Executive Summary

Solid Q1: revenue $3.89B (+5% LC; -$101M FX), non-GAAP EPS $0.52 (+$0.04 YoY), non-GAAP gross margin 52.8% (+140 bps YoY) on stronger AUSTEDO mix; adjusted EBITDA $1.04B (+4% YoY) .
Mixed vs consensus: EPS beat; revenue and EBITDA slight misses. EPS $0.52 vs $0.463*, revenue $3.89B vs $3.99B*, EBITDA $953M vs $1.02B*; note S&P EBITDA definition differs from company “Adjusted EBITDA” .
2025 guidance updated: narrow revenue to $16.8–$17.2B (top-end -$200M on Japan BV sale), raise low-end AUSTEDO to $1.95B, raise low-end operating income/adjusted EBITDA by $200M, and EPS to $2.45–$2.65 (+$0.10 at low-end) .
Strategic drivers: ninth straight growth quarter; innovative brands $589M (+~39% YoY) led by AUSTEDO (+39% LC), AJOVY (+26% LC), UZEDY $39M; tariffs impact immaterial and absorbed in outlook; on path to 30% operating margin by 2027 with ~$700M net savings programs .

What Went Well and What Went Wrong

What Went Well
- Innovative brands acceleration: “They reached $589M sales, +45% YoY,” led by AUSTEDO (+39% global), AJOVY (+26% global), UZEDY $39M; AUSTEDO US +40% to $396M .
- Margin mix improvement: non-GAAP gross margin +140 bps to 52.8% “mainly due to favorable mix driven by higher AUSTEDO revenues” .
- Confidence on cost/margin roadmap: “transforming Teva… ~$700M net savings by 2027” with operating margin expansion of ~400 bps through 2027; EBITDA to grow in 2026 despite Revlimid headwind .
What Went Wrong
- FX headwinds: revenue -$101M and operating income -$50M from FX (after hedging), pressuring reported growth .
- Europe and International softness: Europe revenue -6% (-2% LC), gross margin -290 bps on hedging mix; International revenue -2% (+5% LC) with Japan price pressure; segment profits down 22% and 17% YoY, respectively .
- Slight misses vs Street (S&P): revenue and EBITDA below consensus; EBITDA definitional gap vs company “Adjusted EBITDA” may create confusion (S&P actual $953M vs company $1.041B) .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($B)	$3.82	$4.23	$3.89
Non-GAAP EPS ($)	$0.48	$0.71	$0.52
Non-GAAP Gross Margin (%)	51.4%	54.8%	52.8%
Adjusted EBITDA ($B)	$1.01	$1.28	$1.04

Consensus vs Actual (S&P Global; EPS normalized “Primary EPS”)

Metric	Consensus	Actual	Surprise
EPS ($)	0.463*	0.520	+0.057*
Revenue ($B)	3.988*	3.891	-0.097*
EBITDA ($B)	1.018*	0.953	-0.065*

Values retrieved from S&P Global.
Note: Company “Adjusted EBITDA” was $1.041B vs S&P EBITDA actual $0.953B (different definitions) .

Segment revenue by region

Segment Revenue ($M)	Q1 2024	Q1 2025
United States	1,725	1,910
Europe	1,272	1,194
International Markets	597	582

United States – major products

US Major Products ($M)	Q1 2024	Q1 2025
Generics (incl. biosimilars)	808	849
AUSTEDO	282	396
AJOVY	45	53
UZEDY	15	39
COPAXONE	30	54
Anda (3P distribution)	381	373

KPIs (Q1 2025)

AUSTEDO worldwide revenue: $411M (+39% LC YoY) .
AJOVY worldwide revenue: $139M (+26% LC YoY) .
UZEDY revenue: $39M; >60% share of risperidone LAI market; TRx +177% (off small base) .
AJOVY US exit TRx share: 30.2% (vs 27.4% in Q1’24) .
Generics growth (LC): US +5%, Europe +1%, International +2% .

