01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Teva Pharmaceutical Industries Limited reported first-quarter 2026 revenues of $3,982 milliona, up 2% in U.S. dollars but down 3% in local currency terms, as lower generic revenues (primarily lenalidomide capsules in the U.S. segment and the Japan business venture divestment in International Markets) were partly offset by growth in key innovative products, primarily AUSTEDO.
Gross profit rose to $1,972 millionb, with gross margin at 49.5% versus 48.2% a year earlier. Operating income was $652 million, compared with $519 million, mainly reflecting lower intangible asset impairments and higher gross profit, partly offset by higher S&M expenses. Net income attributable to Teva was $369 million, or $0.31 diluted EPS, versus $214 million and $0.18 a year earlier.
Non-GAAP diluted EPS was $0.53c versus $0.52. Cash flow from operations was negative $40 million, an improvement from negative $105 million, and free cash flow was $188 million. Cash and cash equivalents rose to $3,741 million, while total debt declined to $16,627 million from $16,807 million.
Financial leverage was 67% versus 68% at year-end 2025. The company reported no outstanding balance under its $1.8 billiond revolving credit facility as of March 31, 2026 and the date of the report, and it states it expects to remain within its financial covenant thresholds over the next year. Teva also disclosed a definitive agreement in April 2026 to acquire Emalex Biosciences for $700 million in cash plus up to $200 million in milestones, expected to close by the third quarter of 2026, and the Board has asked management to plan a possible share repurchase program.
02—Key points
Key Highlights
- Revenues of $3,982 million rose 2% in U.S. dollars but fell 3% in local currency; U.S. segment revenues were flat at $1,534 million, Europe rose 12% to $1,340 million, and International Markets fell 10% to $524 million.
- Operating income increased to $652 million from $519 million, and net income attributable to Teva increased to $369 million from $214 million; diluted EPS was $0.31 versus $0.18.
- Gross profit margin improved to 49.5% from 48.2%, driven mainly by higher AUSTEDO revenues, partly offset by lower lenalidomide generic revenues.
- Free cash flow of $188 million, with operating cash flow of negative $40 million versus negative $105 million in the prior-year quarter, mainly on favorable timing of U.S. sales and collections.
- Total debt decreased to $16,627 million from $16,807 million, and cash and cash equivalents increased to $3,741 million; financial leverage was 67%.
- Emalex Biosciences acquisition agreed in April 2026 for $700 million upon closing, plus up to $200 million in milestones, with closing expected by the third quarter of 2026.
- Net revenue from innovative products grew, with AUSTEDO revenues of $559 million (up 41%), AJOVY $87 million (up 64%) and UZEDY $63 million (up 62%) in the U.S. segment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Teva Pharmaceutical Industries kept $0.09.
- Revenue$3.98B100.0%
- Cost of revenue−$2.01B50.5%
- Gross profit$1.97B49.5%
- Operating costs−$1.32B33.1%
- Operating income$652.0M16.4%
- Interest, other & tax−$283.0M7.1%
- Net income$369.0M9.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 29, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $3.98B$3.89B | +2.3% |
| Cost of Revenue | $2.01B$2.01B | −0.1% |
| Gross Profit | $1.97B$1.88B | +5.1% |
| Operating Income | $652.00M$519.00M | +25.6% |
| Net Income | $369.00M$214.00M | +72.4% |
| EPS (Basic) | $0.32$0.19 | +68.4% |
| EPS (Diluted) | $0.31$0.18 | +72.2% |
| Shares Outstanding (Basic) | 1.16B1.14B | +1.6% |
| Shares Outstanding (Diluted) | 1.18B1.16B | +1.7% |
05—Questions
Frequently Asked Questions
How did Teva's profitability change in the first quarter of 2026?
Operating income rose to $652 million from $519 million, and net income attributable to Teva rose to $369 million from $214 million. The increase was mainly due to lower intangible asset impairments ($8 million versus $121 million) and higher gross profit, partly offset by higher S&M expenses, which were $696 million versus $622 million.
Why did revenues decline in local currency terms even though they rose in U.S. dollars?
Revenues increased 2% in U.S. dollars but decreased 3% in local currency terms. The filing states that exchange rate movements, including hedging effects, positively impacted revenues by $219 million. The local currency decline was mainly due to lower generic revenues, primarily lenalidomide capsules in the U.S. segment, and the divestment of the Japan business venture in International Markets.
What is Teva's liquidity and debt position?
Cash and cash equivalents were $3,741 million as of March 31, 2026, and total debt was $16,627 million, down from $16,807 million at December 31, 2025. Short-term debt was $2,612 million, including $2,600 million of current maturities of long-term liabilities. The $1.8 billion revolving credit facility had no amounts outstanding as of March 31, 2026 or the date of the report.
What are the key pending transactions and capital return plans?
Teva agreed in April 2026 to acquire Emalex Biosciences, including its lead asset ecopipam, for $700 million paid to shareholders at closing, funded with existing cash on hand, plus up to $200 million in milestones. The transaction is expected to close by the third quarter of 2026. In April 2026, Teva's Board instructed management to plan a possible share repurchase program, which is subject to legal requirements and future Board approval. The company has not paid dividends since December 2017.
Are there material legal or regulatory risks disclosed in the filing?
The filing describes numerous ongoing matters, including opioid-related claims with estimated cash payments of $379 million expected in 2026, antitrust cases such as the Pennsylvania generic drug multidistrict litigation, and a provision of $4,680 million for legal settlements and loss contingencies. In the first quarter of 2026, legal settlement and loss contingency expenses were $72 million. The filing also notes a European Commission fine of 462.6 million euros related to COPAXONE, which Teva is appealing.
06—Continue