Greetings. Welcome to the Alcon third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Dan Cravens, VP in Global Head Investor Relations. Thank you, Dan. You may begin.

Welcome to Alcon's third quarter 2026 earnings conference call. Yesterday, we issued our press release, interim financial report, and earnings presentation. All of these documents are available on our website at investor.alcom.com. Joining me on today's call are David Endicott, our chief executive officer, and Tim Stonesifer, our chief financial officer. Before we begin, please note that our press release, presentation, and remarks today will include forward-looking statements, including statements regarding our future outlook. We undertake no obligation to update these statements as a result of new information or future events except as required by law. Actual results may differ materially from those expressed or implied in these forward-looking statements. Please do not place undue reliance on them. Importance factors that could cause actual results to differ materially are included in our Form 20F, Earnings Press Release, and Interim Financial Report, each of which is on file with the Securities Exchange Commission and available on their website at sec.gov. will also discuss certain non-IFRS financial measures. These measures may be calculated differently from and may not be comparable to similar measures used by other companies. They should be considered in addition to and not as a substitute for IFRS prescribed performance measures. Reconciliation between our nine IFRS measures and the most directly comparable IFRS measures can be found in our earnings press release. For discussion purposes, our comments on growth, growth rates, are expressed in constant currency. In a moment, David will begin with highlights from the third quarter. After his remarks, Tim will walk through our financial performance in the quarter and outlook for the remainder of the year. David will then return with closing comments before we open the line for Q&A. With that, I'll turn the call over to our CEO, David Endicott.

Thanks, Dan, and good morning, everyone. In the third quarter, we grew sales 5%, bringing year-to-date growth to 6%. We remain on track to deliver on our full-year guidance of approximately 6% sales growth and double-digit core EPS growth, despite some specific areas of competitive pressure. As I reflect on the quarter, we saw good momentum across several parts of the portfolio. In surgical, equipment and consumables remained strong, particularly in the U.S., where demand for Unity and Valeta continued to be robust, while implantables continued to grow in our international markets, but that growth was offset by competitive pressures in the U.S., And in vision care, contact lenses and ocular health both delivered solid growth driven by share gains in contact lenses, trip tier, and sustain. Tim will take you through the detailed financials, so let me focus on what's driving the business and why we remain confident about the opportunities ahead. Underpinning our conviction that we can continue to grow faster than the market is a steady cadence of innovation supported by clinical evidence that differentiates our products. At this fall's major congresses, we shared new data demonstrating the benefits of our latest technologies for surgeons, eye care professionals, and patients. At ESCRS, we presented new data reinforcing the unsurpassed near vision performance of Panoptix Pro and the surgical efficiency of Unity VCS. And at the optometry and ophthalmology annual meetings in the US, we shared new data showing SustainPro delivered symptom relief clinically comparable to the prescription product Mibo with the accessibility and convenience of an over-the-counter option. In addition, new research on Triptir and DryEye showed clinically meaningful improvements in patients' ability to work and perform daily activities with more than 70% reporting satisfaction with digital device use and end-of-day comfort. We also highlighted Valeda, the first and only FDA-approved treatment for early and intermediate dry AMD. We continue to build awareness among ophthalmologists and engage the broader eye care community to identify appropriate patients and broaden access to this important new treatment. Together, these data reinforce the differentiation of our newest products and support our efforts to translate that innovation into sustainable revenue growth. We're seeing that innovation translate into commercial momentum in equipment, where Unity VCS and CS, along with the latest, drove double-digit growth. and the U.S. Unity continues to gain significant traction at some of the nation's most prominent academic medical centers, with placements secured in 40% of U.S. teaching hospitals in the past year alone. Importantly, when combined with our legacy platform, our equipment is now available in 98% of ophthalmology teaching programs, providing broad exposure to the next generation of surgeons. Turning to implantable, sales were down 2%, with IOLs down 1% driven primarily by competitive launches in the US premium IOL category and continued reimbursement challenges for dual procedures and glaucoma implants. In the US, competitive trialing and sampling of IOLs remain significant and we expect that activity to continue through the early part of next year. At the same time, we're strengthening our competitive position with the next wave of innovation in our IOL portfolio, Vividi Pro. Vividi Pro received FDA approval in the US in early November with CE Mark expected soon. This lens was uniquely designed to improve near and intermediate vision without sacrificing distance or contrast. Our clinical data package at launch will include direct comparisons to competitive lenses. We began the US KOL release last week and look forward to the full launch in January with expansion into select European markets to follow during the first quarter. Additionally, True Plus, our first entrance in the monofocal plus segment, is now broadly available in the US and rolling out across Europe. Looking forward, our experience in Europe gives us confidence in how these competitive dynamics can evolve. Competitive launches there have now been in market for some time, and with Panoptix Pro as our response, we've returned to growth and are regaining PCI well share. That provides an encouraging reference point as we prepare for the full US and European launches of Vividi Pro in January. More broadly, we believe this next wave of innovation can strengthen our performance well beyond the near term. Panoptix Pro, Vividi Pro, and TruPlus are the beginning of a steady cadence of new IOL technologies that we believe will position us to drive sustainable above market growth. Turning to contact lenses, we continue to gain share in the US across both dailies and reusables supported by the breadth of our water innovations portfolio. That performance is an important example of our ability to win through differentiated innovation and commercial execution. The underlying market continues to benefit from premiumization as consumers move towards daily disposables and Specialty Lenses. The Total and Precision families give us premium and high performance platforms, while innovations such as Total 30 Multifocal for Astigmatism expand our reach into higher value specialty segments. We remain well positioned to drive continued share and value growth. Finally, in Ocular Health, execution remains strong across both our prescription and consumer dry eye franchises. Triptyr continues to build momentum, reaching approximately 6% market share as of October. We've also recently initiated direct-to-consumer promotion to increase patient awareness and drive demand. We're making solid progress against our reimbursement objectives, with now more than two-thirds of commercial lives covered. And on the consumer side, Sustane delivered another quarter of double-digit growth, led by our multi-dose preservative free formulations, including Sustane Pro, as we continue to gain share in a fast-growing market. We're also continuing to broaden our consumer eye care portfolio. Just a few weeks ago, The FDA approved Brightly, our new redness reliever eye drop. Brightly works in just one minute and provides up to 12 hours of redness reduction, lasting up to 50% longer than Lumify. We expect Brightly to be available at major retailers and online in the first quarter. Before turning to the market environment, let me highlight an important addition to our retina portfolio. We recently acquired Neurotech Pharmaceuticals, adding Inselto, the first and only FDA approved treatment for macular telangiectasia This is a rare and progressive retinal disease that can cause irreversible central vision loss. And CELTO is an encapsulated cell therapy that is intended for surgical intravitreal implantation. Neurotech is strategically compelling because it sits at the intersection of cell therapy, pharmaceuticals, and surgery, and it plays directly to Alcon's leadership in surgical retina. There are approximately 25,000 diagnosed MACTEL patients in the U.S. today with an additional 2,000 to 3,000 newly diagnosed each year. Coverage is largely established. By combining Neurotech's differentiated technology and cell therapy capabilities with Alcon's commercial reach and retina relationships, we believe we can broaden access and build an important new long-term growth platform. We expect peak sales between $250 to $400 million, with the ultimate trajectory largely dependent on how quickly patients are identified and brought into treatment. We're excited to welcome the Neurotech team and believe the acquisition strengthens both our retina franchise and the diversification of Alcon's future growth. Turning briefly to our efforts with Arion, we're pleased to report enrollment is complete in our pivotal phase three program and we remain on track for a 2027 FDA submission and a 2028 FDA approval decision. Before I close, let me share a few observations about the market environment. Let me start with contact lenses. Globally, the market remains healthy, growing in line with our assumptions at approximately 4% to 5%, with roughly three points coming from price and two points from mix. The U.S. remains the strongest market, growing approximately 5% to 6%. Growth outside the U.S. is more modest, particularly in Europe, where online channels and private label brands continue to put pressure on pricing, although mix remains positive. Across markets, the important trend is continued premiumization. as consumers move toward daily disposables and specialty lenses. That shift supports positive mix and plays directly to the strength of our portfolio in these higher valued categories. In Cataract, procedure growth remains in line with our assumptions and below historical levels, reflecting capacity constraints in the U.S. and reimbursement and hospital economics internationally. At the same time, premiumization remains a meaningful source of value growth, and we believe the strength and breadth of our premium IOL portfolio positions us well to capitalize on this trend. U.S. advanced technology IOL penetration reached 21.9%, up 160 basis points year over year, while international penetration increased 60 basis points to approximately 16%. And across our other eye care markets, underlying trends remain healthy and in line with our expectations. So when we put all that together, we estimate that our aggregate markets grew approximately 3% in the third quarter at the low end of our assumptions underlying our guidance. Looking ahead, our base case assumes these trends broadly continue into next year, and our focus remains on execution, innovation, and premiumization across the business. The breadth of our portfolio and the impact of our innovation continue to differentiate us, enabling us to grow faster than the market. So in closing, we remain on track to deliver on our full year of guidance. While our underlying markets are at the low end of our original guidance assumptions, it's our responsibility to deliver through that environment. And we're doing that by executing our launches, Translating innovation into broader adoption and driving premiumization and entering attractive new white spaces. We have a diversified portfolio that continues to get stronger, including the addition of neurotech in retinal disease. This gives us multiple avenues to outgrow our markets and drive durable earnings growth and long-term shareholder value. With that, I'll turn it over to Tim, who will walk you through the financial details of the course.

