01—Abstract
Summary
Summary of the 10-Q filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
Viatris Inc. reported first-quarter 2026 total revenues of $3.52 billiona, up from $3.25 billion a year earlier, with net sales of $3.51 billion, an increase of $266.5 million or 8%.
Net sales rose 3% on a constant currency basis, with Greater China up 22% (18% constant currency) and Developed Markets up 7% (1% constant currency). Gross margin was 33% versus 36% in the prior-year period, and the company cited $71.9 millionb of charges from a fire at its Nashik, India manufacturing facility. Operating results turned to a loss from operations of $79.7 million, compared with a loss of $2.88 billion in the prior year that included a $2.94 billion goodwill impairment.
Net earnings were $176.4 millionc, or $0.15 per diluted share, versus a net loss of $3.04 billion, or $(2.55) per share, a year earlier. The result was helped by a $423.7 million income tax benefit, and the company reported adjusted EBITDA of $1.05 billion and adjusted EPS of $0.59. The balance sheet and cash flow show a modest liquidity build.
Cash and cash equivalents rose to $1.80 billiond from $1.32 billion at year-end 2025, helped by $400.0 million of cash proceeds from the sale of Viatris' Biocon Biologics CCPS. Operating cash flow fell to $388.3 million from $535.5 million, and total debt, including current portion, was about $14.3 billion. The company paid $139.6 million in dividends, and it made no share repurchases in the quarter.
Management also disclosed a 2026 restructuring program with expected pre-tax charges of $700 million to $850 million and a workforce reduction of up to approximately 10%. Legal and regulatory matters remain significant. The company accrued $450.8 million for legal contingencies and recorded an $84.5 million contingent consideration fair value loss tied to the Idorsia transaction.
Pending exposures include a Clomipramine bellwether case and a $1 billion damages claim in a case scheduled for trial in September 2026. The Indore FDA warning letter and import alert remain in effect for 11 products, and the company expects to resume full Nashik operations in July 2026.
02—Key points
Key Highlights
- Total revenues were $3.52 billion, up from $3.25 billion, with net sales up 8% to $3.51 billion; on a constant currency basis net sales rose about 3%.
- Net earnings were $176.4 million, or $0.15 per diluted share, compared with a net loss of $3.04 billion, or $(2.55) per share, in the prior-year quarter, which included a $2.94 billion goodwill impairment.
- Loss from operations narrowed to $79.7 million from $2.88 billion, and gross margin declined to 33% from 36%, which the company attributed partly to $71.9 million of charges from the Nashik facility fire.
- Adjusted EBITDA was $1.05 billion versus $923.5 million a year earlier, and adjusted EPS was $0.59 versus $0.50.
- Cash and cash equivalents increased to $1.80 billion, supported by $400.0 million of proceeds from the sale of Biocon Biologics CCPS, while operating cash flow declined to $388.3 million.
- The company announced a 2026 restructuring program with expected pre-tax charges of $700 million to $850 million, targeted savings of $600 million to $700 million, and a global workforce reduction of up to approximately 10%.
- Litigation exposure remains material, with $450.8 million accrued for legal contingencies and a plaintiff seeking approximately $1 billion in damages in a generic drug pricing case set for trial in September 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Viatris kept $0.05.
- Revenue$3.51B100.0%
- Cost of revenue−$2.35B67.0%
- Gross profit$1.16B33.0%
- Operating costs−$1.24B35.2%
- Operating income−$79.7M2.3%
- Interest, other & tax$256.1M7.3%
- Net income$176.4M5.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 7, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $3.51B$3.24B | +8.2% |
| Cost of Revenue | $2.36B$2.09B | +12.7% |
| Gross Profit | $1.16B$1.16B | −0.3% |
| R&D Expenses | $248.60M$222.00M | +12.0% |
| SG&A Expenses | $928.80M$948.10M | −2.0% |
| Operating Expenses | $1.24B$4.04B | −69.4% |
| Operating Income | -$79.70M-$2.88B | +97.2% |
| Interest Expense | $120.10M$115.50M | +4.0% |
| Net Income | $176.40M-$3.04B | +105.8% |
| EPS (Basic) | $0.15$-2.55 | +105.9% |
| EPS (Diluted) | $0.15$-2.55 | +105.9% |
| Shares Outstanding (Basic) | 1.16B1.19B | −3.1% |
| Shares Outstanding (Diluted) | 1.18B1.19B | −1.4% |
05—Questions
Frequently Asked Questions
How did Viatris perform in the first quarter of 2026 compared with the prior year?
Total revenues rose to $3.52 billion from $3.25 billion, and net earnings were $176.4 million, or $0.15 per diluted share, compared with a net loss of $3.04 billion, or $(2.55) per share, in the first quarter of 2025. The prior-year loss was driven by a $2.94 billion goodwill impairment, so the year-over-year comparison is distorted by that charge.
What drove the change in gross margin and the Nashik facility impact?
Gross margin fell to 33% from 36%, largely because cost of sales rose to $2.36 billion from $2.09 billion, including higher restructuring costs and other special items. Those special items included $71.9 million of charges to write off inventory and fixed assets damaged in a mid-February 2026 fire at the Nashik, India oral solid dose facility. The company expects to resume full operations there in July 2026 and believes it has certain insurance coverage.
What is the status of the 2026 restructuring program and its expected costs?
On February 26, 2026, the company announced results of its enterprise-wide strategic review and began restructuring. It expects total pre-tax charges of $700 million to $850 million, a global workforce reduction of up to approximately 10%, and savings of $600 million to $700 million once fully implemented. The company recognized $77.9 million of charges in the first quarter of 2026.
What are the main legal and regulatory risks disclosed?
The company has $450.8 million accrued for legal contingencies. Key exposures include generic drug pricing litigation, where one plaintiff seeks about $1 billion in damages in a case scheduled for trial in September 2026, and a Clomipramine bellwether case seeking about $350 million. The Indore facility remains under an FDA warning letter and import alert affecting 11 products, and the company recorded an $84.5 million fair value loss on Idorsia-related contingent consideration.
How did cash flow and capital allocation look in the quarter?
Operating cash flow was $388.3 million, down from $535.5 million. Investing cash flow was positive at $277.4 million, mainly due to $400.0 million of proceeds from the Biocon Biologics CCPS sale. The company paid $139.6 million in dividends and made no share repurchases during the quarter, and it declared a $0.12 per share quarterly dividend payable June 17, 2026.
06—Continue