COO 10-K & 10-Q changes, risk factors and insider trading

A significant portion of our current operations are conducted and located outside the United States, and our growth strategy involves expanding our existing foreign operations and entering into new foreign jurisdictions. We have significant manufacturing and distribution sites in North America, Latin America and Europe. More thanApproximately half of our net sales for the fiscal years ended October 31, 2024,2025, and 2023,2024, were derived from the sale of products outside the United States. We believe that sales outside the United States will continue to account for a material portion of our total net sales for the foreseeable future. International operations and business expansion plans are subject to numerous additional risks, including the following:

Economic and trade sanctionssanctions, including tariff and import/export regulations by the U.S. and foreign governments, could make it more difficult or costly for us to conduct our operations or achieve our business objectives.

We manufacture a significant portion of the medical device products we sell. Any prolonged disruption in the operations of our existing manufacturing or distribution facilities or our fertility and stem cell storage facilities, whether due to work stoppages, technical or labor difficulties, integration difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current cGMPcGMP, QSR or similar foreign requirements or other reasons, could have a material adverse effect on our business. In addition, materials such as silicone hydrogel require improvements to our manufacturing processes to make them cost-effective. While we have improved our manufacturing capabilities for our silicone hydrogel products, our failure to continue to develop improvements to our manufacturing processes and reduce our cost of goods could significantly impact our ability to compete. Conversely, constrained, excess or idle capacity, which could result from acquisitions, unexpected demand, inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our profitability, capital investments, customer service levels and near-term financial condition.

We previously identified a material weakness in our internal control over financial reporting related to an ineffective information technology (IT) general control for the U.S. operations within the CooperSurgical segment which,which if notwas remediated appropriatelyas orof timely,October 31, 2025. We may experience additional material weakness in the future which could affect our ability to record, process and report financial information accurately and prepare financial statements within required time periods and could subject us to litigation or investigations, negatively affect investor confidence and adversely impact our stock price.

Internal controls related to the operation of technology systems are critical to maintaining adequate internal control over financial reporting. As disclosed in Part II, Item 9A, during fiscal 2024, management concluded our internal control over financial reporting was not effective as of October 31, 2024 due to a material weakness in IT general controls for the CooperSurgical operations in the U.S. primarily related to the implementation and maintenance of certain enterprise resource planning systems during fiscal 2024. The material weakness resulted from not having a sufficient complement of its personnel, inadequate training of personnel and ineffective assessment of the risks related to change management, user control monitoring and segregation of duties in the affected IT environment. Manual controls that rely on system-generated data or reports from the affected IT environment or process level automated controls in the affected IT environment were ineffective because they could have been adversely impacted. In response to the material weakness, management, with the oversight of the Audit Committee, has begun to implementimplemented steps to remediate the material weakness. If we are unable to remediate the material weakness, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures,procedures in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to reputational harm, legal claims or proceedings, regulatory investigations and enforcement actions, significant costs from remedial actions, additional management resources, and payment of legal and other expenses, negatively affect investor confidence in our financial statement and adversely impact our stock price.

We rely on independent suppliers and third-party logistics providers in our supply chain for raw materials, packaging materials and components, mechanical equipment and some finished goods; we could experience inventory shortages if any of these suppliers encounter a manufacturing or distribution disruption.

Our businesses utilize various chemicals, packaging materials, components, parts and raw materials which are generally available from more than one source. However, in certain instances we acquire components and materials from sole or primary suppliers to make our silicone hydrogel contact lens, certain medical devices and IVF products. We also source mechanical equipment and in certain instances finished goods from OEMoriginal suppliers.equipment manufacturers. Supply of these goods, items and materials is protected by contractual agreements, availability of alternative suppliers and/or safety stocks. However, if current suppliers fail to supply sufficient goods, items or materials to us on a timely basis, or at all for any reason, we could experience inventory shortages and disruption in our supply of products. For example, among other situations, some of the primary material used to make our silicone hydrogel contact lens products, including MyDay, Biofinity, Avaira and clariti, are supplied by few or sole suppliers, and the failure of a key or sole supplier to timely supply sufficient items and materials necessary for the manufacture of our silicone hydrogel contact lenses could in turn disrupt our supply of those lenses to the market, which would have a material adverse effect on our business.