Thanks, David. Beginning with the top line, our third quarter sales were $2.7 billion, up 5% versus prior year and up 6% on a year-to-date basis. While the cadence of growth was slightly different than we anticipated due to specific areas of competitive pressure, we remain on track with the midpoint of the original guidance provided in February and expect to grow approximately 6% for the year. In our surgical franchise, sales were up 4% year-over-year to $1.5 billion. Planable sales were $422 million in the quarter, down 2% versus the prior year. Within this, IOLs were down 1% due primarily to competitive launches, particularly in the U.S. As David mentioned, Panoptix continued to perform well, and the family was up 9% year over year, growing nicely in all regions. This growth was driven by strong customer demand and continued commercial executions. In consumables, third quarter sales of $789 million were up 6%. This growth was driven by procedural volumes, price increases, and Volata. In equipment, sales were $269 million in the quarter and up 11%. This growth was driven by continued momentum from our Unity platform and the strength of our Volata launch, despite now lapping the Unity VCS launch in the prior year. During division care, third quarter sales were $1.2 billion and up 6%. Contact Lend sales increased 5% to $737 million. This performance reflects continued premium trade-up, share gains, and price increases, partially offset by declines in legacy products. In authorital health, third quarter sales were $500 million, up 8% versus prior year. Sustain grew double digits, supported by share gains and strength across our preservative-free portfolio, with sustained pro-revenue doubling year-over-year. This growth was partially offset by continued softness and contact lens care. Moving down the income statement, third quarter core gross margin was 65.7% of 280 basis points year-over-year. As we communicated last quarter, the increase was expected and largely driven by tariff refunds along with continued manufacturing efficiencies. for operating income was $591 million and 21.8% of sales, up 150 basis points versus the prior year. This improvement was largely driven by the tariff refunds I just mentioned and was partially offset by higher sales and marketing expense. Below the operating line, interest expense was $52 million during the quarter, broadly in line with the prior year. Turning to taxes, our core effective tax rate was 17.8%, in the third quarter, up from 16.9% in the prior year. Our year-to-date core effective tax rate was 19.4%, which is broadly in line with our guidance. Finally, core diluted earnings per share were $0.91 in the quarter, up 15% versus prior year. Turning to cash, we generated more than $1.3 billion of free cash flow in the first nine months, which enabled the return of $748 million to shareholders through dividends and share repurchases over the same period. Within the quarter, we returned $210 million to shareholders through our share repurchase program and have now completed more than one-third of our $1.5 billion repurchase authorization. Moving to our outlook for 2026, based on recent market trends, we now assume that aggregate high-care markets grow 3% for the year and exchange rates as of the end of October hold through year-end. We also assume the tariffs currently applicable to Alcon's business remain in effect through year-end including U.S. import tariff rates of approximately 10 to 12.5%. Based on these assumptions and our performance through the first nine months, our guidance for 2026 is as follows. We expect sales growth of approximately 6% consistent with the midpoint of our original guidance issued in February. On profitability, we are narrowing our expected core operating margin expansion to a range of 100 to 150 basis points while also narrowing our range on core diluted EPS growth to 12 to 14%. Moving to 2027, we will be issuing formal guidance in February, but I wanted to provide some color on the headwinds and tailwinds we see heading into next year. Starting with the underlying market, our base case assumption is that the current market trends that David referenced persist through next year. On the top line, starting with surgical, although we expect equipment to grow next year, It will be the primary headwind as we lap the 2026 Unity rollout. However, the launches of Unity M and Unity DX, along with continued expansion of our Valeta installed base, will help alleviate some of that pressure. In implantables, we expect a return to growth given the launches of Vividi Pro and True Plus, as well as the continued momentum from Panoptix Pro. And in vision care, our recent and upcoming launches, including Triptier and Brightly, will continue to contribute to growth, while the addition of Neurotech is expected to add approximately 75 to 100 basis points to the top line. Overall, we expect another year of above-market sales growth in 2027. Moving down the income statement, historically, we've been able to get approximately 100 to 150 basis points of operating leverage by growing revenue faster than our cost base. Next year, we'd expect to drive roughly 150 to 200 basis points of leverage Given the additional efficiency measures we implemented in 2026. However, we will face some headwinds in 2027. First, our 2026 results included $60 million in tariff refunds and a $15 million milestone payment, both of which are non-recurring. In addition, we expect pressure from incremental inflation related to memory and resins, as well as some near-term pressure from the neurotech acquisitions. Despite these headwinds, we continue to expect margin improvement in 2027 and will give you more color in February when we finalize our budget. Before we wrap up, I want to highlight an upcoming new accounting standard. IFRS 18 becomes effective in January and will introduce changes to the presentation and classification of certain items in our financial statements, including some of our key metrics. We'll provide more information on the impact of the new standard when we report in February including select historical financial information reflecting the new presentation to support comparability and modeling. In conclusion, we are performing in line with the expectations we set at the beginning of the year. Our year-to-date sales are up 6%, core diluted EPS is up double digits, and we again demonstrated the free cash flow potential of this business while executing on our commitment to meaningful capital returns. These results reflect the durability of our business are clear market leadership and the efforts of our associates around the world. With that, I'll turn it back to David.

