Cooper Companies Q2: Record Revenue, Litigation Settlement, and CooperSurgical Strategic Review

Transcript intelligence

What changed

Revenue reached a record $1.08 billion, beating the $1.054 billion consensus by 2.6%. Non-GAAP EPS of $1.21 exceeded the $1.10 estimate by 10%, marking the tenth straight quarter above consensus. Free cash flow totaled $96 million, and the FY2026 free cash flow outlook was raised to approximately $650 million. The company settled the December 2023 embryo culture media litigation for a $271.6 million charge excluded from non-GAAP results, covering over 95% of claimants. A strategic review of CooperSurgical is underway with multiple parties expressing interest in the entire business or its components, and a definitive update is expected before the next earnings call. Asia-Pacific contact lens demand remained soft, prompting a modest downward revision to regional guidance.

Guidance delta

Full-year FY2026 guidance was maintained, with organic growth targets of 3.5 to 4.5 percent for CooperVision and 4 to 5 percent for CooperSurgical. The free cash flow outlook was raised to approximately 650 million dollars. A modest downward revision was made to Asia-Pacific regional guidance, offset by strength elsewhere. EPS guidance was left unchanged despite the strong first-half performance, drawing analyst questions.

Key takeaways

• Record Q2 revenue of $1.08 billion (up 8% YoY) and non-GAAP EPS of $1.21 (up 26% YoY), beating consensus for the 10th consecutive quarter.
• Free cash flow of $96 million; FY2026 free cash flow outlook raised to approximately $650 million.
• Embryo culture media litigation settled for $271.6 million (non-GAAP charge), covering over 95% of claimants.
• Strategic review of CooperSurgical launched with multiple interested parties; definitive update expected before next earnings call.
• Asia-Pacific contact lens market remains soft, prompting a modest downward revision to regional guidance.

Management priorities

• Complete the CooperSurgical strategic review and provide a definitive update before the next earnings call.
• Launch Clariti toric and multifocal lenses in Japan and broaden the Clariti rollout across EMEA and Asia-Pacific.
• Expand MyDay MiSight myopia-control franchise in Europe and Japan.
• Roll out AI-driven inventory optimization across the business to reduce inventory and boost free cash flow.
• Accelerate share repurchases once the strategic review progresses.