Bausch Health Companies ((TSE:BHC)) has held its Q1 earnings call. Read on for the main highlights of the call.
Bausch Health Companies recently held an earnings call that painted a picture of robust financial health, marked by significant growth in revenue and EBITDA. The sentiment was largely positive, buoyed by successful refinancing efforts and legal victories, although tempered by concerns over increased interest expenses and potential impacts from tariffs and trade measures.
Revenue and EBITDA Growth
Bausch Health reported impressive year-over-year revenue and adjusted EBITDA growth of 6% and 14%, respectively, excluding Bausch + Lomb. This growth underscores the company’s strong operational performance and its ability to drive profitability.
Successful Refinancing
The company successfully completed a $7.9 billion refinancing effort, effectively extending its debt maturities and retiring approximately $6.9 billion of maturities from 2025 into 2028. This strategic move is aimed at strengthening the company’s financial position in the medium term.
Legal Victory
Bausch Health achieved a significant legal win with a favorable ruling from the D.C. District Court in the Norwich Case against the FDA. This victory is expected to have positive implications for the company’s regulatory landscape.
Solta Medical Segment Growth
The Solta Medical segment delivered remarkable organic revenue growth of 33%, with standout performances in South Korea and China, which saw growth rates of 136% and 30%, respectively. This highlights the segment’s strong market presence and growth potential.
International Segment Resilience
Bausch Health’s international segments demonstrated resilience with organic revenue growth across Canada, Latin America, and EMEA. Notably, Canada’s promoted product portfolio grew by 18%, showcasing the company’s robust international operations.
Increased Interest Expense
The company updated its guidance for adjusted cash flow from operations to reflect higher interest rate expenses resulting from the refinancing. This has led to a $150 million decrease in adjusted operating cash flow, highlighting the cost implications of the refinancing.
Tariff and Trade Concerns
Bausch Health is actively assessing the evolving tariff and trade measures, particularly those affecting the Solta business in China. These developments could pose challenges to the company’s operations in the region.
Adjusted Gross Margin Decline
The earnings call also noted a decline in adjusted gross margin by 130 basis points year-over-year, indicating some pressure on the company’s cost structure.
Forward-Looking Guidance
Looking ahead, Bausch Health maintained its full-year 2025 guidance for revenue and adjusted EBITDA, despite the increased cost of capital by 100 basis points due to refinancing. The company is exploring strategic options, including share buybacks, to unlock shareholder value, as they believe the stock is undervalued. Segment-wise, Solta Medical and the International segment continue to show strong growth prospects.
In summary, Bausch Health’s earnings call highlighted a strong financial performance with notable growth in key segments and successful strategic initiatives. While the company faces challenges from increased interest expenses and potential trade impacts, its forward-looking guidance remains optimistic, with strategic plans to enhance shareholder value.