BHC

• Core Operational Achievements

  • Marked 13 consecutive quarters of both top-line and bottom-line growth, the highest 16% revenue growth and 28% adjusted EBITDA growth in three years
  • Achieved a historical 59% adjusted EBITDA margin, up 530 basis points YoY, and generated the strongest quarterly adjusted operating cash flow since Q4 2024, reducing net debt to $13.7 billion in one of the largest quarter-over-quarter debt reductions since the 2022 refinancing
  • Shibo (full-service China distributor) integration was completed ahead of expectations, delivering margin accretion sooner than projected, with a current full-year 2026 segment profit run rate of $330 million, a $100 million increase over 2025

• Strategic Priorities

  • Continue optimizing Zyfaxan revenue and margins through the remainder of its market exclusivity period (currently expected through January 1, 2028)
  • Drive organic growth and operational excellence across the existing portfolio to strengthen competitive position and earnings power for 2028 and beyond
  • Build a sustainable pipeline of future growth through selective business development that leverages the company's best-in-class U.S. commercial infrastructure and AI-powered customer insights engine
  • Maximize shareholder value from the Bausch & Lomb stake

• Core Management Principles

  • Prioritize profitable growth by activating all available operating levers across market-leading commercial capabilities globally
  • Pursue disciplined resource management and G&A productivity to drive operating leverage and margin expansion alongside growth
  • Prioritize debt reduction through strong cash flow generation, avoiding large unproductive acquisitions that would disrupt deleveraging

• Full-year 2026 guidance for Bausch Health excluding Bausch & Lomb was upgraded across all metrics, with the midpoint increased by $100 million for revenue, $150 million for adjusted EBITDA, and $200 million for adjusted operating cash flow
  • New 2026 revenue guidance: $5.35 billion to $5.50 billion, midpoint represents 5% YoY growth
  • New 2026 adjusted EBITDA guidance: $3.1 billion to $3.25 billion, midpoint represents 10% YoY growth
  • New 2026 adjusted operating cash flow guidance: $1.4 billion to $1.475 billion, midpoint represents 21% YoY growth
• 2027 adjusted EBITDA guidance is maintained at $2.7 billion, with no upward update despite first-half overperformance, as most first-half outperformance is driven by transitional factors; guidance assumes Zyfaxan retains exclusivity through January 1, 2028
• YoY growth rates for revenue and adjusted EBITDA are expected to be lower in the second half of 2026 compared to the first half due to three known headwinds: a $150 million total headwind from channel inventory gross-to-net accrual changes, a $50 million headwind from new generic competition for a diversified segment neuroscience product starting in Q3, and a $75 million revenue headwind from gradual Medicaid/340B volume erosion

Overall consolidated Bausch Health (including Bausch & Lomb) Q2 2026 revenue was $2.852 billion, up 13% year-over-year (YoY) reported, 11% organic. Bausch Health excluding Bausch & Lomb posted total Q2 2026 revenue of $1.458 billion, up 16% YoY, contributing 51.1% of total consolidated revenue. Segment performance is as follows:

• Salix: Revenue of $758 million, up 21% YoY, contributing 52% of total Bausch Health (ex-B&L) revenue. Growth was led by 26% YoY revenue growth for Zyfaxan, driven by favorable net pricing optimization after exiting Medicaid and the 340B program.
• International: Revenue of $305 million, up 10% YoY reported, 5% organic, contributing 21% of total ex-B&L revenue. Organic growth was 16% in LATAM (led by cardiometabolic franchise expansion) and 9% in EMEA (14 consecutive quarters of organic growth), while Canada declined 9% organic after lapping a $6 million one-time prior year pricing benefit.
• Solta: Revenue of $176 million, up 38% YoY reported, 12% organic, contributing 12% of total ex-B&L revenue. Segment profit grew 69% YoY to $91 million. Growth was led by 136% YoY revenue growth in China following full integration of distributor Shibo, with 8% growth in South Korea and 42% growth in Taiwan.
• Diversified: Revenue of $219 million, flat YoY, contributing 15% of total ex-B&L revenue. Growth in neuroscience from favorable net pricing offset declines in dermatology, generics, and dentistry.
• Bausch & Lomb (separate): Revenue of $1.394 billion, up 9% YoY reported, 8% organic, contributing 48.9% of total consolidated Bausch Health revenue.

• The company faces ongoing IP litigation related to Zyfaxan, which creates uncertainty around 2028 financial performance that management is not yet willing to guide for
• Gradual volume erosion is expected for Zyfaxan in remaining Medicaid and 340B channels after the company's exit from these programs
• Proposed U.S. tariffs on imported generics, scheduled to take effect in mid-2028, will create unquantified margin pressure; while the impact is expected to be small due to generics representing only a small portion of current revenue, the full effect will not be assessable until closer to implementation
• Uncertainty remains in the broader macroeconomic environment, which could impact business performance and execution of strategic priorities

Q: What therapeutic areas is Bausch Health targeting for business development, what are the capital allocation guardrails for deals, and would the company increase leverage to pursue acquisitions? / A: Management prioritizes deals in existing core therapeutic areas including GI (specifically liver), neuroscience, dermatology, and pain, plus adjacent categories that can leverage the company's existing U.S. commercial infrastructure and AI customer insights engine. Tuck-in deals are also prioritized for international branded generics in EMEA and LATAM, and for North American promoted brands to offset generic erosion in Canada. Capital allocation priorities remain unchanged: first reduce net debt leverage, second reinvest in the business, shareholder returns are not a current priority. Deals fall into two buckets: small early-stage development assets that can be funded without disrupting deleveraging, and larger late-stage/commercial assets that require quick payback, clear synergy visibility, and cannot interfere with debt reduction targets.

Q: What is the next observable milestone for monetizing Bausch Health's stake in Bausch & Lomb? / A: The 2025 refinancing extended the company's financial runway, creating full flexibility around the timing and method of monetizing the stake to maximize shareholder value. Management is evaluating all possible options to translate Bausch & Lomb's intrinsic value into Bausch Health's share price, and Bausch & Lomb's aggressive Vision 2027 growth targets are an important factor in timing decisions.

Q: Can you elaborate on the $330 million full-year segment profit run rate for Solta, and what margin and growth should be expected in 2027? / A: The Q2 2026 $91 million segment profit is a representative baseline after residual Q1 2026 inventory step-up costs from the Shibo acquisition were fully absorbed, with the $330 million run rate accounting for slight expense phasing timing in Q2. The Shibo integration did not materially change Solta's gross margin profile. Medium-term top-line growth is still expected to be double-digit, with natural operating leverage from top-line growth driving margin expansion even as the company continues to invest in commercial capabilities across all regions, with a focus on balancing growth contribution outside of China and South Korea and expanding the U.S. business.

Q: What impact would the proposed new U.S. tariffs on generic imports have on Bausch Health? / A: The tariffs will not go into effect until mid-2028, and the generic business is already a small portion of Bausch Health's overall revenue, so the expected impact is small. Management will be able to better assess the full impact closer to implementation, once the scope of the tariffs and the size of Bausch Health's generic business at that time are clearer.