Bausch + Lomb’s 2025 Outlook: Navigating Recalls and Currency Headwinds

Bausch + Lomb Corporation has unveiled revised financial guidance for 2025, reflecting a complex interplay of challenges and strategic resilience. The voluntary recall of certain enVista® Intraocular Lenses (IOLs) and unfavorable foreign exchange trends have reshaped the company’s near-term trajectory, even as its long-term growth pillars—vision care, surgical innovation, and pharmaceutical momentum—remain intact.

Revised Guidance: A Closer Look
The company’s updated 2025 outlook raises nominal revenue expectations to $5.0–5.1 billion (up from the prior $4.95–5.05 billion range) but revises downward constant currency growth to 4.5–6.5% from 5.5–7.5%. This adjustment masks the true scale of headwinds: a $155 million combined drag from the enVista recall ($55 million revenue loss) and foreign exchange fluctuations ($100 million revenue hit).

Adjusted EBITDA, a critical measure of operational health, has been trimmed by $50 million at the midpoint, now targeting $850–900 million. This reduction stems not only from the recall’s $65 million EBITDA impact but also from declines in the U.S. Generics business—a segment now overshadowed by competitors like Xiidra®.

Key Drivers of the Revisions
1. The enVista Recall:
The recall, announced in early 2025, has already cost the company $16 million in Q1 operational results and could reduce full-year revenue by $55 million. While the product has been reintroduced with enhanced quality controls, lingering market skepticism and regulatory scrutiny pose risks. The $65 million EBITDA hit underscores the operational and reputational costs of such events.

1. Foreign Exchange Pressures:
   Currency volatility, particularly against the euro and pound sterling, now threatens to shave $20 million off Adjusted EBITDA. This marks a significant escalation from earlier estimates, highlighting Bausch + Lomb’s exposure to macroeconomic instability.

2. Segment Performance:

3. Vision Care: Growth remains robust, driven by flagship products like Daily SiHy contact lenses and consumer health offerings (e.g., LUMIFY®).
4. Surgical: Demand for implantables and consumables persists, though the enVista recall has clouded this segment’s near-term prospects.
5. Pharmaceuticals: MIEBO® continues to deliver, but declines in the Generics business—linked to pricing pressures and competition—highlight vulnerabilities in legacy portfolios.

Strategic Priorities and Risks
The company’s focus on long-term growth—bolstered by a $215 million cash cushion—includes advancing its pipeline (e.g., new contact lens materials, drug delivery systems) and expanding its consumer health footprint. However, execution risks loom large:
- Recall Aftermath: Even with reintroduction, the enVista brand’s recovery depends on sustained quality and market trust.
- Currency Volatility: With ~50% of revenue generated outside the U.S., further dollar strengthening could amplify headwinds.
- Generics Decline: The pharmaceutical segment’s reliance on mature products leaves it vulnerable to margin compression.

Conclusion: A Mixed Picture, but Fundamentals Remain Intact
Bausch + Lomb’s revised guidance paints a nuanced picture. While near-term results are hamstrung by the enVista recall and FX pressures, its core businesses—vision care and surgical—retain strong growth vectors. The company’s adjusted EBITDA midpoint of $875 million, despite the downward revision, still aligns with historical performance, suggesting resilience.

Investors should weigh these short-term challenges against the company’s $5.0–5.1 billion revenue target, which, if achieved, would mark a 1.6–3.6% nominal increase over 2024’s estimated $4.92 billion. The cash position, while modest, provides a buffer for R&D and potential acquisitions.

However, the stock’s recent underperformance relative to peers—partly due to recall fears—may present a buying opportunity for those willing to bet on its long-term strategic bets. The key question remains: Can Bausch + Lomb’s innovation pipeline and consumer health focus offset the drag from legacy issues and external headwinds? The answer will determine whether 2025 is a stumble on the path to recovery or a step toward renewed dominance.

In the end, the company’s ability to navigate these crosscurrents will hinge on two critical factors: the lasting impact of the enVista recall and its capacity to insulate margins from currency volatility. For now, the balance sheet and growth engines suggest cautious optimism—but the execution bar has never been higher.