I'll talk to you about it. And I talked about it in our prepared remarks, and I expect that to continue through the year.

Speaker #20: All right . Great . And then most most of my questions were asked , maybe I'll just ask one more on some of the new product launches .

Brett Fishbin: All right, great. Most of my questions were asked. Maybe I'll just ask 1 more on some of the new product launches. You know, you mentioned several incremental launches that are really phased throughout this year, including MiSight in Japan, MyDay MiSight in Europe and Asia, Energys, you know, the toric multifocal. Are there 1 or 2 of these that you would call out as maybe the most exciting to you in terms of, like, just what they can do for company growth over the next year or 2 as they ramp? Thank you.

Speaker #20: You you know , you mentioned several incremental launches that are really phased throughout this year , including my site in Japan , my day , my site in Europe and in Asia .

Speaker #20: Energous , you know , the talk multifocal . Are there 1 or 2 of these that you would call out as maybe the most exciting to you in terms of just what they can do for company growth over the next year or two as they ramp ?

Speaker #20: Thank you .

Speaker #1: You could kind of hear my excitement on on my day in Japan and my day , my site . I mean , I just I still believe that there is a fantastic market out there in pediatric optometry and treating kid's myopia progression .

Al White: You could kinda hear my excitement on MyDay in Japan and MyDay MiSight. I mean, I still believe that there is a fantastic market out there in pediatric optometry and treating kids' myopia progression. We've had that product. We got to a little slower start than I would've liked on that, and China has turned out to be pretty small in the grand scheme of things. The rest of the world is gaining traction and doing well. MiSight is back, and it is doing well. With MyDay MiSight and the products that we have and the stuff in R&D and so forth, it's gonna continue to do well for a number of years. I'm really excited about that. On the MyDay side, it's execution. I mean, that's what it is.

Speaker #1: And we've had that product. We got to a little slower start than I would have liked on that. And China has turned out to be pretty small in the grand scheme of things.

Speaker #1: But the rest of the world is gaining traction and doing well. And my site is back, and it is doing well.

Speaker #1: And with my day, my sight, and the products that we have, and the stuff in R&D and so forth, it's going to continue to do well for a number of years.

Speaker #1: So that's I'm really excited about that . On the the , my day side , it's execution . I mean , that's what it is .

Speaker #1: Like I said , we got full product availability last summer . We finally got out there . We're executing on contract wins , branded private label .

Al White: Like I said, we got full product availability last summer. We finally got out there. We're executing on contract wins, branded, private label. We're getting product launches done. All that stuff probably takes a little bit longer than you want it to take, but it's execution, and that's what we're doing right now.

Speaker #1: We're getting product launches done. All that stuff probably takes a little bit longer than you want it to take, but it's execution, and that's what we're doing right now.

Speaker #3: Our next question comes from Nephron Research, from the line of Chris Pasquale. Please go ahead.

Operator: Our next question comes from Nephron Research, from the line of Chris Pasquale. Please go ahead.

Speaker #21: Thank you . And that was that was excellent pronunciation on that one . You nailed it . I had a couple of questions .

Chris Pasquale: Thank you. That was excellent pronunciation on that one. You nailed it. I had a couple of questions, one on fertility. You talked about improving cycles in the US and Europe. You didn't mention China, which I think was a big piece of the weakness last year. What are you seeing in that market? Are you still confident that it can bounce back to where it was historically?

Speaker #21: One on fertility. You talked about improving cycles in the US and Europe. You didn't mention China, which I think was a big piece of the weakness last year.

Speaker #21: So, what are you seeing in that market? And are you still confident that it can bounce back to where it was historically?

Al White: I highlighted kind of the Americas and Europe, but Asia Pac and China in particular is still continuing to be not the greatest market in the world. It's getting worse, but it's not. We're not seeing the improvements that we are in other markets around the world.

Speaker #1: I highlighted kind of the Americas and Europe, but Asia, and China in particular, is still continuing to be not the greatest market in the world.

Speaker #1: It's not I wouldn't say it's it's getting worse , but it's but it's not we're not seeing the improvements that we are in other markets around the world .

Speaker #6: Okay .

