10-K: Cooper Companies Reports Mixed FY25 Results Amid Global Headwinds

The Cooper Companies reported a 5% increase in fiscal year 2025 net sales to $4.09 billion, driven by CooperVision, but saw a 3% decline in operating income and a 63% drop in CooperSurgical's operating income.

Summary

• Net sales for fiscal year 2025 increased 5% to $4,092.4 million, up from $3,895.4 million in fiscal 2024.
• CooperVision net sales grew 5% to $2,743.8 million, with toric and multifocal lenses increasing 7% and sphere/other lenses increasing 3%, benefiting from a $16.0 million favorable foreign exchange impact.
• CooperSurgical net sales increased 5% to $1,348.6 million, driven by a 6% rise in office and surgical offerings (including Paragard and obp Surgical acquisition) and a 3% increase in fertility offerings (genomic and gamete services).
• Consolidated gross margin decreased to 66% in fiscal 2025 from 67% in fiscal 2024, primarily due to inventory and long-lived asset write-offs and severance costs from workforce optimization initiatives.
• Consolidated operating income decreased 3% to $682.9 million in fiscal 2025 from $705.7 million in fiscal 2024.
• CooperVision's operating income increased 8% to $729.6 million, while CooperSurgical's operating income significantly decreased 63% to $43.4 million.
• Net income for fiscal 2025 was $374.9 million, down from $392.3 million in fiscal 2024, resulting in diluted earnings per share of $1.87, compared to $1.96 in the prior year.
• Cash provided by operating activities increased to $796.1 million in fiscal 2025 from $709.3 million in fiscal 2024.
• The company repurchased 4.1 million shares of common stock for $290.1 million at a weighted average price of $69.30 per share in fiscal 2025.
• The Board of Directors ended the declaration of the semiannual dividend in December 2023.
• A material weakness in internal control over financial reporting related to IT general controls for CooperSurgical's U.S. operations was remediated as of October 31, 2025.

Sentiment

Score: 5

Explanation: The company's performance is mixed, with overall sales growth offset by a decline in profitability metrics (net income, diluted EPS, gross margin) and a significant drop in CooperSurgical's operating income due to specific charges. While CooperVision shows strength and IT control weaknesses were remediated, the cessation of dividends and ongoing global economic and regulatory challenges suggest a neutral to slightly negative outlook.

Positives

• Overall net sales grew 5% to $4,092.4 million in fiscal 2025.
• CooperVision segment demonstrated strong performance with 5% net sales growth and an 8% increase in operating income.
• MiSight 1 day contact lens, a key myopia management product, received approval for use in Japan from the Japanese Ministry of Health, Labour and Welfare (MHLW) in August 2025, expanding its market reach.
• CooperSurgical's office and surgical net sales increased 6%, driven by strong performance of Paragard contraceptive IUDs and the acquisition of obp Surgical.
• Cash provided by operating activities significantly increased to $796.1 million in fiscal 2025, indicating improved operational cash generation.
• The company successfully remediated a previously identified material weakness in IT general controls for CooperSurgical's U.S. operations as of October 31, 2025.
• The company was in compliance with all debt covenants as of October 31, 2025.
• The Board of Directors increased the authorization under the 2012 Share Repurchase Program to $2.0 billion in September 2025, with $966.4 million remaining for future repurchases.

Negatives

• Consolidated gross margin decreased to 66% in fiscal 2025 from 67% in fiscal 2024, primarily due to inventory and long-lived asset write-offs and severance costs.
• Consolidated operating income decreased 3% to $682.9 million in fiscal 2025.
• CooperSurgical's operating income experienced a significant 63% decrease in fiscal 2025, primarily due to inventory and long-lived asset write-offs, severance costs, and increased amortization expense.
• Net income decreased to $374.9 million in fiscal 2025 from $392.3 million in fiscal 2024.
• Diluted earnings per share decreased to $1.87 in fiscal 2025 from $1.96 in fiscal 2024.
• The Board of Directors decided to end the declaration of the semiannual dividend in December 2023.
• Selling, General and Administrative (SGA) expenses increased 6% across both segments and corporate, driven by increased selling activities, severance costs, and long-lived asset write-offs.
• Research and Development (R&D) expenses increased 11% overall, with CooperVision's R&D up 10% and CooperSurgical's up 12% due to increased project spend.
• Foreign exchange loss increased to $8.0 million in fiscal 2025 from $5.2 million in fiscal 2024.
• Other expense, net, increased primarily due to a loss on the disposal of a minority interest investment.
• The effective tax rate increased to 33.8% in fiscal 2025 from 32.6% in fiscal 2024.

