Alcon Inc. Q3 FY2025 earnings call

• Surgical equipment: Unity VCS launch showing strength with 4D Phaco technology, preparing for Unity CS launch. • Implantables: PanOptix Pro stabilizing U.S. trifocal IOL market share with enhanced optical design. • Contact lenses: Toric modalities grew double-digit, expanding access for astigmatic patients. • Ocular Health: Systane family grew high single-digit, Tryptyr showing early promise for dry eye. • Innovation: ESCRS and AAO conference support, new data on Vivity and WaveLight Plus. • Market dynamics: Cataract volumes up, AT-IOL penetration up, contact lens market mixed. • Acquisition: Positive view on STAAR Surgical acquisition as complementary to laser business.

Surgical franchise revenue was $1.4 billion, up 5% YOY. Implantable sales were $432 million, up 2% YOY. Consumables sales were $745 million, up 5%. Equipment sales were $243 million, up 13% driven by Unity VCS launch. Vision Care sales were $1.2 billion, up 5%, with contact lens sales up 5% driven by product innovation. Ocular Health sales were $462 million, up 6% led by dry eye and glaucoma products.

• Reaffirmed full-year sales guidance: $10.3 billion to $10.4 billion, constant currency growth 4%-5%. • R&D expected in high end of 8%-10% of sales. • Core operating margin 19.5%-20.5%, diluted EPS $3.05-$3.15. • 2026 outlook: Tailwinds from new product launches, headwinds from tariffs (incremental $50M-$100M impact) and Aurion full-year impact pressuring margin by 40 bps.

• Tariffs: Incremental impact on margins, timing lag in tariff impact on profitability. • Competition: Pressure on market share and pricing. • Inventory cycles: Impact on cost of sales timing.

Q: Congratulations here on the quarter. One on Unity and one on just the underlying U.S. market. So on Unity, it looks like the cycle is sort of getting started here...

A: Yes. Thanks, Anthony. Just a little bit on the cycle...

Q: David, on the STAAR transaction, you guys put out, I think, pretty pointed comments about your views about it...

A: Well, let me say that I don't have a lot to add to my prepared remarks because obviously, it's a sensitive period...

Q: This is Kavya, on for Graham. Just a couple, please. First is, do you expect to exit the year at a 7% plus top line growth? Why isn't that a good starting point when we're thinking about next year?...

A: Look, I think we're not going to comment too much on next year until next year...

Q: Thomas Stephan: Great. First one, just on Unity. I know it's early, but can you talk a bit about, I guess, how placements are trending relative to initial expectations?...

A: Sure, Tom. I mean, it's kind of as expected. I think we gave some expectations recently at a conference. I think we're on those...

Q: Matthew Miksic: A question on tariffs. You mentioned the capitalized tariff expense moving through the P&L. I know you're not giving a ton of color on '26, but on the gross margin line, any directionally the effect of that...

A: Yes. Listen, we'll give you more color on '26 when we get to the February call. But when you think about gross margin...

Q: David Saxon: David and Tim, maybe, I'll start on the contact lens market. So I think the U.S. kind of drove that 4% growth...

A: Yes. Really good questions, David. Thank you. A couple of comments on the global market...

Q: Veronika Dubajova: I will keep it to 2, please. One, just want to get your flavor, obviously, lots of questions around Unity and whether that's tracking in line with expectations...

A: Veronika, let me try and break your 2 questions into the 4 that you asked. Just kidding...

Q: Larry Biegelsen: Maybe Tim or David, can you help us with a framework for your equipment growth because there's a lot of components there...

A: Well, look, on the mix, the mix is moving around right now. I would say the mix is...

Q: Jeffrey Johnson: One maybe follow-up question on Unity. I know you've gotten a lot of questions on it so far, David. But again, referring back to the chart that you put up at our conference...

A: Well, look, I mean, VCS' list price, I think, is $185,000. We've given some discounting, but not much...

Q: Jack Reynolds-Clark: I had a couple, please. The first is on PC-IOL penetration. Could you talk about the penetration in the U.S. versus Europe and I guess, versus APAC...

A: Yes. I -- let me start with PC-IOL penetration. The U.S., I think, was 120 or 130 basis points up...

Q: David Adlington: Firstly, just on PanOptix Pro, I just wondered what sort of price premium you're actually achieving...

A: When you say stocking, you talking about the third quarter?

A: Yes. No, not to my knowledge. I think the -- on the price premium, there's a slight price premium...