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    TEVA
    Earnings call· Dec 2025(Q4 FY25)

    TEVA PHARMACEUTICAL INDUSTRIES LTD TEVA

    Jan 28, 2026 Source

    Executive summary

    Teva Q4 FY25 — Strong Innovative Portfolio Growth and Pipeline Progress

    Teva delivered a strong Q4 and full-year 2025, driven by robust performance in its innovative portfolio and significant pipeline advancements. The company is successfully executing its 'Pivot to Growth' strategy, demonstrating consistent revenue growth and margin expansion, while also making substantial progress in deleveraging and advancing its R&D pipeline with multiple key milestones anticipated in 2026. Management remains confident in achieving its long-term financial targets.

    Highlights

    5

    • Full-year revenue increased 5% to $17.3 billion, driven by innovative products.

    • Adjusted EBITDA grew 12% to $5.3 billion, and adjusted EPS grew 19% to $2.93.

    • Innovative portfolio (AUSTEDO, UZEDY, AJOVY) sales reached $3.1 billion for the year, up 35%, surpassing $1 billion in Q4.

    • Net debt to EBITDA reduced to 2.5x, well on track for the 2027 target of 2x.

    • Biosimilars business is on track to grow by $400 million by 2027, with 10 assets in market and 6 more launching by end of 2027.

    Concerns

    4

    • Q4 revenue was down 1% in local currency year-over-year when excluding the $500 million Sanofi milestone payment.

    • Non-GAAP operating margin decreased by 120 basis points year-over-year to 26.7% in Q4 due to higher planned investment in OpEx.

    • Q1 2026 revenue is expected to be light due to a $300 million decline in generic Revlimid revenue from Q1 2025 and sequential impact from AUSTEDO's Q4 2025 one-time benefits.

    • AUSTEDO revenue in Q4 2026 is potentially down year-over-year due to purchasing patterns and pricing environment ahead of IRA implementation in January 2027.

    Guidance & targets

    17
    CategoryTargetConfidence
    Net debt to EBITDA ratio
    2x
    high materiality
    High
    Transformation program savings
    $700 million
    medium materiality
    High
    AUSTEDO sales
    $2.4 billion to $2.55 billion
    high materiality
    High
    UZEDY sales
    $250 million to $280 million
    medium materiality
    High
    AJOVY sales
    $750 million to $790 million
    medium materiality
    High
    Biosimilars business growth
    $400 million
    medium materiality
    High
    Operating margin
    30%
    high materiality
    High
    Cash to earnings
    80%
    medium materiality
    High
    Full-year revenue
    $16.4 billion to $16.8 billion
    high materiality
    High
    Non-GAAP gross margin
    54.5% to 55.5%
    high materiality
    High
    Operating expenses as % of revenue
    27% to 28%
    medium materiality
    High
    Finance expenses
    approximately $800 million
    medium materiality
    High
    Non-GAAP tax rate
    16% to 19%
    medium materiality
    High
    Non-GAAP earnings per share
    $2.57 to $2.77
    high materiality
    High
    Free cash flow
    $2 billion to $2.4 billion
    high materiality
    High
    Free cash flow
    more than $3.5 billion
    high materiality
    High
    Finance expenses reduction
    50%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Innovative Portfolio (AUSTEDO, UZEDY, AJOVY)
    The innovative portfolio surpassed $1 billion in Q4 sales. AUSTEDO showed strong underlying growth despite year-end inventory stocking and favorable gross-to-net in Q4. UZEDY is the fastest-growing long-acting injectable in its category, expanding the market. AJOVY continues strong growth driven by commercial excellence and market share gains in the US and Europe.
    AUSTEDO sales: $725 million (Q4 FY25)AUSTEDO growth: 40% (Q4 FY25 YoY)AUSTEDO sales: $2.2 billion (FY25)AUSTEDO growth: 35% (FY25 YoY)AUSTEDO TRx growth: 10% (YoY)AUSTEDO milligram volume growth: 19% (YoY)AUSTEDO XR new patients: 60%UZEDY sales: $55 million (Q4 FY25)UZEDY growth: 28% (Q4 FY25 YoY)UZEDY sales: $191 million (FY25)UZEDY growth: 63% (FY25 YoY)UZEDY TRx volume growth: 123% (YoY)UZEDY NBRx from oral/treatment naive: >83%AJOVY sales: $211 million (Q4 FY25)AJOVY growth: 43% (Q4 FY25 YoY)AJOVY sales: $673 million (FY25)AJOVY growth: 30% (FY25 YoY)
    		$1.0 billion———
    Generics Business
    The generics business achieved stability in 2025, remaining flat year-over-year (excluding Japan). Performance varies by region, with growth in the US and international markets offsetting a decline in Europe. The biosimilars portfolio is expected to drive future growth.
    2-year CAGR: 6%US growth: 2% (FY25)International markets growth: 1% (FY25)Europe decline: 2% (FY25)
    		—flat——

    Operational metrics

    14
    Revenue
    $17.3 billionup 5%
    FY25

    Includes Sanofi milestones.

