Teva Pharmaceutical Industries Reports Q4 & Full-Year 2025 Financial Results; CEO Francis Highlights Strategic Growth and Profit Turnaround

Teva Pharmaceutical Industries Ltd. reported fourth quarter and full-year 2025 financial results, underscoring a profitable Q4 performance and continued execution of its “Pivot to Growth” strategy. Richard Francis, President and CEO, characterized the results as a significant milestone in Teva’s transformation, with innovation-led brands driving growth and the company turning to profitability after recent years of restructuring and portfolio optimization.

“In 2025, our Pivot to Growth strategy drove Teva’s third consecutive year of growth, solidifying our position as a leading biopharmaceutical company,” Francis said. “Our key innovative brands led expansion, market execution accelerated, and for the first time, we achieved over $1 billion in revenues in a single quarter from our innovative portfolio.”

Fourth Quarter 2025 Results

Teva reported revenues of $4.7 billion in the fourth quarter of 2025, marking an 11 % increase in U.S. dollars compared with Q4 2024. The growth was primarily fueled by development milestone payments related to Phase 3 clinical studies for duvakitug (anti-TL1A) and higher sales of innovative products, notably AUSTEDO®, AJOVY® and UZEDY®.

On a profitability basis, the company swung to a net profit of $480 million, or $0.41 per share on a GAAP diluted basis, compared with a net loss of $217 million in the year-ago quarter. On an adjusted non-GAAP basis, earnings were $0.96 per diluted share, up from $0.71 in Q4 2024 and notably ahead of the average analyst estimate of $0.64. Revenue performance also surpassed expectations, with analysts previously forecasting around $4.33 billion.

Gross profit in the quarter expanded markedly, with gross margins increasing to approximately 56 %, driven by a favorable product mix and milestone payments, while non-GAAP operating margin improved to about 32.5 %, compared with 27.6 % in Q4 2024. This reflected operational efficiencies and the contribution of higher-margin innovative products.

Full Year 2025 Performance

Over the full 2025 fiscal year, Teva delivered revenues of $17.3 billion, a 4 % increase in U.S. dollars over 2024, supported by contributions from both key innovative brands and milestone payments. Gross profit also rose, with a full-year gross margin of 51.8 %, up from 48.7 % in 2024, while non-GAAP gross margins were 55.9 % compared with 53.3 % in the prior year.

The company reported a full-year non-GAAP net income of $3.41 billion, up from $2.86 billion in 2024, and non-GAAP diluted EPS of $2.93, compared with $2.49 a year earlier. Adjusted EBITDA for 2025 reached $5.31 billion, up from $4.78 billion in 2024, reflecting improved profitability and operational leverage.

Operating income returned to positive territory in 2025, with GAAP operating income of $2.16 billion compared with an operating loss of $303 million in 2024. The swing was driven by higher gross profits and reduced goodwill impairments, partly offset by continued investments in research and pipeline progression.

Innovation and Portfolio Drivers

Teva’s growth in 2025 was anchored by its innovative portfolio, with key brands such as AUSTEDO, AJOVY and UZEDY collectively contributing significantly to revenue expansion. The company also advanced its biosimilars pipeline and expanded global generics operations, supporting a diversified revenue base. Milestone payments tied to Phase 3 duvakitug studies provided a meaningful uplift in the quarter’s results.

R&D investment increased in the fourth quarter, reflecting expanded late-stage programs in immunology and other therapeutic areas, while S&M and G&A expenses rose moderately as part of Teva’s transformation efforts to strengthen market execution and organizational efficiency.

Cash Flow, Balance Sheet and Capital Allocation

Teva generated operating cash flow of approximately $1.65 billion in 2025 and free cash flow of about $2.4 billion, enabling continued capital flexibility and deleveraging. During the year, the company reduced gross debt to roughly $16.8 billion and net debt to about $13.3 billion, in line with its 2027 deleveraging targets. The transformation programs executed in 2025 are expected to generate approximately $700 million of net savings by 2027.

Outlook for 2026

Looking ahead, Teva released guidance for full-year 2026, projecting revenues between $16.4 billion and $16.8 billion, non-GAAP operating income of $4.55 billion to $4.8 billion, and adjusted diluted EPS of $2.57 to $2.77. Free cash flow is expected in the range of $2.0 billion to $2.4 billion. The tempered revenue outlook compared with 2025 reflects the timing of milestone payments and anticipated product dynamics across segments.

Francis emphasized that 2026 will be a “milestone-rich year”, with potential key readouts from the late-stage pipeline in immunology and neurology and anticipated regulatory progress for additional product candidates, reinforcing Teva’s confidence in sustained innovation-driven expansion.

Market and Industry Context

Teva’s return to profitability in Q4 and its full-year growth mark a notable turnaround for the company amid continued industry pressures on pricing and generics dynamics. Investors reacted positively to the earnings beat and strategic outlook, with the stock rising in premarket trading following the results release. The performance reflects both Teva’s adaptive strategy and execution across innovative and legacy product portfolios.