Q3 FY2026
Filed Nov 3, 2026Innovative-brand growth and substantial gross-margin expansion offset generics pressure; Teva raised 2026 outlook for AUSTEDO, AJOVY and UZEDY.
Key innovative brands grew 33% year-over-year in local currency, non-GAAP operating income rose to $1,393 million and Teva raised several outlook measures, but total revenue declined 2%, U.S. generics revenue fell 39%, GAAP operating income declined and GAAP diluted EPS fell to $0.20.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net revenuesGAAP | $4.39B | – | (2)% |
| Nine months ended September 30, 2026 net revenuesGAAP | $12.52B | – | – |
| Q3 2026 cost of salesGAAP | $1.96B | – | – |
| Q3 2026 gross profitGAAP | $2.44B | – | 6% |
| Q3 2026 gross profit marginGAAP | 55.5% | – | – |
| Nine months ended September 30, 2026 gross profitGAAP | $6.57B | – | – |
| Nine months ended September 30, 2026 gross profit marginGAAP | 52.4% | – | – |
| Q3 2026 non-GAAP gross profitnon-GAAP | $2.58B | – | 4% |
| Q3 2026 non-GAAP gross profit marginnon-GAAP | 58.7% | – | 345 basis points |
| Nine months ended September 30, 2026 non-GAAP gross profitnon-GAAP | $6.98B | – | – |
| Nine months ended September 30, 2026 non-GAAP gross profit marginnon-GAAP | 55.8% | – | – |
| Q3 2026 R&D expenses, netGAAP | $297M | – | 16% |
| Q3 2026 selling and marketing expensesGAAP | $709M | – | 8% |
| Q3 2026 general and administrative expensesGAAP | $298M | – | (6)% |
| Q3 2026 operating incomeGAAP | $714M | – | – |
| Q3 2026 operating marginGAAP | 16.2% | – | – |
| Nine months ended September 30, 2026 operating incomeGAAP | $1.14B | – | – |
| Nine months ended September 30, 2026 operating marginGAAP | 9.1% | – | – |
| Q3 2026 non-GAAP operating incomenon-GAAP | $1.39B | – | – |
| Q3 2026 non-GAAP operating marginnon-GAAP | 31.7% | – | – |
| Nine months ended September 30, 2026 non-GAAP operating incomenon-GAAP | $2.72B | – | – |
| Nine months ended September 30, 2026 non-GAAP operating marginnon-GAAP | 21.8% | – | – |
| Q3 2026 financial expenses, netGAAP | $414M | – | – |
| Q3 2026 tax rateGAAP | 22.1% | – | – |
| Q3 2026 non-GAAP tax ratenon-GAAP | 16.5% | – | – |
| Q3 2026 net income attributable to TevaGAAP | $233M | – | – |
| Nine months ended September 30, 2026 net income attributable to TevaGAAP | $26M | – | – |
| Q3 2026 diluted EPS attributable to TevaGAAP | $0.20 | – | (47)% |
| Nine months ended September 30, 2026 diluted EPS attributable to TevaGAAP | $0.02 | – | – |
| Q3 2026 non-GAAP net income attributable to Tevanon-GAAP | $1.01B | – | – |
| Q3 2026 non-GAAP diluted EPS attributable to Tevanon-GAAP | $0.86 | – | 10% |
| Nine months ended September 30, 2026 non-GAAP net income attributable to Tevanon-GAAP | $1.66B | – | – |
| Nine months ended September 30, 2026 non-GAAP diluted EPS attributable to Tevanon-GAAP | $1.40 | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $1.50B | – | 7% |
| Nine months ended September 30, 2026 Adjusted EBITDAnon-GAAP | $3.02B | – | – |
| Q3 2026 cash flow generated from operating activitiesother | $241M | – | – |
| Nine months ended September 30, 2026 cash flow generated from operating activitiesother | $612M | – | – |
| Q3 2026 free cash flownon-GAAP | $495M | – | (4)% |
| Nine months ended September 30, 2026 free cash flownon-GAAP | $1.30B | – | – |
| Cash and cash equivalents as of September 30, 2026GAAP | $4.08B | – | – |
| Total debt as of September 30, 2026other | $16.72B | – | – |
| Net debt as of September 30, 2026other | $12.63B | – | – |
| Financial leverage as of September 30, 2026other | 68% | – | – |
| AUSTEDO global revenues, Q3 2026other | $751M | – | 21% year-over-year in local currency |
| AJOVY global revenues, Q3 2026other | $269M | – | 61% year-over-year in local currency |
| UZEDY revenues, Q3 2026other | $85M | – | 96% year-over-year in local currency |
| Key innovative brands collective revenues, Q3 2026other | approximately $1.1 billion | – | 33% year-over-year in local currency |
| Global generics revenues, Q3 2026other | 16% year-over-year decrease in local currency | – | (16)% year-over-year in local currency |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| United States segmentLower generic-product revenue, primarily lenalidomide capsules, was partially offset by higher revenue from AUSTEDO, AJOVY and UZEDY. | $1.87B | – | (11)% |
