• Revenue: $2.259 billion, up 5% on a reported basis and 6% on an organic basis year-over-year.
• Adjusted Gross Margin: 69.9%, a decrease of 130 basis points year-over-year.
• Adjusted Operating Expenses: $994 million, an increase of $78 million compared to the previous year.
• Adjusted R&D Expenses: $143 million, a decrease of 5% year-over-year.
• Adjusted EBITDA: $661 million, a decrease of $4 million or 1% year-over-year.
• Adjusted Operating Cash Flow: $110 million.
• Salix Revenue: $542 million, up 9% on a reported basis and 6% on an organic basis year-over-year.
• Xifaxan Growth: 8% year-over-year, with retail scripts growing 1.5% and new script growth at 3%.
• International Segment Revenue: $262 million, down 1% on a reported basis but up 5% on an organic basis year-over-year.
• Solta Medical Revenue: $113 million, up 28% on a reported basis and 33% on an organic basis year-over-year.
• Diversified Segment Revenue: $205 million, up 1% on a reported basis and flat on an organic basis year-over-year.
• Bausch & Lomb Revenue: $1.1 billion, up 3% on a reported basis and 5% on an organic basis year-over-year.
• Net Debt Reduction: Decreased by approximately $85 million in the first quarter.
• Refinancing Transaction: $7.9 billion refinancing completed, extending debt maturities to 2028 and beyond.
• Full-Year 2025 Revenue Guidance: Between $4.950 billion and $5.1 billion.
• Full-Year 2025 Adjusted EBITDA Guidance: Between $2.625 billion and $2.725 billion.
• Full-Year 2025 Adjusted Operating Cash Flow Guidance: Between $825 million and $875 million.

• Warning! GuruFocus has detected 3 Warning Signs with BHC.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bausch Health Companies Inc (NYSE:BHC) achieved its eighth consecutive quarter of year-over-year revenue and adjusted EBITDA growth.
• The company successfully completed a $7.9 billion refinancing effort, extending near- and medium-term maturities, providing additional financial flexibility.
• Bausch Health Companies Inc (NYSE:BHC) received a favorable ruling from the DC District Court in the Norwich case against the FDA.
• The Salix segment showed strong performance with 8% growth in Xifaxan sales, driven by both price and volume increases.
• The Solta Medical segment delivered 33% organic revenue growth, with significant contributions from South Korea and China.

Negative Points

• Adjusted operating cash flow guidance was updated down by $150 million due to higher interest rate expenses from the refinancing transaction.
• Adjusted gross margin decreased by 130 basis points year-over-year.
• The International segment reported a 1% decrease in revenue on a reported basis, impacted by currency fluctuations.
• The company faces potential challenges from evolving tariffs and trade measures, particularly affecting the Solta business in China.
• Despite strong financial performance, Bausch Health Companies Inc (NYSE:BHC) acknowledges that its stock price does not reflect the company's value, indicating a need to unlock shareholder value.

Q & A Highlights

Q: Last quarter, you mentioned tariffs and their impact on transfer pricing. Can you provide updates on this and the $150 million operating cash flow tied to interest expense? How should we think about EBITDA margins for the rest of the year? A: (Thomas Appio, CEO) The tariff situation is fluid, mainly affecting our Solta business in China. We have inventory in-country to minimize short-term impacts. Pharmaceuticals are not currently affected by tariffs. (Jean-Jacques Charhon, CFO) Our setup isn't significantly exposed to new tariffs, and our guidance accounts for potential impacts. The $150 million cash flow adjustment is due to higher interest costs and refinancing expenses. EBITDA phasing should follow 2024's pattern.

Q: Solta's growth in Korea is impressive. How sustainable is this growth over the next few quarters or years? A: (Thomas Appio, CEO) Solta's business model is durable, with strong capital equipment sales in Korea last year driving current growth. We expect growth to moderate but remain strong. China also shows robust growth despite tariff issues, and the US and EMEA are performing well. The launch of new products like FLX will further drive growth.

Q: Regarding Xifaxan, what are your thoughts on the IRA impact in 2027, and can you confirm if the IP is held in Ireland or Europe? Also, is Xifaxan manufactured in North America or the US? A: (Thomas Appio, CEO) IRA negotiations are in early stages, and we're working with CMS. (Jean-Jacques Charhon, CFO) The IP is in the US, licensed to our principal company in Ireland. Xifaxan is manufactured in Canada, with API sourced from Italy.

Q: If a recession occurs, which parts of your business are most at risk, and which are most resilient? Also, regarding RED-C, is there off-label Xifaxan use for cohort HE, and how might that affect a new product launch? A: (Thomas Appio, CEO) Our business is resilient, with essential products in the US and branded generics in Eastern Europe and Latin America. Solta's consumer base is economically resilient. RED-C's SSD formula is different from Xifaxan, targeting a large global cirrhotic patient population. We see significant opportunity in this area.

Q: On Solta and China revenue, can manufacturing be shifted locally if tariffs persist? Also, can you quantify one-time items in the $576 million EBITDA, and how do share buybacks rank in capital allocation? A: (Thomas Appio, CEO) Manufacturing in Bothell, Washington, is technical and not easily moved, but we're exploring options. (Jean-Jacques Charhon, CFO) One-time items include timing of expenses and gross-to-net adjustments. Capital allocation prioritizes aligning capital structure with our portfolio, reinvestment, and then shareholder returns, including buybacks.

Q: Can you discuss the debt refinancing and the flexibility it offers? How much of your Bausch & Lomb stake is unpledged? A: (Jean-Jacques Charhon, CFO) The $7.9 billion refinancing extends our maturity runway, with $5.6 billion in maturities by 2028. We have $1 billion cash on hand and options for further refinancing. 35.5% of Bausch & Lomb shares are unencumbered, with potential to pledge more if needed.

Q: Can you provide more insight into the proxy supplement and the status of your shareholder rights plan? A: (Thomas Appio, CEO) The shareholder rights plan ensures fair treatment in any unsolicited takeover bid. The proxy supplement details were laid out in the press release, and the stock's response shows perceived value in Bausch Health.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.