Cooper Companies (COO) 2025: Revenue Growth Meets Margin Pressure

The goal of today’s post is to dig into the latest annual financial results from The Cooper Companies, Inc. (COO). While not always a household name, Cooper is a titan in the medical device space, operating primarily through two distinct units: CooperVision (contact lenses) and CooperSurgical (fertility and women’s health).

In their recently filed 10-K annual report for the fiscal year ended October 31, 2025, the company presents a narrative of solid top-line growth tempered by restructuring costs and the complexities of operating a global supply chain.

To visualize how revenue flows from sales down to net income, take a look at the diagram below:

Top-Line Growth: Vision and Fertility

For fiscal 2025, Cooper Companies reported $4.1 billion in net sales, a 5% increase from the previous year. This growth was balanced across both of its primary business segments, which is a positive signal for diversification stability.

CooperVision (CVI) remains the heavyweight, contributing $2.74 billion in revenue. This segment competes with giants like Johnson & Johnson and Alcon. The growth here was driven by high-value specialty lenses. Specifically, sales of Toric (for astigmatism) and Multifocal (for presbyopia/age-related reading issues) lenses grew by 7%. This suggests a successful strategy of focusing on complex vision correction needs rather than just generic sphere lenses.

CooperSurgical (CSI) brought in $1.35 billion, also up 5%. This division focuses on fertility clinics and medical devices like the Paragard IUD. The fertility market continues to be a significant driver, with trends pointing toward increasing maternal age and higher demand for assisted reproductive technology globally.

The Profitability Puzzle

Despite the healthy revenue bump, the bottom line saw some pressure. Net income dipped to $375 million, down from $392 million in fiscal 2024. Consequently, diluted Earnings Per Share (EPS) fell to $1.87 from $1.96.

Why the disconnect between rising sales and falling profits? A closer look at the expense lines reveals the culprits:

1. Workforce Optimization Costs: Corporate Selling, General, and Administrative (SG&A) expenses ticked up. The filing explicitly notes an increase in severance costs related to "workforce optimization initiatives." Essentially, Cooper is spending money now to restructure and theoretically become leaner in the future.
2. Amortization: The company recorded nearly $200 million in amortization expenses. For those new to the term, this represents the gradual write-off of intangible assets—like patents or customer lists acquired from buying other companies. While this reduces reported earnings, it is a non-cash expense, meaning it doesn't drain the bank account directly in the current period.

Debt and Capital Allocation

On the balance sheet side, there is some good news regarding the company's capital structure. Interest expense decreased by 13% to $100 million, driven by lower average debt balances and interest rates. This is a crucial metric for capital-intensive businesses; lower debt service costs free up cash flow for R&D or shareholder returns.

Speaking of shareholders, Cooper Companies repurchased approximately $290 million of its common stock this year, signaling management's belief that the stock is a good investment, even as they ceased dividend payments back in late 2023.

Risks and Market Context

The filing highlights significant exposure to foreign currency fluctuations. Because CooperVision has a massive footprint in EMEA (Europe, Middle East, Africa) and Asia Pacific, a strong US dollar can dampen reported earnings. In 2025, favorable exchange rates actually helped sales by about $16 million, but this remains a volatile variable.

Furthermore, the "Workforce Optimization" mentioned earlier is a double-edged sword. While it promises future efficiency, it indicates that the company is currently navigating a period of internal adjustment to maintain margins against competitive pricing pressures and inflation.

Conclusion

Cooper Companies' 2025 10-K paints a picture of a business with strong product demand but rising operational friction. The growth in specialty contact lenses and fertility services confirms that their core markets are healthy. However, the dip in net income serves as a reminder that scaling revenue is only half the battle—managing the cost of that growth is equally vital. For investors, the key watch-point in 2026 will be whether those restructuring costs pay off in the form of expanded operating margins.