Bausch Lomb — Financial Results

Revenue Grew 6% to $5.1 Billion, Driven by Volume Across All Three Segments

All three business units grew, with the gains coming primarily from higher sales volumes ($301 million worth) rather than price increases. In fact, pricing was a headwind, particularly in Pharmaceuticals, where rebates and discounts eroded $104 million of the volume gains.

Rebates Are Eating Into Profits as Dry Eye Drugs Scale Up

Bausch + Lomb had to offer significantly larger rebates — primarily on its dry eye drugs MIEBO and XIIDRA — to secure placement on insurance formularies (the lists that determine which drugs patients can access). Every dollar of gross revenue is now generating less net revenue than a year ago, which is a real pressure point on profitability.

Operating Income Fell 30% Despite Revenue Growth

Revenue grew, but costs grew faster. Selling, general and administrative (SG&A) expenses rose $152 million, and manufacturing costs climbed due to tariffs and the enVista recall. The company also carries over $400 million in annual interest expense from its heavy debt load, which is the primary reason the bottom line remains deeply in the red.

An IOL Recall Hurt the Surgical Segment Hard

The company voluntarily recalled several enVista intraocular lens (IOL) models in March 2025 after patients experienced a rare but serious eye inflammation reaction. The root cause was traced to a raw material from a new vendor. The recall dragged the Surgical segment's profit down 59% — from $44 million to just $18 million — even as segment revenue still grew 6%. The good news: production resumed, and by Q4 2025, enVista sales had returned to pre-recall levels.

Debt Was Refinanced to Push Maturities Out, But Remains Very Large

In June 2025, the company refinanced its near-term debt, replacing loans due in 2027 with a new $2.325 billion term loan maturing in 2031 and a new $800 million revolving credit line. Then in January 2026, it consolidated its two term loans into a single $2.8 billion facility at a slightly lower interest rate (3.75% margin vs. 4.25% previously). Total debt remains enormous, with roughly $390 million in interest payments expected in 2026 alone — a significant ongoing drag on cash flow.

Operating Cash Flow Is Improving, But Capital Needs Remain High

The business generated more cash from operations, a positive sign. However, the company expects to spend approximately $285 million on capital expenditures in 2026, plus $390 million in interest and a $35 million milestone payment owed for MIEBO's sales success. The cash coming in is being largely consumed by these obligations.