EssilorLuxottica closes 2025 with record revenue: but the cash flow milestone hides more than it shows
We analyse EssilorLuxottica’s real accounts between 2023 and 2025 to understand whether the boom described by the press is as solid as it appears, and what lies behind the numbers that defined the year as historic.
Companies and Finance · 2/7/2026
On 12 February 2026, the Italian portal Businessonline.it published an article with a euphoric headline: “EssilorLuxottica, fatturato e ricavi boom nel 2025 e strategie e previsioni per il 2026”.
The article celebrates a historic year for the Franco-Italian optical group: the first double-digit revenue growth in the group’s history, expansion across all regions, seven million smart glasses sold, a record free cash flow of €2.8 billion, and a future dominated by artificial intelligence and medtech.
Original source: https://www.businessonline.it/news/essilorluxottica-fatturato-e-ricavi-boom-nel-2025-e-strategie-e-previsioni-per-il-2026_n82532.html
The claim is bold.
If it were entirely true, it would mean that EssilorLuxottica has found the formula to grow faster while keeping its profitability intact and generating record cash.
But what do the group’s accounts actually say?
Executive summary
EssilorLuxottica’s accounts between 2023 and 2025 reveal a group in the midst of a strategic transformation whose results are more complex than the narrative offered by the specialist press.
Revenue is growing strongly and free cash flow has reached an all-time high. But margins are falling consistently, net profit in 2025 is below that of 2024, and net debt has barely moved despite generating nearly €3 billion in free cash flow.
| Indicator (€M) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 25,395 | 26,508 | 28,491 |
| IFRS net profit | 2,289 | 2,359 | 2,315 |
| Adjusted gross margin | 63.4% | 63.5% | 60.9% |
| Adjusted operating margin (current rates) | 16.5% | 16.7% | 15.7% |
| Adjusted operating margin (constant rates) | 16.9% | 17.0% | 16.0% |
| Free cash flow | 2,394 | 2,413 | 2,800 |
| Net debt | 9,100 | 10,970 | 10,850 |
The group is billing more than ever. But it is earning proportionally less than two years ago. And all the cash it generates is immediately reinvested in the transformation towards medtech.
The record revenue is real
There is something in the Businessonline.it article that the numbers confirm without qualification: 2025 was the first year in the group’s history with double-digit revenue growth in constant exchange rate terms.
The €28,491 million in revenue represents an increase of 11.2% compared to 2024 and 12.2% compared to 2023. All four geographic regions grew. Both operating segments, Professional Solutions and Direct to Consumer, grew. And the fourth quarter of 2025 was the best quarter in the group’s history, with growth of 18.4%.
| Year | Revenue (€M) | Growth at current rates | Growth at constant rates |
|---|---|---|---|
| 2023 | 25,395 | +4.4% | +7.1% |
| 2024 | 26,508 | +4.4% | +6.0% |
| 2025 | 28,491 | +7.5% | +11.2% |
The main driver of this growth has been the partnership with Meta Platforms and smart glasses. In September 2023, EssilorLuxottica launched the Ray-Ban Meta. Between the launch and early 2025, the group had sold approximately 2 million cumulative units across 2023 and 2024. In 2025 it surpassed 7 million in a single year, also adding the Oakley Meta launched in June. I bought a pair of Ray-Ban Meta in 2025 and I understand perfectly why the product has worked: they are the first smart glasses that do not look like a gadget.
The revenue growth is real, relevant, and operational. On that, the headline does not lie.
The cost of growth: Meta compresses the margin per unit
The problem lies in what that growth costs.
Smart glasses, Ray-Ban Meta and Oakley Meta, have a structurally lower gross margin than the traditional optical business. The integrated electronics, camera and audio components, the greater manufacturing complexity, and the sharing of value with Meta Platforms mean that each pair of smart glasses generates less profitability per unit than a conventional pair of Ray-Bans or Varilux lenses.
The group’s own management acknowledged this explicitly in the annual results press release: the adjusted operating margin for 2025 was 70 basis points below that of 2024 at constant exchange rates, “impacted by the combined headwind of US tariffs and AI glasses”. Both factors acted with greater intensity in the second half of the year.
| Year | Adjusted gross margin | Adjusted operating margin (constant rates) |
|---|---|---|
| 2023 | 63.4% | 16.9% |
| 2024 | 63.5% | 17.0% |
| 2025 | 60.9% | 16.0% |
Over two years, the gross margin has fallen 260 basis points. The operating margin at constant rates has retreated 100 basis points. And the IFRS net profit for 2025, with nearly €2 billion more in revenue than in 2023, is practically identical to that year.
| Year | Revenue (€M) | IFRS net profit (€M) |
|---|---|---|
| 2023 | 25,395 | 2,289 |
| 2024 | 26,508 | 2,359 |
| 2025 | 28,491 | 2,315 |
More volume, the same cash at the end. EssilorLuxottica is pioneering a category whose profitability at scale is still not well understood.
