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Bausch Health Companies Inc. (BHC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered seventh consecutive quarter of Y/Y growth: revenue $2.559B (+6% reported, +9% organic) and Adjusted EBITDA attributable to BHC $935M (+8%); GAAP EPS was $0.25 vs ($0.11) prior year, driven by Salix (Xifaxan +16%) and Solta (+34%) strength, while Diversified declined on tough comps .
  • 2025 outlook introduced: BHC revenue $9.90–$10.15B, Adjusted EBITDA $3.525–$3.675B; ex-B+L revenue $4.95–$5.10B, Adjusted EBITDA $2.625–$2.725B; ex-B+L adjusted operating cash flow $0.975–$1.025B .
  • Capital structure: secured commitment for up to $700M facility backed by a portion of BLCO shares; management signaled tapping capital markets in 1H25 to address 2027+ maturities; Q4 operating cash flow was $601M and FY24 $1.60B .
  • Key debate items: Xifaxan IP (Norwich/Teva sequencing, 30‑month stay), IRA price negotiation for 2027, and tariff scenarios (<$50M cash flow impact under a 25% tariff, per CFO) .

What Went Well and What Went Wrong

  • What Went Well

    • Xifaxan momentum: “Xifaxan delivered 16% revenue growth” with scripts and new scripts each up 5% and extended units +7%; management highlighted AI/ML tools to optimize sales targeting as a contributor .
    • Solta outperformance: +34% Y/Y in Q4 led by South Korea and China; pipeline catalysts include U.S. launch of next‑gen Fraxel in 2025 .
    • Strong cash generation and leverage progress: Q4 CFO $601M; FY adjusted operating cash flow exceeded guidance; net debt ex‑B+L reduced by ~$1B in 2024 via cash flow and liability management actions .

  • What Went Wrong

    • Diversified segment down 12% Y/Y due to prior‑year Ativan supply disruptions creating a tough compare; organic decrease was 11% .
    • International reported revenue declined 4% in Q4 (organic +1%), pressured by FX (notably vs MXN) and Mexico tender timing; Canada remained strong .
    • Ongoing legal and policy overhangs: Xifaxan IP litigation contours (Norwich/Teva) and inclusion of Xifaxan in 2027 IRA negotiation list introduce medium‑term uncertainty despite management’s confidence and preparedness .

Financial Results

  • Consolidated performance vs prior quarters
MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$2.40 $2.51 $2.559
GAAP EPSN/A($0.23) $0.25
Adjusted EBITDA attributable to BHC ($USD Millions)$798 $909 $935
Adjusted Gross Margin % (Consolidated)70.9% N/A72.4%
Cash from Operations ($USD Millions)$380 $405 $601
  • Segment revenue (Q4 2024 vs Q4 2023)
SegmentQ4 2024 ($MM)Q4 2023 ($MM)Reported GrowthOrganic Growth
Total Bausch Health2,559 2,408 6% 9%
BHC (ex‑B+L)1,279 1,235 4% 7%
Salix634 583 9% 12%
International279 290 (4%) 1%
Solta Medical138 103 34% 35%
Diversified228 259 (12%) (11%)
Bausch + Lomb1,280 1,173 9% 10%
  • KPIs (Q4 2024)
    • Xifaxan revenue growth: +16% Y/Y; scripts and new scripts +5% each; extended units +7% .
    • Canada International growth: +9% reported, +16% organic; LatAm −14% organic on tender timing .
    • Solta expansion: APAC (South Korea, China) primary drivers; Q4 +34–35% growth .
    • B+L: Q4 revenue +9% reported, +10% organic .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
BHC RevenueFY2025N/A (initial)$9.900–$10.150B New
BHC Adjusted EBITDAFY2025N/A (initial)$3.525–$3.675B New
BHC (ex‑B+L) RevenueFY2025N/A (initial)$4.950–$5.100B New
BHC (ex‑B+L) Adjusted EBITDAFY2025N/A (initial)$2.625–$2.725B New
BHC (ex‑B+L) Adjusted Operating Cash FlowFY2025N/A (initial)$0.975–$1.025B New
B+L RevenueFY2025N/A (initial)$4.950–$5.050B New
B+L Adjusted EBITDAFY2025N/A (initial)$0.900–$0.950B New

Note: Company provides non‑GAAP guidance for profitability metrics and does not reconcile prospectively .

