Q2 FY2026
Filed Jul 29, 2026Teva Delivers Strong Q2 Results and Raises Outlook for All Three Key Innovative Brands, Reflecting Continued Execution of Its Pivot to Growth Strategy
Key innovative brands grew 43% YoY in local currency to over $1 billion in revenues and Teva raised outlook for all three brands, while consolidated revenue declined and the Emalex acquisition drove a GAAP operating loss and GAAP loss per share.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $4,142 million | – | decrease of 1% in U.S. dollars, or 3% in local currency terms |
| Gross profitGAAP | $2,153 million | – | an increase of 2% |
| Gross profit marginGAAP | 52.0% | – | – |
| Gross profitnon-GAAP | $2,293 million | – | an increase of 1% |
| Gross profit marginnon-GAAP | 55.4% | – | – |
| Research and Development (R&D) expenses, netGAAP | $970 million | – | an increase of 298% |
| Selling and Marketing (S&M) expensesGAAP | $717 million | – | an increase of 10% |
| General and Administrative (G&A) expensesGAAP | $317 million | – | an increase of 4% |
| Operating lossGAAP | $231 million | – | – |
| Loss per shareGAAP | $0.49 | – | – |
| Non-GAAP diluted EPSnon-GAAP | $0.02 | – | – |
| Emalex acquisition expensesGAAP | $726 million | – | – |
| Cash flow generated from operating activitiesGAAP | $411 million | – | – |
| Free cash flowother | $622 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Key innovative brands collectivelyAUSTEDO, AJOVY and UZEDY continued to transform Teva’s portfolio mix and financial profile. | over $1 billion | – | grew 43% YoY in LC |
| AUSTEDOHigher AUSTEDO revenues contributed to higher gross profit and gross profit margin. | $696 million | – | growing 40% YoY in LC |
| AJOVYHigher AJOVY revenues supported a favorable product mix. | $244 million | – | increasing 56% YoY in LC |
| UZEDYUZEDY continues to be the fastest growing LAI amongst atypical LAI’s for schizophrenia, creating a strong foundation for Teva's schizophrenia franchise. | $77 million | – | increasing 43% YoY in LC |
2026 Business Outlook outlook
- Revenue$16.5 - $16.85 billion
- NoteNon-GAAP operating income of $3.8 - $4.0 billion, including ~$0.77 billion of expected 2026 expenses related to Emalex
- NoteAdjusted EBITDA of $4.23 - $4.53 billion, including ~$0.77 billion of expected 2026 expenses related to Emalex
- NoteNon-GAAP diluted EPS of $1.91 - $2.11, including ($0.66) per share of 2026 Emalex expenses
- NoteFree cash flow of $2.0 - $2.4 billion
- NoteCombined 2026 revenue of ~$3.7 billion for key innovative brands, reflecting a ~17% YoY growth at the mid-point
What drove it
- Lower generic-product revenue, primarily lenalidomide capsules in the U.S. segment, reduced consolidated revenue.
- Exchange rate movements including hedging effects positively impacted revenue by $85 million compared to the second quarter of 2025.
- A favorable product mix, primarily higher AUSTEDO and AJOVY revenue, supported GAAP and non-GAAP gross profit margins.
- Teva launched AHZANTIVE in Europe and announced a global licensing agreement with Polpharma Biologics for a proposed biosimilar to Ocrevus.
- Teva raised its 2026 revenue outlook for AUSTEDO, AJOVY and UZEDY.
- The Emalex acquisition and ecopipam development accelerated Teva’s late-stage innovative neuroscience pipeline.
Concerns
- Global generics revenues decreased by 15% YoY in LC, mainly due to lower U.S. lenalidomide capsules revenue amid increased generic competition.
- R&D expenses, net increased by 298%, primarily due to the Emalex Biosciences acquisition and its primary asset, ecopipam.
- The quarter included $726 million of Emalex acquisition expenses, comprising $724 million of IPR&D and $2 million of operating expenses.
- The Emalex acquisition had a per-share impact of ($0.61) on non-GAAP diluted EPS.
- Consolidated revenue decreased by 1% in U.S. dollars and by 3% in local currency terms.
What to watch
- Execution against the raised 2026 outlook for AUSTEDO, AJOVY and UZEDY.
- The U.S. launch timing for olanzapine LAI in Q4 2026, subject to regulatory approval.
- Expected initiation of a Phase 2 study for TEV-’408 in Q4 2026.
- Progress in Phase 3 recruitment for duvakitug in ulcerative colitis and Crohn’s disease.