CooperSurgical competes with a number of manufacturers and service providers in its women’s family health care market areas. Some of these competitors have substantially greater financial and personnel resources and sell a broader range of products, which may give them an advantage in marketing competitive products. In addition, some of CooperSurgical’s markets, such as genomics, contraception and cord blood and cord tissue storage, are characterized by rapid technological advancement. We face the risk that demand for our products will not grow or will decline if our competitors are more successful than us at innovating in these and other areas. There is also a risk that emerging technologies or technology advancements could reduce the medical value of certain of our products and services, such as cord blood and cord tissue storage, which could adversely affect our business. In recent years, CooperSurgical has also expanded direct-to-consumer products and services, which requires implementing new competitive strategies and increases the importance of customer service and consumer reputation as competitive factors.

We and our facilities are subject to a broad range of U.S federal, state, local and foreign environmental laws and requirements, including those governing discharges to the air and water, the handling or disposal of solid and hazardous substances and wastes, remediation of contamination associated with the release of hazardous substances at our facilities and offsite disposal locations and occupational safety and health. We have made, and will continue to make, expenditures to comply with such laws and requirements. Future events, such as changes in existing laws and regulations, new laws and regulations or the enforcement thereof, or the discovery of contamination at our facilities, may give rise to additional compliance or remediation costs that could have a material adverse effect on our business. Such laws and requirements are constantly changing, are different in every jurisdiction and can impose substantial fines and sanctions for violations. As a manufacturer of various products, we are exposed to some risk of claims with respect to environmental matters, and we cannot be assured that material costs or liabilities will not be incurred in connection with any such claims.

In addition, new disclosure standards and rules related to ESG matters have been adopted and may continue to be introduced in various states and other jurisdiction. For example, the European Union Corporate Sustainability Reporting Directive (CSRD) became effective in 2023 and applies to both EU and non-EU entities. In October 2023, California adopted new carbon and climate-related reporting requirements for large public and private companies doing business in the state. Further, the SEC adopted a final rule on the Enhancement and Standardization of Climate-Related Disclosures in March 2024. InternationalIn ESGMarch disclosure standards have also been produced (and further standards will be produced) under2025, the auspicesSEC ended its defense of the International Sustainability Standards Board (ISSB), which some countries (such as the UK) have indicated they may incorporate into ESGclimate-related disclosure standardsrules requiredadopted ofin certainMarch companies. As the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand, significant effort and expenses could be required to comply with the evolving requirements. As our disclosure obligations increase, third parties may make claims or bring litigation relating to those disclosures which may be costly.2024.

If we do not adapt to or comply with existing and/or new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation and business.

If we fail to recruit, develop and retain the necessary personnel, our business and our ability to obtain new customers, develop new products and provide acceptable levels of customer service could suffer. The success of our business is heavily dependent on the leadership of our key management personnel. Our success also depends on our ability to recruit, develop anddevelop, retain and motivate highly skilled sales, marketing, manufacturing engineering and scientific personnel. Competition for these persons in our industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel. We are experiencing increasing challenges in building and retaining our workforce in certain markets, where pressure from inflation and competition have exacerbated turnover and retention trends. Labor shortages and competition for qualified personnel could cause disruptions in our business operations.

Following the end of the “Brexit” transitional period, from January 1, 2021, the MHRA became the UK’s independent regulatory agency for medical devices. Post-Brexit, amendments have been made to the existing UK medical devices legislation which require medical devices to be registered with the MHRA before being placed on the Great Britain market. Manufacturers based outside of the UK need to appoint a UK Responsible Person to register devices with the MHRA. On January 9, 2024, the MHRA published a roadmap setting out its plans and timelines for towards the reform of the regulatory framework for medical devices in the UK. Regulations implementing core elements of the new framework are intended to be in place by 2025. Pending such reform of the UK regulatory framework, the government has confirmed that general medical devices compliant with the EU MDD with a valid declaration and CE marking can be placed on the Great Britain market up until the sooner of expiry of certificate or June 30, 2028. Medical devices, including custom-made devices, compliant with the EU MDR can be placed on the Great Britain market up until June 30, 2030. The rules for placing medical devices on the market in Northern Ireland, which is part of the UK, differ from those in Great Britain (England, Scotland and Wales) and continue to be based on EU law. TheseHowever, developments,consultations orare underway which propose substantial reforms to the perceptionGreat thatBritain anyregulatory relatedregime developmentsfor couldmedical occur, have haddevices and mayIVDs, continueincluding with respect to havemarket a material adverse effect on global economic conditionsaccess and financialconformity markets,assessment andprocedures. ourAny businessdivergent mayrequirements bebetween impactedthe UK and the demandEU formay increase the cost and complexity of running our products could be depressed.business.

