Bausch Health Swings to Profit, Boosts Sales Amid Debt Restructuring

TL;DR

**Bausch Health is finally turning the corner, posting a profit and slashing short-term debt, making it a buy for the patient investor.**

AI Summary

Bausch Health Companies Inc. reported a significant turnaround in its financial performance for the nine months ended September 30, 2025, achieving a net income of $223 million, a substantial improvement from a net loss of $170 million in the same period of 2024. This positive shift was driven by a 5.7% increase in product sales, reaching $7,388 million compared to $6,990 million in 2024. Operating income also saw a robust increase, climbing to $1,339 million from $988 million year-over-year. The company successfully reduced its current portion of long-term debt to $579 million as of September 30, 2025, down from $2,674 million at December 31, 2024, indicating improved liquidity management. However, total long-term debt (non-current portion) increased to $20,463 million from $18,942 million. Cash and cash equivalents rose to $1,308 million from $1,181 million, and total assets increased to $26,824 million from $26,523 million. The company's strategic outlook continues to involve the Bausch + Lomb separation, which is subject to achieving targeted debt leverage ratios and resolving the Xifaxan Generics Litigation.

Why It Matters

This 10-Q filing signals a crucial turning point for Bausch Health, moving from a net loss to a net income of $223 million, which could instill investor confidence and potentially stabilize its stock price. The significant reduction in the current portion of long-term debt from $2,674 million to $579 million demonstrates improved financial health and reduced immediate default risk, making the company a more attractive investment. For employees, a more stable financial footing could mean greater job security and potential for growth. Customers may benefit from continued investment in product development and market expansion, while the broader pharmaceutical market will watch how Bausch Health navigates its debt and the Bausch + Lomb separation, potentially influencing competitive dynamics in eye health and specialty pharmaceuticals.

Risk Assessment

Risk Level: medium — While Bausch Health reported a net income of $223 million for the nine months ended September 30, 2025, and reduced its current portion of long-term debt by over $2 billion, the non-current portion of long-term debt increased to $20,463 million from $18,942 million. The ongoing Xifaxan Generics Litigation, mentioned in Note 18, poses a significant legal and financial risk that could impact the planned Bausch + Lomb separation and future profitability, preventing a 'low' risk rating.

Analyst Insight

Investors should consider Bausch Health's improved profitability and debt management as a positive signal, but remain cautious due to the substantial long-term debt and ongoing Xifaxan Generics Litigation. Monitor developments in the Bausch + Lomb separation and the litigation outcomes, as these will be key determinants of future value. This could be an opportune time for investors with a higher risk tolerance to consider a position, anticipating further deleveraging and a successful B+L spin-off.

Financial Highlights

debt To Equity

-0.13

revenue

$7,470M

operating Margin

17.9%

total Assets

$26,824M

total Debt

$21,042M

net Income

$223M

eps

$0.73

gross Margin

70.5%

cash Position

$1,308M

revenue Growth

+6.4%

Revenue Breakdown

Key Numbers

• $223M — Net Income (Swung from a $170M net loss in 2024 for the nine months ended September 30.)
• $7.39B — Product Sales (Increased by 5.7% from $6.99B in the prior year for the nine months ended September 30.)
• $1.34B — Operating Income (Increased from $988M in the prior year for the nine months ended September 30.)
• $579M — Current Long-Term Debt (Reduced significantly from $2.67B at December 31, 2024.)
• $20.46B — Non-Current Long-Term Debt (Increased from $18.94B at December 31, 2024.)
• $1.31B — Cash and Cash Equivalents (Increased from $1.18B at December 31, 2024.)
• 370.5M — Common Shares Outstanding (As of September 30, 2025, up from 367.8M at December 31, 2024.)
• $0.73 — Basic EPS (Improved from $(0.38) in the prior year for the nine months ended September 30.)

Key Players & Entities

• Bausch Health Companies Inc. (company) — registrant
• Bausch + Lomb Corporation (company) — 88% owned subsidiary
• SEC (regulator) — filing authority
• FASB (regulator) — accounting standards setter
• Xifaxan Generics Litigation (event) — legal proceeding impacting B+L separation
• $223 million (dollar_amount) — net income for nine months ended September 30, 2025
• $170 million (dollar_amount) — net loss for nine months ended September 30, 2024
• $7,388 million (dollar_amount) — product sales for nine months ended September 30, 2025
• $579 million (dollar_amount) — current portion of long-term debt as of September 30, 2025
• $20,463 million (dollar_amount) — non-current portion of long-term debt as of September 30, 2025