| Europe segmentHigher generic-product revenue, proceeds from sale of certain product rights and AJOVY revenue drove growth. | $1.32B | – | 7% |
| International Markets segmentHigher revenue from AJOVY and AUSTEDO drove growth. | $592M | – | 6% |
| Other ActivitiesAnda revenue increased 2%, while additional other activities rose 21% in U.S. dollars; API sales declined 8%. | $613M | – | 3% |
2026 outlook
- Revenue$16.7 - $17.0 billion
- Tax rate20% - 23%
- NoteNon-GAAP operating income: $3.8 - $3.9 billion; includes $0.87 billion of acquired IPR&D charges
- NoteAdjusted EBITDA: $4.23 - $4.43 billion; includes $0.87 billion of acquired IPR&D charges
- NoteNon-GAAP diluted EPS: $1.92 - $2.11; includes $0.71 of acquired IPR&D charges
- NoteFree cash flow: $2.1 - $2.4 billion
- NoteAUSTEDO revenues: $2.55 billion - $2.65 billion
- NoteAJOVY revenues: $930 million - $960 million
- NoteUZEDY revenues: $290 million - $310 million
- NoteCAPEX: 0.5
- NoteFinance Expenses: ~$0.8
- NoteLAI schizophrenia portfolio peak sales potential: $1.5 billion - $2.0 billion
- NoteBiosimilars revenues: more than $0.8 billion
What drove it
- AUSTEDO global revenue was $751 million, up 21% year-over-year in local currency, supported in the U.S. by volume growth and favorable business mix including improved net-price realization.
- AJOVY global revenue was $269 million, up 61% year-over-year in local currency. U.S. revenue increased due to a reduction in sales allowance and volume growth.
- UZEDY revenue was $85 million, up 96% year-over-year in local currency, driven by volume growth.
- GAAP and non-GAAP gross margin expanded as a favorable product mix from innovative products, largely AUSTEDO, more than offset lower lenalidomide revenue.
- Europe segment profit rose to $420 million from $303 million, reflecting higher gross profit, product-rights proceeds and positive hedging activity.
- International Markets segment profit rose to $125 million from $95 million as AJOVY and AUSTEDO improved mix.
- The FDA approved WELTRUZA on October 9, 2026, and Teva expects it to become available in the U.S. in the coming weeks.
- Teva expects biosimilars revenue to exceed $0.8 billion in 2026, reaching its original 2027 revenue objective one year ahead of plan.
Concerns
- U.S. generic products including biosimilars revenue declined 39% to $718 million, primarily due to increased generic competition for lenalidomide capsules.
- Total Q3 revenue declined 2% and global generics revenues decreased 16% year-over-year in local currency.
- GAAP operating income declined to $714 million from $882 million, driven by higher tangible asset impairments and higher legal settlements and loss contingencies.
- GAAP net income attributable to Teva declined to $233 million from $433 million, while financial expenses increased to $414 million and included a $224 million loss on extinguishment of debt.
- R&D expenses increased 16% to $297 million and selling and marketing expenses increased 8% to $709 million.
- Teva discontinued its Phase 2 Multiple System Atrophy study of emrusolmin following an interim futility analysis.
- API sales to third parties declined 8%, and Teva stated there can be no assurance that its intended API business divestiture will be completed.
What to watch
- Execution against raised 2026 revenue outlooks for AUSTEDO, AJOVY and UZEDY.
- The U.S. commercial launch of WELTRUZA and progress toward the stated $1.5 billion - $2.0 billion peak-sales potential for the UZEDY and WELTRUZA LAI schizophrenia portfolio.
- The effect of lenalidomide competition on U.S. generic revenue and the contribution from recently launched generic products and biosimilars.
- Progress toward Teva Transformation objectives of a 30% non-GAAP operating income margin and approximately $700 million of net savings by 2027, including ~two-thirds expected to be realized in 2026.
- FDA action on the ecopipam NDA expected in Q1 2027 and the planned Q4 2026 start of Phase 2b development of anti-IL-15 in vitiligo.
- The effect of acquired IPR&D charges included in 2026 non-GAAP operating income, Adjusted EBITDA and diluted EPS guidance.
