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Bausch Health Companies Inc. (BHC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered consolidated revenue of $2.68B (+7% YoY; +6% constant currency) and GAAP EPS of $0.48, with adjusted EBITDA attributable to BHC of $0.99B; management raised FY2025 guidance for consolidated revenue and adjusted EBITDA, and for BHC ex-B+L also raised adjusted operating cash flow .
  • Salix (+12% YoY) and Solta Medical (+25% YoY) led outperformance; Xifaxan revenue grew 16% with volume +9%, aided by one-time net pricing favorability from Medicaid/340B exits and continued AI-driven commercial execution .
  • Sequentially, revenue and cash from operations improved (Q2→Q3: $2.53B→$2.68B; CFO $289M→$405M), while adjusted gross margin expanded to 72.7% in Q3 (from 70.6% in Q2), reflecting mix and cost discipline .
  • Stock-relevant catalysts: raised guidance, debt deleveraging (redeemed $601M 9.25% notes; cancelled $300M AR facility post-quarter), and visibility on CMS-negotiated Xifaxan pricing (publication expected Nov. 30, 2025) with management indicating 2026–2027 average EBITDA similar to 2025 despite IRA impact .

What Went Well and What Went Wrong

  • What Went Well

    • “Tenth consecutive quarter of year-over-year growth in Revenue and Adjusted EBITDA for Bausch Health, excluding Bausch + Lomb,” driven by strong Salix and Solta performance .
    • Xifaxan momentum: revenue +16% YoY; volume +9%; new-to-brand scripts +14% supported by DTC and an AI customer insights engine; 71k new patients in Q3 (196k YTD) .
    • Guidance raised across revenue, adjusted EBITDA, and adjusted operating cash flow (ex-B+L), reflecting stronger conversion and operational execution .

  • What Went Wrong

    • International segment declined 2% reported and 4% organic; regional softness in Canada (-8%) and LATAM (-17%), with macro headwinds in Mexico .
    • Diversified segment -4% reported and -6% organic; neurology impacted by non-recurrence of prior-year Cardizem orders and dermatology facing mixed pricing dynamics .
    • SG&A in Q3 was “unusually low” due to non-recurring accrual adjustments; run-rate should be based on Q1/Q2 rather than Q3, implying near-term OpEx normalization .

Financial Results

  • Quarterly trends (oldest → newest):
MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$2.259 $2.530 $2.681
GAAP EPS ($)($0.16) $0.40 $0.48
Adjusted EBITDA attributable to BHC ($USD Billions)$0.661 $0.842 $0.986
Cash from Operations ($USD Millions)$211 $289 $405
Operating Income ($USD Millions)$276 $444 $619
  • Q3 YoY comparison:
MetricQ3 2024Q3 2025
Revenue ($USD Billions)$2.510 $2.681
GAAP EPS ($)($0.23) $0.48
Adjusted EBITDA attributable to BHC ($USD Billions)$0.909 $0.986
  • Margins:
MetricQ2 2025Q3 2025
Adjusted Gross Margin (%)70.6% 72.7%
  • Segment breakdown (oldest → newest):
Segment Revenue ($USD Millions)Q3 2024Q2 2025Q3 2025
Salix642 627 716
International291 278 286
Solta Medical112 128 140
Diversified269 219 258
Bausch + Lomb1,196 1,278 1,281
Total Bausch Health2,510 2,530 2,681
  • KPIs (commercial/operational):
KPIQ2 2025Q3 2025
Xifaxan TRx growth (%)+6% +9%
Xifaxan extended units (total)+7% +11%
Non-retail extended units (%)Double-digit; explicit +?+20%
New-to-brand scripts (%)+8% +14%
New patients (000s)67 71
Solta APAC growth (South Korea)+115% yoy +96% yoy
EMEA growth (International)+?+12% reported
Adjusted Operating Cash Flow ($M)$442 $508

Guidance Changes

MetricPeriodPrevious Guidance (as of Jul 30, 2025)Current Guidance (as of Oct 29, 2025)Change
BHC Revenues ($B)FY 2025$10.000–$10.250 $10.050–$10.250 Raised lower bound
BHC Adjusted EBITDA ($B)FY 2025$3.485–$3.635 $3.570–$3.660 Raised
BHC (ex-B+L) Revenues ($B)FY 2025$4.950–$5.100 $5.000–$5.100 Raised lower bound
BHC (ex-B+L) Adjusted EBITDA ($B)FY 2025$2.625–$2.725 $2.700–$2.750 Raised
BHC (ex-B+L) Adjusted CFO ($B)FY 2025$0.825–$0.875 $0.975–$1.025 Raised
Bausch + Lomb Revenues ($B)FY 2025$5.050–$5.150 $5.050–$5.150 Maintained
Bausch + Lomb Adjusted EBITDA ($B)FY 2025$0.860–$0.910 $0.870–$0.910 Slightly raised lower bound

