Baxter International (BAX) Q2 2025 earnings summary

Executive summary

• Second quarter 2025 sales from continuing operations grew 4% reported and 1% operationally, reaching $2.81 billion and aligning with guidance.

• Adjusted EPS from continuing operations was $0.59, up 28% year-over-year; GAAP diluted EPS was $0.24.

• New CEO Andrew Hider appointed, effective September 2025, to drive innovation and transformation.

• Sale of Kidney Care business completed in January 2025, generating $3.3B in net after-tax proceeds and reported as discontinued operations.

• Inventory levels restored post-Hurricane Helene, with IV solutions allocations removed and partnership with Vizient expanded for supply security.

Financial highlights

• Q2 2025 global sales from continuing operations totaled $2.8B, up 4% reported and 1% operational; H1 2025 sales were $5.44B, up 5%.

• Adjusted gross margin was 40.7%, down year-over-year; GAAP gross margin was 35.3%.

• Adjusted operating margin was 15.1%, up 180 bps year-over-year; adjusted operating income was $423M.

• Net income from continuing operations was $122M for Q2 2025, up from $95M in Q2 2024.

• Free cash flow for H1 2025 was $(144)M, with $77M positive in Q2.

Outlook and guidance

• Full-year 2025 sales growth expected at 6%-7% reported, 3%-4% operational; adjusted EPS guidance is $2.42–$2.52.

• Third-quarter 2025 sales growth expected at 6%-7% reported, 3%-4% operational; adjusted EPS $0.58–$0.62.

• Segment sales growth for 2025: Medical Products & Therapies and Healthcare Systems & Technologies 3%-4%, Pharmaceuticals 4%-5%.

• Adjusted operating margin for FY 2025 projected at 15%-16%.

• Guidance reflects downside risks from Novum IQ pump pause, IV Fluid Conservation, and macroeconomic uncertainty.