Solventum Corporation reported fourth‑quarter 2025 results on February 26 2026, with revenue of $1,998 million, a 3.7% year‑over‑year decline that reflects the impact of divestitures and a shift in product mix. GAAP earnings per share were $0.36, falling 37.3% below the consensus estimate of $0.60, while adjusted EPS rose to $1.57, beating the $1.50 consensus estimate by $0.07 (a 4.7% beat). The company’s guidance for 2026 includes organic sales growth of 2%–3% (3%–4% excluding SKU rationalization), adjusted EPS of $6.40–$6.60, and free cash flow of roughly $200 million.
Revenue decline was driven by a 3.2% organic growth in MedSurg ($1.2 billion), a 5.9% organic increase in Dental Solutions ($343 million), and a 3.2% organic rise in Health Information Systems ($348 million). However, the company’s divestiture of the Purification and Filtration business and the integration of Acera Surgical contributed to a lower overall top line compared with the $2.07 billion reported in Q4 2024.
Operating margin dynamics illustrate the difference between GAAP and adjusted performance. GAAP operating margin held steady at 6.2%, while adjusted operating margin expanded to 19.9% in Q4 2025 and is projected to reach 21%–21.5% in 2026. The GAAP margin stability masks a 230‑basis‑point decline in gross margin, largely driven by higher logistics costs and manufacturing timing issues, whereas the adjusted margin growth reflects successful cost‑control initiatives and a favorable product mix.
Management highlighted the company’s progress in its post‑spin transformation. CEO Bryan Hanson said, "Solventum's fourth quarter results reflect another quarter of solid performance resulting in full year 2025 results ahead of our expectations for sales and EPS. We continue to deliver on our commitments; our underlying momentum and the intentional steps we've taken in our transformation journey demonstrate clear progress towards achieving our long‑range plan." CFO Wayde McMillan added, "We made progress across both our transformation phases and turning around the business. Our commercial improvements yielded a significant increase in our organic sales growth, putting us on an accelerated path to reach our long‑range plan sales growth target." The company also reaffirmed a $1 billion share‑repurchase program.
Market reaction was muted, with investors weighing the revenue beat and adjusted EPS upside against the GAAP EPS miss and year‑over‑year revenue decline.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.