In the United States, in vitro diagnostic devices (IVDs) are a type of medical device that can be used in the diagnosis or detection of diseases or other conditions. The FDA considers laboratory developed tests (LDTs) to be a subset of IVDs that are designed, manufactured, and used within a single laboratory. Similar tests are also known as In-House Tests (IH-Tests) in the EU and LDTs have historically been subject to enforcement discretion by the FDA and were not previously regulated under the 98/79EC in-vitro diagnostic directive (IVDD) of the EU. On May 6, 2024, the FDA published a final rule on the regulation LDTs, making explicit that LDTs are medical devices under the FDCA. In addition, the FDA is finalizing a policy under which the FDA will provide greater oversight of IVDs offered as LDTs through a phaseout of its general enforcement discretion approach over the course of four years, as well as targeted enforcement discretion policies for certain categories of IVDs manufactured by laboratories.

We offer certain genetic testing services to help identify the likelihood of pregnancy as well as identify possible disorders or diseases of a child prior to birth, and we have historically marketed these tests as LDTs in the United States. As a result, our tests may now be subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions,provisions. subjectOn toMay 6, 2024, the fourFDA yearpublished phase-outa final rule on the regulation LDTs, making explicit that LDTs are medical devices under the FDCA. Although since then the FDA has rescinded its prior rule regulating LDTs as medical devices, it is unclear whether the FDA may seek greater oversight of enforcement discretion beginningLDTs in May of 2025. Compliance with the new requirements may require additional analytical or clinical studies or other actions in order to continue marketing our tests during the phase-out period,ways, which could increase costs and expenses or otherwise negatively affect our business. The FDA LDT regulation is currently subject to legislative challenges which may result in less stringent requirements or a decrease in FDA enforcement of LDT requirements. Therefore, the costs to comply with the FDA LDT regulation and its impact on our business is difficult to predict.

Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, or a state or foreign license or accreditation, could have a material and adverse effect on our diagnostic testing business, operating results and financial condition. Three federal agencies are responsible for administering the CLIA program in the United States: the Centers for Medicare & Medicaid Services (CMS),CMS, the Centers for Disease Control and Prevention (CDC), and the FDA. The CMS in particular has the authority to impose a wide range of sanctions, including revocation of CLIA certification along with a bar on the ownership or operation of a CLIA-certified laboratory by any owners or operators of the deficient laboratory. If we were to lose our CLIA certification or required state or foreign licensure, we would not be able to operate our clinical laboratory and conduct our tests, worldwide or in particular jurisdictions, which would adversely impact our diagnostic testing business, operating results, and financial condition.

Our effective tax rate could fluctuate based on the geographic composition of income, which could significantly change based on our business results and acquisitions. Our effective tax rate could also fluctuate based on changes in estimates, changes in excess tax benefits from share-based compensation, changes in non-deductiblenondeductible expenses, changes in tax laws and the valuation of deferred tax assets and liabilities. These fluctuations could have an adverse effect on our financial results.

We are optimistic about the long-term prospects for the worldwide contact lens and general health care markets, and the resilience of and growth prospects for our businesses and products. However, we face significant risks and uncertainties in our global operating environment as further described in the “Risk Factors” section in Part I, Item 1A of this filing. These risks include uncertain global and regional business, political and economic conditions, including but not limited to those associated with man-made or natural disasters, pandemic conditions, inflation, foreign exchange rate fluctuations, regulatory developments, supply chain disruptions, and escalating global trade barriers.barriers and disruptions, such as the impact of tariffs. These risks and uncertainties have adversely affected our sales, cash flow and performance in the past and could further adversely affect our future sales, cash flow and performance.

