Teva Pharmaceutical Industries (TEVA) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenues reached $4.0 billion, up 2% year-over-year in USD, driven by strong growth in the innovative portfolio (AUSTEDO, UZEDY, AJOVY), offsetting declines in generics and the Japan divestment.

• Adjusted EBITDA rose 2% to $1.1 billion; non-GAAP EPS increased 2% to $0.53; net income was $369 million, up from $214 million YoY.

• Free cash flow surged 76% to $188 million, reflecting improved operating cash flow and asset sales.

• The acquisition of Amylyx/Emalex for $700 million upfront plus up to $200 million in milestones accelerates the shift toward innovative, high-margin products, with ecopipam NDA filing expected H2 2026 and launch/revenue contribution anticipated in 2027.

• The company remains committed to its 2027 financial targets, including a 30% operating margin, net debt/EBITDA below 2x, and 80% cash-to-earnings.

Financial highlights

• Q1 2026 GAAP revenues were $3,982 million (+2% YoY); non-GAAP gross margin was 52.9%, driven by innovative product mix.

• GAAP operating income was $652 million (+25% YoY); non-GAAP operating income was $956 million (+1% YoY).

• GAAP net income was $369 million (+70% YoY); non-GAAP net income was $621 million (+3% YoY).

• Free cash flow was $188 million (+76% YoY); net debt/EBITDA improved to 2.42x.

• R&D expenses were $222 million (5.6% of revenue); S&M expenses were $696 million (17.5% of revenue).

Outlook and guidance

• 2026 revenue guidance maintained at $16.4–$16.8 billion; non-GAAP gross margin expected at 54.5%-55.5%; free cash flow projected at $2.0–$2.4 billion.

• Operating margin expected at 27%-28.5%; adjusted EBITDA $4.23–$5.3 billion; non-GAAP diluted EPS at $1.91–$2.11.

• Amylyx/Emalex acquisition expected to close in late Q2 or early Q3 2026; ecopipam launch and revenue contribution anticipated in 2027.

• 2027 targets reiterated: mid-single digit revenue growth, 30% non-GAAP operating margin, net debt/EBITDA <2x, and 80% cash-to-earnings.

• Transformation programs expected to deliver $700 million in cost savings by 2027, including an 8% workforce reduction.