Core Insights - Bausch Health Companies Inc. reported its tenth consecutive quarter of revenue and adjusted EBITDA growth, with a 7% year-over-year revenue increase on a reported basis and a 5% increase on an organic basis for the third quarter of 2025 [5][7][11] - The company raised its full-year guidance for revenue, adjusted EBITDA, and adjusted cash flow from operations due to strong performance in the first nine months of the year [6][18][19] Financial Performance - Consolidated revenue for the third quarter was $2.681 billion, reflecting a 7% increase on a reported basis and a 5% increase on an organic basis compared to the same period last year [10] - Adjusted EBITDA was $986 million, an increase of $77 million or 8% year-over-year, while adjusted operating cash flow was $508 million [10] - For Bausch Health excluding Bausch + Lomb, revenue was $1.4 billion, up 7% on a reported basis and 5% on an organic basis, with adjusted EBITDA of $773 million, reflecting a 7% increase [11][12] Segment Performance - The Solta and Salix businesses showed strong performance, with Solta achieving 25% growth and Salix achieving 12% growth on a reported basis [7][12] - XIFAXAN revenue grew 16% in the third quarter, driven by volume growth and a strong marketing campaign [12][23] - The International segment saw mixed performance, with EMEA growing by 12% while Canada and LATAM experienced declines of 8% and 17%, respectively [14] Strategic Initiatives - The company closed its acquisition of Direct Corporation, enhancing its R&D pipeline and focusing on innovation to drive future growth [30] - Bausch Health is committed to optimizing its capital structure, having reduced debt by approximately $600 million [6][21] - The company is focused on executing its five strategic priorities: people, growth, efficiency, innovation, and unlocking value [22] Guidance and Outlook - Full-year revenue is now expected to be between $5 billion and $5.1 billion, representing a 4% increase year-over-year [18] - Adjusted EBITDA outlook is now expected to be between $2.7 billion and $2.75 billion, indicating a 7% increase versus 2024 [19] - Adjusted operating cash flow is projected to be between $975 million and $1.025 billion, reflecting a $150 million increase in the midpoint of the range [19]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $2,530 million, up 5% on a reported basis and 4% on an organic basis compared to the same period a year ago [20] - Adjusted EBITDA was $871 million, an increase of $45 million or 5% year over year [21] - Adjusted operating cash flow was $442 million, reflecting strong operational cash flow generation [21] Business Line Data and Key Metrics Changes - Salix revenues were $627 million, an increase of 12% compared to the same period last year, driven by favorable net pricing and strong volume performance [23] - Solta revenues were $128 million, an increase of 25% on a reported basis and 26% on an organic basis compared to the same period last year, primarily fueled by South Korea [26] - Diversified segment revenues were $219 million, a decrease of 13% compared to the same period a year ago, impacted by one-time pricing adjustments in 2024 [28] Market Data and Key Metrics Changes - EMEA achieved 6% organic growth in the second quarter, marking the region's tenth consecutive quarter of organic growth [11] - Canada experienced 12% growth driven by the promoted products portfolio [24] - LATAM's performance was softer due to ongoing macroeconomic challenges and partial channel destocking [25] Company Strategy and Development Direction - The company is focused on unlocking value, growth, and optimizing capital structure, with a commitment to R&D and business development [6][31] - A strategic partnership was announced with YunnV to launch probiotic-based products for acne-prone skin in Poland [13] - The company is evaluating opportunities to reduce the net cost of capital of its debt over the next couple of months [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute strategic priorities and deliver value for stakeholders [20][68] - The company reaffirmed its full-year 2025 guidance for revenue and adjusted EBITDA, expecting revenue between $4,950 million and $5,100 million [30] - Management acknowledged the uncertain macro environment but highlighted strong operational performance and growth opportunities [5][19] Other Important Information - The company completed a $7,900 million debt refinancing, extending maturities and improving capital structure [7] - The acquisition of Direct Corporation is expected to advance the development of a treatment for alcohol hepatitis, pending certain conditions [17][18] Q&A Session Summary Question: Share buybacks and DTC efforts with XIFAXAN - Management indicated that share buybacks are still under evaluation but have taken a back seat to reinvestment in the business [39] - The focus for DTC investments is currently on the OHE indication, with significant growth in patient starts [41] Question: Rifaximin franchise and SSD trials - Management confirmed that lactulose background therapy is allowed in the SSD trials and emphasized the opportunity for expansion in the patient population [46][48] Question: XIFAXAN potential ROA headwinds in 2027 - Management acknowledged ongoing negotiations regarding XIFAXAN and the potential for significant price cuts, while emphasizing efforts to minimize impact [51][63] Question: Direct Corporation acquisition details - Management expressed confidence in the Direct acquisition, highlighting the potential for addressing unmet medical needs in hepatology [55] Question: Rifaximin SSD differentiation and off-label use - Management stated that the SSD formulation is different and does not plan to run head-to-head trials at this time [60]