Guidance Changes

Metric	Period	Previous Guidance (Jan 29, 2025)	Current Guidance (May 7, 2025)	Change
Revenue ($B)	FY 2025	16.8 – 17.4	16.8 – 17.2	Narrowed; top-end -$0.2B (Japan BV divestiture)
AUSTEDO ($M)	FY 2025	1,900 – 2,050	1,950 – 2,050	Raised low-end +$50M
AJOVY ($M)	FY 2025	~600	~600	Maintained
UZEDY ($M)	FY 2025	~160	~160	Maintained
COPAXONE ($M)	FY 2025	~370	~370	Maintained
Non-GAAP Operating Income ($B)	FY 2025	4.1 – 4.6	4.3 – 4.6	Raised low-end +$0.2B
Adjusted EBITDA ($B)	FY 2025	4.5 – 5.0	4.7 – 5.0	Raised low-end +$0.2B
Non-GAAP EPS ($)	FY 2025	2.35 – 2.65	2.45 – 2.65	Raised low-end +$0.10
Free Cash Flow ($B)	FY 2025	1.6 – 1.9	1.6 – 1.9	Unchanged

Additional color: Guidance excludes post-Q1 contribution from Japan BV (closed 3/31/25) and any Sanofi TL1A milestones; tariff impact deemed immaterial and absorbed .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Margin roadmap to 30% by 2027	Detailed mix/COGS/OpEx levers; 2025 GM 53–54% target; 27–28% OpEx; deleveraging toward 2x by 2027	~$700M net savings by 2027; GM to 57–58% by 2027; OP +125–200 bps in 2026 and +125–250 bps in 2027; EBITDA growth through 2026–27	Positive execution visibility
IRA/Medicare impact	AUSTEDO on list; acknowledge 2027 pricing and Part D redesign	AUSTEDO Medicare price-setting effective 1/1/27; UZEDY Part D redesign already flows through	Managing headwinds; phased
Tariffs/supply chain	Not a major headwind; US footprint	“Tariffs immaterial; absorbed in guidance; substantial US manufacturing; limited China/India sourcing”	Mitigated
Innovative brands	AUSTEDO exceeded $1.6B in 2024; AJOVY >$500M; UZEDY $117M	AUSTEDO $411M (+39% LC), AJOVY $139M (+26% LC), UZEDY $39M; AUSTEDO 2025 low-end raised	Strong momentum
Biosimilars	Portfolio build; launches (SIMLANDI, octreotide LAR) pending SELARSDI	US launches of Humira and Soliris biosimilars; SELARSDI approved interchangeable Apr 30, 2025	Accelerating
R&D execution	TL1A positive Ph2b; DARI Ph3 enrollment ramp; olanzapine LAI safety/filing plans	TL1A Ph3 to initiate H2’25; DARI global Ph3 on track; olanzapine LAI NDA H2’25; 2027 innovative growth targets reiterated	On track
Revlimid generic cadence	Q2–Q3 seasonality explained; 2026 drop managed via biosimilars/complex portfolio	2026 EBITDA to grow YoY despite Revlimid impact, supported by savings and innovative growth	Improving confidence
Capital allocation/deleveraging	Net debt/EBITDA ≈3x; target 2x by 2027; ratings outlook improved	Net debt ~$15B; gross debt $16.7B; on 2x by 2027 path	Progressing

Management Commentary

“This is our ninth consecutive quarter of growth… driven by executing on our pillars: deliver on our growth engines, step up innovation, sustain the generics powerhouse and focus the business.” — CEO Richard Francis .
“Innovative brands reached $589M sales, +45% YoY… AUSTEDO grew 39% globally; AJOVY +26%; UZEDY doubled to $39M.” — CEO .
“Non-GAAP gross margin grew 140 bps YoY to 52.8%… mainly due to favorable mix… two-thirds flowed through to operating margins, +100 bps YoY.” — CFO Eli Kalif .
“Tariffs… already absorbed in our revised guidance; substantial US manufacturing footprint; limited China/India exposure.” — CFO .
“Transformation programs will deliver approximately ~$700M net savings… enabling a clear path to 30% operating margin by 2027.” — CFO .
“EBITDA will go up in absolute dollars in 2026… significant organizational effectiveness benefits hit in 2026 alongside innovative growth.” — CEO .

