Cooper Companies at William Blair Conference: Strategic Growth and Challenges

On Thursday, 05 June 2025, Cooper Companies (NASDAQ:COO) participated in the 45th Annual William Blair Growth Stock Conference. The company discussed its strategic priorities and market outlook, highlighting both growth initiatives and challenges. While Cooper aims to expand faster than the market, it is also navigating inventory corrections and foreign exchange headwinds.

Key Takeaways

• Cooper Companies aims to grow faster than the contact lens market, with a focus on expanding its MyDay and MiSight product lines.
• The company is addressing inventory corrections and expects normalization by Q4.
• Cooper has shifted its capital allocation priorities towards debt reduction and strategic stock buybacks.
• Free cash flow is projected to be $350 million to $400 million, with plans for further improvements.
• CooperVision is anticipated to grow at 6% to 7%, exceeding market expectations.

Financial Results

• CooperVision is growing at 6% to 7% this year, surpassing the market growth forecast of 4% to 6%.
• CooperSurgical is expected to grow at 3.5% to 4.5%.
• The company projects a Non-GAAP EPS range of $4.05 to $4.11.
• Gross and operating margins are anticipated to expand on both a constant currency and as-reported basis.
• Revenue guidance was reduced by 1%, equating to a $7 million decrease.

Operational Updates

• Cooper is enhancing operational efficiencies to achieve low double-digit constant currency operating income growth.
• Capacity improvements are facilitating more aggressive marketing for MyDay products.
• MiSight, a myopia control product, is expected to grow 25% to 30% next quarter, with a 40% increase by year-end.
• A silicone hydrogel MiSight lens is planned for a European launch next year.
• Integration activities are ongoing within the surgical business, with a launch in Japan set for early 2026.

Future Outlook

• The contact lens market is expected to grow 4% to 6% next year, with CooperVision aiming to outpace this growth.
• MiSight is projected to grow at least 30% next year.
• The fertility market is anticipated to return to mid-to-upper single-digit growth.
• Cooper plans to enhance free cash flow margins by reducing CapEx and improving working capital management.
• Free cash flow is expected to increase by approximately $100 million compared to last year.

Q&A Highlights

• Cooper lowered its guidance due to a conservative view of market growth, adjusting expectations from 5% to 7% to a 4% to 6% range.
• The company is experiencing a channel inventory correction, with normalization expected by Q4.
• A new strategy for MiSight includes offering free lenses to encourage trials.
• Investments in manufacturing capacity are now in "harvest mode," leading to improved margins.
• Cooper is focusing on free cash flow generation through debt paydown and improved working capital management.

Readers are encouraged to refer to the full transcript for a detailed understanding of Cooper Companies’ strategic direction and financial performance.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Margaret Kayser Andrew, Analyst, William Blair: Alright. Good afternoon, everyone. Thank you for coming out and surviving and making it to the last meeting of the William Blair gross dot conference. Really appreciate you guys all being here. My name is Margaret Kayser Andrew.

I am the analyst here at William Blair, that covers Cooper Companies. I am required to inform you that you can find a complete list of research disclosures and conflicts of interest at williamblair.com. With that, I’m gonna turn it over to Brian who’s gonna give a short background on the company, and then, we’ll probably make this more of a a q and a session, for the rest of the time. Thanks.

Brian, Unidentified, Cooper Companies: Thanks, Margaret. I recognize a lot of the faces in the room. I’m only going to go through a couple slides of our investor deck. Our investor deck’s available on our website. I should probably grab that clicker.

So let’s leave enough time for q and a. A little bit about Cooper. We’re a global medical device company. About two thirds of our business is contact lenses, soft contact lenses, And then the other third is is related to women’s health primarily. We do a lot in fertility.

We’re a leader in fertility. About 40% of that surgical business is fertility. The other 60% is a is a host of of surgical products primarily for the OB GYN, though also used in specialty surgery. We’ve got a stem cell business and an IUD that’s treated as a pharma that make up that the the other 60%. So you’ve got 16,000 employees.