Thanks, Tim. As we approach the end of the year, I remain confident about the trajectory of the business. Our innovation pipeline continues to strengthen. We're executing with discipline, and we're continuing to modernize our go-to-market approach. We're on track to complete a restructuring to improve operational efficiency. We've strengthened our portfolio with the addition of Neurotech. and we have already returned approximately 750 million to shareholders. And none of this would be possible without the hard work of our more than 25,000 associates around the world who help people see brilliantly every day. With that, operator, please open the line for questions.

Thank you. We will now be conducting a question and answer session. We ask that you please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary. Just one moment, please, while we poll for questions. Our first question is from Anthony Patron with MISO Group. Please proceed with your question.

Thanks, and good morning, everybody. Maybe, David, one on equipment. and then I'll go to Brightly. When we think about the rate of Unity VCS installs, it looks like it's tracking on schedule roughly 3,000 units a year. But I think when you initially put that trajectory out, there was a little bit of a step up in 2027 for installs. So should we be thinking that there's another bolus that can come in 2027 versus 2026 just in terms of the number of installations? And then just on Brightly, I know the launch is 1Q, but should we be expecting any kind of big stocking orders in 4Q ahead of that large retail launch in 1Q? Thanks.

Thanks, Anthony. You know, on the equipment piece, you know, I think you should think about it as relatively similar to this year in terms of unit placements. I think maybe this year was a big year for VCS, and CS got out the gate, I think, probably Full Speed, maybe second quarter. So I think we've got a little bit more step up in CS as opposed to VCS. So remember that the CS market is much bigger. So again, I think there'll be a bit of a mixed shift to CS next year as we sell probably a good bit more of that versus VCS. But largely, I would say the units are similar, I would say. I think on the Brightly launch, we have got retail orders. I don't think we're going to ship that until next year, and so I would not count on anything in the fourth quarter. But we are excited about that product. It is kind of a new market area for us, and we've been looking for white spaces like this. So, again, this product lasts longer than the market leader, and we're excited about the potential of that with the consumer. Thanks, David.

Our next question is from Brett Fishman with KeyBank Capital Markets, Inc. Please proceed with your question.

