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    BLCO
    Earnings call· Jun 2026(Q2 FY26)

    Bausch & Lomb Q2 FY26 earnings call BLCO

    Jul 29, 2026 Source

    Executive summary

    Bausch + Lomb Q2 FY26 — Strong Broad-Based Growth and Margin Expansion Drive Raised Outlook

    Bausch + Lomb delivered another strong quarter, showcasing broad-based revenue growth and significant margin expansion, which is translating into robust cash flow generation and deleveraging. The company reiterated its commitment to its three-year plan, driven by consistent execution, strategic product mix shifts, and continued investment in a diversified pipeline, leading to a raised full-year outlook.

    Highlights

    5

    • Constant currency revenue grew 8%, reflecting consistent performance across all segments.

    • Adjusted EBITDA increased 28% year-over-year to $246 million, with margin expanding 260 basis points to 17.6%.

    • Adjusted cash flow from operations more than tripled to $161 million in Q2, with year-to-date conversion at 46%.

    • Net leverage reduced by a full turn year-over-year to 4.7x, demonstrating strong balance sheet progress.

    • Full-year revenue guidance raised by $20 million to $5.440 billion - $5.540 billion, and Adjusted EBITDA guidance raised by $15 million to $1.025 billion - $1.075 billion.

    Concerns

    3

    • Consumer headwinds tied to gas prices

    • Moderation of exchange rates

    • Strikes in Europe

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $5.440 billion to $5.540 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $1.025 billion to $1.075 billion
    high materiality
    High
    Full-year 2026 Constant Currency Revenue Growth
    5.8% to 7.7%
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margin
    approximately 19.1%
    high materiality
    High
    Full-year 2026 Adjusted Gross Margin
    approximately 62%
    medium materiality
    High
    Full-year 2026 R&D Investment as % of Revenue
    7.5% to 8%
    medium materiality
    High
    Full-year 2026 Interest Expense
    approximately $365 million
    medium materiality
    High
    Full-year 2026 Adjusted Tax Rate
    approximately 19%
    medium materiality
    High
    Full-year 2026 Capital Expenditure
    approximately $285 million
    medium materiality
    High
    Full-year 2026 Revenue FX Tailwind
    approximately $45 million
    medium materiality
    High
    Net Leverage Target
    3.5x or better
    high materiality
    High
    Adjusted Free Cash Flow Conversion
    50-plus percent
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Vision Care
    Broad-based performance across consumer and contact lenses, with strong international growth in contact lenses.
    Consumer business growth: 3%Consumer dry eye portfolio revenue: $123 millionConsumer dry eye portfolio growth: 5%Blink growth: 12%Artelac growth: 3%LUMIFY revenue: $63 millionLUMIFY growth: 2%Eye vitamins (PreserVision and Ocuvite) revenue: $104 millionEye vitamins growth: 1% (reported)Contact lens revenue growth: 5% (constant currency)Daily SiHy growth: 16% (constant currency)Biotrue growth: 13% (constant currency)ULTRA growth: 9% (constant currency)US contact lens growth: 5%International contact lens growth: 6%EMEA contact lens growth: 11%Latin America contact lens growth: 7%Canada contact lens growth: 11%Asia Pac contact lens growth: 3%
    		$784 million4%——
    Surgical
    Significant momentum driven by premium IOLs and strong recovery post-recall, with a strategic shift towards higher-margin categories.
    Implantables growth: 64%Implantables growth vs Q2 2024: 37% (constant currency)Premium IOLs growth: 175% (reported)Premium IOLs as % of surgical revenue: 13% (Q2 FY26)Premium IOLs as % of surgical revenue: 9% (2025)Premium IOLs as % of surgical revenue: 7% (2024)Premium IOLs as % of surgical revenue: 6% (2023)Consumables growth: 4%Equipment revenue growth: 2%
    		$256 million16%——
    Pharmaceuticals
    Strong performance anchored by the dry eye franchise, particularly Miebo and Xiidra, with significant growth in the US market.
    US Pharma business growth: 17%Dry eye franchise growth: 23%Miebo revenue: $91 millionMiebo growth: 44%Miebo average weekly TRx growth: 29% (year-over-year)Xiidra revenue: $87 millionXiidra growth: 6%International Pharma growth: 8%
    		$354 million14%——

    Operational metrics

    16
    Adjusted EBITDA
    $246 millionup 28% year-over-year (reported basis)
    Q2 FY26

    Excludes acquired IPR&D.