We operate in over a 30 countries. Our revenue mix is a little bit more than half of our revenues are based outside of The US. So when you look at that America as part of the pie, that includes, obviously, Canada, Central And South America. But pretty diversified across geographies, and we operate in great industries that have great macro trends, great fundamentals, secular growth. We’re in the early stages of we’re in the early innings of of trading up wears into daily silicones, more revenue per patient, healthier for the eyes.

We’ve got a great portfolio, a differentiated portfolio where we offer unique products that our competition doesn’t offer, and we also offer myopia control products that help reduce the progression of myopia in children. Again, something that our competition doesn’t doesn’t have. We also do have a a large branded and private label part of the portfolio. So we do a lot of customer brands for key accounts around the world. Again, a diff point of differentiation.

And and then we offer a wide range of of lenses that are torics, extended range torics, toric multifocals, so forth within the vision business, which really differentiates us. If we just kind of look at our performance over the years, I mean, this goes back ten years, but you can go back twenty years and see it’s the same kind of up into the right. Our businesses always grow, except 2020 during COVID, see up into the right performance from vision and surgical, some of the CAGRs there. We’re committed to growing faster faster than the market. We’ve been growing faster than the market in vision for the twenty years the twenty or so years I’ve been at Cooper, and we intend to continue to drive market share gains every year going forward.

We’re committed to margin expansion, driving OI growth, and free cash flow. And that’s a big, big focus area for us right now. If you look at our guidance, this is the last slide, and then we’ll jump into q and a. You know, we have CooperVision growing six to 7% this year with an with a market that’s expected to grow four to six. CooperSurgical growing three and a half to four and half percent, and our non GAAP EPS range is right there, four zero five and to four eleven.

Embedded within the p and l is gross margin expansion, both on a constant currency and as reported basis. Operating margin expansion, again, on a constant currency and as reported basis. FX has been a headwind for us. It will be. It is this year for us.

It has been since 2019, but we’re committed to driving operational improvements, operational efficiencies and NOI growth this year. And that’s our goal every year to drive low double digit constant currency OI growth. With that, we’ll allow the FX flow through to the bottom line. We’ll talk about probably, some of the confusion around our guidance raise on EPS with the Q and A. But expect to have a good year here.

Free cash flow, $350,000,000 to $400,000,000 We’re only at 9% of revenues. We can do a lot better than that. We’re positioned to do better than that. We’re going to grow free cash flow margin every year over the next coming years. It wasn’t that long ago in 2018 when we were closer to 20% free cash flow margin.

No reason why we can’t get back to that that place. It’s just going to take a little bit of time, but we’re going to be working our way towards that in the coming years. So I guess with that, I’ll move it to Margaret in Q and A.

Margaret Kayser Andrew, Analyst, William Blair: Perfect. So maybe just let’s start with the quarterly performance and some of the commentary you had talked about in regards to CVI and the guidance change. What what struck that guidance change? What are you seeing, you know, in the market today that that made you change it?

Brian, Unidentified, Cooper Companies: Yeah. I mean, I I’d say that, you know, if we look at pre COVID, we were seeing a market that was growing sort of in that four to six percent range. And when we look at right now, you know, we exited last year with a market that grew 7%. And in the fourth quarter of last year, the market grew 9%. Now I don’t think the market was as strong as 9% because you saw q one this this year, calendar the quarter this year, grow 4%.

So, you know, you had J and J growing 2.7% and Alcon grew 4%. Those were not really the the sell through numbers. That’s just reflective of probably some inventory that was in the channel last year, some overselling last year, some buying by distributors, key accounts, global retailers. So the 7% probably wasn’t quite as strong as 7%. It was probably closer to 6% if you look through all of that.

And so our competition has been talking about, you know, mid single digits growth in the contact lens industry. We agree with them. So we reflected we updated our expectations for market growth of 5% to 7% to 4% to 6%. With that, we took down our the midpoints of the midpoint of CooperVision by a point, and and that’s how we arrived at our our updated guidance.