Hey, guys. Thank you so much for taking the questions. I just wanted to ask one first just to clarify some of the margin commentary for 2027. I think you mentioned potentially driving 150 to 200 basis points of leverage and then walked through a couple considerations. I wanted to just understand if the 150 to 200 basis points is net of some of those expected headwinds, or if you're talking about like 150 to 200 basis points of underlying improvement before some of those headwinds.

Yeah, I think about that as more of a gross number before the adjustment. So if you look at historically, we've always said 100 to 150 basis points of improvement. We think it'll be higher next year given the efficiency program that we implemented. So if you start with 150 to 200 basis points, I'd then start subtracting the pressures that we're going to see from the one-offs that we saw in 2026 that don't recur. We do anticipate seeing a little bit more inflationary pressure and then a little bit of pressure, near-term pressure for the neurotech acquisition.

All right, super helpful. And then just on implantables, you know, it seemed like You know, growth took a little bit of a step back this quarter. It sounded like it was more specific to the U.S. I was hoping you could just expand maybe on, you know, what you saw incremental from, you know, 1H levels that caused a little bit of further erosion and then just level of confidence, you know, in your remarks. Do you expect a return to growth next year with some of the new product launches? Thank you so much.

Yeah, I think you're right. I mean, actually, the step forward was international. So Europe, I think, gained share in the quarter. But there was an extraordinary amount of activity, competitive activity in the third quarter. There'll be more in the fourth quarter, I think. So, you know, we're going to see some continued competitive activity that, you know, surgeons want to try new products and, you know, good companies bring products out, they're going to try them. And so I think we felt like that was certainly part of the challenge, but it wasn't way off of where we've been. You know, it was a little bit off of where we've been in the prior quarters. So I think we're just kind of working our way through to the next launches. And I think, as I said in my remarks, Vivity Pro is a really exciting product for us. And we've got it approved now. So I think we've got it in the hands of a number of KOLs right now. And we've got very good data comparing it to the competitor who's most active right now. So I think we feel like we're in a good place with better near vision, better intermediate than the competition, and with very similar contrast and distance. So that data, I think, makes us confident that When we get it out full speed next year, we'll see this thing continue. I would also point out that TruePlus, you know, is just kind of getting its feet around the world. And that's our new entry into the monofocal plus space. And Panoptix Pro is still getting going, you know, internationally. So I think, you know, if you look around the world at where our portfolio is, and frankly, you know, we've got a number of products after that which are on their way. You know, we feel very confident over the next several years that We're going to be in a solid position for implantables.

Our next question is from Julian O'Dewar with Bank of America. Please proceed with your question.

Hi, thank you very much. I have one question and one I was keeping for it. The question, I just want to clarify your comment about Unity where you expect the same volume next year but the shift to CS, which I believe the ASP is lower. I just want to make sure that you expect the revenue in Absolute Terminal Equipment to grow next year given the mix shift. and the follow-up, maybe I can ask it right now. Could you just help us to disaggregate the growth contribution from Valeda in the quarter? I mean, how much did Valeda contribute to the 11% growth in equipment and the 6% growth in consumables? Thank you very much.

Yeah, Julian, you know, we don't break up the individual products in the categories, but I would just say that the category growth in equipment we were pleased with. You may have misheard me or I may have missaid it. I think the way to think about Unity is that the mix will shift at CS in aggregate The value growth will be greater than it was in the prior year, principally because the CS market is much bigger than the retina market. So the retina market, I don't know, is maybe a million and a half procedures, two million procedures. The cataract market's five or six in the U.S., and around the world it's much bigger. So I think we have a much bigger market to address with CS, and I suspect we'll do quite well with CS.

Our next question is from Larry Beagleson with Wells Fargo. Please proceed with your question.

Good morning. Thanks for taking the question. I had one on 27 and one on neurotech. So, Tim, maybe, you know, if we could, what's the net impact of what you said on revenue? You know, how will growth in 27 compare to 26? Are you pointing to basically, you know, call it 5% organic growth plus 75% to 100 basis points for Neurotech. And margins, you know, you talked about a lot of headwinds. So should we be thinking about, but you also said some margin improvement. So should we be thinking about 50 basis points of improvement? And I have one follow-up.

Yeah, I'm not going to give guidance here today, Larry, but you're thinking about it correctly. Listen, we think the markets are going to hang in there at about 3%, as David said in the prepared remarks. We don't anticipate, we're not expecting any uplift from that. As we've always said, we think we can grow faster than the market. We feel very good about the innovation pipeline and the launches that we have coming up and that are in place now. So we'd expect to grow faster than that market. And then to your point, I would add 75 to 100 basis points on that for neurotech. As far as the margin expansion, those are the pressure points. I think we've hit those. We do expect margin expansion next year, and we'll give you more color on that. We're going to continue to get some margin expansion out of our marketing and sales area, as we've done historically. But you're not going to see a net number of 100 to 150 basis points like we've talked about before. And we'll give you more color in February.

Very helpful. On neurotech, I mean, and CELTO seems like a sleeper based on our checks. So what are 2026 sales? and the 75 to 100 basis poise for 27. It sounds like it wasn't clear if that was vision care or total outcome, but even if it's total outcome, I think if I'm doing the math right, it's 50 million, which seems small. And just lastly, how are you thinking about the ramp to those peak sales of 275 to 400? I mean, even the midpoint there implies only about 750 patients or 1,500 eyes per year. Thanks.

Yeah, Larry, you know, you're doing the math the same way we are. Let me just tell you the dynamic we're trying to manage. What we're trying to manage is, you know, this is a new, we've been involved in this for now a few months, and trying to understand exactly the pace at which patients can be found and brought into treatment is really the kind of key variable here. And until we get a really clean view of what that looks like, you know, we feel comfortable with the 250 to 400 range. I understand the math you're doing and I do understand that that could be the case. I think what we're going to find is that these patients, you know, there's a certain number of centers that are prepared to do this surgery. These are infrequently found patients and the pace at which we find them, get them to treatment, get them through the reimbursement system will be the defining factor. Now, you know, you could be right and we could be wrong on this one, but I think we're going to be careful around this as we go forward.