    Adjusted EBITDA Margin
    17.6%up 260 basis points year-over-year
    Q2 FY26

    Reflects operating leverage and margin expansion.

    Cash Conversion
    46%
    YTD Q2 FY26

    In line with expectations.

    Net Leverage Ratio
    4.7xfull turn reduction since Investor Day
    end of Q2 FY26

    Reflects meaningful balance sheet progress.

    Adjusted Gross Margin
    62.2%up 160 basis points year-over-year
    Q2 FY26

    Builds on Q1 progress and demonstrates continuous execution.

    Adjusted R&D Investment
    $114 millionincrease of 19% year-over-year
    Q2 FY26

    Reflects continued focus on advancing a deep and diversified pipeline.

    Adjusted SG&A Margin Improvement
    130 basis points
    Q2 FY26

    Reinforces durability of structural changes implemented in 2025 and ability to drive growth with lower fixed cost structure.

    Adjusted EPS (excluding acquired IPR&D)
    $0.16compared with $0.07 in prior year quarter
    Q2 FY26
    Working Capital Days Reduction
    12 days
    year-over-year

    Fundamental shifts in how working capital is managed, contributing to strong cash flow.

    Miebo Revenue Growth
    44%
    Q2 FY26

    Part of the dry eye franchise, contributing to strong Pharma segment performance.

    Miebo Average Weekly TRx Growth
    29%
    year-over-year

    Speaks to continued momentum behind the brand.

    Xiidra Revenue Growth
    6%
    Q2 FY26

    Contributed to solid growth in the dry eye franchise.

    Blink Franchise Revenue Growth
    12%
    Q2 FY26

    Continuing a long-running upward trajectory in the consumer dry eye portfolio.

    Blink Triple Care New Users Volume
    66%
    Q2 FY26

    Volume coming from new users to the franchise, indicating category expansion rather than cannibalization.

    Contact Lens Market Growth
    approximately 4.5%up from 4% in 2025
    2026

    Brent Saunders' prediction for the market.

    Miebo Medicare Coverage
    88%increased from 71%
    Q2 FY26

    Indicates expanded access and potential for continued growth.

    Industry KPIs

    6
    MetricValueDetails
    New product launch ramp175%%
    FCF conversion leverage guidance46%%
    Segment franchise organic growth16%%
    Consumables recurring revenue mix13%%
    Sales force commercial capacity build—
    Pivotal trial clinical evidence milestonesFDA submission

    Product announcements

    2
    ProductTypeDetails
    Blink Triple Care preservative-freelaunch
    PreserVision AREDS3update

    Risks & headwinds

    3
    Consumer headwinds tied to gas pricesearly Q2 FY26

    tracked closely to gas prices, causing some pressure on consumption early in Q2

    Mitigation: consumption grew as gas prices came down; business built to be resilient, sometimes trade down to smaller pack sizes or more promotionally sensitive in those times

    Moderation of exchange ratesFY26

    reduced expected full-year revenue tailwind from $50 million to $45 million

    Strikes in EuropeQ2 FY26 and likely until end of FY26

    continued in Q2 and will probably continue until the end of the year

    What to watch in Q3 FY26

    5

    Dual-action dry eye candidate Phase IIb readout

    end of Q3 FY26
    CurrentRecruitment completed, data cleaning in progress
    TargetTop-line results

    Why it matters

    This readout will determine the path forward for a potential new dry eye therapy, impacting future pipeline and market positioning.

