Viatris (VTRS) Q3 2024 earnings summary

Executive summary

• Achieved sixth consecutive quarter of operational revenue growth, with Q3 2024 total revenues of $3.8B and $133M in new product revenues, totaling $497M year-to-date.

• Net earnings for Q3 2024 were $95M ($0.08 per diluted share), with adjusted EBITDA of $1.3B and adjusted EPS of $0.75 on a divestiture-adjusted basis.

• Approximately $1.9B in debt was repaid, with notional debt outstanding below $15B and a gross leverage target of ~3.0x by year-end.

• Strategic focus on a diversified and growing base business, financial strength, and expanding innovative portfolio, including exclusive licensing for sotagliflozin.

• Major divestitures (OTC, API, women's healthcare) completed, with proceeds used for debt reduction and pipeline expansion.

Financial highlights

• Q3 2024 total revenues were $3.8B, down 5% year-over-year on a GAAP basis, but up 3% operationally on a divestiture-adjusted basis.

• Adjusted EBITDA was $1.3B (up 4% operationally, down 6% GAAP); adjusted EPS was $0.75; free cash flow was $866M, excluding transaction costs.

• Net earnings for Q3 2024 were $95M, down from $332M in Q3 2023.

• New product revenues were $133M for the quarter, totaling $497M year-to-date.

• Share repurchases totaled $250M for the nine months; $431.5M in dividends paid.

Outlook and guidance

• 2024 full-year total revenues expected between $14.6B and $15.1B, midpoint $14.85B, representing a ~4% decrease year-over-year.

• Adjusted EBITDA guidance for 2024 is $4.575B–$4.87B; adjusted EPS $2.56–$2.71; free cash flow projected at $2.17B–$2.57B.

• Reaffirmed base business operational revenue growth of ~2% and new product revenue of $500M–$600M for 2024.

• On track to achieve gross leverage target of ~3.0x and notional debt below $14B by year-end.

• Q4 revenue expected to be lower due to seasonality, product phasing, and generic entrants; free cash flow in Q4 anticipated to decline due to divestiture costs, taxes, higher CapEx, and interest payments.