Margaret Kayser Andrew, Analyst, William Blair: Okay. And and so I think Dane called himself an optimist on the call, and that makes sense. You guys have been doing better. Market obviously has been doing better. And so hopefully, there’s some reversal to that.

But maybe give us some context over how contact lenses have maybe ebbed and flowed in prior market downturns and and why this may or may not be a good corollary.

Brian, Unidentified, Cooper Companies: Yeah. I mean, if we look back at in in 08/00/2009, the market we had one quarter where the market grew 3%. I think that year, the market around o eight, o ’9, the the market grew somewhere around three to 4%. We grew 5% that year. The market fundamentals haven’t changed right now.

I mean, you you look at fitting activity, and it’s still really strong. You still have consumers that are preferring and going into premium products. You know, our MyDay portfolio is doing exceptionally well, and the only limiter to its growth has been supply. And so now what we’re saying to the street is we are unencumbered. We have taken the handcuffs off.

We are now getting fit sets out. We haven’t had we haven’t given fit sets into markets in a long time, trial lenses. So that when a customer comes in and they need a toric and they’re astigmatic or they they’re presbyopic and they want a multifocal, Now there’s a lens that they can that a doctor can grab off the shelf, put it on eyes, send them home with a with some lenses to try, and that’ll turn into revenue. So if we looked at what happened in 08/00/2009, there was there was definitely people stretching out their wear. But back then, you had FRP lenses, a frequent the the monthly lenses or two week lenses where the two week wear lens wearers were trying to stretch to a month or a month wear trying to stretch to forty five days.

Now that you’ve got more and more people wearing dailies and people are already wearing their lenses kind of five days a week, maybe they’re going to four days a week. You know, maybe they’re what we’re also seeing with consumers is, you know, where they were buying, let’s say, a year supply, maybe they’re buying six months instead of a year or three months instead of six months. That’s impacting some of the channel, the channel levels because if people are buying a little bit less, but they’re utilizing still the same amount, you’re still gonna need a little bit of a correction in the channel. And that’s what we’re seeing right now play out where there’s just a little bit of correction that’s happening in the industry. And for us, we think we’re gonna be we’re gonna be through the channel noise once we get through q three and back to kind of a normal sort of state of affairs within the channel as we exit and get into q four.

Margaret Kayser Andrew, Analyst, William Blair: And so just on that point, right, you were talking a little bit inventory, we’re talking a little bit of new new fits, new starts. New fit starts seem like they haven’t really ebbed down in your view. So it is more inventory dynamics?

Brian, Unidentified, Cooper Companies: We haven’t seen any change in fits. In fact, we’re seeing some acceleration in fits just because of we have more supply going out into the market. So again, the consumer is still buying premium products. You see our competition that have premium products and those products doing well. Same is true for us.

Fitting activity is still robust. And so when we say, is there anything structurally different? No. Is there any fundamentals that are changed? I mean, you still have prices as a tailwind for the market.

Price is going to be 2% to 3% this year to help offset inflation. You’ve got wears growing roughly 1%. And then the balance, you know, related to the trade up to dailies and dailies silicones because you still have a long way to go to move the market and to get more and more people into dailies that are that are otherwise in in FRPs or in hydrogels or or legacy daily dailies.

Margaret Kayser Andrew, Analyst, William Blair: Okay. And maybe let’s go to my day, and you you had talked about that seeing some really nice nice uplift. Can you provide a little bit more detail around Torx multifocals and kind of the new Energous offering as well?

Brian, Unidentified, Cooper Companies: Yeah. So MyDay is a full family of products. We’ve got spheres, Torx. We’ve got the widest range of Torx in the market in that in that portfolio. We’ve got a phenomenal multifocal.

We’ve got Energous, which provides a little bit of a digital boost for people who who are just myopic, you know, sphere wearers, but it kinda gives them a little bit of plus power to be able to see their iPhone or see the screen. It’s it’s unique. It’s it’s it’s unique to Cooper. No one else has a product like that. So we just launched that in we launched Energous in in Canada recently, and we’ll be launching Energous in Europe next year.