Earnings Call Themes & Trends

TopicQ2 2024 (two quarters ago)Q3 2024 (prior quarter)Q4 2024 (current)Trend
Solta/APAC growth and product pipelineThermage FLX China launch progressing; APAC growth (Korea doubled; China/Taiwan high‑teens) Solta +35% Y/Y led by Korea and China Solta +34% Q4; strong APAC; next‑gen Fraxel U.S. launch in 2025 Strengthening
International businessDouble‑digit Canada growth; LatAm growth Canada double‑digit; LatAm solid Canada +9% reported/+16% organic; LatAm −14% organic on tender timing; FX headwind vs MXN Mixed (Canada strong; LatAm timing/FX)
Xifaxan IP/litigationFDA cannot approve Norwich until Oct‑2029; expected generic entry Jan‑1‑2028; new IBS‑D patents (No incremental specifics in 8‑K beyond normal risk language) 30‑month stay believed to apply; BHC/Teva intervened; litigation ongoing Ongoing legal overhang
Capital structure and maturities$555M of 2025/26 bonds retired YTD by Q2; focus on maturity profile, liquidity ~$1.5B Maturities concentrated 2027–2028; total debt obligations detailed Up to $700M secured facility; plan to access capital markets; net debt ex‑B+L −~$1B in 2024 Improving flexibility
R&D execution (RED‑C, amiselimod)RED‑C Phase 3s in treatment; topline early 2026; amiselimod Phase 3 UC protocol submitted to FDA RED‑C on track early‑2026; amiselimod global regulatory engagement RED‑C on track early‑2026; discontinuing Crohn’s study; assessing UC; pipeline cadence continues On track; focused scope
Policy/IRA and tariffs——Xifaxan on 2027 IRA list; too early for detail; 25% tariff case modeled as < $50M cash flow impact New focus area

Management Commentary

  • CEO framing: “We closed out 2024 with a strong fourth quarter… seventh consecutive quarter of revenue and adjusted EBITDA growth... momentum heading into 2025” .
  • AI enablement: “We have developed tools and algorithms that apply AI and machine learning to our sales process for Xifaxan… one of the drivers of the performance for the product in 2024” .
  • Portfolio breadth: “Our durable and underappreciated International business continued to deliver… EMEA… eighth consecutive quarter of organic growth” .
  • Capital strategy: “We still believe that there are 3 primary levers… increase Bausch Health portfolio value… maximize BLCO value… optimize capital structure… plan on tapping the capital markets in the first half of 2025” .

Q&A Highlights

  • Xifaxan litigation status: Norwich has tentative approval; FDA denied final approval; BHC and Teva intervened; management believes Teva remains first‑to‑file and 30‑month stay applies; no comment on at‑risk launch .
  • 2025 growth drivers: Largest contributions expected from Salix (Xifaxan) and Solta; 2H24 Xifaxan dynamics assumed to continue in 2025 .
  • IRA/tariffs sizing: Xifaxan on 2027 IRA list, too early to quantify; under a well‑publicized 25% tariff case, CFO estimates < $50M cash flow impact in a full year given pharma COGS mix .
  • Balance sheet and BLCO stake: ~$700M facility commitment secured; management exploring capital markets in 1H25, potentially pledging a portion of BLCO shares; flexibility to address 2025–26 maturities without additional funding; pursuing separation only if accretive to BHC shareholders .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS/Revenue/EBITDA could not be retrieved in this session due to access limits; therefore, we cannot assess beat/miss vs consensus and do not present estimate comparisons here. Values from S&P Global were unavailable at the time of analysis.

Key Takeaways for Investors

  • Execution quality remains high: diversified engines (Salix, Solta, B+L) drove Q4 revenue +6% and Adjusted EBITDA +8% with cash generation inflecting; watch if mix‑driven gross margin gains (72.4% in Q4) are sustainable into 2025 .
  • Salix/Xifaxan still key to 2025: management points to continued contribution; monitor litigation docket (Norwich/Teva) and IRA process; legal outcomes and Medicare pricing trajectory are medium‑term stock catalysts .
  • Solta is an under‑appreciated growth asset: APAC strength (Korea/China) and new device launches (Fraxel) support above‑market growth and high‑margin mix .
  • International steady ex‑LatAm timing: Canada strong; LatAm tenders can swing quarterlies; FX (MXN) a swing factor—track organic trends for true run‑rate .
  • Balance sheet de‑risking path clearer: $700M facility plus planned market access in 1H25 reduce refinancing risk for 2025–26 and set up 2027+ discussions; BLCO stake remains a flexible lever .
  • 2025 guidance sets achievable bar: mid‑single‑digit revenue/EBITDA growth; watch cadence of Adjusted OCF normalization ex‑one‑timers (~$1.0B ex‑B+L) .
  • Near‑term trading setup: headline catalysts include capital markets transactions, any IP/legal updates, and Solta product newsflow; absent estimates context, focus on sequential momentum and cash/credit milestones .

Additional process notes:

  • We read the full Q4 2024 8‑K/press release and full Q4 2024 earnings call transcript. We also reviewed Q3 2024 8‑K for trend analysis. No other relevant Q4 2024 company press releases were found in the document set beyond the earnings materials .