Chris Pasquale: Okay. Just on the capital allocation front, you know, your debt leverage ratio is lower now than it's been in a few years. It's gonna go down even further when you repay that portion of the term loan. As you think about your priorities and the pace of buybacks, is there a target leverage ratio that you think is appropriate for the business that would dictate kind of how quickly you go? You've still got, I think, close to $1 billion in authorization available.

Speaker #21: And then just on the capital allocation front, your debt leverage ratio is lower now than it's been in a few years. It's going to go down even further when you repay that portion of the term loan.

Speaker #21: As you think about your priorities and the pace of buybacks, is there a target leverage ratio that you think is appropriate for the business that would dictate how quickly you go?

Speaker #21: You've still got , I think , close to $1 billion in authorization available

Al White: Well, share buybacks are a high priority of ours right now, given where our stock is trading. I would envision us to continue to do share buybacks. Depending upon what happens with the stock price over, you know, after this and the next quarter and so forth, especially with our belief and our visibility in the back half of the year, I think you could see us get quite a bit more aggressive on stock buybacks.

Speaker #1: Well, share buybacks are a high priority of ours right now given where our stock is trading. So I would envision us to continue to do share buybacks.

Speaker #1: And depending upon what happens with the stock price over , you know , after this and the next quarter and so forth , especially with our our belief and our visibility in the back half of the year , I think you could see us get quite a bit more aggressive on stock buybacks .

Speaker #21: Okay . Thanks , Alan

[Company Representative] (The Cooper Companies): Thanks, Al.

Al White: Thanks, Al.

Speaker #3: Redburn, our next question comes from the line of Izzy Kirby. Please go ahead.

Operator: Redburn, our next question comes from the line of Issie Kirby. Please go ahead.

Speaker #22: Hi, thanks so much for squeezing me in. You made an interesting comment at the end around looking at sort of next-generation manufacturing and production.

Issie Kirby: Hi. Thanks so much for squeezing me in. You made an interesting comment at the end around looking at sort of next generation manufacturing and production. Obviously appreciated early, but would love any more color around that. Do you think this puts you really ahead of your peers in terms of manufacturing capabilities? Is this factored in, I guess, to the CapEx and free cash flow guidance over the next few years? Thanks.

Speaker #22: Obviously, I appreciate it's early, but would love any more color around that. Do you think this puts you really ahead of your peers in terms of manufacturing capabilities?

Speaker #22: And then is this factored in, I guess, to the CapEx and free cash flow guidance over the next few years? Thanks.

Al White: Are just world-class. I mean, they're best in class. They've been spending a lot of time and energy, especially at CooperVision over the last number of years, expanding facilities, starting new lines up and so forth. To be able to now take a breather and work with our great R&D team to look at next generation work, and deploying that and optimizing our infrastructure and so forth, like, there's a lot of exciting stuff that we can do there. It takes time. There's a lot of exciting stuff that we can do there as our CapEx comes down. I think I'll turn to Brian, because I think that's all factored in on how he looked at free cash flow.

Speaker #1: Are just world class . I mean , they're best in class . They've been spending a lot of time and energy , especially at Coopervision over the last number of years , expanding facilities , starting new lines up and so forth .

Speaker #1: To be able to now take a breather and work with our great R&D team to look at next-generation work, and deploying that and optimizing our infrastructure and so forth.

Speaker #1: Like, there's a lot of exciting stuff that we can do there. It takes time, but there's a lot of exciting stuff that we can do there.

Speaker #1: As our CapEx comes down—and I think I'll turn to Brian because I think that's all factored in, in how he looks at free cash flow.

Speaker #2: Yeah , certainly . I mean , we have we take a we have a three year , five year , ten year view on things .

Brian Andrews: Yeah, certainly. I mean, we take a 3-year, 5-year, 10-year view on things. When we gave the free cash flow commentary, and we reiterated again today, you know, over $2.2 billion, that factors that in. We've talked about over the years, as we're building to support more supply and capacity, it's hard for us to work on continuous improvement and these optimization things. Now we've got a breather, and we can do that. There's lots of great ideas and lots of opportunities to drive success into the future.

Speaker #2: And so when we gave the free cash flow commentary and we reiterated again today over $2.2 billion , that factors that in . But we've talked about over the years as we're building as we're building building building to to support more supply and capacity , it's hard for us to work on continuous improvement .

