Bausch + Lomb Lifts Outlook After Margin-Heavy Quarter

Bausch + Lomb Corporation ((BLCO)) has held its Q1 earnings call. Read on for the main highlights of the call.

Bausch + Lomb’s latest earnings call struck an upbeat tone, with management emphasizing broad-based growth, sharp margin expansion, and strong traction in higher-value Pharma and premium products. Challenges in surgical equipment, regional softness, and seasonal prescription swings were framed as temporary, while the modest guidance raise underlined a cautiously confident outlook.

Top-Line Growth and FX Tailwinds

Bausch + Lomb posted Q1 revenue of $1.244 billion, up 6% year over year on a constant currency basis, signaling steady top-line momentum. Foreign exchange added about $42 million, giving an extra boost but not obscuring the underlying organic growth story.

EBITDA Surge and Margin Expansion

Adjusted EBITDA jumped to $200 million, a 59% year-over-year increase, as profitability accelerated faster than sales. The adjusted EBITDA margin improved to 16.1%, a 500-basis-point gain that highlights the company’s improving operating discipline.

Operating Leverage From Gross and SG&A Gains

Adjusted gross margin climbed to 61.2%, up 170 basis points from last year, supported by a richer mix and efficiency gains. At the same time, adjusted SG&A margin tightened by roughly 340 basis points, reinforcing meaningful operating leverage across the P&L.

Pharmaceutical Segment Outperformance

Pharma revenue reached $305 million, up 12% on a constant currency basis and 14% on a reported basis, making it a standout growth engine. Flagship products Miebo and Xiidra delivered revenue increases of 33% and 30%, respectively, reflecting strong prescription trends and effective commercialization.

Vision Care and Contact Lens Momentum

Vision Care revenue rose to $711 million, a 5% year-over-year increase that underscores resilience in the core eye-care franchise. Contact lenses grew 5% overall, with Daily SiHy up roughly 23% and Ultra up 3%, helped by 6% growth in the U.S. and 4% internationally.

Premium Surgical Franchise Progress

The premium surgical portfolio continued to scale, with premium IOLs growing 27% on a constant currency basis as surgeons adopt higher-value solutions. Within that, enVista U.S. sales rose 16% and the Envy product surged 88%, while U.S. system placements were nearly triple last year’s level.

Pipeline and Regulatory Milestones

Management spotlighted a busy innovation agenda, noting that more than 60 programs are advancing through the pipeline. Recent milestones included an NDA for LUMIFY NXT, a CE Mark submission for seeLYRA, and Q1 launches of PreserVision AREDS3 and Blink Triple Care preservative-free.

Balancing R&D Investment With Profit Growth

The company invested about $101 million in adjusted R&D in Q1, an increase of roughly 15% to 17% year over year that underscores its innovation push. Despite ramped research spend, Bausch + Lomb still delivered notable margin expansion, signaling a healthy balance between growth and profitability.

Cash, Capital Allocation and Leverage

Adjusted EPS excluding acquired R&D swung to $0.08 from a $0.07 loss a year ago, reflecting improved profitability and cost control. Net leverage improved and management reiterated a target of roughly 3.5x by the end of 2028, even as Q1 CapEx reached $100 million against $45 million of adjusted operating cash flow.

Surgical Segment Near-Term Disruption

Surgical revenue inched up just 1% to $228 million and fell short of expectations, weighed down by several one-off headwinds. Weather-related procedure disruptions, reimbursement pressure in some markets, and a deliberate U.S. field-force rebuild created short-term friction in the franchise.

Equipment Revenue Decline

Equipment revenue fell 4% in the quarter, dragging on overall Surgical results even as system placements increased. Management linked part of the decline to a mix shift toward system placements, suggesting revenue timing rather than structural demand erosion.

Regional Weakness and Macro Volatility

The company flagged softness in parts of Asia, including China and Southeast Asia, as well as ongoing weakness in Japan, which moderated regional growth. Executives also cited geopolitical and logistics risks, particularly in the Middle East and freight and oil markets, that could pose cost pressures if they persist.

Prescription Seasonality and Miebo Volatility

Miebo prescription trends dipped sequentially in January and February before recovering in March, creating some short-term noise in the numbers. Management attributed the volatility to typical early-year seasonality and insurance deductible resets that temporarily depress prescription volumes.

Xiidra Contract Strategy and TRx Trade-Offs

For Xiidra, the company walked away from a CVS contract, which hurt total prescription counts but supported stronger economics per script. As part of that strategy, management expects Xiidra’s gross-to-net to move to the low-70% range from the high-70s, prioritizing profitability over sheer volume.

Cash Flow and CapEx Timing

Adjusted operating cash flow reached $45 million in Q1 versus $100 million of CapEx, including about $7 million of capitalized interest, leading to modest near-term free cash generation. Management framed this as a normal first-half pattern, with full-year CapEx still expected at roughly $285 million.

Conservative Guidance Raise and Outlook

Management increased full-year revenue guidance by $45 million to a range of $5.42 billion to $5.52 billion, implying 5.3% to 7.2% constant-currency growth and about a 30-basis-point step-up versus prior. Adjusted EBITDA guidance was raised by $10 million to $1.01 billion to $1.06 billion, pointing to roughly 19% margins, mid-teens EBITDA growth, a $50 million FX tailwind, stable CapEx, and a path toward lower leverage.

Bausch + Lomb’s earnings call painted a picture of a company leaning into profitable growth, powered by high-performing Pharma assets, premium surgical offerings, and a deeper pipeline. While near-term surgical disruptions, regional softness, and cash timing add some noise, the strong margin gains and higher guidance suggest management sees more upside than risk ahead.