Note: BHC and BHC (ex-B+L) adjusted EBITDA guidance excludes the $81M acquired IPR&D charge .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Technology in CommercialAI customer insight engine driving Xifaxan adherence and new patient starts Continued AI-enabled targeting; DTC “I Wish I Knew” campaign; 71k new patients; NBRx +14% Improving execution
Supply Chain/TariffsManaged Solta shipments to minimize China tariffs; APAC strength No material pharma tariffs under USMCA/EU; China aesthetics demand cautious Neutral to cautious
IRA/CMS PricingNegotiations ongoing; CMS to publish price Nov 2025 CMS price expected Nov 30, 2025; 30% of Xifaxan volume via Part D; 2026–2027 average EBITDA similar to 2025 outlook Better visibility; mitigated impact
Product Performance (Salix)Xifaxan +10% rev; TRx +6%; new scripts +7% Xifaxan +16% rev; volume +9%; pricing favorability from Medicaid/340B exit; Trulance volume +5% (pricing headwinds) Improving
Product Performance (Solta)Solta +25% (reported); SK +115% yoy; US/Canada double-digit Solta +25% (reported); SK +96% yoy; US/EMEA/Canada double-digit; Fraxel rollout momentum Sustained strength
Regional Trends (International)EMEA double-digit streak; Canada growth; LATAM soft EMEA +12% reported; Canada -8% and LATAM -17%; Mexico soft Mixed
Regulatory/LegalNorwich case favorable ruling; legacy opt-outs reduced Ongoing CMS pricing; tariff commentary; continued litigation item adjustments Ongoing
R&D ExecutionRED-C two global Phase 3; early 2026 readout RED-C Phase 3 on track; DURECT acquisition closed; LAR-2 Phase 3 planned early 2026 Advancing pipeline

Management Commentary

  • “The third quarter marks our tenth consecutive quarter of year-over-year growth in Revenue and Adjusted EBITDA for Bausch Health, excluding Bausch + Lomb” — Thomas J. Appio, CEO .
  • “We are raising full-year guidance for revenue, adjusted EBITDA, and adjusted operating cash flow for Bausch Health, excluding Bausch + Lomb” — JJ Charhon, CFO .
  • “Our laser focus on driving new patient starts resulted in 71,000 new patients being started on Xifaxan in Q3… Direct-to-consumer advertising, combined with enhanced capabilities in our AI customer insight engine, enabled us to directly target and activate patients” — CEO .
  • “While the impact on Xifaxan is significant… when you look at our business across all segments, including the CMS impact, it’s fair to assume the average EBITDA over the next two years will not be materially different than 2025” — CFO .

Q&A Highlights

  • Xifaxan revenue outpacing scripts due to one-time gross-to-net favorability from exiting Medicaid/340B; underlying pricing typically mid-single digits YoY; balanced channel growth .
  • SG&A: Q3 unusually low from non-recurring accrual changes; use Q1/Q2 as run-rate indicators .
  • Tariffs/manufacturing: Pharma flows largely excluded under USMCA/EU, no material tariffs; Xifaxan API origin Italy; continued evaluation of U.S. manufacturing optionality .
  • CMS/IRA: final price publication expected Nov 30, 2025; multiple mitigation levers; 30% of Xifaxan volume in Part D; average 2026–2027 EBITDA similar to 2025 outlook .
  • Generics erosion (post-2028): assume typical erosion curve with multiple entrants .
  • Capital allocation: deleveraging priority; asset sales (potential B+L equity stake) most probable supplemental funding; AR facility eliminated in October .

Estimates Context

  • Consensus vs actuals for Q3 2025 (S&P Global):
MetricConsensusActualSurprise
Revenue ($USD)$2,625,533,330*$2,681,000,000*+$55,466,670 (+2.1%)*
Primary EPS ($)1.058*1.1638*+0.1058 (+10.0%)*
EBITDA ($USD)$955,625,000*$1,023,000,000*+$67,375,000 (+7.1%)*

Values retrieved from S&P Global.
Note: Company-reported adjusted EBITDA attributable to BHC was $986M in Q3 (includes acquired IPR&D charge); S&P “actual” may reflect a different EBITDA definition (including noncontrolling interest) .

Where estimates may need to adjust: upward revisions for Salix (Xifaxan volume/pricing mix), Solta APAC strength, and consolidated cash flow conversion; cautious adjustments for International (Canada/LATAM) and Diversified neurology pricing dynamics .

Key Takeaways for Investors

  • Consolidated beat on revenue and EPS; BHC raised FY2025 revenue and adjusted EBITDA guidance — supportive for near-term sentiment and multiple expansion .
  • Xifaxan demand drivers (DTC + AI engine) and channel mix improvements appear durable; watch for normalization of net pricing as Medicaid/340B exit effects annualize .
  • Solta’s APAC-led strength continues, with early U.S. Fraxel traction; momentum likely to sustain segment mix benefits into 2026 .
  • CMS pricing outcome for Xifaxan is a key event (Nov 30); management’s guidance framework suggests mitigated medium-term EBITDA impact (average 2026–2027 ~2025) — reduces tail risk .
  • Balance sheet actions are ongoing (notes redemption; AR facility cancellation); further deleveraging could involve asset monetization (B+L equity stake), a potential catalyst for equity value unlock .
  • Expect SG&A to normalize above Q3’s unusually low level; model OpEx using Q1/Q2 run-rate .
  • Pipeline optionality: RED-C Phase 3 readouts early 2026 and LAR-2 Phase 3 initiation early 2026 create medium-term catalysts in hepatology .

Additional Notes

  • Other relevant Q4’25 press releases: Bausch + Lomb Investor Day reaffirmed 2025 guidance and set 3-year growth/margin targets; useful for segment outlook context .