I would just say, Larry, on 2027 that I would apply that 75 to 100 basis points on the total Alcon revenue. All right. Thank you.

Our next question is from Veronica Dubai-Hovo with Citi. Please proceed with your question.

Hi, guys. Good afternoon. Good morning. Thanks for taking my questions. I have two, please. The first one is I just want to come back on the moving pieces for Marge and Tim. I guess you know this year you stepped up DTC by about 40 million sort of spending some of the proceeds from the tariff refunds just curious if this is something you intend to continue into next year or should we put that into the tailwind column as we think about the margin piece for 2027 and then my second question is on contact lenses and David your thoughts on kind of the health of the market and your ability to outgrow it obviously The gap between you and the market has narrowed pretty substantially this year. I know you've had some headwinds in terms of discontinuation of some older product lines, but it'd be good to understand one, how you're thinking about market growth contact lenses for next year and two, your ability to outperform that from a share gain perspective. Thanks so much, guys.

Hey, Veronica. Thanks for the question. Listen, it's really hard to say if the $40 million of additional spend is recurring given that our total SG&A base is $3.5 billion. But I get your point. I think the way to think about it is take the 150 to 200 basis points that we talked about, back out the pressures that I just mentioned. Most of that is going to be in the gross margin line if you think about the refunds and the milestone payments and the inflation. However, we're still expecting to get margin expansion next year, and most of that will come from, as I said, M&S and a little bit from G&A. So we will continue to expect to get leveraged. out of the M&S line.

And Veronica, you know, the global contact lens market was probably four to five percent. It was healthy in the U.S., probably five to six with maybe three percent price and two percent mix. But international contact market was softer, you know, as a function of online channels and the private label business. It was probably in that kind of one to two percent range. So, you know, we grew a sharepoint on the quarter or roughly a sharepoint. we continue to outperform the market in that space and I think we're feeling pretty good about it right now principally because we kind of rotated back towards dailies and specialty lenses and the reason for that obviously is those are the fastest growing segments of the market. We had a good run in a reusable market. We took some share back there. Those are very profitable businesses for us and now I think we see the market as growing principally in this premiumization process of moving people up. That's been the case for a while but It continues on very successfully, I think, in the U.S. And again, the international business was grown principally by mix. So, again, less price there, but more mix. And we're trying to play that particular trend right now.

Our next question is from Ryan Zimmerman with U.S. Bancorp BTIG. Please proceed with your question.

Good morning, and thanks for taking the questions. Tim, if we look at 27, I appreciate all the color. But as I think about kind of the continued double-digit core EPS growth, I'm just curious, what's coming from, say, operating leverage versus revenue growth versus share count reduction? And again, knowing that you didn't give double-digit core EPS growth as a guide, but assuming that that's the case.

Yeah, again, as you know, the revenue growth really drives the operating leverage. So assuming that we can grow faster than the market, we would expect to get the margin expansion that I talked to a little bit earlier and that will drop down to EPS growth. From a year-over-year basis, from a share count and buyback, I wouldn't expect anything significantly different than what we did this year. But again, we'll evaluate that as we do when we look at our capital allocation strategy and it just really depends on what M&A is out there, how much cash we have, but we will put the cash to work.

Okay. And then on implantables, down 2% this quarter, flat year-to-date on a constant currency basis, David, can you help us maybe size the market share loss in your view, and is it concentrated in a specific product area, whether that's eat-off or monofocals, versus maybe what's happening in the market? Thank you.

Yeah, sure, sure. I mean, look, the total foldables for us globally was actually flat in volume. It was ATI wells, and it was really U.S. So if you look at the international markets, we gained share in Europe, U.S., you know, we lost some share in the PCIO market and the monofocal business. Again, we actually gained a small amount. So, you know, our general view is volumes are pretty healthy still because, you know, we basically were flat this quarter in volume. But you can't give up the ATI well share because it's obviously more valuable. So this premiumization play that I think exists in that market, we need to, you know, get on the front foot with. So Again, I feel very good about what's going on in Europe with Panoptix Pro and what's moving around the world with Pro. We're hoping to see that very same thing happen with Vividi Pro as we come back in on top of these competitive launches. Thank you.

Our next question is from Jeff Johnson with Baird. Please proceed with your question.

Yeah, thank you. Good morning, everyone. So, Tim, I guess one clarifying question, a lot of focus on 2027 for Panoptix. for all the right reasons. But the approximate 6% for this year in the updated guidance, that approximate could be doing a decent amount of heavy lifting, I guess. Trying to back into what you expect for 4Q, if I go right to 6%, I'd be kind of pushing about 100 basis points improvement versus 3Q. Are you implying in the updated guidance a little bit of improvement in growth versus 3Q or should we be thinking 3Q is kind of the run rate at least for now? And then one follow-up, thanks.

Yeah, listen, the reason we went with approximate is because we don't see 5 in play and we don't see 7 in play. So we thought approximately 6 was kind of how we're looking at it right now. As far as, you know, again, I'm not going to guide Q4 revenue, but your thinking is the right thinking and just keep in mind there will be some neurotech in there. So that's why you might see a little bit more of a jump up but we would expect to see some improvement in Q4.

All right fair enough and then David you know you've talked you've said a couple different things on VCSCS I just want to clarify what you've said I know you don't guide product line but again you know I guess the question is you do expect it sounds like VCSCS combined unit growth next year offset by negative mix but then I think you use the word value I just want to make sure you are expecting VCSCS combined unity platform revenue growth next year and then on top of that a little bit of M&DX and Valeta contributions so that equipment growth does have a positive sign on it next year. Thank you.

