Executive Summary

Q3 delivered modest top-line growth and a clean beat vs Street on revenue and adjusted EPS, but management cut full‑year revenue and margin guidance on U.S. Nexplanon policy headwinds and ongoing respiratory weakness; Adjusted EPS was $1.01 on $1.602B revenue (YoY +1% as-reported) . Consensus for Q3 was ~$1.576B revenue and $0.93 EPS; both were exceeded (see Estimates Context) *.
Guidance cut: FY25 revenue lowered to $6.200–$6.250B (from $6.275–$6.375B) and Adjusted EBITDA margin to ~31% (from 31–32%); FX now a ~$35–$45M tailwind vs prior ~$50M headwind .
Management addressed the U.S. wholesaler sales practices for Nexplanon: revenue recognized under ASC 606, net pull‑forward impact in Q3 was small (~$2M), but Q4 will feel the lack of offset; issue rolls off in 2025 with no carry into 2026 .
Portfolio actions and deleveraging remain central: agreement to divest JADA for up to $465M (proceeds to debt reduction), dividend maintained at $0.02/quarter, net leverage ~4.2x at quarter-end with further deleveraging expected .

What Went Well and What Went Wrong

What Went Well
- Beat on revenue and adjusted EPS: $1.602B revenue and $1.01 Adjusted EPS versus S&P Global consensus (~$1.576B, $0.93) *.
- Biosimilars growth: +19% YoY to $196M on Hadlima strength and Ontruzant tender; denosumab biosimilars (Bildyos/Bilprevda) approved/launched and Tofidence adds breadth .
- Cost execution: Adjusted EBITDA up 13% YoY to $518M; margin improved to 32.3% (vs 29.0% LY) on ~14% reduction in non‑GAAP operating expenses .
- Management tone on cash and deleveraging: “more than $900 million in free cash flow before one-time costs this year” and proactive debt reduction to create capacity for women’s health growth opportunities (Interim CEO) .
What Went Wrong
- Guidance cut: FY25 revenue and margin lowered on policy headwinds for Nexplanon and respiratory softness; ex‑FX growth now down (3.7%)–(3.1%) (prior: (1.2%)–0.3%) .
- Women’s Health pressure: category down 3% YoY; Nexplanon down 9% ex‑FX on U.S. funding constraints (Title X/Planned Parenthood), partially offset by ex‑U.S. demand/tenders .
- Respiratory underperformance: Singulair ~‑40% ex‑FX and Dulera ~‑30% ex‑FX on demand/pricing pressures and supply constraints; weakness expected to persist into 2026 .
- Non‑GAAP gross margin down 140 bps YoY to 60.3% on FX in inventory turns, pricing, and mix; reported gross margin fell to 53.5% on manufacturing network one‑time costs .

Financial Results

Headline metrics vs prior periods

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($B)	$1.582	$1.594	$1.602
GAAP Diluted EPS ($)	$1.38	$0.56	$0.61
Adjusted Diluted EPS ($)	$0.87	$1.00	$1.01
Adjusted EBITDA ($B)	$0.459	$0.522	$0.518
Adjusted EBITDA Margin (%)	29.0%	32.7%	32.3%
Adjusted Gross Margin (%)	61.7%	61.7%	60.3%

Actual vs Street consensus (S&P Global)

Metric	Q3 2025 Consensus*	Q3 2025 Actual	Outcome
Revenue ($B)	$1.5755*	$1.602	Bold beat
Adjusted Diluted EPS ($)	$0.9313*	$1.01	Bold beat

Values with “*” retrieved from S&P Global.

Segment revenue breakdown

Segment ($M)	Q3 2024	Q3 2025	YoY
Women’s Health	$440	$429	(3%)
Biosimilars	$165	$196	19%
Established Brands	$951	$956	1%
Other (mfg. sales)	$26	$21	(15%)
Total	$1,582	$1,602	1%

Selected KPIs (Top products)

Product ($M)	Q3 2024	Q3 2025
Nexplanon/Implanon NXT	$243	$223
VTAMA	—	$34
Hadlima	$40	$63
Renflexis	$72	$70
Ontruzant	$20	$31
Emgality/Rayvow	$29	$51
Singulair	$85	$53
Dulera	$48	$34

Notes: Women’s Health softness driven by U.S. Nexplanon funding headwinds; VTAMA and Emgality contributions helped offset Established Brands LOE and respiratory declines .

