Bausch Health(US:BHC)2025-10-29 22:02Financial Data and Key Metrics Changes - Bausch Health reported a revenue of $2.681 billion for Q3 2025, reflecting a 7% increase on a reported basis and a 5% increase on an organic basis compared to the same period last year [8][9] - Adjusted EBITDA was $986 million, an increase of $77 million or 8% year over year, while adjusted operating cash flow was $508 million [8][9] - 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, also up 7% [9][10] Business Line Data and Key Metrics Changes - Solta Medical achieved 25% growth on a reported basis and 24% on an organic basis, while Salix delivered 12% growth on a reported basis and 11% on an organic basis [7][10] - Xifaxan revenue grew 16% in Q3, with volume up 9%, driven by strong performance in the OHE indication [10][20] - The diversified segment saw revenues decrease by 4% on a reported basis and 6% on an organic basis, primarily due to challenges in the neurology business [14] Market Data and Key Metrics Changes - International segment revenues were $286 million, a decrease of 2% on a reported basis and 4% on an organic basis, with mixed performance across geographies [11] - EMEA led the international segment with a 12% increase, while Canada and LATAM contracted by 8% and 17% respectively [11] Company Strategy and Development Direction - The company is focused on five strategic priorities: people, growth, efficiency, innovation, and unlocking value, which guide its vision for the future [18][21] - Bausch Health is raising its full-year guidance for revenue, adjusted EBITDA, and adjusted operating cash flow due to strong performance in the first nine months of the year [6][15] - The acquisition of DURECT Corporation is expected to enhance the R&D pipeline and support innovation and growth priorities [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic macro backdrop and highlighted the strong operational performance across various business lines [6][18] - The company anticipates continued growth in its Salix business and is optimistic about the future potential of Solta Medical [21][22] Other Important Information - The company reduced its debt by approximately $600 million using cash on hand [6] - Adjusted gross margin was 72.7%, which is 40 basis points lower year over year [8] Q&A Session Summary Question: Revenue growth for Xifaxan outpacing script growth - Management explained that the disconnect is due to a one-time benefit associated with gross-to-net accrual changes and strong new patient starts [30][32] Question: Impact of CMS negotiations on Xifaxan - Management confirmed ongoing fruitful negotiations with CMS and expects pricing to be published on November 30, 2025, with a minimal impact on overall EBITDA outlook [35][36] Question: Revised guidance and one-time factors - Management acknowledged one-time adjustments in Q3 but emphasized positive trends across the portfolio, leading to increased guidance for EBITDA and cash flow [46] Question: SG&A spending trends - Management indicated that Q3 SG&A was unusually low due to non-recurring accrual changes, suggesting Q1 and Q2 as better indicators for future run rates [47] Question: Capital allocation and debt refinancing - Management outlined a focus on servicing debt and reinvesting in the business, with potential asset sales as a means for deleveraging [81]