CooperVision - We compete in the worldwide contact lens market with our spherical, toric, multifocal and toric multifocal contact lenses offered in materials like silicone hydrogel Aquaform technology. We believe that there will be lower contact lens wearer dropout rates as technology improves and enhances the wearing experience through a combination of improved designs and materials and the growth of preferred modalities such as single-use and monthly wearing options. CooperVision also competes in the myopia management and specialty eye care contact lens markets with myopia management contact lenses using its ActivControl technology and with products such as orthokeratology (ortho-k) and scleral lenses. CooperVision has FDA approval for its MiSight 1 day lens, which is the first and only FDA-approved product indicated to slow the progression of myopia in children with treatment initiated between the ages of 8-12. Further, CooperVision hasreceived Chinese NMPA approval for itsuse of the MiSight 1 day lens in China and received MHLW approval for use of the MiSight 1 day lens in China.Japan. CooperVision is focused on greater worldwide market penetration using recently introduced products, and we continue to expand our presence in existing and emerging markets, including through acquisitions.

In the fiscal year ended October 31, 2024,2025, the growth experienced across all categories was partiallypositively offsetimpacted by unfavorablefavorable foreign exchange rate fluctuations,fluctuations whichof approximatedapproximately $14.6$16.0 million.

•Toric and multifocal grew primarily through the success of MyDayBiofinity and Biofinity.MyDay.

•Sphere, other grew primarily through MyDay, MiSight and Biofinity.MyDay, offset by a decrease in legacy hydrogel products.

•"Other" products represented approximatelyless than 1% of net sales in fiscal 20242025 and 2023.2024.

CooperVision's growth in net sales acrossin allthe regionsAmericas and EMEA was primarily attributable to increasedmarket salesgains of silicone hydrogel contact lenses. The growth in EMEA was positively impacted by favorable foreign exchange rate fluctuations. Refer to CooperVision Net Sales by Category above for further discussion.

•Office and surgical offerings include products that facilitate surgical and non-surgical procedures that are commonly performed primarily by obstetricians and gynecologists in hospitals, surgerysurgical centers, and medical offices. This includes medical devices, cryostorage (such as cord blood and cord tissue storage), and contraception.

•Fertility offerings include highly specialized products and services that target the IVFin vitro fertilization process, including diagnostics testing with a goal to make fertility treatment safer, more efficient and convenient. This includes fertility consumables and equipment, donor gamete services, and genomic services (including genetic testing).

In the fiscal year ended October 31, 2024,2025, office and surgical net sales increased primarily due to theincreased additionsales of CookParagard Medicalcontraceptive intrauterine devices and the acquisition of obp Surgical on NovemberAugust 1, 2023.2024. Fertility net sales increased primarily due to an increase in revenue from consumablegenomic productsservices and geneticgamete testing.services.

CorporateCooperVision's SGA expenses increased in fiscal 20242025 compared to fiscal 20232024 primarily due to share-basedincreased compensationselling activities, severance costs related expensesto workforce optimization initiatives, and corporatelong-lived supportasset functions.write-offs.

CooperVision's R&D expenses increased in fiscal 20242025 compared to fiscal 20232024 primarily due to myopiaan managementincrease programs andin R&D projects.project spend. CooperVision's R&D activities are primarily focused on the development of contact lenses, manufacturing technology and process enhancements.

CooperSurgical's R&D expenses increased in fiscal 20242025 compared to fiscal 20232024 mainlyprimarily due to an increase in R&D project spend. CooperSurgical's R&D activities are primarily focused on developingthe anddevelopment refining diagnostic and therapeutic products including medical interventions,of surgical devices and fertility solutions.solutions, manufacturing technology and process enhancements.

CooperVision's amortization expense fordecreased in fiscal 20242025 compared to fiscal 2023 decreased2024, primarily due to morecertain intangible assets becomingbeing fully amortized during fiscal 2024.amortized.

CooperSurgical's amortization expense increased in fiscal 20242025 compared to fiscal 2023,2024, primarily due to the amortization of intangible assets recently acquired through acquisitions.acquisitions in the second half of fiscal 2024.

CooperVision's operating income increased in fiscal 20242025 compared to fiscal 2023,2024, primarily due to the increase in net sales outpacedoutpacing the increase in operating expenses.

CooperSurgical's operating income increaseddecreased in fiscal 20242025 compared to fiscal 2023,2024, primarily due to paymentinventory ofand a $45.0 million termination fee under anlong-lived asset purchasewrite-offs, agreementseverance costs related to Cookworkforce Medical’soptimization reproductiveinitiatives healthand businessan increase in fiscalamortization 2023 and decrease in advertising and marketing expenses in fiscal 2024.expense.