    I think --again, as mentioned, I think the study completed recruitment, and we are actually just in the terms of cleaning the data and so forth. So we should be expecting to end of quarter 3, the top lines.

    Q&A highlights

    7

    How has the three-year plan progressed since November, and is confidence higher? Are there stronger/weaker areas than anticipated?

    Brent Saunders expressed high confidence, citing consistent delivery on commitments (8% CC revenue growth, 28% EBITDA growth, nearly doubled cash flow, 1 turn leverage reduction). He emphasized structural improvements (SG&A, product mix, gross margin) and balanced innovation investment.

    “if you look at every quarter we've printed since Investor Day, we have been proving that we can deliver on our commitments.”

    asked by Patrick Wood · answered by Brenton L. Saunders

    2 min read7 chapters

    Detailed Narrative

    01

    Operating Leverage and Margin Expansion

    The company continued to demonstrate strong operating leverage, with adjusted EBITDA growing 28% year-over-year and adjusted EBITDA margin expanding 260 basis points to 17.6%. This was driven by favorable product mix, productivity initiatives, and structural changes implemented in 2025, leading to SG&A declining as a percentage of revenue. Adjusted gross margin expanded 160 basis points to 62.2%, contributing to the overall profitability improvement.

    02

    Surgical Segment Transformation

    The Surgical segment showed significant momentum with 16% constant currency revenue growth, and 17% versus the Q2 2024 pre-recall baseline. This growth was fueled by a 175% increase in premium IOLs, which now represent 13% of surgical revenue, up from 9% in 2025. The strategy focuses on driving premium IOLs, launching equipment innovation (ELIOS, Synera, Sinova), and optimizing manufacturing capabilities to build structural operating leverage.

    03

    Pharmaceuticals Dry Eye Franchise Strength

    The Pharmaceuticals segment grew 14%, primarily driven by the dry eye franchise, which increased 23%. Miebo revenue surged 44% to $91 million, with average weekly TRxs up 29% year-over-year. Xiidra also contributed with 6% growth to $87 million. The company expects Miebo to soon become the branded industry leader in dry eye treatment, supported by improved Medicare coverage increasing from 71% to 88%.

    04

    Contact Lens Portfolio Performance

    Vision Care delivered dependable performance, with contact lens revenue up 5% constant currency. This was broad-based across geographies (U.S. up 5%, International up 6%) and product families, including Daily SiHy (up 16%), Biotrue (up 13%), and ULTRA (up 9%). The company anticipates continued growth with a disciplined global rollout schedule and a strong development pipeline, including Project Halo/Bioactive lens expected in late 2028.

    05

    Pipeline Progress and Innovation

    Bausch + Lomb is advancing a deep and diversified pipeline across various eye care categories. Key near-term milestones include the FDA submission for the ELIOS implant-free MIGS excimer laser in Q2 and expected readouts for dual-action dry eye and ocular surface pain candidates in H2 FY26. The company is expanding EBITDA margins while increasing R&D spend by 19% year-over-year, emphasizing balanced growth and innovation.

    06

    Cash Flow and Deleveraging

    Strong revenue growth and margin expansion are translating into healthy cash flow generation. Adjusted cash flow from operations was $161 million in Q2, contributing to a full turn reduction in net leverage to 4.7x since Investor Day. The company has also reduced working capital by 12 days year-over-year and is tracking ahead of its 2028 target of 50%+ free cash flow conversion to adjusted EBITDA.

    07

    Consumer Business Resilience

    The consumer business grew 3%, with the dry eye portfolio up 5% (Blink up 12%, Artelac up 3%). LUMIFY generated $63 million, up 2%. Despite some consumer headwinds🌐 tied to gas prices early in the quarter, demand strengthened, and new launches like Blink Triple Care preservative-free are expanding the category by attracting new users, with roughly 66% of its volume coming from new users.

    AI-generated summary of the company’s earnings call. Not investment advice.