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Bausch Health Companies Inc. (BHC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $2.26B (+5% YoY), GAAP LPS was ($0.16), and Adjusted EBITDA attributable to BHC was $661M; company maintained ex‑B+L revenue/EBITDA guidance but lowered consolidated Adjusted EBITDA and ex‑B+L Adjusted CFO due to higher interest expense .
  • Against Wall Street consensus, revenue and EPS missed, and Adjusted EBITDA was below expectations; management highlighted strong Salix/Xifaxan and Solta growth but higher selling/advertising in B+L weighed on operating income . Primary EPS Consensus Mean* was $0.846 vs GAAP LPS ($0.16), Revenue Consensus Mean* $2.277B vs $2.259B, EBITDA Consensus Mean* $769.6M vs Adjusted EBITDA $661M (company definition) .
  • Strategic catalysts: completed $7.9B refinancing extending maturities (reduces near/medium-term debt risk), favorable D.C. District Court ruling in Norwich vs FDA (supports Xifaxan IP), and ongoing evaluation of options to unlock shareholder value, including potential share buybacks .
  • Guidance updated: consolidated revenue raised, consolidated Adjusted EBITDA lowered; B+L revenue raised but B+L Adjusted EBITDA lowered; ex‑B+L Adjusted CFO lowered by $150M on higher interest costs .

What Went Well and What Went Wrong

  • What Went Well

    • Salix revenue up 9% YoY driven by Xifaxan (+8%); 59,000 new Xifaxan patients activated, with improved sales force productivity (“20% to 30% more calls than 18 months ago”) .
    • Solta delivered 28% reported and 33% organic growth, with standout strength in South Korea (+136%) and China (+30%); Health Canada cleared Thermage FLX and Fraxel FTX launched in the U.S. .
    • Balance sheet actions: $7.9B refinancing extended maturities into 2030–2032, with management noting investor confidence and increased financial flexibility .

  • What Went Wrong

    • Consolidated operating income down $5M YoY to $276M, reflecting higher selling/advertising/promotion in B+L despite higher revenues .
    • Adjusted gross margin fell to 69.9% (down 130 bps YoY), and consolidated Adjusted EBITDA attributable to BHC declined modestly to $661M .
    • Guidance reductions where interest expense rose post-refinancing: consolidated Adjusted EBITDA and ex‑B+L Adjusted CFO lowered; B+L Adjusted EBITDA lowered despite raised B+L revenue .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$2.51 $2.56 $2.26
GAAP EPS ($)($0.23) $0.25 ($0.16)
Adjusted EBITDA attributable to BHC ($USD Millions)$909 $935 $661
Operating Income ($USD Millions)$318 $558 $276
Cash from Operations ($USD Millions)$405 $601 $211
Segment Revenues ($USD Millions)Q3 2024Q4 2024Q1 2025
Salix$642 $634 $542
International$291 $279 $262
Solta Medical$112 $138 $113
Diversified$269 $228 $205
Bausch + Lomb$1,196 $1,280 $1,137
BHC (excl. B+L)$1,314 $1,279 $1,122
Total BHC$2,510 $2,559 $2,259
KPIsQ3 2024Q4 2024Q1 2025
Adjusted Gross Margin %N/A72.4% 69.9%
GAAP Net Income (Loss) Attributable to BHC ($MM)($85) $93 ($58)
Adjusted Net Income Attributable to BHC ($MM)$415 $430 $220
Cash & Equivalents ($MM)$719 $1,181 $1,134
Interest Expense ($MM)$(346) $(337) $(330)
Total Long-Term Debt & Other ($MM)$21,507 $21,616 $21,510
Q1 2025 Actual vs Wall Street ConsensusActualConsensus MeanSurprise
Revenue ($USD Billions)$2.26 $2.277*MISS (~$0.018B, ~0.8%)*
Primary EPS ($)($0.16) $0.846*MISS (definitions differ: GAAP vs Primary EPS)*
EBITDA ($USD Millions)$661 (Adj. EBITDA attributable to BHC) $769.6*MISS (~$109M)*

Values with asterisks are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Feb 19, 2025)Current Guidance (Apr 30, 2025)Change
BHC Revenues ($B)FY 2025$9.900–$10.150 $9.950–$10.200 Raised
BHC Adjusted EBITDA ($B)FY 2025$3.525–$3.675 $3.475–$3.625 Lowered
BHC (excl. B+L) Revenues ($B)FY 2025$4.950–$5.100 $4.950–$5.100 Maintained
BHC (excl. B+L) Adjusted EBITDA ($B)FY 2025$2.625–$2.725 $2.625–$2.725 Maintained
BHC (excl. B+L) Adjusted Cash Flow from Operations ($B)FY 2025$0.975–$1.025 $0.825–$0.875 Lowered
Bausch + Lomb Revenues ($B)FY 2025$4.950–$5.050 $5.000–$5.100 Raised
Bausch + Lomb Adjusted EBITDA ($B)FY 2025$0.900–$0.950 $0.850–$0.900 Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/technology initiativesN/A“Tools and algorithms that apply AI and machine learning to our sales process for Xifaxan” “Sales force delivers 20–30% more calls… fine-tune our AR engine” Expanding use in commercial ops
Supply chain resilienceN/AAgile supply chain met unexpected Wellbutrin demand in Canada Regional manufacturing footprint; Xifaxan API from Italy, final manufacturing in Canada; U.S. treated as Italian import Resilient, regionally diversified
Tariffs/macroN/AGuidance noted tariff uncertainty Exposure limited; Solta China most impacted; potential tariff impact ≤$50M; China Solta market ≈$150M revenue Monitored; incorporated in guidance
Xifaxan performance+7% in Q3 +16% in Q4 +8% in Q1; 59k new patients; balanced price/volume Healthy, moderating
Solta growth+35% +34% +33% organic; South Korea +136%, China +30% Sustained high growth
Regulatory/legal (Norwich)FDA denied final approval; 30-month stay perspective Status reiterated; 30-month stay applies per company view D.C. District Court ruled in favor of FDA/Teva/BHC Positive clarity
R&D execution (RED‑C)Phase 3 ongoing; early 2026 topline On track; early 2026 topline On track; early 2026 topline Steady progress