FAQ

Risk Factors

• Xifaxan Generics Litigation [high — legal]: The company's strategic outlook, including the Bausch + Lomb separation, is contingent on resolving the Xifaxan Generics Litigation. The outcome of this litigation could materially impact the company's financial position and future operations.
• Debt Leverage Ratios [high — financial]: Achieving targeted debt leverage ratios is a prerequisite for the Bausch + Lomb separation. Failure to meet these ratios could delay or prevent the separation, impacting strategic objectives.
• Intangible Asset Amortization [medium — operational]: Amortization of intangible assets was $765 million for the nine months ended September 30, 2025, a decrease from $818 million in the prior year. While reduced, this remains a significant expense impacting profitability.
• Non-current Long-term Debt Increase [medium — financial]: Non-current portion of long-term debt increased to $20,463 million as of September 30, 2025, from $18,942 million at December 31, 2024. This increase requires careful management of future debt obligations.
• Restructuring, Integration and Separation Costs [medium — operational]: Costs related to restructuring, integration, and separation were $49 million for the nine months ended September 30, 2025, up from $25 million in the prior year. These costs reflect ongoing strategic initiatives.
• Product Sales and Regulatory Environment [medium — regulatory]: The company's performance is tied to its product sales, which are subject to the evolving regulatory landscape for pharmaceuticals and medical devices. Changes in regulations could impact product approvals and market access.
• Accumulated Deficit [low — financial]: The company has an accumulated deficit of $9,555 million as of September 30, 2025. While improved from $9,824 million at December 31, 2024, it indicates a history of net losses.
• Inventory Management [low — operational]: Inventories remained stable at $1,598 million as of September 30, 2025, compared to $1,595 million at December 31, 2024. Effective inventory management is crucial to avoid obsolescence and carrying costs.

Industry Context

Bausch Health operates in the diversified healthcare industry, encompassing pharmaceuticals and medical devices. The sector is characterized by significant R&D investment, stringent regulatory oversight, and competitive pressures from both branded and generic manufacturers. Trends include an aging global population driving demand for treatments, increasing focus on specialty pharmaceuticals, and ongoing consolidation.

Regulatory Implications

The company's operations are subject to extensive regulation by health authorities like the FDA. Compliance with manufacturing standards, drug approvals, and marketing practices is critical. The ongoing Xifaxan Generics Litigation highlights potential legal and regulatory risks that can impact product exclusivity and market dynamics.

What Investors Should Do

1. Monitor Xifaxan Generics Litigation resolution
2. Track progress on debt leverage ratios
3. Analyze revenue growth drivers by segment
4. Evaluate the impact of restructuring and separation costs
5. Observe changes in cash flow and liquidity

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported significant financial turnaround with net income of $223 million and product sales of $7,388 million.
• 2024-12-31: As of December 31, 2024 — Reported total long-term debt of $21,616 million ($2,674M current + $18,942M non-current) and accumulated deficit of $9,824 million.
• 2024-09-30: Nine months ended September 30, 2024 — Reported a net loss of $170 million and product sales of $6,990 million.

Glossary

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (Indicates the company's historical profitability, with Bausch Health showing a significant deficit of $9,555 million as of September 30, 2025.)

Amortization of intangible assets

The systematic allocation of the cost of an intangible asset over its useful life. (A significant expense for Bausch Health, totaling $765 million for the nine months ended September 30, 2025.)

Noncontrolling interest

The portion of equity interest in a subsidiary that is not attributable to the parent company. (Represents $921 million of equity as of September 30, 2025, and impacts the net income attributable to the parent company.)

Current portion of long-term debt

The portion of long-term debt that is due within one year. (Significantly reduced to $579 million as of September 30, 2025, from $2,674 million at December 31, 2024, improving short-term liquidity.)

Debt leverage ratios

Measures of a company's ability to meet its debt obligations, often expressed as a ratio of debt to equity or debt to EBITDA. (Key targets for the Bausch + Lomb separation, indicating the company's focus on financial deleveraging.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. (A substantial asset for Bausch Health, valued at $11,287 million as of September 30, 2025.)

Operating income

Profitability from a company's core business operations before interest and taxes. (Showed a strong increase to $1,339 million for the nine months ended September 30, 2025, reflecting improved operational performance.)

Provision for income taxes

The amount of income tax expense recognized by a company. (Totaled $88 million for the nine months ended September 30, 2025, despite a pre-tax income of $311 million.)

Year-Over-Year Comparison

Bausch Health Companies Inc. has demonstrated a significant financial improvement compared to the prior year. Product sales for the nine months ended September 30, 2025, increased by 5.7% to $7,388 million from $6,990 million in 2024. This revenue growth, coupled with expense management, led to a substantial swing from a net loss of $170 million to a net income of $223 million. Operating income also saw a robust increase from $988 million to $1,339 million. While current liabilities decreased due to a reduction in the current portion of long-term debt, total long-term debt increased, and new risks related to litigation and leverage ratios remain prominent.