Risks

• Adverse changes in global or regional general business, political, and economic conditions, including international conflicts, natural disasters, pandemic conditions, and inflation, could adversely affect global markets and economic stability.
• The impact of international conflicts and global responses on the economy, financial markets, energy markets, currency rates, and the ability to supply products to affected countries.
• Challenges in managing substantial and expanding international operations, including compliance with diverse legal, compliance, and regulatory requirements.
• The actual imposition or threats of tariffs, customs duties, fees, and other retaliatory trade protection measures by governments.
• Foreign currency exchange rate and interest rate fluctuations could decrease net sales and earnings, and increases in variable rate indebtedness could adversely affect financial health.
• Changes in tax laws, examinations by tax authorities, and shifts in the geographic composition of income could adversely affect financial results.
• Acquisitions and other strategic transactions involve risks such as failure to achieve anticipated benefits, integration delays or costs, regulatory approval issues, increased leverage, and lack of access to financing.
• Compliance costs and potential liability related to U.S. and foreign privacy and security laws (e.g., HIPAA, CCPA, GDPR), including those resulting from data security breaches.
• Major disruptions in manufacturing, accounting, financial reporting, research and development, distribution facilities, or raw material supply chain due to integration challenges, disasters, pandemics, or cybersecurity incidents.
• Disruptions from the failure of third-party vendors, including cloud computing providers, or other technological problems related to information systems.
• Successful cybersecurity attacks could interrupt or disrupt information technology systems, or those of third-party service providers, or cause the loss of confidential or protected data.
• Market consolidation of large customers globally could result in a larger proportion or concentration of business being derived from fewer customers.
• Disruptions in supplies of raw materials, particularly components used to manufacture silicone hydrogel lenses.
• New U.S. and foreign government laws and regulations, and changes in existing ones, affecting the healthcare industry, including the EU Medical Devices Regulation (MDR) and In Vitro Diagnostic Medical Devices Regulation (IVDR).
• Legal costs, insurance expenses, settlement costs, and the risk of adverse decisions related to product liability, patent infringement, contractual disputes, or other litigation.
• Limitations on sales following product introductions due to poor market acceptance.
• New competitors, product innovations, or technologies, including advances by competitors, new products and patents, and competitors' expansion through acquisitions.
• Reduced sales, loss of customers, reputational harm, and costs from product recalls and warning letters.
• Failure to receive, or delays in receiving, regulatory approvals or certifications for products.
• Failure of customers and end users to obtain adequate coverage and reimbursement from third-party payers for products and services.
• The requirement to provide for a significant liability or to write off, or accelerate depreciation on, a significant asset, including goodwill, other intangible assets, and idle manufacturing facilities and equipment.
• The success of research and development activities and other start-up projects.
• Dilution to earnings per share from acquisitions or issuing stock.
• Impact and costs incurred from changes in accounting standards and policies.
• Risks related to environmental laws and requirements applicable to facilities, products, or manufacturing processes, including evolving regulations regarding hazardous substances.
• Risks related to environmental, social, and corporate governance (ESG) issues, including regulatory and disclosure requirements, climate change, and sustainability.
• Inability to retain key personnel and attract and retain other highly skilled employees.
• Provisions of governing documents and Delaware law may have anti-takeover effects.
• Legislative or regulatory reforms in the United States, Europe, or other countries may make it more difficult and costly to obtain regulatory clearances, approvals, or certifications for products.
• Products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval, or certification, which could harm reputation and business.
• Failure of manufacturing operations to comply with applicable regulations could lead to delays, disruptions, product recalls, and reduced sales and profitability.
• Increased regulatory scrutiny of genetic testing may adversely affect business through increased costs and risks associated with gaining marketing approvals or certifications and potential impact on demand.
• Failure to comply with applicable federal, state, local, and foreign laboratory licensing requirements (e.g., CLIA, ISO 15189, UK HFEA) could lead to loss of ability to perform genetic tests.
• HCT/P products (donor eggs/sperm, cord blood/tissue) are subject to extensive government regulation, and failure to comply or reclassification by the FDA could cause business to suffer.
• Disruptions at the FDA and other government agencies or notified bodies caused by funding shortages or global health concerns could hinder their ability to review and approve products in a timely manner.
• Ethical, legal, and social concerns related to the use of genetic information, sperm and egg selection services, and stem cells could reduce demand for service offerings.
• The costs of complying with federal, state, local, and foreign laws pertaining to the privacy and security of personal information, including health-related information, and potential liability for failure to do so.
• Changes in legislation and government regulation of the healthcare industry, as well as third-party payors' efforts to control healthcare costs, could materially adversely affect the business.
• Laws pertaining to healthcare fraud and abuse (e.g., Anti-Kickback Statute, Stark Law, False Claims Act) could materially adversely affect the business.
• Volatility in the securities markets, interest rates, and other factors could substantially increase defined benefit plan costs.