Guidance Changes

Metric	Period	Previous (Aug 5, 2025)	Current (Nov 10, 2025)	Change
Revenue	FY 2025	$6.275B–$6.375B	$6.200B–$6.250B	Lowered
Nominal revenue growth	FY 2025	(2.0%)–(0.4%)	(3.2%)–(2.4%)	Lowered
FX translation	FY 2025	~($50M) headwind	~$35M–$45M tailwind	Improved
Ex‑FX revenue growth	FY 2025	(1.2%)–0.3%	(3.7%)–(3.1%)	Lowered
Adjusted Gross Margin	FY 2025	60–61%	Unchanged	Maintained
SG&A (% of sales)	FY 2025	Mid‑20% range	Unchanged	Maintained
R&D (% of sales)	FY 2025	Upper single-digit	Unchanged	Maintained
Adjusted EBITDA Margin	FY 2025	31–32%	~31%	Lowered
Interest expense	FY 2025	~$510M	Unchanged	Maintained
Depreciation	FY 2025	~$135M	Unchanged	Maintained
Effective non‑GAAP tax rate	FY 2025	22.5%–24.5%	Unchanged	Maintained
FD shares	FY 2025	~263M	Unchanged	Maintained
Dividend	Q4 2025	—	$0.02 declared; pay 12/11/25 (rec 11/20/25)	Declared

Implied Q4 revenue from slides: $1.49–$1.54B .

Earnings Call Themes & Trends

Topic	Q1 2025 (then-CEO Ali)	Q2 2025	Q3 2025	Trend
Nexplanon U.S. policy/funding	Strong start; aiming >$1B 2025; manageable tariff exposure	U.S. funding constraints (Title X/PP) pressured demand; ex‑U.S. strong; 5‑yr indication filing	U.S. policy headwinds intensified; global Q4 Nexplanon down mid‑teens ex‑FX expected; 5‑yr trade‑offs discussed; 2026 carry should be limited	Deteriorated in U.S.; mitigated by ex‑U.S.
Respiratory portfolio	Japan/China price and mild season weighed	Called out risk; softened through H1	Persistent decline (Singulair/Dulera) to continue into 2026	Worsened
VTAMA ramp/access	Targeting $150M 2025; positive early AD dynamics	Strong Q2 sequential growth; access push to ~80% lives by early 2026	Full‑year now “closer to $120–$130M”; increased SG&A support in Q4	Below prior target; investing to accelerate
Biosimilars (Hadlima, Tofidence, denosumab)	Portfolio expansion plans in 2H25 and 2026	Hadlima leading TRx among peers; Tofidence added; denosumab late 2025	Growth continued; denosumab FDA approval/launch late Sept; tender aided Ontruzant	Improving
Deleveraging/capital allocation	Reset dividend to prioritize debt; sub‑4x by YE25 targeted	$345M principal repaid; sub‑4x path reiterated	Net leverage ~4.2x; JADA sale proceeds to debt reduction; 2026 interest to $450–$475M run-rate expected	On track
Sales practices investigation	—	—	Limited revenue impact; no restatement; practices ceased; remediation under way	Resolved/contained
Tariffs/macro FX	Limited 2025 exposure; FX headwind in Q1	FX tailwind developing; sensitivity discussed	FY25 FX now tailwind $35–$45M	Improved FX

Management Commentary

Interim CEO Joe Morrissey: “We expect [to] generate more than $900 million in free cash flow before one-time costs this year… committed to… reducing our debt burden… positioning us to pursue future growth opportunities in women’s health” .
CFO Matt Walsh on Nexplanon sales practices: “Revenue recognition… appropriately recognized… under ASC 606… pull‑forward dynamic rolls off in the fourth quarter and will be contained within 2025 with no carryover impact to 2026” .
CFO on guidance cut drivers: persistent U.S. policy headwinds in Nexplanon and respiratory erosion led to lowering revenue range to $6.2–$6.25B and Adjusted EBITDA margin to ~31% .
CFO on VTAMA: launch “flatter” than expected; 2025 revenue now likely $120–$130M vs prior $150M, with added investment to drive uptake in AD .