And that’s due in large part because of the supply that we’ve have. We’ve been putting a lot of capital into production with great success. So that offers us an ability to go and push more Torix out in the market, expand existing private label relationships that only had a certain SKU set to expand their SKUs, to give them the multifocal, to enter into new private label agreements and key account agreements, to to get MyDay into Asia Pac, where we’ve been really limiting the release of MyDay into that market. And then it also allows us to launch a silicone hydrogel MiSight lens next year, which we’ll do probably in the early part of next year into the Europe into Europe. So you’ll have MyDay MiSight in Europe next year, which will help drive some MySite growth.

Margaret Kayser Andrew, Analyst, William Blair: Okay. And so there’s a couple of concepts maybe to follow-up on. You’ve got more of the capacity now that’s leading to some of these more aggressive, maybe not aggressive, but just normal marketing strategies. How does that differ versus the competition in the marketplace?

Brian, Unidentified, Cooper Companies: I would say that, the competition is good. I mean, I think everybody’s got everyone sort of has their respective lanes. You have a little bit of a battle going on in this sort of the one week, two week space between our competition, but we don’t play in that space. We’ve got a monthly product in Biofinity that can fit 99.9% of wearers. So if you’re a key account and you’re trying and you want to private label a phenomenal product and have it and have a monthly product for your your customers, Biofinity has always been and always will be a great option because we have we have the widest route ski range of torics.

You’ve got the multifocal. You’ve got toric multifocals for those astigmatics that become presbyopic. Got Energous, which provides that plus power. So it’s a it’s a product that there has been there has been there was a launch last year by a competitor, and it’s a fine product. It’s a good product.

But Biofinity continues to perform really, really well up against that product, not only because of comfort and fit and acuity, but also just because it’s a wide range. So I think we all have our our points of strength. Certainly for Cooper, we’ve got a myopia control franchise, the only FDA approved product to to reduce the progression of myopia. So when you look at our growth of six and a half percent against the market midpoint of five, we’re growing a little bit faster than the rest of the competition, and we will continue to do so in our core portfolio of contact lenses. And then when you take when you add to that MiSight, which will be a hundred million dollar product this year, growing, you know, you know, just grew 35%, probably goes 25 to 30% in q three as we give more free lenses away, and maybe you’ll have some questions on that.

And then and you know, probably exiting the year, probably growing 40%. I think we have a good chance of growing that product at least 30% next year. Again, growing another point giving us another point of growth. So beyond just the core portfolio, which is going to do well against the market, we also have that extra advantage of having a myopia control product, which gives us additional point of growth.

Margaret Kayser Andrew, Analyst, William Blair: And so as we talk about that, that’s one of the things you referenced on the next quarter is maybe growth kind of pulls back a little bit because you are going to give away some lenses to try to, you know, basically get that new start and then there’s, you know, stream of revenue, hopefully, should they stick with the product. But why haven’t you done that as aggressively in the past? Why is now right the the right moment?

Brian, Unidentified, Cooper Companies: Yeah. I mean, I would say we’ve been we’ve been challenging sort of what is what’s been so what’s been holding back MiSight? Because we know that it’s effective. We know that when we put MiSight onto a child’s eyes and you have a small window within which you can influence the progression of myopia, you want to try to get as started as early as possible with a child because that window runs out in their late teens. So what we found through a number of different trials and testing and and and is that if we try to discount the lens, it doesn’t really move the needle much.

And we tried various different discounting scenarios. But when we give three months free or give at least one month free of just say, hey. You know what? If the parent comes in with a child, you know, parent is a little concerned about, well, can I get contact lenses in my 10 year old? Like, is my 10 year old gonna be able to put this on?

Are we sure that this is gonna work? Like, I don’t know. And and it’s expensive. It’s a barrier, and it takes sometimes a year or two to get that parent convinced. Because when parent comes in with with the 10 year old and that child is a minus one, and then they come in a year later and that child’s a minus two, it’s another opportunity to have that conversation and say, you know, you could have done something about it.