Corporate operating loss increased in fiscal 20242025 compared to fiscal 2023,2024, primarily due to higheran share-basedincrease compensationin expenses.severance costs related to workforce optimization initiatives.

Interest expense increaseddecreased during fiscal 20242025 compared to the prior year, primarily due to higherlower interest rates and higherlower average debt balances.

Foreign exchange loss was primarily associateddue withto the relative weakeningmovements of the U.S. dollar against various foreign currencies and the effect on intercompany receivables.receivables and payables.

Other expense, net decreasedincreased in fiscal 2024,2025, primarily due to a decrease in loss on the disposal of a minority investments.interest investment.

The effective tax rates for fiscal 20242025 and 20232024 were 32.6%33.8% and 28.7%,32.6%, respectively. The increase was primarily due to changes in valuation allowance and a decrease in excess tax benefits from share-based compensation, partially offset by changes in unrecognized tax benefits and changes in the geographic composition of pre-tax earnings and an increase in the UK statutory tax rate from 19% to 25%.earnings.

The effective tax rate for fiscal 2025 and 2024 was higher than the U.S. federal statutory rate primarily due to foreign earnings subject to U.S. tax and foreign earnings in jurisdictions with higherdifferent tax rates. The effective tax rate for fiscal 2023 was higher than the U.S. federal statutory rate primarily due to foreign earnings subject to U.S. tax.

Working capital at October 31, 2024,2025, and October 31, 2023,2024, was $928.7$993.6 million and $735.9$928.7 million, respectively. The increase in working capital was primarily due to increases in trade accounts receivable,receivable prepaidmainly expensesdriven by higher sales and othertiming currentof assets,collections and inventories, partially offset by an increaseincreases in otheraccounts currentpayable, liabilities.employee compensation and benefits and short-term debt.

Cash used in investing activities in fiscal 20242025 increaseddecreased compared to cash used in investing activities in fiscal 2023,2024, primarily attributable to $343.4 million cash paid for acquisitions in fiscal 2024.

As of October 31, 2024,2025, the Company was in compliance with all debt covenants. On May 1, 2024, the Company entered into a Revolving Credit Agreement.Agreement (the 2024 Credit Agreement). The Company drew on the 2024 Credit Agreement to fully repay borrowings outstanding under the 2020 Term Loan and 2020 Revolving Credit Facility and terminated the 2020 Credit Agreement. See Note 5. Financing Arrangements for further information.

Considering recent market conditions, weWe have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cash available under our 2024 Credit Agreement will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of the Consolidated Financial Statements included in this annual report. To the extent additional funds are necessary to meet our liquidity needs such as for acquisitions, share repurchases or other activities as we execute our business strategy, we anticipate that additional funds could be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.

Share RepurchasesRepurchase

In MarchSeptember 2017,2025, the authorization under the 2012 Share Repurchase Program (2012 Program) was increased to $1.0$2.0 billion by the Company's Board of Directors. As of October 31, 2024,2025, $256.4$966.4 million remainedremains authorized for repurchase under the program. See Note 8. Stockholders’ Equity for additional information. In fiscal 2024, there were no share repurchases under the 2012 Program.repurchase.

Income tax liabilities related to the one-time transition tax resulted from the enactment of the 2017 U.S. Tax Act and are payable in annual installments through fiscal 2026. The installment for fiscal 20242025 is classified in "Other current liabilities" in our Consolidated Balance Sheet. We are unable to reliably estimate the timing of future payments related to uncertain tax positions and have excluded $20.4 million of long-term income taxes payable. See Note 6. Income Taxes for the expected one-time transition tax payments.

Purchase obligations consist of agreements to purchase goods and services that are enforceable and legally binding and includes obligations for inventory, capital expenditures and other operating expense commitments. As of October 31, 2024,2025, we had purchase obligations of $696.0$585.1 million, with $272.8$279.3 million payable within the twelve months ending OctOctober 31, 2025.2026.

