Teva Pharmaceutical Industries (TEVA) Q4 2025 earnings summary

Executive summary

• Achieved third consecutive year of growth, with 2025 revenues of $17.3 billion, up 4% year-over-year, driven by innovative brands AUSTEDO, AJOVY, and UZEDY, and a stable generics business.

• Transformation programs delivered $70 million in annualized savings in 2025, targeting $700 million by 2027, and contributed to improved margins.

• Balance sheet strengthened with net debt reduced to $13.3 billion and net debt/EBITDA at 2.5x, progressing toward investment-grade ratings.

• Key innovative brands collectively surpassed $3 billion in annual revenue, with Q4 2025 marking the first $1 billion quarter for these brands.

• Transformation and operational discipline supported margin expansion and cost savings.

Financial highlights

• FY 2025 revenues: $17.3 billion (+4% YoY); Q4 2025 revenues: $4.7 billion (+11% YoY).

• Non-GAAP EPS: $2.93 (+18% YoY); free cash flow: $2.4 billion (+16% YoY); adjusted EBITDA: $5.3 billion (+11% YoY).

• FY 2025 non-GAAP gross margin: 55.9%; non-GAAP operating margin: 28.4%.

• Net debt at year-end 2025: $13.3 billion; cash and cash equivalents: $3.6 billion.

• $500 million milestone payment from Sanofi for duvakitug Phase 3 initiation recorded as revenue in Q4 2025.

Outlook and guidance

• 2026 revenue guidance: $16.4–$16.8 billion, reflecting normalization after one-time duvakitug milestone in 2025.

• 2026 adjusted EBITDA: $5.0–$5.3 billion; non-GAAP EPS: $2.57–$2.77; free cash flow: $2.0–$2.4 billion.

• Non-GAAP gross margin expected at 54.5%–55.5%; OpEx at 27%–28% of revenue.

• Long-term targets reaffirmed: $700 million in savings by 2027, >$3.5 billion free cash flow by 2030, and continued deleveraging.

• Revenue and margins expected to ramp up over 2026, with Q1 light due to loss of generic Revlimid revenue and AUSTEDO inventory effects.