You can’t reverse it, but we should try it now. So that that has been a slow and steady role. What’s different now is we have spec savers in Europe that was willing to really lean into myopia control across all of their their stores and say, you know what? Every child that comes in here, we’re going to treat them with a form of myopia control, a standard of care. And whether that’s glasses or it’s contacts, if it’s contacts, it’s gonna be MiSight.

And so what we did with them is we did a private label with with Specsavers. It’s their brand with MiSight technology, essentially the MiSight lens. And we said, hey. We when we trialed this in a number of their stores, we realized that if we can just give the child that we can let the the parent go home with a child with three months free, and we can get them convinced that the child can put it put the contact lens in their eyes, they come back, and they buy the lens. And so we’re really excited about it.

We just started rolling that out now. It’ll result in a little bit of softness in q three. But again, I still think we’ll probably grow 25 in excess of 25% in q three. But what it does do is it kind of it leads to stronger uptake in revenue growth in the fourth quarter as we get into next year.

Margaret Kayser Andrew, Analyst, William Blair: And then if we look at my side in areas like Japan, right, that’s still to be launched there. I think it’s 2026. Maybe walk us through the go to market strategy and expectations.

Brian, Unidentified, Cooper Companies: Yeah. We’re excited about Japan because Japan has no myopia control products in that market. You have a lot of myopes, a lot of myopic children in Japan. So we’ve been going through doing clinicals and and, you know, got some really good clinical data to support an approval there. We expect to get an approval later this year, and that would lead to a launch in Japan early next year.

So what we’re doing right now is we’re we’re working with key account or or KOLs in the market. We’re talking to doctors who are going to be getting ready to fit that lens. We’re educating the docs. We’re educating our sales force. We’re getting promotional materials ready, really so that once we get the approval, we can hit the ground running and launch that product in the early part of twenty twenty six.

Margaret Kayser Andrew, Analyst, William Blair: And then as we think about SiteGlass, every once in a while, get these questions as that is an opportunity. It does seem like it’s a meaningful opportunity. Update us on where where you are today.

Brian, Unidentified, Cooper Companies: Yeah. So Cycleus is a fifty fifty joint venture with Essilor Luxottica. It’s a it’s a phenomenal product. It works. It’s a it’s effective.

We have it launched in a number of markets around the world. Where it’s really taking off is in China. The the results of that product are you know, the the the efficacy of that product is good as long as the child is wearing the the the glasses seven days a week, you know, the majority of the day. And and we’re excited about it. I mean, we’d love to see Spectacles get approved in The US market.

And so we’ll see. I mean, I I think anywhere we have Spectacles in the market alongside MiSight, it’s an opportunity for the doctor to start fitting a my form of myopia control at an early age onto a child. And whether that’s glasses or contacts, eventually, child is gonna graduate and want to get into contacts, or they’re not going be wearing their glasses long enough to get the efficacy, and that’ll be a conversation starter to get them into contact. So we want to see glasses in the market. We want to make it easy for optometrists to have that conversation.

And sight glass has got great technology that’s different from other technologies that are out there. And, you know, we’re bullish on it, but, the FDA has been slow to to move, unfortunately.

Margaret Kayser Andrew, Analyst, William Blair: Yeah. One of the the common questions we we’ve gotten even frankly this week and in the past has been around your capacity, the improvements in capacity, but then more importantly, of the free cash flow conversion of those investments. So maybe you can provide us some thoughts around that.

Brian, Unidentified, Cooper Companies: Yeah. I mean, there’s been a very heavy investment cycle that we put into the CooperVision business. And and when Al and I took over in our roles seven plus years ago, know, we really decided to lean into our innovation and proficiency around Torix and multifocals and and the differentiation in our families between Clarity and MyDay and really lean into being a dailies powerhouse. And, you know, historically, we’ve always been that specialty company that does a good job with Torix and does a good job with FRPs, but we really wanted to invest in in dailies. And so we’ve invested in manufacturing, packaging, labeling, automation, distribution, because a lot of our key accounts expect that we’re gonna manage their inventory for for them.