Yeah, it does in both. So growth in total units will be higher than it was this year because the CS mix will help it. Growth in total dollars will be up next year but it will be a little bit less than the unit growth because obviously we're getting a lower ASP on average if you if you mix to CS versus VCS. Hopefully that helps. Thank you.

Our next question is from Chris Pasquale with Barclays. Please proceed with your question.

Thanks. One on neurotech. Just how soon after diagnosis do patients need to start therapy in order to see a benefit? I'm just wondering how much penetration into that prevalence pool the peak sales estimate assumes versus just achieving some broad use in the annual incidence rate.

This is a very slow-moving disorder, and it takes years to lose as much central vision as you ultimately will. you know as soon as you're diagnosed you know historically there hasn't been a therapy to treat this and so I'm not sure I know the answer precisely to your question other than you know I think we have a pool of patients who have been diagnosed we kind of know who they are we need to get them to a surgeon who is willing to do this and then have them through the system work through the reimbursement part of this thing and then also get them to a center that will do the surgery so The logistics of this, I think, are the piece that we're still working our way through. I think we have a sense that there are plenty of patients and patients that we can find. I think it is a matter of then how do we get them to the right surgeon who knows how to do this, is trained to do it in a center that will do it. And again, this isn't like cataract surgery where they're doing 1,000 a year. This is one or two or three. And so it's a novel procedure to many surgical centers.

That's helpful. And then you talked about premiumization in both contacts and IOLs. In some other corners of MedTech, we've heard some rumblings recently about increased economic sensitivity due to cost of living pressures. It certainly doesn't sound like you're seeing that yet, but as you think about 27, how confident are you that price and mix can continue to be such significant contributors to your market growth?

Well, you know, when I think about, I don't know that price is going to be a big piece of it. I do think mix will be, you know, and I think We would look at that and we'd say, we've run sensitivities and tried to correlate consumer confidence with revenue growth in both contact lenses and HIOLs, for example, or even OTC products. You just don't see that big of a correlation. Over long periods of time, there's almost none. In short windows, there may be a little bit, but I think there's principally something to ignore there on the consumer side. I think you could see that even in this current quarter where we had... Very significant ATIO growth in penetration, you know, up almost two points in the Americas, up a half a point, 50 basis points in international. So globally, you know, very significant penetration. The same thing with kind of contact lenses. You saw, you know, continued movement of the highest value lenses. You know, the dailies, I think, were growing, you know, high single digits as opposed to, you know, the rest of the market, which was growing roughly in the 5% range. So I think we're pretty comfortable with the premiumization. I'd be a little more cautious on price and how that plays out.

Our next question is from Graham Doyle with UBS. Please proceed with your question.

Good morning. Thanks, guys. Just one quick clarification and then one on the midterm guide. Sorry, I know it's come up a few times, but just to double check, because we've had something coming from investors here. David, your comments on Unity. You expect Unity, VCS and CS to sell more volume next year than this year, just to clarify that. And then a question on the midterm guide. On the six to eight constant currency, you obviously weren't in the range last year. You'll be at the bottom end this year. How do we think about the relevance of this guide going forward into next year, given where market growth is? Just be useful to know that so when we kind of go back to our model, so we can think about that. Thank you.

Yeah, I obviously wasn't particularly clear on this VCS thing. We are going to grow in total units, you know, and we are going to grow in total dollars. But the mix, you know, will be more to the CS side. Is that relatively clear?

Super clear. Thank you.

Okay, great. And then, look, on the long-term guide, you know, obviously, you know, during this stretch, market growth has been more modest. And, you know, given last year's performance and where we are this year, you know, and where we think going forward, you know, we still think we're in the range of our guide, but obviously we're at the low end of it. So I think It's hard to come off of a four on a five-year guide and then get yourself back into six to eight. So it's our belief that we continue to be at the low end of that guide. But our job right now is to maximize new IOL launches, to extend our equipment presence, to get into higher growth categories and try and find the ways that we can grow our business beyond the market growth that's obviously not where we would like it to be right now. So but that's partly why we're entering new categories, right? You know, we got Valeda out there, we've got Brightly out there and Seltos. Those are all new white space areas for us. And then you've got, you know, all the new IOLs coming, which I think help us. I think you've got, you know, continued movement in equipment that drives this bit. So, you know, take it in aggregate. We probably have 10, 12 new products, all of which are adding some degree of growth, many of which are concentrating now on the fastest segments of what we're doing. and importantly getting into white space. So what we need to do is perform with those, execute well against those and try and grow our way regardless of what the markets do. That's really where we're focused. My sense is we can get into and stay in the range but it will likely be the bottom of the range.

Our next question is from Steve Lichman with William Blair. Please proceed with your question.

Thank you. David, just going back on contact lenses on the price contribution, the 3% currently you mentioned not sustainable. What level do you think is sustainable and should we be factoring in? And how does that differ US versus what you're seeing OUS?

Yeah, I mean, the US is more sustainable in price and international is less. And the fundamentals are pretty basic, right? I mean, it's the online market is squeezing the chains The chains are then resisting price and, you know, online has always resisted price. You know, you're going to get a little bit there, but you're just not going to get what we used to get. And, you know, in the U.S., it's still predominantly an independent OD market. So, you know, you can still pass on price. The customer passes, you know, our optometrist community passes that price along. And the chains are relatively receptive in the U.S., you know, still because they're, you know, it's probably 60% independence and 40%, you know, chains and online. It's exactly the opposite internationally. So I think what you should expect is that price is not as strong, but I think you'll get some. And again, we'll have to see how the consumer fares over the next couple of months. We've already taken a price increase in this business, so we'll watch that for next year and see what happens.