    Adjusted EBITDA
    $5.3 billionup 12%
    FY25

    Includes Sanofi milestones.

    Adjusted EPS
    $2.93up 19%
    FY25

    Includes Sanofi milestones.

    Net debt to EBITDA
    2.5x
    Q4 FY25

    Well on track for 2027 goal of 2x.

    Revenue (excluding Sanofi milestone)
    down 1%YoY
    Q4 FY25

    Excludes $500 million Sanofi milestone payment.

    Transformation program savings
    $70 million
    FY25

    Initial savings achieved in 2025 towards $700 million target by 2027.

    Non-GAAP gross margin
    56.2%increased by 80 bps YoY
    Q4 FY25

    Mainly driven by stronger-than-expected growth in key innovative products, especially AUSTEDO.

    Non-GAAP gross margin
    54.7%
    FY25

    Well above the top end of guidance range.

    Non-GAAP operating margin
    26.7%decreased by 120 bps YoY
    Q4 FY25

    Mainly due to higher planned investment in OpEx to support innovative growth.

    Non-GAAP EPS
    $0.68vs $0.70 in Q4 2024
    Q4 FY25

    Total non-GAAP adjustments in Q4 were $649 million, including $77.3 million impairment charge.

    Revenue headwind from generic Revlimid
    $1.1 billion
    FY26

    Expected to be largely offset by growth in innovative portfolio and global generics.

    Generic Revlimid revenue from Q1 2025
    $300 million
    Q1 FY25

    Year-over-year decline in Q1 2026 U.S. generics revenue due to this going away.

    AUSTEDO Q4 2025 one-time benefits
    $100 million
    Q4 FY25

    Expected to cause sequential impact on Q1 2026 AUSTEDO revenue.

    Royalty Pharma payment for anti-IL-15
    1/3 of $75 million
    FY26

    Embedded in 2026 EBITDA, backloaded for the year.

    Industry KPIs

    11
    MetricValueDetails
    Peak sales guidance$2.5 billionUSD
    Prescription volume10%%
    EPS revenue guidanceRevenue: $16.4B-$16.8B; Non-GAAP EPS: $2.57-$2.77USD
    Pricing policy impactpotentially down YoY
    Pipeline clinical milestones7
    Regulatory approvals filingsolanzapine LAI
    Therapeutic drug market share#1
    Price volume mix decomposition19%%
    Geographic regional revenue growthUS: 2%; International: 1%; Europe: -2%%
    Clinical trial efficacy safety datahighest reported numbers
    Business development capacity deal appetitenot desperate

    Deals & partnerships

    2
    SanofiCollaboration agreement for duvakitug program$500 million

    Teva received a $500 million milestone payment in Q4 2025 for initiating Phase III of UC and Crohn's indication for duvakitug.

    Royalty PharmaFunding for anti-IL-15 program in vitiligo

    Royalty Pharma provided funding for Teva's anti-IL-15 program for a Phase II/III program in vitiligo.

    Risks & headwinds

    6
    Revenue headwind from generic RevlimidFY26

    $1.1 billion

    Mitigation: Expected to be largely offset by continued strong momentum in innovative portfolio and low single-digit growth in global generics business.

    Generic Revlimid revenue decline in Q1 2026Q1 2026

    $300 million

    Mitigation: Expected to make Q1 2026 light, but revenue expected to gradually increase over the course of the year.

    Sequential impact of AUSTEDO Q4 2025 one-time benefitsQ1 2026

    Approximately $100 million (inventory build and gross to net)

    Mitigation: Expected to make Q1 2026 light, but strong year-over-year growth for AUSTEDO is still expected in Q1 2026.

    AUSTEDO revenue decline due to IRA implementationQ4 2026

    Potentially down YoY

    Mitigation: Due to different purchasing patterns and pricing environment ahead of IRA implementation in January 2027.

    Higher planned investment in OpExQ4 2025

    Decreased non-GAAP operating margin by 120 bps YoY to 26.7% in Q4 2025

    Mitigation: Necessary to support innovative growth; transformation programs are expected to deliver savings to achieve 30% operating margin target by 2027.

