Bausch + Lomb (BLCO) Q4 2025 earnings review
Growth 'Smarter': Margins Expand as Dry Eye Portfolio Surges
Bausch + Lomb closed FY25 with a decisive rebound. Q4 revenue grew 10% reported (7% constant currency) to $1.405B, while Adjusted EBITDA surged 26% to $326M, validating the CEO's 'Financial Excellence' pivot. The standout driver remains the dry eye portfolio—specifically MIEBO, which generated $112M in the quarter. The surgical segment has fully recovered from the mid-year enVista recall, posting 8% growth. Looking ahead, management issued bullish FY26 guidance, projecting Adjusted EBITDA to break the $1B threshold ($1.00-$1.05B), implying a significant acceleration in profitability.
🐂 Bull Case
The dry eye portfolio generated $1.1B in FY25. MIEBO is a blockbuster, hitting $112M in Q4 sales. With XIIDRA stabilizing, BLCO has established a defensible moat in a high-growth category.
Operating leverage kicked in during Q4. While revenue grew 10%, Adjusted EBITDA grew 26%. FY26 guidance calls for ~$1.025B EBITDA (midpoint) on ~$5.4B revenue, suggesting the 'Financial Excellence' cost-control measures are structural.
🐻 Bear Case
Despite strong adjusted numbers, GAAP Net Loss widened to -$58M in Q4 (vs -$3M in 24Q4), driven by a swing in tax provisions and persistent interest expenses (~$98M/quarter). The spread between Adjusted Net Income ($115M) and GAAP Loss is concerning.
The full separation from Bausch Health (BHC) remains complex and unfinished. Until BLCO is fully independent, the capital structure and stock liquidity remain constrained by the parent company's issues.
⚖️ Verdict: 🟢
Bullish. The operational turnaround is real. The surgical recall is in the rearview mirror, MIEBO is outperforming, and margins are expanding rapidly. The FY26 EBITDA guidance of >$1B is a major psychological and financial cleared hurdle.
Key Themes
MIEBO Hyper-Growth
Accelerating. MIEBO revenue reached $112M in Q4, up from $84M in Q3 and $53M in 24Q4. It is the primary engine behind the Pharmaceuticals segment's 16% growth. The dry eye portfolio now exceeds $1.1B annually, providing a durable growth layer on top of the vision care base.
Surgical Segment Recovery
Reversing to Growth. After the enVista IOL recall dragged down H1 2025 performance, Surgical revenue rebounded to $249M (+8% YoY) in Q4. Specifically, Premium IOLs grew 20%, with the enVista platform returning to Q1 levels ahead of schedule. This high-margin segment is critical for the FY26 profitability targets.
U.S. Generics Drag
Stabilizing. While the Pharma segment grew 16% overall, full-year commentary noted a decline in U.S. Generics. This business remains volatile and creates a drag on what would otherwise be even higher growth rates in the branded pharma portfolio.
Vision Care Durability
Stable. Vision Care grew 8% YoY (5% Constant Currency). The consumer franchise (LUMIFY, Eye Vitamins) and contact lenses continue to perform steadily. This segment provides the cash flow ballast ($778M revenue in Q4) that funds the growth in Pharma.
Interest Expense Burden
Stable (High). Interest expense remains a heavy burden at $98M in Q4 ($421M for FY25). This consumes nearly a third of Adjusted EBITDA and pushes GAAP earnings into negative territory. Deleveraging or refinancing remains a critical long-term need.
Other KPIs
Accelerating. Up 26% YoY. Margin expanded to ~23.2%. This result was $67M higher than 24Q4, driven by the fall-through of higher revenue and operating leverage. This sets a strong exit rate for FY26.
Accelerating. Up 16% YoY reported (14% Constant Currency). This is the fastest-growing segment, fueled almost entirely by MIEBO's parabolic adoption curve.
Accelerating. Up from $232M in FY24 (+22%). Improvement driven by working capital initiatives, though partially offset by refinancing fees and transformation payments.
Guidance
Stable Growth. Implies +5% to +7% constant currency growth vs FY25. This matches the growth rate achieved in FY25, suggesting management sees current momentum as durable rather than a one-time bounce back.
Accelerating. The midpoint ($1.025B) implies ~19.5% growth over FY25's $858M. This is a significant acceleration in profitability compared to the flat EBITDA performance between FY24 and FY25.
Key Questions
Tax Provision Volatility
The tax provision swung from an $8M benefit in 24Q4 to a $71M expense in 25Q4, driving the GAAP loss. What is the normalized tax rate expectation for FY26, and will this volatility persist?
Separation Timeline
With operational metrics improving, what are the specific hurdles remaining for the full spin-off from Bausch Health? Does the improved EBITDA profile accelerate this process?
MIEBO Saturation
MIEBO has grown explosively to $112M/quarter. At what point do you anticipate the growth curve to flatten, and what is the peak sales potential given current coverage?