•Income taxes - Income taxes are estimated based on enacted income tax laws and the results of operations in each jurisdiction. Deferred tax assets and liabilities are estimated based on temporary differences between the financial reporting basis and income tax basis of assets and liabilities. Judgment is required in measuring the value of deferred tax assets, which are reduced by a valuation allowance to the extent it is more likely than not that the assetstax benefits are not expected to be realized.realized, These deferred tax assets are primarilyincluding tax credits and net operating loss carryforwards expected to expire before they can be claimed or deducted. For uncertain tax positions, judgment is required in evaluating tax positions for uncertainty in the application of accounting guidance and tax laws. A tax benefit is recognized if it is more likely than not a tax position will be sustained based on its technical merits in a tax authority examination, based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority.

In this section, we discuss the results of our operations for the secondthird quarter of fiscal 2026 ended AprilJuly 30,31, 2026, compared with the same period of fiscal 2025. We discuss our cash flows and current financial condition under “Capital Resources and Liquidity.” Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.

In the three and six months ended AprilJuly 30,31, 2026, thenet growth experiencedsales across all categories waswere negatively impacted by unfavorable foreign exchange rate fluctuations of approximately $2.8 million, while in the three months ended July 31, 2025, net sales across all categories were positively impacted by favorable foreign exchange rate fluctuations of approximately $28.4$26.8 million and $56.5 million, respectively.million.

•Sphere, other grew primarily through MyDayMiSight and MiSight.MyDay.

•"Other" products represented less than 1% of net sales in the three and sixnine months ended AprilJuly 30,31, 2026 and 2025, respectively.2025.

Item 2. Management’s Discussion and Analysis of Financial Condition In the three months ended July 31, 2026, CooperVision's growth in net sales in the Americas anddeclined EMEAdue wasto reductions in U.S. channel inventory. In the nine months ended July 31, 2026, net sales in the Americas increased, primarily attributable to market gains of silicone hydrogel contact lenses. In EMEA, net sales growth for both the three- and nine-month periods was primarily driven by market gains of silicone hydrogel contact lenses and favorable foreign exchange rate fluctuations. In Asia Pacific, net sales declined for both the three- and nine-month periods, primarily due to softness in Japan.Japan Theand growth in EMEA was positively impacted by favorable foreign exchange rate fluctuations.China. Refer to CooperVision Net Sales by Category above for further discussion.

In the three months ended AprilJuly 30,31, 2026, office and surgical net sales increased primarily due to increased sales of surgical products. Fertility net sales increased primarily due to an increase in revenue from consumable products and genetic testing.testing, partially offset by a decrease in equipment sales.

In the sixnine months ended AprilJuly 30,31, 2026, office and surgical net sales increased primarily due to increased sales of surgical products, partially offset by a decrease in revenue of Paragard contraceptive intrauterine devices.products. Fertility net sales increased primarily due to an increase in revenue from consumable products and genetic testing.

Gross Margin.Margin

CooperSurgical'sConsolidated amortizationgross expensemargin decreasedincreased in the three and sixnine months ended AprilJuly 30,31, 2026,2026 to 67% and 68%, respectively, compared to 65% and 67% in the three and sixnine months ended AprilJuly 30,31, 2025, respectively, primarily duedriven by inventory write-offs related to certaina intangibleproduct assetsline being fully amortized and the write-off of an intangible assetexit in fiscal 2025.

CooperVision's operatingamortization incomeexpense increaseddecreased in the three and sixnine months ended AprilJuly 30,31, 2026, compared to the three and sixnine months ended AprilJuly 30,31, 2025, primarily due to thecertain increaseintangible inassets netbeing salesfully outpacing the increase in operating expenses.amortized.

CorporateCooperSurgical's operatingamortization lossexpense decreased in the three and sixnine months ended AprilJuly 30,31, 2026, compared to the three and sixnine months ended AprilJuly 30,31, 2025, primarily due to acertain decreaseintangible assets being fully amortized and the write-off of an intangible asset in share-basedfiscal compensation related expenses.2025.

Interest expense decreased during the three and sixnine months ended AprilJuly 30,31, 2026, compared to the three and sixnine months ended AprilJuly 30,31, 2025, due to lower interest rates and lower average debt balances.

Foreign exchange loss decreased duringfor the three and sixnine months ended AprilJuly 30,31, 2026, compared to the three2026 and sixJuly months ended April 30,31, 2025, was primarily due to movements of U.S. dollar against various foreign currencies and the effect on intercompany receivables and payables.

