Bausch Health Confirms 2025 Revenue Goal of $4.95B–$5.1B Amid Debt Reduction and Pipeline Growth

Key Highlights from Bausch Health’s Q2 2025 Earnings Call

During the recent earnings call, Bausch Health Companies Inc. (BHC) provided a detailed overview of its performance for the second quarter of 2025. The company continued to demonstrate strong financial results, with consistent growth in revenue and adjusted EBITDA. CEO Thomas J. Appio highlighted that this marks the ninth consecutive quarter of growth, excluding the Bausch + Lomb segment.

Appio emphasized the 5% year-over-year revenue growth and 10% adjusted EBITDA growth, which was primarily driven by strong performances in Salix, Solta, EMEA, and Canada. He also announced a strategic move to acquire DURECT Corporation, aiming to expand Bausch Health’s capabilities in hepatology, particularly in developing treatments for alcohol hepatitis. This acquisition is expected to close in Q3 2025, pending all necessary conditions.

In addition, the company completed a significant $7.9 billion debt refinancing in April, extending maturities and evaluating further steps to manage upcoming obligations. Appio noted recent actions taken to reduce debt maturing in 2026 and pay down high-interest accounts receivable facilities, improving the company's capital structure.

The CFO, Jean-Jacques Charhon, reported that revenue for the quarter reached $2.53 billion, representing a 5% increase on a reported basis and a 4% rise on an organic basis compared to the same period last year. Adjusted EBITDA came in at $871 million, up $45 million year-over-year. Charhon also highlighted the strong performance of the Salix business, which generated $627 million in revenue, a 12% increase over the previous year, attributed to favorable net pricing and volume gains.

Outlook and Guidance for 2025

Management reaffirmed its full-year 2025 guidance for Bausch Health, excluding Bausch + Lomb, with revenue expected to be between $4.95 billion and $5.1 billion. Adjusted EBITDA is projected to range from $2.625 billion to $2.725 billion, while adjusted operating cash flow is anticipated to fall between $825 million and $875 million.

Charhon pointed out that the midpoint of these ranges represents a 4% increase year-over-year and a 5% increase compared to 2024. The guidance remains unchanged from the previous quarter, reflecting confidence in the company’s strategic direction and operational execution.

Financial Performance Overview

Consolidated revenue for Q2 2025 totaled $2.53 billion, marking a 5% year-over-year increase. Adjusted gross margin stood at 70.6%, slightly lower than the prior year by 30 basis points. Adjusted operating expenses rose to $1.16 billion, an increase of $61 million year-over-year.

Adjusted EBITDA reached $871 million, up $45 million from the previous year. For Bausch Health excluding Bausch + Lomb, revenue was $1.252 billion, with adjusted EBITDA increasing by 10% year-over-year.

The Salix business saw revenue of $627 million, a 12% increase, driven by 10% growth in Xifaxan and 67,000 new patient starts. Solta Medical recorded $128 million in revenue, with 25% growth, including 115% organic revenue growth in South Korea and double-digit growth in the U.S. and Canada.

The international segment generated $278 million in revenue, with double-digit growth in Canada and EMEA, although there was some softness in LATAM. Net debt remained flat post-refinancing, with cash on hand rising to nearly $1.5 billion.

Q&A Session Insights

During the Q&A session, analysts raised several key questions. Jason Matthew Gerberry of BofA Securities asked about share buybacks and direct-to-consumer (DTC) efforts for Xifaxan. Charhon outlined the company’s focus on deleveraging and reinvesting in the business, with share buybacks being a potential option if surplus capital is available.

Gerberry also inquired about the focus areas for Xifaxan DTC. Appio clarified that the investment is focused on the OHE indication, emphasizing heavy support behind it.

Umer Raffat of Evercore ISI asked about the potential for Xifaxan to go over-the-counter (OTC). Appio acknowledged the question but stated that the company has not considered OTC status at this time.

Douglas Miehm of RBC Capital questioned the impact of IRA price negotiations on Xifaxan and the discrepancy between revenue and script growth. Appio mentioned ongoing discussions with CMS, with a final price expected by November 2025. Charhon cited favorable gross-to-net accruals as a contributing factor.

Michael Thomas Nedelcovych of TD Cowen asked about confidence in DURECT’s asset after a missed Phase IIb endpoint and the differentiation of SSD. Appio expressed internal R&D confidence, highlighting the unique formulation of SSD, with no head-to-head trial planned.

Analyst Sentiment and Management Tone

Analysts maintained a neutral to slightly cautious tone, focusing on capital allocation, potential IRA impacts, and product-specific growth outlooks. Management, however, remained confident throughout the call, repeatedly referencing their ability to execute on strategic priorities.

Appio stated, "We remain confident in our ability to execute on our strategic priorities focused on delivering tangible results." Compared to the previous quarter, management’s tone remained consistent, with analysts maintaining similar levels of inquiry.

Quarter-over-Quarter Comparison

Full-year 2025 guidance remains unchanged from Q1, with revenue and adjusted EBITDA targets reaffirmed. Strategic focus continues on debt reduction, operational growth, and innovation, with the DURECT acquisition marking a new development.

Salix and Solta segments sustained double-digit growth, while the international segment saw continued momentum in Canada and EMEA. Analysts’ questions revolved around capital allocation, product growth, and regulatory risks, mirroring the previous quarter.

Risks and Concerns

Several risks were identified, including the outcome of IRA price negotiations for Xifaxan, which could lead to potential price reductions. Appio and Charhon emphasized ongoing negotiations and strategy evaluation to mitigate the impact.

LATAM macroeconomic weakness and channel destocking affected international segment performance. Legacy legal matters continue, with 11 opt-out cases remaining from an original 37, and ongoing defense efforts.

The DURECT acquisition is subject to closing conditions and regulatory approvals, introducing integration and execution risk.

Final Takeaway

Bausch Health management emphasized sustained revenue and adjusted EBITDA growth, reaffirmed 2025 guidance, and outlined progress on strategic priorities, including debt reduction and international expansion. The company continues to advance its product pipeline and pursue business development opportunities, such as the anticipated DURECT acquisition. Management remains confident in its ability to navigate regulatory risks and capitalize on growth opportunities, positioning Bausch Health for continued momentum in the second half of the year.