• Total Revenue: $1.137 billion, reflecting 5% growth.
• Vision Care Revenue: $656 million, increased by 5%.
• Surgical Segment Revenue: $214 million, an increase of 11%.
• Pharma Segment Revenue: $267 million, growth of 1%.
• Adjusted Gross Margin: 59.5%, including a one-time headwind of 140 basis points due to the enVista recall.
• Adjusted EBITDA: $126 million, including a one-time impact of $16 million related to inventory write-off from the enVista recall.
• Net Interest Expense: $91 million.
• Adjusted EPS: Loss of $0.07 per share, excluding IPR&D.
• 2025 Revenue Guidance: Raised to $5 billion to $5.1 billion.
• 2025 Adjusted EBITDA Guidance: Updated to $850 million to $900 million.
• Currency Impact: $19 million headwind to revenue and $7 million to adjusted EBITDA in Q1.
• R&D Investment: $86 million in adjusted R&D for Q1.
• Tariff Impact: Estimated potential headwind of 120 basis points to adjusted EBITDA margin in 2025.

• Warning! GuruFocus has detected 5 Warning Signs with BLCO.

Release Date: April 30, 2025

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

Positive Points

• Bausch & Lomb Corp (NYSE:BLCO) reported mid-single-digit constant currency revenue growth in the first quarter, aligning with industry growth expectations.
• The Vision Care segment saw a 5% revenue increase, driven by strong performance in both consumer and contact lenses, with Daily SiHy contact lenses growing by 42%.
• The Surgical segment experienced an 11% revenue increase, with premium IOLs contributing significantly to this growth.
• Miebo, a key product in the Pharmaceuticals segment, delivered $57 million in revenue, showing sequential growth of 8% and year-over-year growth of over 100%.
• The company successfully managed a voluntary recall of enVista IOLs, demonstrating strong operational resilience and a commitment to patient safety, with a quick return to market.

Negative Points

• The Pharmaceuticals segment faced challenges, with the US Generics business declining by 23% due to increased competition and lower inventory levels.
• Xiidra, despite strong prescription growth, faced headwinds from higher gross to net deductions, impacting its financial performance.
• The enVista IOL recall is expected to have a one-time negative impact of approximately $55 million on revenue and $65 million on adjusted EBITDA for 2025.
• Tariffs pose a potential headwind of approximately 120 basis points to adjusted EBITDA margin in 2025, with ongoing uncertainty around their impact.
• Currency fluctuations were a headwind, reducing revenue by approximately $19 million and adjusted EBITDA by $7 million in the first quarter.

Q & A Highlights

Q: How are you thinking about the total impact of the enVista recall and its effect on customer relationships? A: Brent Saunders, CEO, explained that the recall decision was made swiftly to prioritize patient safety. The company has since resolved the issue and returned to market. Feedback from customers at ASCRS was positive, with many planning to resume using enVista lenses soon. Saunders expects a recovery in trust and business by the fourth quarter.

Q: Can you discuss the performance and outlook for your consumer-exposed businesses, particularly in the US and China? A: Brent Saunders, CEO, noted strong consumption trends despite potential inventory destocking by retailers. He highlighted the resilience of their essential healthcare products, which are less discretionary. In China, contact lens sales grew by 6%, indicating solid demand.

Q: How quickly can you implement tariff mitigation strategies, and can you pass costs to customers if needed? A: Brent Saunders, CEO, and Sam Eldessouky, CFO, explained that immediate actions include inventory management and utilizing free trade zones. Long-term strategies involve potential shifts in manufacturing locations. They are evaluating pricing adjustments as part of their mitigation efforts.

Q: What is your view on the contact lens market demand and potential recessionary impacts? A: Brent Saunders, CEO, expects mid-single-digit growth in the contact lens market. He noted that recessions typically result in muted growth but do not significantly impact lens usage. The company is optimistic about its pipeline, including biomimetic lenses and myopia control products.

Q: How are you addressing the potential impact of tariffs on your business, and are there risks to debt covenants? A: Sam Eldessouky, CFO, stated that the company is executing multiple levers to offset tariff impacts, including inventory management and potential manufacturing shifts. They are in full compliance with debt covenants and continue to monitor the situation closely.

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