Balance sheet and cash flow
- Cash and cash equivalents were $4,085 million as of September 30, 2026, compared to $3,556 million as of December 31, 2025.
- Debt was $16,718 million as of September 30, 2026, compared to $16,807 million as of December 31, 2025.
- Teva consummated an early redemption of $4,678 million in aggregate principal amount of senior notes and issued $4,837 million of new senior notes, net of discount and issuance costs, during Q3 2026.
- The portion of total debt classified as short-term was 24% as of September 30, 2026, compared to 11% as of December 31, 2025.
- Average debt maturity was approximately 6.3 years as of September 30, 2026, compared to 5.6 years as of December 31, 2025.
- Q3 2026 free cash flow of $495 million included $241 million in operating cash flow, $327 million in beneficial interest collected in exchange for securitized accounts receivables, $47 million of proceeds from sale of businesses and long-lived assets, and $120 million in cash used for capital investments.
Analysis
Teva reported Q3 2026 revenue of $4,395 million, down 2% from $4,480 million. The principal drag was the United States, where segment revenue fell 11% to $1,870 million and generic products including biosimilars declined 39% to $718 million amid increased generic competition for lenalidomide capsules. This was partly offset by a portfolio mix increasingly led by innovative medicines. AUSTEDO, AJOVY and UZEDY collectively generated approximately $1.1 billion and grew 33% year-over-year in local currency.
The innovative portfolio showed broad momentum. AUSTEDO generated $751 million globally and grew 21% year-over-year in local currency, AJOVY generated $269 million and grew 61%, and UZEDY generated $85 million and grew 96%. Europe revenue rose 7% to $1,319 million, supported by generic products, AJOVY and product-rights sales. International Markets revenue increased 6% to $592 million as AJOVY and AUSTEDO expanded. Teva also received FDA approval for WELTRUZA in October 2026, adding to its long-acting injectable schizophrenia portfolio.
Mix drove material profitability improvement at the gross-profit level. GAAP gross margin increased to 55.5% from 51.4%, and non-GAAP gross margin increased to 58.7% from 55.3%. Q3 non-GAAP operating income increased to $1,393 million from $1,294 million and non-GAAP operating margin rose to 31.7% from 28.9%. GAAP operating income nevertheless declined to $714 million from $882 million, with higher tangible asset impairments and legal settlements and loss contingencies cited as the principal factors. GAAP diluted EPS declined to $0.20 from $0.37, while non-GAAP diluted EPS increased to $0.86 from $0.78.
Cash generation was lower in the quarter, with operating cash flow of $241 million versus $369 million, primarily from the timing of sales and collections. Free cash flow was $495 million versus $515 million. Teva refinanced its debt during the quarter, redeeming $4,678 million of senior notes and issuing $4,837 million of new senior notes, net of discount and issuance costs. Total debt was $16,718 million and net debt was $12,633 million as of September 30, 2026. The company cited investment-grade rating upgrades and refinancing as evidence of a strengthened financial profile.
Management raised its 2026 revenue outlook to $16.7 - $17.0 billion from $16.5 - $16.85 billion and raised outlooks for each key innovative brand. AUSTEDO guidance is now $2.55 billion - $2.65 billion, AJOVY guidance is $930 million - $960 million, and UZEDY guidance is $290 million - $310 million. The revised non-GAAP operating income outlook is $3.8 - $3.9 billion and free-cash-flow outlook is $2.1 - $2.4 billion. The updated outlook includes acquired IPR&D charges, which temper the reported non-GAAP operating income, Adjusted EBITDA and diluted EPS ranges.
Management, verbatim
Our strong third-quarter performance is another clear demonstration of Pivot to Growth in action and how far Teva has come. The FDA approval of WELTRUZA has further advanced our innovative portfolio, our recently announced biosimilars agreement with Samsung Bioepis has strengthened our generics powerhouse and our return to investment grade reflects the transformation of our financial position.
Richard Francis, President and CEO
This performance, together with continued margin expansion and cash flow generation, gives us the confidence to raise our 2026 revenue outlook for all three brands.
Richard Francis, President and CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore no actual-versus-prior-guidance comparisons are included.
- Q3 2026 cash balance comparison with September 30, 2025 was not provided on the same balance-sheet row.
- Share repurchases and dividends to Teva shareholders were not reported.
- GAAP forward-looking guidance and reconciliations of forward-looking non-GAAP guidance to GAAP measures were not provided.
- Quarter-over-quarter comparisons were not reported for the presented key metrics.
- Prior-year revenue values for global AUSTEDO, global AJOVY, UZEDY, collective key innovative brands and global generics were not printed on those specific metric rows.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.