That's helpful. And then, Tim, on the efficiency programs, Are the incremental savings you mentioned coming on the manufacturing side or in OPEX? And how much of the now $130 million in savings are you going to be capturing in 2026?

Thanks. Yeah, I would say that it's a combination of areas. We continue to drive productivity in our manufacturing operations and footprint, to your point. I would say that's a good chunk of it. We've also made some structural changes in R&D due to the discontinuation of the Power Vision project that we talked about last quarter. And then, you know, just looking across the business, you know, all the teams are identifying additional opportunities. So we feel very good about the program. And as we said, when we first came out, we called about $100 million of run rate savings. And now we think it's going to be about $130 million of run rate savings. As far as the additional 30 and how much of that hits this year, I'd say a small piece, I would think a majority of that will hit next year.

Thanks, Tim.

Our next question is from Izzy Kirby with Redburn. Please proceed with your question.

Hi, guys. Thanks for taking my questions. I wanted to ask about the Neurotech acquisition and your commercial strategy here. Will you be leveraging your existing sales force? Any expansion needed? and then also when Orion eventually comes to market, just thinking about what commercial investments you might need to make that and then I have a follow-up.

Yeah, Izzy, on Neurotech, they're pretty well situated. They're a year into that launch and we'll probably complement what they're doing with some more resource but I think mostly what we're going to try and do is coordinate and obviously we have a fairly substantial retina sales force already that I think can Thank you for joining us. 18 months away from an approval at least. And so I think if we're kind of in that back half of 28, see that as an approval timing, I would think we'll need to be putting things together really next year. Those will all be incremental costs, but I would say they're planned in right now as we think about next year. We'll guide on that as we get into the beginning of February.

Great. Thank you. And then on the ATiOLs, is the way you're going to market or certainly marketing changing at all, given how much more competitive it is, particularly in the U.S.? You mentioned you'll include sort of direct clinical comparisons with Vivity Pro. Just how are you thinking about your go-to-market with advanced IOLs in a more competitive space? Thanks.

Yeah, it's a really good question. There's, you know, there's, yeah, the short answer is yes. We're doing two or three things, actually. You know, one of the things we're doing is we are... You'll see that over the last 18 months, we've sped up the innovation pace. We've got Panoptix Pro out, we've got TruePlus out, we've got Vividi Pro out, all really within the last 24 months or so. We've got another two lenses behind that that we will... appropriately launch based on the timing that we see the market would be receptive. I think in addition to that, I think what we've done is we've done some direct to patient work that's mostly online work, but I think it's a different go-to-market strategy than we've had in the past, which is to try and articulate to patients what the differences are in these lenses and what their preferences might be and how those could be satisfied. And I think further to that point, We've also spent a good bit of time thinking about with new products, what are we comparing to so that we have not just my lens is better than your lens, but good data that says here's the difference in near vision actually in a direct comparison. Here's the difference in intermediate vision actually. And here's the difference if there is one and there isn't in many cases on distance and contrast because we're quite concerned about the... The misinformation, I think, that's going on, at least in some of the initial launches.

Our next question is from David Saxon with Needham & Company. Please proceed with your question.

Great. Good morning, David and Tim. Thanks for taking my questions. So first, maybe I'll do trip tier and then I'll have a follow up. So I think last quarter trip tier was kind of in the high teens in dollar terms. So, you know, did that get into the 20s this quarter? And how are you feeling about driving volumes next year? And also, how should we think about kind of gross to net dynamics over the next call it 12 months?

Yeah, look, trip here is going well. I mean, you know, we're, you know, our volumes are kind of on pace to what we'd hoped for. I think, you know, I think we saw something like 11,000, you know, unique prescribers last month. We've got two-thirds of the commercial lives covered at this point. And, you know, our share, I think we're, you know, we've gained up just short, I think, of about 6% this month or last month. And so I feel like, you know, we're doing exactly what we need to do. We've got more work to do on reimbursement. We need to pick up another Medicare plan at least. And I do think there's still some commercial work we can do. But what we're most excited about is getting the DTC out going. We needed to kind of get over a certain threshold with commercial to make that viable. We initiated that last month. And I think what you're seeing is a real positive response to the product itself from the physicians that are prescribing it. And that's been I think our most important idea has been, you know, look, what are you seeing with the patients? And they're seeing, you know, very quick response, which is what we had hoped for, and a very, you know, kind of meaningful, you know, tolerance, which is really a big deal too, because I think patients will really want, you know, resolved kind of comfort. And I think the data that we showed at the optometry and ophthalmology meetings on Triptir. I think it gives us real comfort that what we had hoped to see with Triptir is exactly what they're seeing. And we were hearing that from the docs, but it's really great to see it in both the doc feedback and then also the data that we've created.

Okay, great. Thanks for that. And then I wanted to follow up on just your comments around the next round of Iowa launches. I mean, you have You know, Panoptix Pro and Vividi Pro are out there. Vividi is coming out. But you just discontinued Power Vision last quarter. So how do we think about kind of that next leg of IOL launches as it relates to kind of what you have out there in the market or getting out and, you know, what's already out there from a competitive perspective. And then also just kind of general level of confidence in the U.S. penetration, ATIO penetration getting into the 30, 40 percent range that you've talked about historically. Thanks so much.

