Transcription des résultats du troisième trimestre 2025 de Virtu Financial (VIRT)

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Date

Oct. 29, 2025 at 8 a.m. ET

Call participants

- Chief Executive Officer — Brenton L. Saunders

- Chief Financial Officer — Osama Eldessouky

- Head of R&D and Chief Medical Officer — Yehia Hashad

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Full Conference Call Transcript

Brenton L. Saunders: Thank you, George, and good morning to everyone joining us today. I'm going to provide an overview of our impressive third quarter performance and speak to how our strategy and patience is paying off. Sam will go deeper on the financials and update 2025 guidance, and I'll close with a look at products driving growth and opportunity. I'd like to thank my 13,000 colleagues around the world upfront because without their commitment and belief in what we can achieve together, we'd be stuck in neutral. Instead, we're delivering on the vision we laid out in 2023.

6% constant currency revenue growth was once again fueled by a base business engine that continues to hum and the steady introduction of innovative products across categories. Pharmaceuticals was a standout, thanks to $84 million in Miebo revenue. Miebo growth helped bolster our comprehensive dry eye portfolio, which is front and center for eye care professionals, patients and consumers. Effective selling has also meant more surgeons implanting enVista intraocular lenses, helping drive 27% constant currency revenue growth in premium IOLs. Our loaded and differentiated pipeline will be on full display in just a few weeks at Investor Day. Importantly, the pipeline products we'll highlight aren't aspirational. These are clinical stage programs with anticipated launches over the next several years.

Every part of our nearly 3-year journey since I returned as CEO has been aligned to 1 or more of 3 categories you've all become familiar with: selling excellence, operational excellence and disruptive innovation. Those aren't optional. They are imperatives. While our journey is nowhere near complete, given how far we've come, we've introduced a fourth category, financial excellence. This is our opportunity to deliver sustained profitable growth that reflects our real potential. We'll show you what that looks like at Investor Day when we share our 3-year plan. We've reached a pivotal point in our journey to becoming the best eye health company.

Being the best means elevating the standard of care in eye health, which is why our pipeline is filled with products that have the potential to be truly disruptive and reset expectations for eye care professionals, patients and consumers. You'll learn much more about the science behind our pipeline and market opportunity at Investor Day, but here's a sneak peek. In consumer, new formulations of LUMIFY, PreserVision and Blink Triple Care will make category leaders even more appealing and are expected to unlock significantly larger audiences. In Pharmaceuticals, next-generation lifitegrast would change the dry eye disease treatment paradigm.

Our ocular surface pain medication would be the first of its kind, and our glaucoma medication would be the first to improve visual acuity. The contact lens market has been starved for innovation. There's been no material science breakthrough since 1999, which we're addressing with a first-of-its-kind bioactive lens. Our highly successful SiHy platform will expand with a cost-competitive daily disposable, a frequent replacement offering and a lens designed to slow the progression of myopia in children and young adolescents. Finally, in Surgical, we're building on a steady stream of premium products representing consumables, equipment and implantables, the holy trinity of that business. We delivered growth across all segments in the third quarter, once again demonstrating our holistic strength.

I mentioned Pharmaceuticals as a standout earlier, but I would be remiss if I didn't recognize Vision Care, which captures contact lenses and consumer offerings. Several franchises in both categories are highlighted here, including Blink with 37% reported revenue growth, Artelac at 24%, Daily SiHy offerings at 22% and eye vitamins at 12%. Our overall contact lens portfolio grew a healthy 6% on a constant currency basis. We'll discuss new iterations of some of the highlighted products at Investor Day as we work to make established high performers even more popular with meaningful scientific advancements.

I'll now turn it over to Sam for a closer look at the financial metrics, including significantly improved cash flow figures and an update on 2025 guidance. Sam?

Osama Eldessouky: Thank you, Brent, and good morning, everyone. Before we begin, please note that all of my comments today will be focused on growth expressed on a constant currency basis unless specifically indicated otherwise. In Q3, we delivered strong performance with year-over-year revenue and adjusted EBITDA growth. We're also very pleased with our cash flow generation this quarter. Turning now to our financial results on Slide 8. Total company revenue for the quarter was $1.281 billion, which reflects year-over-year growth of 6%. The revenue growth was across all our segments. For the third quarter, currency was a tailwind of approximately $19 million to revenue. Now let's discuss the results of each of our segments in more detail.

