BLCO Q4 2025 Deep Dive: Dry Eye and Product Innovation Propel Growth, Margin Expansion in Focus

Eyecare company Bausch + Lomb (NYSE:BLCO) announced better-than-expected revenue in Q4 CY2025, with sales up 9.8% year on year to $1.41 billion. The company’s full-year revenue guidance of $5.43 billion at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $0.32 per share was 10.3% below analysts’ consensus estimates.

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StockStory’s Take

Bausch + Lomb’s fourth quarter showed strong revenue growth but fell short on non-GAAP profit expectations, prompting a modestly negative market reaction. Management attributed the performance to robust momentum in its dry eye portfolio, notably Miebo, and improved operating leverage through cost discipline. CEO Brenton Saunders emphasized the impact of executing their Vision 27 program, citing a shift toward higher-margin products and operational efficiency as key contributors. Saunders remarked, “The quarter reflects the impact of Vision 27, our program that we put in place at the beginning of the year, and we're shifting mix towards higher-margin products, improving pricing discipline, driving productivity across the organization and operating with a more fixed cost infrastructure.”

Looking ahead, Bausch + Lomb’s guidance is shaped by continued investment in its dry eye franchise and a series of upcoming product launches, with management expecting revenue and margin expansion to outpace the market. CFO Osama Eldessouky noted that the company aims to build on its operating leverage, expecting adjusted EBITDA growth to nearly triple the rate of revenue growth in 2026. President Andrew Stewart highlighted expectations for increased contributions from both Miebo and Xiidra, driven by stable market access and a broader push into underpenetrated segments of eye health. Stewart stated, “We anticipate normal seasonality from Miebo prescriptions, similar to what we see for Xiidra and other branded medications in the category.”

Key Insights from Management’s Remarks

Management pointed to product innovation, cost discipline, and successful new launches in the dry eye and surgical segments as primary factors behind the quarter’s performance and future outlook.

• Dry eye franchise momentum: The expansion of the dry eye portfolio, led by Miebo and Xiidra, drove significant prescription and revenue growth. Miebo prescriptions grew 113% year-over-year, while Xiidra achieved its highest quarterly total since launch, reflecting successful access and sales execution.
• Contact lens outperformance: Bausch + Lomb’s contact lens business outpaced global market growth, fueled by strong gains in Daily SiHy and Ultra lenses. The company’s direct-to-consumer model in China contributed to 7% growth in the region, even as competitors faced headwinds.
• Surgical recovery and premium mix: The surgical segment rebounded from the enVista recall, with premium intraocular lenses (IOLs) posting 20% revenue growth in the quarter. Management credited this to surgeon trust and new product launches, which improved the business mix towards higher-margin offerings.
• Cost discipline and operating leverage: The Vision 27 program and structural changes to the cost base allowed for improved profitability despite tariff pressures. Operating with a more fixed cost infrastructure enabled growth to flow through to the bottom line, as seen by a 330 basis point expansion in adjusted EBITDA margin year-over-year.
• Pipeline progress and product launches: The company reported positive early results from a new bioactive contact lens material and prepared for the launch of new consumer and surgical products, including PreserVision AREDS3 and Blink Triple Care preservative-free. Management underscored that ongoing R&D and innovation are converting into revenue and future growth opportunities.

Drivers of Future Performance

Management expects margin expansion and above-market revenue growth, driven by product innovation, targeted investments, and structural cost improvements.

• Dry eye franchise growth: Management expects Miebo and Xiidra to continue driving revenue and profit growth as broader adoption occurs, with Miebo’s peak sales estimate now exceeding $600 million. Growth will be supported by stable market access and increased physician and patient engagement.
• Margin expansion through cost leverage: The company’s shift to a more fixed cost base and disciplined SG&A spending are expected to yield operating margin improvements. Management projects adjusted EBITDA margin to reach 19% in 2026, with margin expansion supported by a combination of gross margin gains and further SG&A efficiencies.
• Product pipeline execution: Upcoming launches—such as PreserVision AREDS3, Blink preservative-free offerings, and advanced surgical devices—are expected to unlock new revenue streams. However, management highlighted risks from competitive dynamics, particularly in the U.S. intraocular lens and contact lens markets, as well as ongoing tariff impacts.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) sustained growth and profitability in the dry eye segment, particularly as Miebo and Xiidra mature; (2) the commercial uptake and clinical feedback of new product launches such as PreserVision AREDS3 and advanced contact lenses; and (3) the company’s ability to maintain operating leverage and margin gains amid competitive and tariff pressures. Execution on upcoming R&D milestones and successful expansion in international markets will also be key indicators.

Bausch + Lomb currently trades at $17.25, down from $17.73 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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