Viatris (VTRS) Q3 2024 earnings summary

Executive summary

• Achieved sixth consecutive quarter of divestiture-adjusted operational revenue growth, with Q3 2024 total revenues of $3.8B and $133M in new product revenues; nine-month revenues were $11.21B.

• U.S. GAAP net earnings for Q3 2024 were $95M ($0.08 per diluted share), with adjusted EBITDA of $1.3B and adjusted EPS of $0.75 per share on a divestiture-adjusted basis.

• Approximately $1.9B of debt was repaid year-to-date, with leverage target of ~3.0x in sight and notional debt outstanding below $15B.

• Entered exclusive licensing agreement for sotagliflozin, expanding the innovative cardiovascular portfolio.

• Completed major divestitures (OTC, API, women's healthcare) and acquired Idorsia's Phase 3 assets, expanding the late-stage pipeline.

Financial highlights

• Q3 2024 total revenues were $3.8B, down 5% year-over-year on a GAAP basis, but up 3% operationally on a divestiture-adjusted basis.

• Adjusted EBITDA for Q3 was $1.28B, down 6% year-over-year, but up 4% on a divestiture-adjusted operational basis; adjusted EPS was $0.75.

• Free cash flow for Q3 was $866M (excluding transaction costs), up 10% year-over-year; nine-month operating cash flow was $1.82B.

• New product revenues were $133M for Q3 and $497M year-to-date, with $500M–$600M expected for 2024.

• Share repurchases totaled $250M for the nine months; $431.5M in dividends paid.

Outlook and guidance

• 2024 full-year total revenues expected between $14.6B and $15.1B (midpoint $14.85B), representing a ~4% decrease year-over-year.

• Adjusted EBITDA guidance for 2024 is $4.575B–$4.87B; adjusted EPS $2.56–$2.71; free cash flow projected at $2.17B–$2.57B.

• Reaffirmed base business operational revenue growth of ~2% for 2024; Q4 revenue expected to be lower due to seasonality, product phasing, and generic entrants.

• On track to achieve gross leverage target of ~3.0x and notional debt outstanding below $14B by year-end.

• Capital expenditures for 2024 projected at $350M–$450M.