TEVAHIGH SIGNALFINANCIAL10-K

TEVA executed a dramatic financial turnaround, swinging from a $303M operating loss to $2.2B operating income while reducing total debt by $3.7B and divesting its Japan business operations.

This represents a fundamental transformation of TEVA's financial profile, with the company achieving profitability after significant losses while simultaneously deleveraging its balance sheet. The disposal of the Japan venture and new cross-currency hedging strategy indicate active portfolio optimization and risk management improvements.

Comparing 2026-02-03 vs 2025-02-05View on EDGAR →
FINANCIAL ANALYSIS

TEVA delivered exceptional financial improvement across all key metrics, with operating income surging over 800% to $2.2B positive and net income swinging $3B from negative to positive territory. The company strengthened its balance sheet significantly by reducing total debt 11.4% to $28.8B while growing stockholders' equity 47% to $7.9B, supported by higher operating cash flows (+32%) and improved gross margins. This comprehensive financial turnaround, combined with reduced R&D spending and higher receivables indicating strong sales activity, signals a successful operational restructuring and return to sustainable profitability.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
+811.9%
-$303.0M→$2.2B

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Net Income
P&L
+186%
-$1.6B→$1.4B

Net income grew 186% — bottom-line growth signals improving overall business health.

Stockholders Equity
Balance Sheet
+47.2%
$5.4B→$7.9B

Equity base grew 47.2% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Operating Cash Flow
Cash Flow
+32.2%
$1.2B→$1.6B

Operating cash flow surged 32.2% — exceptional cash generation, highest quality earnings signal.

Accounts Receivable
Balance Sheet
+21.2%
$3.1B→$3.7B

Receivables grew 21.2% — monitor days sales outstanding for collection efficiency.

R&D Expense
P&L
-14%
$114.0M→$98.0M

R&D spending cut 14% — could signal cost discipline or concerning reduction in innovation investment.

Total Debt
Balance Sheet
-11.4%
$32.5B→$28.8B

Debt reduced 11.4% — deleveraging strengthens balance sheet and reduces financial risk.

Current Assets
Balance Sheet
+11.1%
$12.6B→$13.9B

Current assets grew 11.1% — improving short-term liquidity or inventory/receivables build.

Gross Profit
P&L
+10.8%
$8.1B→$8.9B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

LANGUAGE CHANGES
NEW — 2026-02-03
PRIOR — 2025-02-05
ADDED
Mainly in connection with a declaration of dividends to non-controlling interests in Teva s business venture in Japan.
On May 2025, Teva entered into a $500 million notional amount of fixed to fixed cross-currency interest rate swaps relating to its 5.75% senior notes due 2030 to hedge the foreign currency exchange risk of future principal and interest payments associated with the USD denominated notes.
The cross-currency swaps synthetically convert part of the USD debt into CHF, aligning debt servicing costs with Teva s inflows and reducing economic volatility.
These swaps have been designated as cash flow hedges and the gain or loss on these swaps will be reported as a component of other comprehensive income and reclassified into earnings in each period during which the swaps affect earnings in the same line item associated with the USD denominated bonds.
Other items, net in the year ended December 31, 2024 includes mainly amounts related to an agreement with the Israeli Tax Authorities.
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REMOVED
Cumulative goodwill impairment as of December 31, 2024, December 31, 2023 and December 31, 2022 was approximately $29.55 billion, $28.3 billion and $27.6 billion, respectively.
The increase in deferred tax is mainly due to intellectual property related integration.
The amounts shown for 2023 are primarily comprised of Capitalization of R D Expenses.
Amounts do not include foreign currency translation adjustments attributable to non-controlling interests of $61 million loss in 2024, $50 million loss in 2023 and $116 million loss in 2022.
On March 31, 2023, Teva entered into a cross-currency interest rate swap agreement, designated as cash flow hedge for accounting purposes with respect to an intercompany loan due October 2026, denominated in Japanese yen.
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