Vision Care third quarter revenue of $736 million increased by 6%, driven by growth in both consumer and contact lenses. The consumer business grew by 6% in Q3 as our key brands performed well and consumption trends remained steady. We delivered solid growth in the quarter while absorbing a destocking impact of approximately $6 million. Let me go over a few highlights. Eye vitamins, PreserVision and Ocuvite grew by 11%. LUMIFY generated $48 million of revenue, up 2%. In the quarter, we continue to see strong consumption. Year-to-date, LUMIFY revenue is up 13%. We saw strong execution in the consumer dry eye portfolio, which delivered $113 million of revenue in Q3, up 18%.

Our 2 key franchises, Artelac and Blink, once again contributed to the strong performance. Artelac was up 18% and Blink was up 36%. Contact lens revenue growth was 6%. Our contact lens business has outpaced the market, and we saw strong performance once again in the quarter. The growth was led by Daily SiHy, which was up 24%. Biotrue was up 7% and Ultra was up 4%. In Q3, our contact lens business saw growth in both U.S. and international markets. The U.S. was up 9% and international was up 4%. Moving now to the Surgical segment where we continue to see steady market dynamics and procedure volume. Third quarter revenue was $215 million, an increase of 1%.

Excluding the enVista recall, Q3 revenue growth was 7%. In Q3, implantables were up 2% and 14% sequentially. As Brent will discuss, we are continuing to make solid progress with the enVista return to market, and we are regaining momentum in premium IOLs. Consumables were flat on a constant currency basis and up 4% on a reported basis as we lapped last year's notably strong Q3, which saw stronger volumes driven by resupply to the market. Finally, equipment was up 4%. Revenue in the Pharma segment was $330 million in Q3, which represents an increase of 7%. Our U.S. branded Rx business was up 13% in the quarter. Miebo delivered $84 million of revenue in Q3.

This represents sequential growth of 33% and a 71% increase year-over-year. It also reflects TRx growth of 110%. Xiidra delivered $87 million of revenue in the quarter, which is in line with our expectations. Xiidra TRx growth was 8%. Our international pharma business was up 12% in the quarter. We continue to make progress in our U.S. generics business. As anticipated, we are seeing sequential growth with U.S. generics up 2% this quarter compared to Q2. Now let me walk through some of the key non-GAAP line items on Slide 9. Adjusted gross margin for Q3 was 61.7%, which represents a 130 basis points decrease year-over-year.

This was mainly driven by product mix and the onetime impact of the investor recall. In Q3, we invested $95 million in adjusted R&D, which represents an increase of approximately 13% over Q3 of 2024. Third quarter adjusted EBITDA, excluding acquired IP R&D was $243 million, up 7% year-over-year on a reported basis. Q3 adjusted EBITDA margin, excluding acquired IP R&D was 19%, which represents a sequential increase of 400 basis points. We are continuing to execute our margin expansion strategy as we transition from the most active product launch cycle in the history of the company to a growth phase and as we remain focused on disciplined cost management.

Adjusted cash flow from operations was $161 million in the quarter, and adjusted free cash flow was $87 million. We are pleased with the continued progress of our efforts to drive cash flow optimization initiatives. Net interest expense for the quarter was $98 million. Adjusted EPS, excluding acquired IPR&D, was $0.18 for the quarter. Now turning to our 2025 guidance on Slide 12. We are maintaining our full year revenue guidance at a range of $5.05 billion to $5.15 billion. This revenue guidance represents constant currency growth of approximately 5% to 7%. Shifting to adjusted EBITDA.

We are updating our adjusted EBITDA guidance to a range of $870 million to $910 million from a range of $860 million to $910 million. The raise in the lower end of the range is driven by the strength in the performance of the business. In terms of the other key assumptions underlying our guidance, we continue to expect adjusted gross margin to be approximately 61.5%. For the full year, we continue to expect investments in R&D to be approximately 7.5% of revenue and interest expense to be approximately $375 million. We continue to expect our adjusted tax rate to be approximately 15%. We now expect full year CapEx to be approximately $295 million.