We’re gonna we’re gonna handle their supply chain, and we’re gonna do customized solutions, and we’re gonna do different things with labeling and inserts and so forth. So all of that took a lot of investment, and we’ve been putting that investment into our facilities all around the world. And we’re now kind of in harvest mode. We’re now actually starting to see the benefits where we’re putting volumes through our plants, we’re putting volumes through our distribution centers, and where you’re seeing leverage. When I talked about getting gross margin expansion and operating income growth and operating margin expansion, it’s coming from leveraging that prior investment activity in manufacturing, packaging, distribution.

Beyond that, we’re also just being mindful of hey. We have two businesses, a vision and surgical, that have largely operated on their own. And surgical has acquired a number of businesses where they’re just wrapping up and finishing some really important integration activities that’ll continue to drive their expenses down and drive better margin expansion within surgical. But but on the whole, when you have more critical mass between both businesses and you had people in countries and in regions and in and at the divisional level around some of the support structures, you know, finance, IT, legal, HR, it gives us it gives you an opportunity to really now think differently about how are you going to support those businesses. So we’re still investing in commercial.

We’re still investing in r and d because we want to see that consistent revenue growth. We want to still drive faster than our markets, that durable, consistent, sustainable growth. But we’re there’s opportunities for us to continue to leverage that prior investment activity in the manufacturing and all that capacity expansion we’ve been putting in, get better utilization from our plants, better cost per unit, drive better efficiencies there, but also go after some of the integration work and some of the centralization work, which will lead to some better SG and A savings this year and going forward.

Margaret Kayser Andrew, Analyst, William Blair: We’ve got more questions on on the P and L. I know we haven’t gotten to CSI, but but I guess just to to wrap up the free cash flow and the capital usage. You know, how do you look at the return to shareholders versus M and A as an argument versus CapEx?

Brian, Unidentified, Cooper Companies: Yeah. So free cash flow is certainly a focus of ours right now. And and I’d say capital priorities have shifted. You know, we’re definitely prioritizing our free cash flow towards debt pay down. You know, if we can take our interest expense this year down from $90,000,000 that’s immediately accretive and will help drive better free cash flow going forward.

We bought back some stock last quarter. We saw a dislocation in our stock price relative to our peers, and and, you know, and and we saw an opportunity to buy back stock. So, obviously, where we’re trading today is I would use a more inflammatory word than irritating if I wasn’t in a public discourse. But it’s it’s it’s it’s something that we’re gonna we’re evaluating, you know, because it’s it we were obviously not clear enough about the strength of our business, the strength of our industry, how we’re set up to drive success this year into next year. And that’s not only on the revenue side, but also on driving double low double digit constant currency ROI growth.

It’s a target for this year. It’s embedded in our guidance. It’s gonna be a goal for next year. And any FX moves that are positive, and we’re starting to finally hear in q three, get to a place of tailwind for the first time in as long as I can remember since 2019. We’re gonna let that flow through to the bottom line too, and it’s a positive for next year.

So, you know, again, I’m knocking on wood because I hate talking about FX, but hopefully, we’re starting to see some benefits there. I think the third piece of it is just free cash flow. I mean, we had a softer free cash flow quarter here in q two. We’ve got some big tax payments that went out the door, bonus and IPP payments that went out the door in q two and some timing of some other payments. But we’re still we’re not come backing off of $3.50 to 400,000,000 this year.

But with CapEx starting to come down on a percentage basis next year and and and all likely are coming down not only in a percentage basis, but on an absolute basis in 2027, and better, more focus on working capital initiatives, inventory, DSOs, DPOs. There’s no reason why we can’t drive free cash flow margin higher each and every year. I expect we’re going do that. We’re focused on it as a part of our comp and everyone’s we’ve got the whole organization aligned around it. So we we know that free cash flow delivery is important.

And and first started with revenues, then margins, now free cash flow. And now we can we’re we’re lined up really well to be able to to deliver on all three of those.