Future Outlook

The company is optimistic about the long-term prospects for the worldwide contact lens and general healthcare markets, anticipating lower contact lens wearer dropout rates due to technology improvements and a shift towards single-use and monthly wearing options. Management plans to focus on greater worldwide market penetration of recently introduced products and expand presence in existing and emerging markets, including through acquisitions. Investment in CooperSurgical's business is expected to continue, with a goal of expanding integrated solutions in fertility and women's health, particularly as OB/GYN medical offices and fertility clinics consolidate. The company expects additional state, federal, and foreign healthcare reform measures, which could limit payments for healthcare products and services, reduce demand, or increase pricing pressures. While current cash and credit facilities are deemed sufficient for the next 12 months, additional funds for future liquidity needs like acquisitions or share repurchases may be sought through further indebtedness or equity financings, though availability and terms are not guaranteed.

Management Comments

• We are optimistic about the long-term prospects for the worldwide contact lens and general health care markets, and the resilience of and growth prospects for our businesses and products.
• Our ability to compete successfully with a full range of silicone hydrogel products is an important factor to achieving our desired future levels of sales growth and profitability.
• We expect to continue investing in CooperSurgical's business, including through strategic transactions, with the goal of expanding our integrated solutions model within the areas of fertility and women's health.
• We believe our portfolio of offerings and focus on service, quality and clinical education will help increase our share of business within these key account groups.
• We believe we have good relations with our workforce, and we invest in our workforce to meet current and future business objectives, always driving towards our goal of being a global employer of choice.

Industry Context

The contact lens market is experiencing a shift towards single-use and monthly wearing options, with growing demand for silicone hydrogel-based products. Myopia management is identified as an attractive new market, with the company's MiSight 1 day lens holding a unique position as the only FDA, Chinese NMPA, and Japanese MHLW approved product for slowing myopia progression in children. The fertility and women's health market is characterized by increasing global infertility rates, rising maternal age, and a growing number of fertility clinics. Consolidation of medical offices and fertility clinics is a trend that the company believes its broad product portfolio can leverage. The healthcare industry faces ongoing pressures from third-party payors and governments to control costs, with legislative changes like the Inflation Reduction Act and the One Big Beautiful Bill Act impacting drug pricing and reimbursement. The regulatory landscape for medical devices and in vitro diagnostics in the EU (MDR, IVDR) and UK is evolving, leading to longer review times and increased compliance costs. The regulatory status of Laboratory Developed Tests (LDTs) remains uncertain following recent FDA actions, potentially affecting genetic testing services. Cybersecurity regulations are also evolving, requiring enhanced risk management and secure product development frameworks.

