Bausch Lomb (BLCO) Q2 Revenue Rises 5%

Bausch + Lomb (BLCO -0.58%), a global eye health company known for its contact lenses, surgical devices, and eye pharmaceuticals, released results for the second quarter of fiscal 2025 on July 30, 2025. The main headline from the release is GAAP revenue growth of 5% year over year to $1.278 billion, beating analyst expectations by $18 million. Adjusted earnings per share (EPS) (non-GAAP) reached $0.07, beating the consensus estimate by $0.01 but falling short of last year's figure of $0.13. Top line growth and a narrowed net loss (GAAP) reflect some improvement, Margin pressure and a declining Pharmaceuticals segment weighed on overall profitability. The period showed strength in Vision Care, especially consumer and contact lens brands, offset by softer results in Pharmaceuticals and continued cost pressures.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Bausch + Lomb is a long-established company specializing in products for eye health, including contact lenses, over-the-counter (OTC) consumer eye care brands, prescription pharmaceuticals, and surgical devices. Its operations span three primary business segments: Vision Care, Surgical, and Pharmaceuticals.

The company's growth strategy interweaves a broad product portfolio, a continuing separation process from its parent Bausch Health Companies, geographic expansion, and ongoing investment in research and development (R&D). It also faces substantial regulatory and market complexity. Key focus areas include advancing its product pipeline, managing regulatory risks, and increasing scale in fast-growing consumer and surgical eye health markets.

Quarterly Performance and Segment Results

The quarter saw revenue outperformance in Vision Care, with that segment posting $753 million in GAAP sales, up 8% from the prior-year period. This was fueled by strength in daily silicone hydrogel (SiHy) contact lenses, the ULTRA monthly lens line, and consumer brands such as LUMIFY redness reliever, ARTELAC, and Blink eye drops and supplements. The dry eye portfolio, spanning OTC and prescription options, reached approximately $1 billion in trailing 12-month revenue, underscoring its scale within the company.

Surgical segment revenue (GAAP) reached $216 million, growing 3% year over year, primarily driven by growth in consumables, partially offset by the voluntary recall of certain enVista IOL products. Growth momentum was offset by a voluntary recall of specific enVista intraocular lens (IOL) products. After identifying the root cause, the company resumed full production and began replenishing the market during the quarter. Management reported positive feedback from surgeons in response to how the recall was handled, aiming for a full commercial rebound in the coming periods.

Pharmaceuticals revenue (GAAP) slipped slightly to $309 million, making it the smallest of the three segments. The decline in the Pharmaceuticals segment was attributed to weak performance in US generics and ongoing "gross-to-net" pricing pressure, particularly for XIIDRA prescription eye drops for dry eye disease. These challenges were only partially offset by MIEBO, a recently launched prescription therapy for dry eye, and expanded international sales. Management pointed to efforts to stabilize the business but acknowledged the continued pressure.

Despite solid revenue growth, profitability was mixed. Adjusted EBITDA (non-GAAP) dropped to $191 million. This reflected higher spending on selling, advertising, and promotions, especially for the MIEBO launch, as well as costs from the recall and an unfavorable product mix shift toward lower margin consumer items. The net loss narrowed to $62 million from $151 million a year earlier, driven largely by lower taxes, even as operating income swung from a profit to a loss. Cash flow from operations improved to $35 million, a result of better working capital management despite higher financing costs.

Research and development expenses (GAAP) increased to $96 million. This was in line with the company's stated focus on innovation and bringing new products to market. Management cited around 60 R&D projects underway as of December 31, 2024, ranging from next-generation contact lenses to therapeutics for glaucoma and dry eye disease. Clinical trials for several pipeline assets are expected to start in the second half of the year. The company also highlighted plans for a major investor day in November 2025 to further showcase new product candidates.

Looking Ahead: Guidance and Key Watch Points

Management raised its full-year 2025 revenue guidance to a range of $5.05 billion to $5.15 billion, reflecting both quarter performance and a positive foreign currency effect. Projected constant currency revenue growth for full year 2025 was also nudged up to between 5% and 7%. Adjusted EBITDA guidance (excluding IPR&D, or acquired in-process R&D) is now set at $860 million to $910 million (non-GAAP) for full year 2025, with the increases mainly driven by robust demand in Vision Care and Surgical, while absorbing the impact of the enVista recall.

The outlook for FY2025 does not yet include a full calculation of the potential impact of global tariffs. Management estimates that tariffs could pose a significant headwind, equal to 120 basis points of adjusted EBITDA margin (non-GAAP) in the second half of 2025, but states that mitigation strategies are ongoing and guidance will be updated as necessary. Investors should watch for updates on tariff risks, ongoing cost control, the pace of Pharmaceuticals stabilization, and the rollout of new products in the Vision Care and Surgical lines in upcoming quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.