Margaret Kayser Andrew, Analyst, William Blair: And just from a from a free cash flow perspective, as we look at ’26, I I hate to, you know, look for guidance or anything like that. But from a growth perspective, you know, what are the moving pieces that can get you to to a higher rate?

Brian, Unidentified, Cooper Companies: Yeah. So I think if you just kind of look at the CooperVision business, you know, I would say there’s no reason why the contact lens market shouldn’t grow four to 6% next year. And like I said earlier, Cooper growing faster than the market driven by a little bit better core performance and then MiSight. Know, I still think MiSight should grow at least 30% next year. You know, I’d say on the surgical side of things, there’s no reason why we shouldn’t be back to sort of mid single digit growth next year as we work through some of the channel stuff, some of the the cycle noise in Asia Pac.

You know, you can only delay IVF for so long. You know, if you’re going to an IVF center and you’re seeking treatment, you’ve probably run out of luck. You’ve tried IUI. You’ve tried to get pregnant in lots of different ways. And and maybe now you’re in your thirties.

And so you can only delay so long before that window closes. So we expect that the fertility market is still going to get back to sort of mid to upper single digits next year. We’ll grow at least at that rate, maybe a touch higher. The rest of the surgical business will do as it does with stem cell and PARAGARD will be sort of up and down. At the end of the day, there’s no reason why we can’t deliver mid single digit growth.

If we look at the rest of the P and L, it’s more of the same. It’s kind of leveraging prior investment activity, driving OI growth, and then letting FX fall through the bottom line. Don’t want to guide to next year, but we will give some more color on our Q3 call. I think there’s enough good and enough that we’re going to want to talk about just to kind of clear there and calm the nerves that that’s probably worthwhile for us to talk about it in Q3.

Margaret Kayser Andrew, Analyst, William Blair: Okay. And realistically, free cash flow, would imagine, grows even faster than that because of the debt pay downs, CapEx leverage

Brian, Unidentified, Cooper Companies: and so. Yes. So you know, we will you know, by the end of this year, we will have increased free cash flow this year versus last year by roughly a hundred million dollars. Your next year, cash flow margin will take another step higher because free cash flow is abating I’m sorry. CapEx is abating.

You’re moderating at least. Interest expense coming down. Tax will be probably pretty similar, around a little bit nothing crazy about it, nothing different about our tax rate materially. And then just the higher revenues and hopefully FX and operating improvements driving free cash flow higher.

Margaret Kayser Andrew, Analyst, William Blair: Okay. We’re just about out of time at least for the public forum version of this. So unless you have, you know, any final statements, we might just switch to the breakout, which we’re gonna leave in this room since we’re the last presentation.

Brian, Unidentified, Cooper Companies: No. I I guess, you know, with that commentary about what’s what’s happening, like, this isn’t a onetime thing. So when I look at next year and I look at sort of, you know, earnings expectations for next year, we’re not getting enough credit for the good that’s happening sort of in the center of the the p and l. And so, know, I think that that maybe was something that we didn’t articulate or that, you know, when we talked about the raise of 10¢ for EPS, I think a lot of people kinda came away from my commentary that it was mostly FX that drove the f the EPS increase, and that is not true. You know, if you look at revenues, we took down revenues by 1%, and FX offset it by a little bit more.

So we were able to raise by $7,000,000 on a consolidated basis for revenues. If you look at EPS, that $41,000,000 takedown in revenues was offset by by FX of 10¢. So 10¢ down on revenues, 10¢ up because of FX. What you’re left with is roughly 10¢ of operating efficiencies that led to the EPS raised by 10. So, you know, I think that maybe was something that was maybe misunderstood that we could have articulated better.

We tried to simplify the message and maybe it got missed. But but outside of that, I think you’ve we’ve kind of

Margaret Kayser Andrew, Analyst, William Blair: Not me. No.

Brian, Unidentified, Cooper Companies: Yeah. No. Not you. That’s true. That’s for sure.

Margaret Kayser Andrew, Analyst, William Blair: Alright. Really appreciate it, Brian. Thank you. If we could wrap that. Appreciate it.

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