Yeah, okay. So on the lenses themselves, look, you know, I feel very confident that we probably have the world's most successful optical design engineers and I do believe that what you see in Panoptix and then Panoptix Pro and Vividi and then Vividi Pro and we have follow-ons for both of those products that advance those designs even further so again we're traveling towards lower optical disturbances with the trifocals and the diffractive lenses and then we're traveling closer and closer to Better Near, Better Intermediate with the Edof lenses. And I think we are going to be in front of most people on this. And it's not that they won't catch up eventually, but I think we are certainly going to lead the way as we go forward on those designs and those lenses. Now, we obviously entered last quarter an agreement with the RxSight folks. We think they've got a great idea in adjustability. We've got some great ideas around what we could do to create presbyopic resolution. and together I think we could come up with something that's really exciting so that's our our next kind of phase after that and then you know we've got a lot of irons in the fire around the world on other kinds of designs and ideas and I would just I'd be a little bit hesitant to kind of comment on those yet they're generally pretty early and in their work but we're excited about that stuff. On ATI well penetration you know I do think that the you know the confidence we have on on the long term is built off of kind of an annual survey we do around you know what the consumer willingness to pay is it generally is hovered kind of in the 35 to 40 you know percent of patients you know given the right information are willing to compensate you know for the the ATIOL and PCI well in particular what I think is important is that you do see these kind of run-ups when you see new products so you know this most recent run-up I would attribute largely to the amount of competitive promotion going on in the U.S. but the international one Again, that's pretty steady right now. And I think you see kind of this steady march that has historically been kind of 50 basis points a year, has accelerated most recently closer to 100. I expect it will probably settle back at some point, but it's going to be a kind of steady march towards, I think, kind of low 30s, you know, ultimately peaking somewhere in the mid 30s.

Our next question is from Tom Steffen with Stifel. Please proceed with your question.

Great. Hey, guys. Good morning. Thanks for taking the questions. First one on 2027, I guess the way I'm kind of reading it, you sound pretty confident in maybe 4% to 5% organic growth next year on REVs, but this year's tracking maybe only a bit above that on the guide organically. Next year, you lap Unity, so that will be a pretty meaningful headwind. So I guess my question is, what gets you next year to maybe 4% to 5% As we think about other segments in the biz outside of equipment that we need to accelerate from 26 to 27, I think you called out implantables, but what else accelerates organically from a growth rate standpoint next year versus this year? And then I have the follow-up.

Well, let me start by saying, look, during this stretch where the market growth is more modest, our desire right now is to is to focus on executing more effectively in things like the IOL launches. So if you think about what we're trying to do, we're trying to maximize our IOL launches, particularly Vividi Pro, True Plus, and then also Panoptix Pro around the world, and get into this high premiumization idea where the segment of the market we're participating in is growing considerably faster than the average total market aggregated. That's what we're doing with that. That's what we're doing with you know daily disposables that's why we're concentrating on artificial tears and OTC that's why we're concentrating on dry eye and RX those are categories that are all growing faster by a lot than the market so if we rotate our promotion that direction and we enter new categories like Valeta with dry AMD like Voyager with you know glaucoma like Brightly with a whitener like Encelto those are all new white spaces for us What I'm trying to direct you towards is that if we shift our mix towards the faster part of the market that's growing the fastest, we avail ourselves of a faster growing TAM than when we aggregate ourselves into some of the slower growing markets, which again look like monofocal cataract, some of the other kinds of businesses that we're in, reusable lenses, etc. That's the principal way in which we're going to get there, but I will also just point to Brightly is a new product, Unity M, Unity DX, and Celto. We've got a couple of other, you know, contact lenses. We've got a new contact lens coming. And we've got Unity, sorry, Vividi Pro all coming. Those are all new products for us next year that add to, you know, year one revenue. Got it, that's great.

And then quickly on my follow-up, just for equipment, you know, nice to see, again, strong year-over-year growth, but a little surprising seeing Revs down sequentially in the third quarter. I know there's seasonality, but, you know, the Unity launch, still early days, especially CS, not really getting going until... The second quarter, and it sounds like Valeda is continuing to ramp. So, David, kind of talk about what happened in the quarter with equipment, what you saw from kind of an end market standpoint, you know, as it relates to possibly higher interest rates. And, you know, what does that kind of pretend for 4Q and sort of the near term? Thanks for taking the questions.

Yeah, well, first thing is just remember the comp last year was 27% growth or something like that. I might have that partially correct, but it's in the high 20s. And I think what you're really seeing right now is more of a steady – we're moving into a steady state of reasonable growth. It's going to be somewhere in the high single digits to the low double digits as we kind of move forward depending on what we're launching when. So I think the exciting part of where we are with – CS and VCS is, you know, we are kind of working our way through a backlog of really, you know, kind of older equipment that needs to be replaced. Now, the replacement cycle, you know, people, you know, some markets, let's read Japan in particular, has been a little slower than we had hoped for. But other markets like the U.S. have been particularly good. So I think, you know, we've seen kind of on balance what we would have expected given, you know, all of the equipment that we're launching. And, you know, again, I feel pretty good about the leads we've got the visibility to our funnel is solid we're looking at the fourth quarter and I think we feel pretty good about that so again I see next year as principally continuation of what we had always said which is first year will be very strong second year will be similarly strong and then it'll settle into a cadence that is year on year roughly representing the amount of equipment that retires which again would be about a tenth to and 12th of the total installed base. So that's kind of the way we see it.

It's really helpful. Thanks, David.

We have reached the end of the question and answer session. I would like to turn the floor back over to Dan Cravens for closing comments.

Thanks, Max. And thanks again for joining us today. If anybody has any follow-up questions, certainly reach out to the IR team for investors. or our CORPCOM team for media. I know there are a couple analysts that didn't get questions in, but we'll be sure to address those in the follow-up calls. Again, thanks again for your time and look forward to connecting with you.

This concludes today's solid conference. You may disconnect your lines at this time. Thank you for your participation.