Q&A Highlights

Portfolio optimization: JADA divestiture rationale (better owner economics; proceeds to deleveraging); no specific additional divestitures announced but opportunistic lens applied across assets .
Respiratory outlook: category weakness driven by pediatric share loss and mandatory price cuts; softness expected into 2026; rest of Established Brands broadly stable .
Investigation scope and personnel: issue limited to Nexplanon at two U.S. wholesalers; no restatement; remediation in place; leadership changes addressed; some rebate increases reflect competition .
CEO search: active process; strategic continuity expected; interim leadership viewed as stable bridge .
Biosimilars expansion: excited about denosumab launch; broader U.S. biosimilar bag enhances access for 2026 including Tofidence .
BD and pipeline: late‑stage/marketed assets prioritized given leverage; pipeline trimmed to focus spend; dermatology field force can support additional assets .

Estimates Context

Q3 2025 vs S&P Global consensus: Revenue $1.602B vs $1.5755B* and Adjusted EPS $1.01 vs $0.9313* — both beats; EBITDA comparisons vary by definition (company Adjusted EBITDA $518M vs SPGI “EBITDA” actual datapoint differs given methodology) *.
Q4 2025 outlook vs Street: Company slides imply revenue $1.49–$1.54B vs consensus ~$1.522B*; Adjusted EBITDA margin set to ~31% FY, with planned SG&A ramp in Q4 (VTAMA/Tofidence) *.
Potential estimate revisions: Expect lower FY revenue/margin models reflecting guidance cut and weaker respiratory; some may reduce VTAMA trajectory to new $120–$130M range; deleveraging and FX tailwind partially offset .
Values with “*” retrieved from S&P Global.

Key Takeaways for Investors

Print beat overshadowed by a guidance cut: Street may refocus models on lower FY revenue (~$6.20–$6.25B) and ~31% margin with U.S. Nexplanon and respiratory pressure the main drivers .
The Nexplanon wholesaler issue looks contained, with accounting intact and impact rolling off in Q4; this reduces headline risk into 2026 .
Biosimilars are a bright spot (Hadlima momentum, denosumab launch), providing a counterweight to respiratory declines; this mix shift will matter for margin and growth durability .
VTAMA under-delivers near term vs $150M target but remains strategic; management is increasing Q4 investment to re-accelerate, with broader access targeted by early 2026 .
Balance sheet is improving: dividend retained at token level ($0.02), JADA proceeds earmarked for debt paydown, and net leverage poised to trend below 4x in 2026; interest expense should step down next year .
Trading setup: Near-term sentiment sensitive to Q4 Nexplanon/respiratory prints and VTAMA traction vs spend; catalysts include CEO appointment, Nexplanon 5‑year label dynamics, and biosimilar launches/tenders .

Additional Details and Disclosures

Reported GAAP to non‑GAAP adjustments included manufacturing network costs, amortization, and acquisition-related costs (Dermavant inventory fair value), among others; Adjusted gross margin was 60.3% (vs 61.7% LY) and Adjusted EBITDA margin 32.3% .
Cash and cash equivalents $672M; total debt $8.83B as of 9/30/25 .
Dividend: $0.02 per share payable Dec 11, 2025 (record Nov 20, 2025) .

All cited figures are from Organon’s Q3 2025 Form 8‑K, press releases, and earnings call materials unless otherwise noted. Values marked with “*” are consensus estimates retrieved from S&P Global.

Organon & Co. (OGN)·Q3 2025 Earnings Summary