Management Commentary

  • “We started the year strong… eighth consecutive quarter of year-over-year growth in Revenue and Adjusted EBITDA for Bausch Health, excluding Bausch + Lomb… successfully closed a comprehensive refinancing… we are laser focused on… evaluating all options to unlock shareholder value.” – CEO Thomas J. Appio .
  • “Adjusted EBITDA was $661 million, a decrease of $4 million or 1% year-over-year… adjusted operating cash flow was $110 million.” – CFO Jean‑Jacques Charhon (non‑GAAP) .
  • “We received a favorable ruling from the D.C. District Court in Norwich’s case against the FDA… will continue to vigorously defend our intellectual property.” – CEO .
  • “Our setup is not significantly exposed to new tariffs… limited exposure… we integrated the impact of tariffs into our guidance and maintained the outlook.” – CFO .
  • “We remain committed to evaluating all options… including… share buybacks.” – CEO .

Q&A Highlights

  • Tariffs and cash flow: Management reiterated limited direct impact (≤$50M), Solta China the most exposed; ex‑B+L Adjusted CFO lowered due to ~100 bps higher blended cost of capital and transaction fees; EBITDA phasing to mirror 2024 .
  • Solta sustainability: Strong installed base in Korea supports consumables; growth expected to normalize but remain healthy; U.S./EMEA/Canada also positive; Thermage FLX Canada clearance a potential driver .
  • Xifaxan IRA (2027) and manufacturing: Too early for detailed negotiation outcomes; IP licensed to Ireland; API from Italy; final manufacturing in Canada; U.S. customs treats as Italian import .
  • Capital allocation and buybacks: Debt runway extended; buybacks considered when stock undervalued but priority remains deleveraging and reinvestment; refinancing adds flexibility; ~28% of BLCO shares potentially unencumbered post-upsizing .
  • Shareholder rights plan: Adopted to ensure fair treatment in unsolicited bids; proxy supplement referenced; management believes market sees value in BHC .

Estimates Context

  • Revenue, EPS, and EBITDA missed S&P Global consensus in Q1 2025. Company’s Adjusted EBITDA ($661M) differs from S&P’s EBITDA methodology; analysts should align definitions when comparing. Primary EPS Consensus Mean* $0.846 vs GAAP LPS ($0.16); Revenue Consensus Mean* $2.277B vs $2.259B; EBITDA Consensus Mean* $769.6M vs Adjusted EBITDA $661M .
    Values retrieved from S&P Global.

Where estimates may need to adjust:

  • Lower consolidated and B+L Adjusted EBITDA guidance suggests downward revisions to EBITDA forecasts; raised revenue guidance for BHC and B+L implies modest top‑line upward tweaks, offset by margin/interest headwinds .
  • Tariff commentary and Solta exposure may temper near‑term margin expectations in aesthetics while Salix/Xifaxan demand supports pharma revenue .

Key Takeaways for Investors

  • Operational momentum persists: Salix and Solta growth offset B+L cost pressure; near‑term margin compression reflects higher selling spend and interest costs .
  • Debt risk reduced: $7.9B refinancing extends maturities, enhancing flexibility; expect higher interest expense near‑term but improved runway for deleveraging .
  • Legal overhang improved: Norwich ruling supports Xifaxan IP and delays generic risk pathways; ongoing IRA negotiation remains a 2027 event to monitor .
  • Guidance mix shift: Revenue up, EBITDA down at the consolidated level; B+L revenue up but EBITDA down—focus on B+L cost discipline and mix .
  • Watch Solta China: Strong demand but tariff sensitivity; management exploring options but near‑term manufacturing relocation is difficult .
  • Potential capital returns: Management explicitly evaluating share buybacks, contingent on leverage and valuation; BLCO stake provides optionality .
  • Trading lens: Near‑term sentiment hinges on EBITDA trajectory and tariff headlines; medium‑term thesis levered to Salix/Xifaxan durability, RED‑C readouts by early 2026, and capital structure optimization .

Note: No additional Q1 2025 press releases beyond the 8‑K exhibit were found in the period searched .