The Cooper Companies (COO) Q3 2024 earnings summary

Executive summary

• Achieved first-ever $1 billion revenue quarter in Q3 2024, with both CooperVision and CooperSurgical reporting record revenues and improved margins, driving double-digit earnings growth and record non-GAAP quarterly earnings.

• Net income for Q3 2024 was $104.7 million, up 23% year-over-year; GAAP diluted EPS increased 22% to $0.52, and non-GAAP diluted EPS rose 14% to $0.96.

• Growth was driven by execution of a multi-year strategy in daily contact lenses and global fertility, supported by strategic investments in manufacturing, technology, product launches, and employee training.

• Recent acquisitions contributed to performance, and a four-for-one stock split was completed in February 2024.

Financial highlights

• Q3 2024 consolidated revenues slightly over $1 billion, up 8% year-over-year organically; CooperVision revenues reached $676 million (up 10%), CooperSurgical $327 million (up 5–9%).

• Non-GAAP EPS grew 14% to $0.96; GAAP diluted EPS was $0.52; consolidated gross margin improved to 66.6% (GAAP 66%).

• Operating margin rose to 25.5% non-GAAP (GAAP 19%); free cash flow was $118–$118.5 million, CapEx $89 million, net debt decreased to $2.5–$2.6 billion.

• Operating cash flow for nine months was $441.2 million; cash and equivalents at quarter-end: $109.7 million.

• Foreign exchange negatively impacted earnings by $0.05, partially offset by a higher tax rate; effective tax rate for Q3 2024 was 16.6% (GAAP 36.1%).

Outlook and guidance

• Fiscal 2024 consolidated revenue guidance raised to $3.89–$3.913 billion, up 8–8.5% organically; non-GAAP EPS expected at $3.64–$3.67.

• CooperVision guidance: $2.606–$2.62 billion, up 9–9.5% organically; CooperSurgical: $1.286–$1.294 billion, up 5.5–6.5% organically.

• Q4 2024 total sales guidance: $1.015–$1.036 billion, 7–9.5% organic growth; non-GAAP EPS $0.98–$1.01.

• Fiscal 2025 expected to deliver low double-digit constant currency operating income growth, with positive FX and stronger free cash flow anticipated.

• FY24 guidance was raised on August 28, 2024.