The Cooper Companies (COO) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $1.066 billion, up 1% year-over-year, with CooperVision and CooperSurgical contributing $717 million and $349 million, respectively; performance was stable across business units.

• Net income surged to $432.8 million, driven by a $307.2 million discrete tax benefit and insurance recoveries related to litigation.

• Free cash flow reached a record $273 million, up 66% year-over-year.

• Strategic review concluded with no sale of CooperSurgical; focus remains on organic growth, sales execution, and capital allocation.

• Investments in salesforce, marketing, and R&D are underway to drive future growth.

Financial highlights

• Gross margin improved to 67% from 65% year-over-year, with non-GAAP gross margin down 60 bps due to higher costs and FX headwinds.

• Operating margin increased to 21% (GAAP) and 26.3% (non-GAAP), up 30 bps year-over-year.

• Non-GAAP EPS rose 4% to $1.15, including $0.03 from tariff refunds; GAAP diluted EPS was $2.24, up from $0.49.

• Free cash flow for the quarter was $273 million and $528 million year-to-date, up 86%.

• Interest expense declined to $21.5 million due to lower rates and average debt balances.

Outlook and guidance

• Q4 consolidated revenue expected at $1.057–$1.08 billion, organic growth of 0%–2%.

• CooperVision Q4 revenue guidance: $692–$706 million, down 2% to flat organically; CooperSurgical Q4 revenue: $364–$374 million, organic growth of 4%–6%.

• Fiscal 2026 total revenue guidance: $4.229–$4.252 billion (2–3% organic growth); non-GAAP diluted EPS $4.51–$4.55.

• Q4 non-GAAP EPS expected at $1.05–$1.09; free cash flow around $170 million, excluding $272 million in litigation payments.

• Fiscal 2027 tax rate expected to rise to ~17.5% due to GILTI increase.