The record free cash flow: genuine, but incomplete
The Businessonline.it article celebrates the free cash flow of €2.8 billion as definitive proof of the group’s operational strength. It is the most striking number in the results presentation and the one that has generated the most headlines.
It is worth understanding exactly what that number measures. EssilorLuxottica defines free cash flow as the net cash flow from operating activities less purchases of property, plant, equipment and intangibles, and payments of the principal portion of lease liabilities. It is a pre-dividend metric: dividend payments do not enter the calculation. Under that definition, the €2.8 billion is a genuine and operational figure.
The problem is not in the number. It is in what is not accounted for after that number.
To understand it, one must look at the actual change in the group’s net debt position over the course of the year:
| Indicator | End 2024 | End 2025 | Change |
|---|---|---|---|
| Free cash flow generated | — | €2,800M | — |
| Net debt | €10,970M | €10,850M | -€120M |
The group generated €2.8 billion in free cash flow. But net debt fell by only €120 million. The remaining €2,680 million went out the door in the form of medtech acquisitions, Optegra, Cellview, A&R, PUcore, the stores in Malaysia, and cash dividends.
This is where the scrip dividend comes in. In 2025, EssilorLuxottica offered its shareholders the option to receive the dividend for the 2024 financial year in newly issued shares rather than in cash. The total paid in cash was €547 million. The previous year, the dividend for 2022 paid in June 2023 had been €487 million in cash.
The scrip dividend does not improve free cash flow, that was already calculated beforehand. What it does is reduce the subsequent cash outflow, allowing the group to finance its expansion without deteriorating its treasury position. It is a legitimate and common financial management tool among European companies with capital-intensive growth plans.
The technical conclusion is this: the record free cash flow reflects a genuine operational improvement, driven primarily by revenue growth. But the image of financial strength projected by that number is qualified when one observes that, after allocating it to acquisitions and dividends, net debt has barely moved in twelve months. The group grows and generates cash, but for now all that cash is immediately reinvested in the transformation towards medtech.
Behind the headline
The news is that EssilorLuxottica closed 2025 with record revenue of €28.491 billion and the best free cash flow in its history.
But behind the headline there are two realities that the numbers tell with precision.
The first: revenue growth is genuine. Smart glasses have multiplied their sales by more than three in a single year, making EssilorLuxottica the company that launched the first wearable category with real mass adoption. As a buyer of a pair of Ray-Ban Meta I can confirm it: the product works, and that is not a small thing.
The second: that same growth is compressing margins. The gross margin has fallen 260 basis points over two years. Net profit in 2025 is below that of 2024 despite billing nearly €2 billion more. And net debt has barely fallen by €120 million despite generating €2.8 billion in free cash flow, because all the cash goes towards financing medtech expansion.
EssilorLuxottica is betting on volume and the future, sacrificing present profitability. It is a bet that could make a great deal of sense if smart glasses scale and margins recover with volume. Or it could be the beginning of a transformation more difficult than the headlines suggest.
There is one final piece of data that deserves attention and has passed almost unnoticed. On 23 June 2026, EssilorLuxottica and Meta jointly announced the launch of Meta Glasses, a new collection of smart glasses starting at $299. Unlike the Ray-Ban Meta and Oakley Meta, where the design and brand belong to EssilorLuxottica, these new glasses were designed in-house by Meta for the first time. EssilorLuxottica manufactures them, but the product carries the Meta name, not Ray-Ban’s or Oakley’s.
It is a subtle but strategically relevant shift. Until now, EssilorLuxottica has been the one that made it possible for Meta to have credibility in the world of eyewear: Italian manufacturing, the network of nearly 18,000 stores, the ability to produce prescription lenses, decades of know-how in eyewear. Without EssilorLuxottica, the Ray-Ban Meta would have been just an idea from Silicon Valley. In that sense, it is fair to recognise that until now EssilorLuxottica has contributed more to the partnership in terms of real execution.
But with Meta Glasses, Meta is beginning to control pricing, distribution, and the product narrative directly, without needing the umbrella of an EssilorLuxottica brand. The question that the accounts of the coming years will have to answer is whether EssilorLuxottica will remain the strategic partner that built a new category alongside Meta, or whether the balance of power within the partnership will progressively shift towards Silicon Valley.
The answer is not in the February press release. It will be in the accounts of the next three years.
