Bausch Health raises 2025 revenue guidance to $5B-$5.1B while strengthening Solta and Salix growth

Earnings Call Insights: Bausch Health Companies Inc. (BHC) Q3 2025

MANAGEMENT VIEW

* CEO Thomas Appio stated that Bausch Health, excluding Bausch + Lomb, delivered "our 10th consecutive quarter of revenue and adjusted EBITDA growth, consistent with our strong performance this year." Appio highlighted year-over-year revenue growth of 7% on a reported basis and 5% on an organic basis, and noted, "we are raising full year guidance for revenue, adjusted EBITDA and adjusted cash flow from operations for Bausch Health, excluding Bausch + Lomb."
* Appio explained, "Solta saw a 25% growth on a reported basis and 24% on an organic basis while Salix delivered 12% growth on a reported basis and 11% growth on an organic basis." He also mentioned "triple-digit growth for Cabtreo and Ryaltris as well as double-digit growth for Xifaxan and Thermage."
* CFO Jean-Jacques Charhon reported, "Revenue was $2.681 billion, up 7% on a reported basis and 5% on an organic basis compared to the same period a year ago. Adjusted EBITDA was $986 million, an increase of $77 million or 8% year-over-year."
* Charhon added, "Adjusted EBITDA was $773 million, up 7% versus the prior year and included a charge of in-process R&D of $81 million related to our acquisition of DURECT. Excluding that, our adjusted EBITDA increased operationally 18% year-over-year, which was outstanding."

OUTLOOK

* Charhon stated, "The new guidance for the full year is now as follows: Revenue is now expected to be between $5 billion and $5.1 billion. The midpoint of that range has been increased by $25 million and translate to a 4% increase year-over-year. Our adjusted EBITDA outlook is now expected to be between $2.7 billion and $2.75 billion, excluding the impact of a core IP R&D. The midpoint of that range is now increased by $50 million and represents a 7% increase versus 2024. Adjusted operating cash flow is now expected to be between $975 million and $1.025 billion bringing up the midpoint of that range by $150 million."
* The company indicated no changes to its capital allocation priorities, which remain focused on deleveraging, reinvestment, and value maximization.

FINANCIAL RESULTS

* Consolidated revenue reached $2.681 billion, while Bausch Health, excluding Bausch + Lomb, reported $1.4 billion in revenue.
* Adjusted operating cash flow was $508 million on a consolidated basis and $347 million for Bausch Health, excluding Bausch + Lomb.
* Salix revenues were $716 million, with Xifaxan revenue growing 16% and volume up 9% in Q3. Trulance volume grew 5%, offset by unfavorable net pricing. Relistor faced payer coverage challenges.
* Solta Medical revenues were $140 million, driven by 25% reported growth, with South Korea achieving 96% year-over-year growth. China grew 3%, and the U.S., EMEA, and Canada saw double-digit Solta growth.
* Dermatology segment performance was supported by Cabtreo and Jublia, with respective revenue growth of 186% and 11%.
* The company reduced debt by approximately $600 million using cash on hand.

Q&A

* Leszek Sulewski, Truist Securities, Inc.: Asked about the disconnect between revenue and script growth for Xifaxan and the drivers of script growth. Charhon responded, "Xifaxan benefit from a onetime benefit associated with the gross to net accrual…Typically, pricing for Xifaxan year-over-year is in the mid-single digits." Appio added, "Non-retail extended units was 20%. So when we take a look at it from a total extended unit perspective, it's 11%. On the new to brand, which is the one we're really looking at a lot is 14%."
* Sulewski followed up on CMS price negotiations. Appio replied, "negotiations have concluded. We are expecting that CMS will publish their agreed pricing on November 30, 2025." Charhon added, "30% of our volume goes through Medicare Part D...when you look at our business across all segments, including the CMS impact, it's probably fair to assume that the average EBITDA over the next 2 years will not be materially different than what we're providing in the outlook and the revised guidance."
* Chi Meng Fong, BofA Securities, asked why guidance was only modestly raised. Appio said, "we got some onetimers in Q3 in the form of an adjustment of our gross-to-net rebates...the fourth quarter is roughly in line with our prior expectations."
* Fong also asked about SG&A seasonality. Appio responded, "3Q is unusually low. There's been some changes to accruals that we process in the quarter that are nonrecurring."
* Questions on pipeline progress, capital allocation, and RED-C Phase III trial timing were addressed, with management confirming planned data readouts in early 2026 and reaffirming capital priorities on debt service and reinvestment.

SENTIMENT ANALYSIS

* Analysts pressed on sustainability of growth, pricing dynamics, and limited upward guidance revision, with a neutral to slightly skeptical tone.
* Management maintained a confident stance in both prepared remarks and Q&A, using phrases like "we are raising full year guidance" and "we remain optimistic about Solta's premium positioning."
* Compared to last quarter, management's tone was somewhat more assertive regarding guidance, while analysts remained focused on risk factors and sustainability of growth drivers.

QUARTER-OVER-QUARTER COMPARISON

* The company raised full-year guidance for revenue, EBITDA, and cash flow, compared to reaffirmation in the prior quarter.
* Both quarters featured strong growth in Salix and Solta, but Q3 highlighted higher growth contributions from Cabtreo and Ryaltris, as well as a completed acquisition of DURECT and integration into the pipeline.
* Management's tone on strategic priorities and innovation was more pronounced, with additional detail on product launches and R&D progress.
* Analysts' questions remained focused on revenue quality, sustainability, and the impact of external risks, with increased attention to one-time items and price negotiations.

RISKS AND CONCERNS

* Management noted the impact of CMS price negotiations on Xifaxan, which accounts for 30% of volume through Medicare Part D.
* There were questions regarding the durability of SG&A savings and the persistence of one-time revenue benefits.
* Relistor continues to face payer coverage challenges, and Lat Am markets remain soft.
* Macroeconomic caution, especially in China for Solta, was acknowledged, with management citing cautious consumer behavior.
* The company is monitoring potential future tariffs and evolving regulatory policies impacting manufacturing and sales channels.

FINAL TAKEAWAY

Bausch Health delivered its tenth consecutive quarter of revenue and adjusted EBITDA growth, driven by robust performances in Salix and Solta, and strong contributions from Cabtreo, Ryaltris, and Xifaxan. Management raised full-year 2025 guidance for revenue, adjusted EBITDA, and cash flow, while emphasizing strategic progress in R&D, capital structure optimization, and portfolio expansion through the DURECT acquisition. The call highlighted ongoing focus on disciplined execution, operational excellence, and proactive risk mitigation, positioning the company for continued growth into 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/bhc/earnings/transcripts]

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