Q&A Highlights

2026 EBITDA trajectory: Management explicitly guided to higher absolute EBITDA and operating profit in 2026 despite Revlimid generic headwind, citing cost programs and innovative growth .
Tariffs pass-through vs mitigation: Company has mitigated current tariffs via footprint/supply chain; pass-through less emphasized; contingencies in place .
Savings phasing and reinvestment: ~$700M net savings between 2025–27 with OpEx held at 27–28% of sales as savings fund innovation/commercial while gross margin expands ~400 bps through 2027 .
Biosimilar dynamics: “US slow and steady… depends on product/channel”; Europe faster; portfolio breadth seen as driver through 2027 .
LAI antipsychotic franchise: UZEDY gaining share; olanzapine LAI expected to build on franchise; efficacy/safety familiarity seen as an advantage vs new MOAs .

Estimates Context

Q1 2025 vs S&P Global consensus: EPS $0.52 vs $0.463 (beat); revenue $3.891B vs $3.989B (miss); EBITDA $953M vs $1.018B (miss). EPS estimate count: 4; revenue estimate count: 5. Values retrieved from S&P Global.*
Street adjustments: Given company-reported Adjusted EBITDA of $1.041B and mix-driven gross margin outperformance, models may lift AUSTEDO full-year and margin trajectory while trimming ex-US/FX exposures and Europe hedging assumptions .

Key Takeaways for Investors

Mix upgrade remains the core driver: innovative brands continue to outgrow the base, lifting gross margins and supporting EPS beats despite FX and regional headwinds .
FY25 setup improved: higher low-end EPS/EBITDA/operating income and AUSTEDO guidance signal confidence; revenue narrowed by Japan BV sale is mechanical, not operational .
2026 inflection credible: management affirmed EBITDA growth in 2026 vs 2025 as savings accelerate; watch execution on footprint consolidation and cost of goods .
Policy overhangs manageable: tariffs absorbed; IRA timelines known (UZEDY Part D redesign now; AUSTEDO price-setting 2027) .
Biosimilars portfolio broadening is an underappreciated lever alongside complex generics, aiding Revlimid step-down management in 2026 .
Near-term catalysts: olanzapine LAI NDA filing (H2’25), TL1A Phase 3 initiation (H2’25), DARI Phase 3 enrollment progress, and continued AUSTEDO XR adoption .
Trading lens: Expect positive sentiment on mix/margin and raised EPS floor, tempered by Europe/FX and Street EBITDA definition differences; focus on innovative run-rate sustainability and cost-savings execution .

Appendix: Additional Items from the Quarter

Segment details: US revenue +11% to $1.91B (AUSTEDO +40% to $396M; UZEDY +156% to $39M); Europe -6% to $1.19B (hedging/mix); International -2% to $582M (+5% LC) .
Cash/debt: Free cash flow $107M; gross debt $16.65B (down from $17.78B YE’24) on $1.37B notes repaid; net debt ~$15B; leverage just over 3x .
Regulatory/biosimilars: SELARSDI (ustekinumab) approved as interchangeable effective Apr 30, 2025; SIMLANDI (adalimumab) and eculizumab biosimilar noted among recent launches .

References:

Q1 2025 earnings call transcript (May 7, 2025) –
Q1 2025 8-K/press release (May 7, 2025) –
Q4 2024 8-K/press release (Jan 29, 2025) –
Q3 2024 8-K/press release (Nov 6, 2024) –

TEVA PHARMACEUTICAL INDUSTRIES LTD (TEVA)·Q1 2025 Earnings Summary