Cooper Companies (NASDAQ:COO) reported record revenue and non-GAAP earnings for its fiscal second quarter of 2026, while management said it is advancing discussions with multiple parties interested in CooperSurgical as part of its strategic review.
President and Chief Executive Officer Albert White said revenue rose 8% year over year to $1.08 billion, while non-GAAP earnings per share increased 26% to $1.21. White said the quarter marked the company’s 10th consecutive quarter of exceeding consensus earnings expectations. Chief Financial Officer and Treasurer Brian Andrews said consolidated revenue grew 5% organically.
CooperVision Growth Offset by Asia-Pacific Weakness
CooperVision revenue increased 8% to $724 million, or 4% organically, led by share gains in the Americas and EMEA. White said the Americas grew 7%, supported by strength in premium lenses, while EMEA rose 6% on demand for MyDay and MiSight.
Asia-Pacific revenue declined 6%, which management attributed to portfolio repositioning, including the rationalization of legacy hydrogel products, and broader market softness. White said weakness in Japan was greater than expected and that China also remained under pressure.
During the question-and-answer session, White said the pressure in Asia-Pacific was “market-based” and tied to consumer weakness, especially in Japan and China. He said some markets in the region have more of a consumer-discretionary profile because contact lenses can be purchased without a prescription. White also noted some shift toward e-commerce, where CooperVision is less strong than in eye-care practitioner channels.
Daily silicone hydrogel lenses grew 8%, with the MyDay brand delivering double-digit growth. White said Biofinity grew 5% organically, led by toric and multifocal lenses. MiSight, CooperVision’s pediatric myopia control product, grew 24% to $32 million. White said Japan is exceeding expectations for MiSight, while the launch of MyDay MiSight in Europe is performing “extremely well.”
CooperSurgical Posts Growth as Fertility Rebounds
CooperSurgical revenue rose 8% to $358 million, or 6% organically. Fertility revenue increased 10% organically to $144 million, with strength in capital equipment, genomics and consumables. White cited U.S. strength and global momentum for RI Witness, CooperSurgical’s automated lab tracking system, as contributors to the quarter.
White said fertility sales also benefited from late-quarter buy-in activity in the Middle East as distributors restocked after airspace reopened. He said underlying fertility trends remain healthy and that the business is expected to grow in the mid-single-digit range in the back half of the year.
In the surgical products and services business, sales rose 4% to $214 million. Medical devices grew 6%, and PARAGARD revenue was flat, which White said was ahead of expectations. He noted that the prior-year comparison included the launch of the single-hand inserter.
Strategic Review Advances After Litigation Settlements
White said the company has reached settlements with substantially all claimants related to a December 2023 embryo culture media recall in the fertility business. Andrews said CooperSurgical voluntarily recalled one batch of embryo culture media consisting of three specific lots, which led to claims and lawsuits across multiple jurisdictions.
Andrews said Cooper reached settlement agreements covering more than 95% of claimants and recorded a net charge of $271.6 million. That included $324.1 million of accrued settlement costs, partially offset by $52.5 million of insurance recoveries. The company excluded the charge from non-GAAP earnings.
White said the resolution of the litigation allows Cooper to advance strategic discussions. He said the company has received “robust interest” in CooperSurgical and is working with its board and advisers to determine the best path to maximize shareholder value.
In response to analyst questions, White said Cooper has received significant interest in both the entire CooperSurgical business and pieces of it, but that the company is currently proceeding based on interest in the entire business. He said there is “nothing now holding us back from being able to move very quickly” and indicated that an update could come before the next earnings call if progress is made.
Margins, Cash Flow and Buybacks
Andrews said non-GAAP gross margin was 68.1%, roughly flat from the prior year, as positive currency offset higher costs, including tariffs. Operating expenses increased 1%, reflecting benefits from the company’s reorganization. Operating income rose 19%, and operating margin was 27.5%.
Free cash flow totaled $96 million in the quarter. Andrews said the company used cash to reduce net debt to $2.3 billion and repurchase $13 million of stock. White said buybacks were limited during the quarter but remain a core part of Cooper’s capital allocation strategy.
Andrews said the company expects to be “much more aggressive” on share repurchases going forward after taking a conservative position during the quarter because of other activity. White also said that if CooperSurgical is sold, a significant portion of proceeds would likely be used for share buybacks, while the company would also evaluate the remaining company’s balance sheet.
Guidance Updated for Revenue, EPS Maintained
Cooper updated its fiscal 2026 revenue outlook to approximately $4.28 billion to $4.32 billion, reflecting 5% to 6% reported growth and 3.5% to 4.5% organic growth. CooperVision revenue is expected to be about $2.88 billion to $2.91 billion, up 5% to 6%, or 3.5% to 4.5% organically. CooperSurgical guidance was essentially unchanged at roughly $1.4 billion to $1.41 billion, up 4% to 5% as reported and organically.
The company maintained non-GAAP EPS guidance of $4.58 to $4.66. Andrews said interest expense is expected to be around $85 million, with an effective tax rate of about 15.5%.
Andrews also raised the fiscal 2026 free cash flow outlook to roughly $650 million, excluding litigation payouts, most of which are expected during fiscal 2026. He said the company still expects to generate $2.2 billion in free cash flow from 2026 through 2028, inclusive of expected litigation-related payments.
Management said gross margins are expected to decline year over year, with third-quarter gross margin around 66%. Andrews attributed the pressure to unfavorable foreign exchange and higher costs, including tariffs and freight, as well as lower production at CooperVision as a new AI-enhanced inventory control system helps reduce inventory levels.
Andrews said guidance assumes about $22 million of tariff impact this fiscal year and does not include potential tariff refunds. He said refunds could be as much as $15 million and would provide upside if received.
About Cooper Companies (NASDAQ:COO)
Cooper Companies, Inc (NASDAQ: COO) is a global medical device company headquartered in San Ramon, California. Founded in 1958, the company has grown through strategic acquisitions and organic development to become a major provider of vision care and women’s health products. Cooper Companies operates through two primary business segments—CooperVision and CooperSurgical—each serving specialized markets within the healthcare industry.
The CooperVision segment develops, manufactures and markets a broad range of soft contact lenses, as well as related accessories.