    Non-GAAP tax rate increaseFY26

    16% to 19%

    Mitigation: Slightly higher than 2025, which benefited from IP-related integration plans and U.S. tax attributes. This is a planned increase.

    What to watch in Q1 FY26

    5

    Duvakitug maintenance data readout

    first half of this year (2026)
    CurrentPhase II data showed high efficacy in induction
    TargetDurability of response

    Why it matters

    Durability is key for chronic diseases like UC and Crohn's, and strong maintenance data would validate duvakitug as a best-in-class TL1A inhibitor, impacting its market potential.

    And the important thing about the maintenance data is that we will show hopefully💬 the durability of response. And that's really what people need in ulcerative colitis and Crohn's disease.

    Q&A highlights

    5

    How should we think about AUSTEDO's net pricing and volume growth assumptions for 2026, considering Q4's one-time benefits? Similarly, for UZEDY, what are the net pricing assumptions given its Medicaid exposure?

    For AUSTEDO, underlying fundamentals are strong with TRx and milligram volume growth. Net pricing has been disciplined to maintain value and access, with no significant changes expected. The 2026 guidance range reflects strong growth (11-18% ex-Q4 one-time benefits) and accounts for potential Q4 2026 destocking due to IRA. For UZEDY, strong TRx growth is noted, and guidance factors in the mix of Medicaid and Medicare channels, acknowledging differing profitability.

    “But if you actually take that out, then we still grew at 20% in Q4. So once again, the underlying growth of this product is very strong.”

    asked by David Amsellem · answered by Richard Francis

    2 min read6 chapters

    Detailed Narrative

    01

    Pivot to Growth Strategy Execution

    Teva continues to successfully execute its 'Pivot to Growth' strategy, now in its third year. The strategy focuses on four pillars: delivering on growth engines, stepping up innovation, sustaining generics powerhouse, and focusing the business. This approach has led to consecutive years of revenue growth, with a 6% CAGR over the last three years, and significant progress towards financial targets like net debt reduction and operating margin expansion.

    02

    Innovative Portfolio Performance

    The innovative portfolio, comprising AUSTEDO, UZEDY, and AJOVY, was a primary growth driver, achieving $3.1 billion in sales for the full year, a 35% increase. In Q4 alone, these products surpassed $1 billion in sales. AUSTEDO grew 35% to $2.2 billion, UZEDY was up 63% to $191 million, and AJOVY increased 30% to $673 million, demonstrating strong market adoption and commercial execution across these key brands.

    03

    Pipeline Advancements and Milestones

    Teva's R&D pipeline is progressing rapidly, with several key milestones achieved and anticipated. Olanzapine LAI was filed in the US and is expected to be filed in the EU in Q2 2026, with potential approval by year-end. The DARI study completed enrollment, and Phase III for duvakitug in UC and CD has commenced. The company expects 7 significant pipeline milestones in 2026, including data readouts for duvakitug, anti-IL-15 (vitiligo and celiac), and a futility analysis for emrusolmin.

    04

    Generics and Biosimilars Business Stability and Growth

    The generics business achieved stability, remaining flat in 2025 compared to 2024, excluding Japan. Over a two-year CAGR, the generics business grew 6%. The biosimilars portfolio is a significant growth driver, with 10 assets currently in the market globally and plans to launch 6 additional biosimilars by the end of 2027, and another 10 from 2028 onwards. This expansion positions Teva to grow its biosimilars business by $400 million by 2027.

    05

    Financial Transformation and Deleveraging

    Teva's transformation programs are on track to deliver approximately $700 million in net savings by 2027, with $70 million achieved in 2025 and two-thirds expected by the end of 2026. This, combined with the shift towards high-margin innovative products, provides a clear path to achieving a 30% non-GAAP operating margin by 2027. The company also reduced net debt to $13 billion, achieving a net debt-to-EBITDA ratio of 2.5x, moving closer to its 2x target and investment-grade ratings.

    06

    2026 Outlook and Quarterly Progression

    For 2026, Teva projects full-year revenue of $16.4 billion to $16.8 billion, non-GAAP gross margin of 54.5% to 55.5%, and non-GAAP EPS of $2.57 to $2.77. Free cash flow is expected to be $2 billion to $2.4 billion. Revenue is anticipated to gradually increase throughout the year, with Q1 expected to be lighter due to the absence of generic Revlimid revenue from Q1 2025 and the sequential impact of one-time📎 benefits from AUSTEDO in Q4 2025.

    AI-generated summary of the company’s earnings call. Not investment advice.