Viatris (VTRS) Q2 2024 earnings summary

Executive summary

• Q2 2024 total revenues were $3.80 billion, with $210 million from new product launches, and marked the fifth consecutive quarter of divestiture-adjusted operational revenue growth.

• Completed major divestitures, including women's healthcare, API, and OTC businesses, generating $677.7 million in proceeds in H1 2024 and positioning for accelerated growth.

• Adjusted EBITDA was $1.21 billion and adjusted EPS was $0.69, with free cash flow of $426 million excluding transaction costs.

• Paid down approximately $800 million in debt during Q2, returned capital to shareholders via $288 million in dividends and $250 million in share repurchases.

• Expanded innovative pipeline through acquisitions and accelerated development of assets like Selatogrel and Cenerimod.

Financial highlights

• Q2 2024 total revenues declined 3% year-over-year on a U.S. GAAP basis but grew 2% on a divestiture-adjusted operational basis.

• Net loss for Q2 2024 was $326.4 million, or $(0.27) per share, compared to net earnings of $264.0 million in Q2 2023.

• Adjusted EBITDA was $1.21 billion, down from $1.31 billion in Q2 2023; adjusted EPS was $0.69, up 3% on a divestiture-adjusted basis.

• Free cash flow for Q2, excluding transaction costs, was $426 million; cash and cash equivalents at June 30, 2024, were $917 million.

• Q2 2024 adjusted gross margin was 58%–59.5%, with adjusted SG&A at 24% and adjusted R&D at 5% of revenues.

Outlook and guidance

• 2024 full-year new product revenue guidance raised to $500–$600 million.

• 2024 full-year total revenues expected at $14.6–$15.1 billion, a ~4% decrease year-over-year on a U.S. GAAP basis, but ~2% growth on a divestiture-adjusted operational basis.

• Adjusted EBITDA guidance for 2024 is $4.6–$4.87 billion; free cash flow expected between $2.17 and $2.57 billion.

• Gross leverage ratio targeted at 3.0x by year-end, with strong free cash flow generation expected.

• Capital expenditures for 2024 projected at $350–$450 million.