- Operational readiness for 3 additional biosimilars in 2027 and progress toward $800 million in biosimilars revenues by 2027.
- Expected realization of two-thirds of targeted Teva Transformation savings in 2026 and the objective of approximately $700 million of net savings by 2027.
- The replacement of the ADS program with direct listing of ordinary shares on the NYSE on Monday, September 14, 2026.
Balance sheet and cash flow
- Cash flow generated from operating activities of $411 million
- Free cash flow of $622 million
- Expenses of $726 million for the Emalex acquisition were recorded in Q2 2026.
- Fitch Rating Agency raised the Company's corporate credit rating to Investment Grade BBB-.
Analysis
Teva reported Q2 2026 revenue of $4,142 million, down 1% in U.S. dollars and 3% in local currency terms from the second quarter of 2025. The decline was primarily attributable to lower generic-product revenue, particularly U.S. lenalidomide capsules amid increased generic competition. Exchange rate movements including hedging effects positively affected revenue by $85 million compared with the second quarter of 2025.
The innovative portfolio was the central offset. AUSTEDO, AJOVY and UZEDY collectively generated over $1 billion in revenue and grew 43% YoY in local currency. AUSTEDO generated $696 million, AJOVY generated $244 million and UZEDY generated $77 million. Management attributed higher gross profit and improved product mix to innovative-brand growth, particularly AUSTEDO and AJOVY, while the generic revenue decline remained a counterweight.
GAAP gross profit increased to $2,153 million from $2,102 million, and GAAP gross profit margin increased to 52.0% from 50.3%. Non-GAAP gross profit was $2,293 million compared with $2,278 million, with non-GAAP gross profit margin of 55.4% compared with 54.6%. However, R&D expense rose to $970 million from $244 million, mainly due to the Emalex acquisition. The $726 million of recorded Emalex expenses, including $724 million of IPR&D and $2 million of operating expenses, contributed to a GAAP operating loss of $231 million compared with operating income of $455 million and a GAAP loss per share of $0.49.
Non-GAAP diluted EPS was $0.02 and included a per-share impact of ($0.61) from the Emalex acquisition. Cash flow generated from operating activities was $411 million and free cash flow was $622 million. Teva characterized its capital allocation as disciplined and cited Fitch’s upgrade of its corporate credit rating to Investment Grade BBB-.
For 2026, Teva maintained its outlook for revenue, non-GAAP operating income, adjusted EBITDA, non-GAAP diluted EPS and free cash flow, while raising outlook for each of its three key innovative brands. The company now expects combined 2026 revenue of ~$3.7 billion from those brands, reflecting ~17% YoY growth at the mid-point. The next operating questions are whether innovative-brand momentum can continue to offset generic erosion, the pace of integration and development spending following Emalex, and execution on biosimilar launches, pipeline milestones and Teva Transformation savings.
Management, verbatim
Our second quarter reflects continued execution of our Pivot to Growth strategy. During the quarter, and into July, we advanced several value-creating assets, including two additional indications for duvakitug, demonstrating its pipeline-in-a-product potential, the acquisition and NDA submission of ecopipam (EBS-101), continued progress for olanzapine LAI, and expansion of our biosimilars pipeline through strategic collaborations.
Mr. Richard Francis, Teva's President and CEO
Our key Innovative brands collectively generated over $1 billion in revenues, continuing to transform Teva’s portfolio mix and financial profile. The breadth of these milestones underscores the increasingly diversified nature of Teva’s growth profile. We are strengthening our neuroscience and immunology pipeline, expanding access through biosimilars, and continuing to modernize the business to support sustainable, innovation-driven growth and long-term value creation for patients and shareholders.”
Mr. Richard Francis, Teva's President and CEO
Not in the filing
stated, not guessed- Prior-year revenue amount
- Prior-quarter revenue and revenue change
- GAAP net income or loss amount
- Prior-year and prior-quarter GAAP loss per share
- Prior-year and prior-quarter non-GAAP diluted EPS
- Non-GAAP operating income for Q2 2026
- Adjusted EBITDA for Q2 2026
- GAAP and non-GAAP operating margin figures, because the filing text is truncated after the operating-loss-margin sentence
- Individual revenue outlook figures for AUSTEDO, AJOVY and UZEDY
- Absolute global generics revenue and prior-year global generics revenue
- Revenue and comparisons for U.S., Europe and other geographic segments
- Cash balance
- Debt balance
- Share repurchases
- Dividends
- Capital expenditures
- Prior-year operating cash flow and free cash flow comparisons
- Previous-release outlook for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.