Filing Documents

• bhc-20250930.htm (10-Q) — 2630KB
• exhibit311q32025.htm (EX-31.1) — 10KB
• exhibit312q32025.htm (EX-31.2) — 10KB
• exhibit321q32025.htm (EX-32.1) — 6KB
• exhibit322q32025.htm (EX-32.2) — 6KB
• 0000885590-25-000051.txt ( ) — 13167KB
• bhc-20250930.xsd (EX-101.SCH) — 95KB
• bhc-20250930_cal.xml (EX-101.CAL) — 89KB
• bhc-20250930_def.xml (EX-101.DEF) — 548KB
• bhc-20250930_lab.xml (EX-101.LAB) — 957KB
• bhc-20250930_pre.xml (EX-101.PRE) — 770KB
• bhc-20250930_htm.xml (XML) — 2218KB

Financial Information

Part I. Financial Information

Condensed Consolidated Financial Statements (unaudited)

Item 1. Condensed Consolidated Financial Statements (unaudited) Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 1 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 3 Condensed Consolidated Statements of Shareholders' Equity (Deficit) for the three and nine months ended September 30, 2025 and 2024 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 5 Notes to the Condensed Consolidated Financial Statements 6

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 45

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 87

Controls and Procedures

Item 4. Controls and Procedures 88 Part II . Other Information

Legal Proceedings

Item 1. Legal Proceedings 89

Risk Factors

Item 1A. Risk Factors 89

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 89

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 89

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 89

Other Information

Item 5. Other Information 89

Exhibits

Item 6. Exhibits 89

Signatures

Signatures 91 i BAUSCH HEALTH COMPANIES INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025 Introductory Note Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (this "Form 10-Q") to the "Company", "we", "us", "our" or similar words or phrases are to Bausch Health Companies Inc. and its subsidiaries, taken together. In this Form 10-Q, references to "$" are to United States ("U.S.") dollars, references to "" are to Euros and references to "CAD" are to Canadian dollars. Unless otherwise indicated, the statistical and financial data contained in this Form 10-Q are presented as of September 30, 2025.

Forward-Looking Statements

Forward-Looking Statements This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and may be forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"), as described in more detail under the heading "Forward-Looking Statements" in Item 2 of Part I of this Form 10-Q. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found (i) in our Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 19, 2025, under Item 1A. "Risk Factors"; (ii) under Item 1A. "Risk Factors" of Part II of this Form 10-Q; and (iii) in the Company's other filings with the U.S. Securities and Exchange Commission (the "SEC") and the Canadian Securities Administrators (the "CSA"). When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider such factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes, except as required by law. We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the list of important factors, as described in more detail under the heading "Forward-Looking Statements" in Item 2 of Part I of this Form 10-Q, that may affect future results is not exhaustive and should not be considered a complete statement of all potential risks and uncertainties. ii

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share amounts) (Unaudited) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,308 $ 1,181 Restricted cash 32 20 Trade receivables, net 2,417 2,140 Inventories, net 1,598 1,595 Prepaid expenses and other current assets 894 838 Total current assets 6,249 5,774 Property, plant and equipment, net 2,026 1,780 Intangible assets, net 4,830 5,551 Goodwill 11,287 11,087 Deferred tax assets, net 2,050 1,968 Other non-current assets 382 363 Total assets $ 26,824 $ 26,523 Liabilities Current liabilities: Accounts payable $ 616 $ 589 Accrued and other current liabilities 3,598 3,489 Current portion of long-term debt 579 2,674 Total current liabilities 4,793 6,752 Acquisition-related contingent consideration 224 310 Non-current portion of long-term debt 20,463 18,942 Deferred tax liabilities, net 145 128 Other non-current liabilities 843 713 Total liabilities 26,468 26,845 Commitments and contingencies (Note 18) Equity (Deficit) Common shares, no par value, unlimited shares authorized, 370,473,221 and 367,843,058 issued and outstanding at September 30, 2025 and December 31, 2024, respectively 10,515 10,490 Additional paid-in capital 275 234 Accumulated deficit ( 9,555 ) ( 9,824 ) Accumulated other comprehensive loss ( 1,800 ) ( 2,179 ) Total Bausch Health Companies Inc. shareholders' deficit ( 565 ) ( 1,279 ) Noncontrolling interest 921 957 Total equity (deficit) 356 ( 322 ) Total liabilities and equity (deficit) $ 26,824 $ 26,523 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 BAUSCH HEALTH COMPANIES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues Product sales $ 2,657

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