Other (income) expense, net changed from expense in the three and sixnine months ended AprilJuly 30,31, 2025 to income in the three and sixnine months ended AprilJuly 30,31, 2026, primarily due to a $15.7 million loss on the disposal of a minority interest investment in fiscal year 2025.

The effective tax rates for the three months ended AprilJuly 30,31, 2026, and AprilJuly 30,31, 2025, were (61.0114.5)% and 39.3%,35.3%, respectively. The decrease was primarily due to changes in unrecognized tax benefits discussed below. The effective tax rates for the sixnine months ended AprilJuly 30,31, 2026, and AprilJuly 30,31, 2025, were 63.2%(40.5)% and 35.5%,35.4%, respectively. The changesdecrease werewas primarily due to changes in unrecognized tax benefits and the discrete tax impact of the litigation accrualaccrual, discussed below, partially offset by changes in the geographicgeographical composition of pre-tax earnings.

During the threenine months ended AprilJuly 30,31, 2026, the Company recorded $271.6$272.0 million litigation expense, net of insurance recoveries, as described in Note 9. Contingencies and Commitments. As a result, the Company recognized a $42.8$40.9 million discrete income tax benefit, net of indirect tax effects, primarily driven by a reduction in U.S. taxable income.

Working capital as of AprilJuly 30,31, 2026 and October 31, 2025 was $495.1$414.9 million and $993.6 million, respectively. The decrease in working capital was primarily due to an increase in short-term debt.

Cash provided by operating activities in the first sixnine months of fiscal 2026 increased compared to the first sixnine months of fiscal 2025, primarily due to increased cash inflows from net income after adjusting for the non-cash discrete income tax benefit and accrual for litigation liability. Refer to Note 5. Income Taxes and Note 9. Contingencies and Commitments for additional information.

Cash used in investing activities in the first sixnine months of fiscal 2026 increaseddecreased compared to the first sixnine months of fiscal 2025, primarily due to an increasereductions in purchases of property, plant and equipment,equipment partially offset by a decrease inand spending on equity investments.

Cash used in financing activities in the first sixnine months of fiscal 2026 increased compared to the first sixnine months of fiscal 2025, primarily due to an increase in repurchase of common stock, partially offset by higher net repaymentsborrowings on the revolving credit and lower net proceeds from short-term debt.facility.

The following is a summary of the maximum commitments and the net amounts available to us under different credit facilities as of AprilJuly 30,31, 2026:

As of AprilJuly 30,31, 2026, the Company was in compliance with all debt covenants. On May 1, 2024, the Company entered into a Revolving Credit Agreement (the 2024 Credit Agreement). The Company drew on the 2024 Credit Agreement to fully repay borrowings outstanding under the 2020 Term Loan Facility and 2020 Revolving Credit Facility and terminated the 2020 Credit Agreement. On February 3, 2026, the Company entered into Amendment No. 3 to the 2021 Credit Agreement. The amendment modifies the 2021 Credit Agreement by, among other things, extending the maturity date of $950.0 million of term loans to February 3, 2031, with the remaining $550.0 million of term loans retaining their original maturity date. See Note 4. Financing Arrangements of the Consolidated Condensed Financial Statements for further information.

We have re-evaluated our operating cash flows and cash requirements and continue to believe that current cash, cash equivalents, future cash flow from operating activities and cashavailable availableborrowing capacity under our 2024credit Credit Agreementfacilities will be sufficient to meet our anticipated cash needs, including working capital needs, capital expenditures and contractual obligations for atthe leastnext 12 months fromand the issuance date of the Consolidated Condensed Financial Statements included in this quarterly report.beyond. To the extent additional funds are necessary to meet our liquidity needs suchin asthe next 12 months or beyond, including for acquisitions, share repurchases or other activities as we execute our business strategy, we anticipate that such funds could be Item 2. Management’s Discussion and Analysis of Financial Condition execute our business strategy, we anticipate that additional funds could be obtained through the refinancing of existing indebtedness, the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.funds.

In September 2025, the authorization under the 2012 Share Repurchase Program was increased to $2.0 billion by the Company's Board of Directors. As of AprilJuly 30,31, 2026, $860.8$521.7 million remains authorized for repurchase.