Comparison to Industry Standards

• MiSight 1 day contact lens is highlighted as the first and only product approved by the FDA, Chinese NMPA, and Japanese MHLW for slowing the progression of myopia in children aged 8-12, positioning it as a critical differentiator in the myopia management market.
• In the soft contact lens market, the company competes against major global players such as Johnson & Johnson Vision Care, Inc., Alcon Inc., and Bausch + Lomb, noting that these competitors may possess greater financial resources, R&D budgets, sales forces, and market penetration.
• In the fertility market, CooperSurgical competes with specialized companies like Vitrolife Group, Nexpring, and Fairfax Cryobank/EggBank, as well as larger medical device companies including Johnson & Johnson, Baxter International, Medtronic, and Hologic.
• For stem cell storage, the company's primary competitor is ViaCord, a division of Revvity.
• The Paragard IUD competes with hormonal IUD manufacturers like Bayer and AbbVie, other Long Acting Reversible Contraceptives (LARC) from Organon, and anticipates future competition from the FDA-approved non-hormonal IUD, Miudella.
• The company maintains ISO 13485 certification for quality management systems and CE marks for its medical devices, and ISO 15189 certification for its genomics laboratories, aligning with international quality benchmarks for medical devices and IVDs.

Corporate Governance

Legal Proceedings

• The company is involved in various lawsuits, claims, and other legal matters arising in the ordinary course of business, including matters involving products, intellectual property, supplier relationships, distributors, competitor relationships, and employees.
• The company does not believe that the ultimate resolution of these proceedings or claims pending against it could have a material adverse effect on its financial condition or results of operations.

Stakeholder Impact

• Shareholders are impacted by a decrease in diluted EPS and net income, as well as the cessation of the semiannual dividend, though the share repurchase program provides some capital return.
• Employees are affected by workforce optimization initiatives, which resulted in severance costs, but also benefit from ongoing investment in training, development, and competitive compensation and benefits.
• Customers may benefit from new product introductions and expanded market presence, but could face pricing pressures due to market consolidation and healthcare reform initiatives.
• Patients and end-users may gain access to innovative products like MiSight 1 day and fertility solutions, but could be impacted by changes in third-party payor coverage and reimbursement policies.
• Suppliers face potential risks of disruption if they are sole or primary providers of critical raw materials, which could affect the company's production capabilities.
• Creditors are currently in compliance with debt covenants, but the company's significant indebtedness and potential need for future financing could be a factor.

Next Steps

• Continue to expand presence in existing and emerging markets, including through acquisitions.
• Invest in CooperSurgical's business, including strategic transactions, with the goal of expanding integrated solutions in fertility and women's health.
• Educate eye care practitioners, patients, and their families to develop the myopia management market.
• Monitor and adapt to evolving state laws and regulations governing human reproductive materials.
• Follow leading cybersecurity standards and practices to guide strategies, processes, technologies, and controls.
• Evaluate the impact of recently issued accounting pronouncements (ASU 2025-07, 2025-06, 2025-05, 2024-03, 2023-09).
• Make contributions totaling $3.6 million to the Retirement Income Plan during fiscal 2026.
• Hold the Annual Stockholders' Meeting in April 2026.

Key Dates

Recommendation

The company presents a mixed financial picture for fiscal year 2025, with overall sales growth driven by the strong performance of CooperVision, particularly in myopia management. However, this positive is significantly tempered by a decline in consolidated net income and diluted EPS, and a substantial 63% drop in CooperSurgical's operating income due to write-offs and severance costs. The decision to end the semiannual dividend also signals a more conservative financial stance. While the remediation of the IT material weakness is a positive governance step, the underlying operational challenges in CooperSurgical and the broader macroeconomic and regulatory uncertainties warrant a cautious 'hold' recommendation. Investors should await clearer signs of sustained profitability improvement across both segments and a more stable operating environment before considering a stronger position.

Keywords

Medical Devices, Contact Lenses, Fertility, Women's Health, CooperVision, CooperSurgical, Myopia Management, MiSight 1 day, Paragard, IVF, Genomic Services, SEC Filing, 10-K, Financial Results, Healthcare Industry, Global Operations, Risk Management, Cybersecurity, Regulatory Compliance, Acquisitions, Share Repurchase, Earnings, Gross Margin, Operating Income, EPS