Consistent with our previous guidance, our current guidance excludes any potential onetime IPR&D charges that we may incur in 2025. Finally, a brief word on tariffs. The tariff policy remains fluid, and we are continuing to monitor updates. Based on where the policy stands today and the actions we're taking, our updated guidance assumes we will be able to offset the impact of tariffs in 2025. To conclude, we had a strong quarter and our business fundamentals remain solid. We are committed to our strategy to drive sustainable growth and margin expansion. I look forward to seeing you all at our Investor Day on November 13. And now I'll turn the call back to Brent.

Brenton L. Saunders: Thanks, Sam. Let's spend some time highlighting growth drivers in each business. There's not much I need to say here as these charts plotting TRx growth for Miebo and Xiidra speak volumes. 110% year-over-year prescription growth for Miebo is outstanding, especially considering there was a new entrant in dry eye disease treatment. Xiidra is doing what we said it would, steadily growing in volume while maintaining a sizable market share. We expect both medications will continue to benefit from ongoing category expansion as dry eye awareness and education increase. As a reminder, we're at the tip of the iceberg when it comes to treating the millions of Americans who suffer from dry eyes.

We often reference a thoughtful approach to expanding our daily SiHy portfolio as was the case in the third quarter when we launched a toric model in Japan. We're now in more than 50 countries and the portfolio still shows no sign of slowing down with 24% constant currency revenue growth in Q3. We're still in early innings, but remain excited for additional expansion and anticipated introduction of new SiHy offerings under development. At a macro level, in consumer, we saw impressive consumption considering a work-down of inventory in the trade. That's a testament to brand building and confidence in our products among eye care professionals whose OTC recommendations carry significant weight.

It's worth taking a moment to remember that we only acquired the Blink family of eye drops a few years ago in a deal that was largely overshadowed by our Xiidra acquisition. In that short period, we've completely revitalized the global brand and introduced new options, helping drive nearly 40% reported revenue growth in the quarter. Earlier, I referenced Artelac, which, as a reminder, continues to be our most global dry eye option with availability in more than 40 countries and plans to expand further. Double-digit reported revenue growth is common for the brand and Q3 was no different. Eye vitamins saw a nice uptick with 12% reported revenue growth.

Our new formulation of PreserVision, which we expect will be on the shelves in the first half of 2026, could significantly increase the addressable market for age-related macular degeneration. One caveat on LUMIFY performance. Our typical growth wasn't reflected in the third quarter due to the timing of a large promotional order shipped to Costco in June. Then that we saw the benefit in the second quarter with 27% reported revenue growth. LUMIFY's popularity and category dominance is clear with consumption seeing 14% growth in Q3. Two call-outs for Surgical, both related to our momentum in the high-margin premium market.

While not fully recovered, progress on our return to market for the enVista IOL platform and Envy in particular has been faster than expected, thanks to the tireless work from the team and our deep relationships with ophthalmic surgeons. Total enVista Envy sales in the third quarter reached 82% of Q1 or pre-recall levels, with Envy coming in at 91%. While enVista Envy has a foothold in North America pending additional launches, our LuxSmart premium offering continues to expand in Europe with 6% constant currency revenue growth in the third quarter. I've already said as much as I can on our pipeline.

The rest we'll save for Investor Day, which will take place at the New York Stock Exchange on November 13. What I can say is we put a premium on durability of growth through innovation and that these are exciting times for Bausch + Lomb. Let's now move to Q and A. Operator?

Operator: [Operator Instructions] And the first question today is coming from Patrick Wood from Morgan Stanley.

Patrick Wood: I'll keep it to one just in the interest of time. But not to steal the thunder from the Investor Day, but you added obviously that financial excellence pillar. High level, any kind of commentary you could give us on like how we should interpret that? Are we thinking about is this a cash conversion thing? Is this like a margin structure thing? What was the impetus at least behind kind of adding that? Curious what you can add at least ahead of the Investor Day in November.

Brenton L. Saunders: Yes, of course. And thanks, Patrick. Look, under our roadmap, which we've been talking abo