Bausch + Lomb Q2 Earnings Call Highlights

Key Points

• Bausch + Lomb reported strong second-quarter results, with revenue up 8% year over year on a constant-currency basis to $1.394 billion and adjusted EBITDA up 28% to $246 million. Margin expansion and improved cash generation were supported by favorable product mix, productivity initiatives and lower fixed-cost intensity.
• The company raised its 2026 outlook, increasing revenue guidance to $5.440 billion–$5.540 billion and adjusted EBITDA guidance to $1.025 billion–$1.075 billion. Deleveraging remains the top capital-allocation priority, with management targeting net leverage of 3.5 times or better by the end of 2028.
• Growth was broad-based: pharmaceutical revenue rose 14%, surgical revenue increased 16% and vision care grew 4%. MIEBO sales jumped 44%, while surgical implantables grew 64%; the company also expects key regulatory milestones for ELIOS and enVista Beyond.

Bausch + Lomb NYSE: BLCO reported second-quarter 2026 revenue growth across its vision care, surgical and pharmaceutical businesses, while raising its full-year revenue and adjusted EBITDA outlook. The company said improved product mix, productivity initiatives and lower fixed-cost intensity supported margin expansion and stronger cash generation.

Total second-quarter revenue was $1.394 billion, up 8% on a constant-currency basis. Foreign exchange provided an approximately $12 million revenue tailwind. Adjusted EBITDA increased 28% year over year on a reported basis to $246 million, while adjusted EBITDA margin rose 260 basis points to 17.6%.

“Revenue growth and margin expansion are now also translating into stronger cash generation and deleveraging to strengthen the balance sheet,” Chief Financial Officer Sam Eldessouky said on the company’s earnings call.

Cash flow, margins and outlook

Adjusted cash flow from operations totaled $161 million in the quarter, compared with $45 million in the first quarter, according to Chairman and Chief Executive Officer Brent Saunders. Adjusted free cash flow was $90 million after $71 million in capital expenditures. Net leverage stood at approximately 4.7 times at the end of the quarter, which the company said was a full-turn reduction from its Investor Day level.

Adjusted gross margin was 62.2%, up 160 basis points year over year, supported by a higher mix of premium products in pharmaceuticals and surgical, as well as productivity efforts. The company invested $114 million in adjusted research and development, an increase of 19% from the prior-year period. Adjusted SG&A margin improved by approximately 130 basis points.

Bausch + Lomb raised its 2026 revenue guidance by $20 million to a range of $5.440 billion to $5.540 billion. The outlook implies constant-currency growth of about 5.8% to 7.7%, 50 basis points above its prior outlook. The company cited a $25 million increase in its underlying business outlook, partly offset by a $5 million reduction in anticipated currency benefits.

The company also increased adjusted EBITDA guidance by $15 million to $1.025 billion to $1.075 billion. At the midpoint, the guidance implies an adjusted EBITDA margin of approximately 19.1% and adjusted EBITDA growth of approximately 18% year over year. Bausch + Lomb maintained expectations for about $365 million in interest expense, a 19% adjusted tax rate and approximately $285 million in full-year capital expenditures.

Saunders said deleveraging remains the company’s top capital-allocation priority, with a target of net leverage of 3.5 times or better by the end of 2028. The company said it would also evaluate investments that are immediately accretive and broadly neutral to leverage ratios.

Pharmaceuticals and vision care growth

Pharmaceutical revenue was $354 million, up 14% from the prior year on a constant-currency basis. U.S. pharmaceuticals grew 17%, led by the dry-eye franchise, which increased 23%. MIEBO revenue rose 44% to $91 million, while XIIDRA revenue increased 6% to $87 million.

Saunders said MIEBO’s Medicare coverage increased to 88% from 71% after the addition of Humana Medicare coverage. He also said the company expects MIEBO to become the branded industry leader in dry-eye treatment, though the company did not provide a specific timeline.

International pharmaceuticals grew 8%. Bausch + Lomb expects a top-line data readout for its dual-action dry-eye candidate near the end of the third quarter. Yehia Hashad, executive vice president of research and development and chief medical officer, said the Phase 2 study is evaluating efficacy and safety of the combination therapy, including whether it demonstrates superiority over each individual component. If results support advancement, the company plans to begin Phase 3 studies in 2027.

Vision care revenue was $784 million, up 4%. Consumer revenue increased 3%, while contact lens revenue grew 5%. The consumer dry-eye portfolio generated $123 million in revenue, up 5%, including 12% growth for Blink and 3% growth for Artelac. LUMIFY revenue was $63 million, up 2%, while PreserVision and Ocuvite eye vitamins generated $104 million, up 1% on a reported basis.

The company said consumer demand strengthened during the quarter and continued into July. Saunders noted that retail consumption trends have tracked closely with gasoline prices, with some consumers trading down to smaller pack sizes or showing greater promotional sensitivity during periods of pressure.

Contact lens growth was broad-based across product lines and geographies. Daily silicone hydrogel products grew 16%, Biotrue rose 13% and ULTRA increased 9%. U.S. contact lens revenue grew 5%, while international revenue increased 6%, including 11% growth in EMEA and Canada, 7% in Latin America and 3% in Asia-Pacific.

Surgical business gains momentum

Surgical revenue was $256 million, up 16% year over year and 17% compared with the second quarter of 2024, which the company characterized as its pre-recall baseline. Implantables grew 64% year over year and 37% versus the 2024 comparison period. Premium intraocular lens revenue increased 175%.

Luc Bonnefoy, president of surgical, said premium eyewear represented 13% of surgical revenue in the second quarter, compared with 9% in 2025, 7% in 2024 and 6% in 2023. He attributed the mix shift to the company’s premium IOL portfolio and field-force execution, as well as manufacturing and supply-network initiatives.

The company filed an FDA submission during the quarter for ELIOS, its implant-free minimally invasive glaucoma surgery excimer laser. Management said it expects approval in the second half of 2026. Hashad said clinical-trial results over two years showed more than 80% of patients treated with ELIOS were drop-free.

Bausch + Lomb also said it remains on track to submit enVista Beyond by the end of 2026 and expects approval by the end of 2027. Hashad said the company had received an initial set of data and was continuing its analysis, but remained confident in the overall data seen so far.

About Bausch + Lomb (NYSE:BLCO)

Bausch + Lomb Corporation operates as an eye health company in the United States, Puerto Rico, China, France, Japan, Germany, the United Kingdom, Canada, Russia, Spain, Italy, Mexico, Poland, South Korea, and internationally. It operates in three segments: Vision Care, Pharmaceuticals, and Surgical. The Vision Care segment provides contact lens that covers the spectrum of wearing modalities, including daily disposable and frequently replaced contact lenses; and contact lens care products comprising over-the-counter eye drops, eye vitamins, and mineral supplements that address various conditions, such as eye allergies, conjunctivitis, dry eye, and redness relief.

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