Speaker #2: And these optimization things . And now we've got a breather and we can we can do that . But there's lots of great ideas and lots of opportunities to drive success into the future .

Speaker #22: Great . Thank you . And then just really quickly , if I may , on site glass and the FDA approval , any updates there ?

Issie Kirby: Great. Thank you. Just really quickly, if I may, on SightGlass Vision and the FDA approval, any updates there? I know it seems to be performing well with EssilorLuxottica in Asia, would just love to hear thoughts on SightGlass Vision.

Speaker #22: I know it seems to be performing well with SLR in Asia, so we'd just love to hear your thoughts on Sight Glass.

Speaker #1: Yeah, it's performing well in Asia. You're exactly right. We still love that product, and it's doing really well in Asia and a number of other markets around the world.

Al White: Yeah, it's performing well in Asia. You're exactly right. We still love that product, and it's doing really well in Asia and a number of other markets around the world. We love it, and we think it's gonna do fantastic long term. No update, though, on an FDA approval.

Speaker #1: So we love it, and we think it's going to do fantastic long term. No update, though, on an FDA approval.

Speaker #3: And our final question comes from Goldman Sachs, from the line of David Roman. Please go ahead.

Operator: Our final question comes from Goldman Sachs from the line of David Roman. Please go ahead.

Speaker #23: Thank you . Good afternoon . I'll keep it to one here . Given where we are in the time of the call , maybe I think in your prepared remarks , you talked about some of the specifics you were seeing on opex efficiency .

David Roman: Thank you. Good afternoon. I'll keep it to one here, given where we are in the time of the call. I think in your prepared remarks, you talked about some of the specifics you were seeing on OpEx efficiency, and I think you called out operating expense declines in CSI, which I know we'll see when the Q comes out here. Can you maybe just help us think through how you are reflecting on some of the G&A savings that you're realizing here from the restructuring you announced last year, to what extent you're contemplating reinvesting that and whether that is showing up in the P&L now? In a scenario you did go down a path of reinvestment, where would you be looking to deploy those resources?

Speaker #23: And I think you called out operating expense declines in CSI, which I know we'll see when the Q comes out here.

Speaker #23: But can you maybe just help us think through how you are reflecting on some of the G&A savings that you're realizing here from the restructuring you announced last year, to what extent you're contemplating reinvesting that, and whether that is showing up in the P&L now? And then, in a scenario where you did go down a path of reinvestment, where would you be looking to deploy those resources?

Speaker #1: I mean , we are doing that . We're doing that already . I was talking about how aggressively we're doing that . Certainly on the my side of things .

Al White: I mean, we are doing that. We're doing that already. I was talking about how aggressively we're doing that, certainly on the MiSight side of things. We certainly saw that in Q1. That's just putting dollars back into sales and marketing. That's where it's going. Leverage G&A, put dollars into sales and marketing, and we're getting enough savings through all of our work that we're able to do those reinvestments and still put up stronger than earnings than people were expecting. The combination has kinda come together very, very nicely for us.

Speaker #1: And we certainly saw that in Q1 . That's that's just putting dollars back into sales and marketing . That's where it's going . So leverage and put dollars into sales and marketing , and we're getting enough savings through all of our work that we're able to do those reinvestments and still put up stronger than earnings than people were expecting .

Speaker #1: So that combination has kind of come together very, very nicely for us.

Speaker #7: Okay .

David Roman: Okay, thank you.

Speaker #23: Thank you .

Speaker #12: Yep .

Al White: Yep.

Speaker #3: And with no further questions in queue, I will turn the call back over to Al White for closing remarks.

Operator: With no further questions in queue, I will turn the call back over to Al White for closing remarks.

Speaker #1: Great . Thank you . Operator . And thank you , everyone for taking the time on today's call . We look forward to talking to everybody in three months .

Al White: Great. Thank you, operator, and thank you everyone for taking the time on today's call. We look forward to talking to everybody in three months and continuing to make progress and having a good call then. Thank you and have a good night.

Speaker #1: And continuing to make progress and having a good call then. So, thank you, and have a good night.

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Q1 2026 The Cooper Companies Inc Earnings Call

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