Viatris grew Q2 2026 revenue 4.9% to $3.76B on Greater China (+21%) and new products, and raised its guidance midpoints, but a $178M Tyrvaya write-down turned GAAP results into a $119M net loss.
Revenue
$3.8B
+4.9% YoY
Net income
-$119M
Diluted EPS
$-0.10
Operating margin
0.2%
How VTRS compares with Health Care peers
Figure
VTRS
Peer median
Rank
Revenue growth (YoY)
+4.9%
+7.3%
40th of 53
Operating margin
0.2%
15.1%
49th of 53
Rank 1 = fastest revenue growth, highest operating margin. Peers are the other Health Care companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
Viatris grew second-quarter 2026 revenue 4.9% to $3.76 billion, led by a 21% jump in Greater China and about $101 million of new-product sales, yet still posted a GAAP net loss of $118.8 million. The loss came almost entirely from a $177.8 million non-cash write-down of its dry-eye drug Tyrvaya, which it has agreed to sell. On the company's adjusted basis, which strips out that charge and other items, earnings per share rose 11% to $0.69, and management raised the midpoint of every 2026 guidance range. The second half has a known problem, though: supply disruptions at its Nashik, India plant are expected to cost $100–150 million of revenue.
At a glance
$3.76 billion revenue, up 4.9% (3.5% excluding currency moves). This is growth for a company whose sales had been shrinking through divestitures and falling generic-drug prices. About 1.4 points came from a weaker U.S. dollar.
$(0.10) GAAP loss per share against $0.69 adjusted EPS. The $927 million gap between GAAP and adjusted net earnings is mostly acquisition-related amortization ($586 million) plus the Tyrvaya write-down. Neither is a cash cost this quarter.
Greater China net sales of $713.8 million, up 21%. China is now 19% of net sales and supplied about three-quarters of the company's constant-currency sales growth ($96.3 million of $127.7 million).
The numbers
Metric
Q2 2026
Q2 2025
YoY Change
Total revenues
$3,756.8M
$3,582.1M
+4.9%
GAAP gross margin
38.8%
37.2%
+1.6 pts
GAAP operating margin
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Operating margin is operating earnings divided by revenue: the share of sales left after running the business, before interest and tax. Adjusted EBITDA is the company's own measure of earnings before interest, tax, depreciation and amortization, with restructuring, litigation and similar items also removed. Free cash flow is operating cash flow minus capital spending.
Where the growth came from
Viatris reports its business by geography, in four segments. Net sales ("net" means after discounts and rebates) grew $176.9 million. The 10-Q breaks that down as follows: a $49.2 million boost from currency, $101.0 million from new products (mainly in Developed Markets), and $26.7 million of "net base business growth," which the company attributes to Greater China.
Segment
Q2 2026 net sales
Reported change
Constant-currency change
What the 10-Q says drove it
Developed Markets (North America + Europe)
$2,193.7M
+4%
+2%
New products, mainly octreotide acetate (a hormone-therapy injectable) in North America, and estradiol patches; partly offset by supply constraints in Europe
Greater China
$713.8M
+21%
+16%
"Strong growth across multiple channels, including e-commerce and retail," from more marketing and selling
Emerging Markets
$542.3M
-2%
-2%
Lower volumes of ARVs (HIV antiretrovirals) because of continued supply constraints
JANZ (Japan, Australia, NZ)
$296.1M
-3%
Flat
The decline was almost all currency
"Constant currency" means the sales change recalculated at last year's exchange rates, so it shows real volume and price change without the effect of the dollar moving.
At the product level, the old Pfizer brands kept growing. Lipitor (cholesterol) rose to $452.2 million from $387.9 million, Norvasc (blood pressure) to $200.2 million from $182.7 million, and Zoloft to $71.4 million from $61.1 million. EpiPen ($129.2 million vs $136.8 million), Lyrica and Dymista declined.
What the headline numbers hide
Why GAAP profit fell while adjusted profit rose. Operating earnings dropped from $233.0 million to $6.3 million even though gross profit grew $123.6 million. Three items explain the difference:
Tyrvaya write-down. SG&A (selling, general and administrative costs) rose $205.8 million, and $177.8 million of that was the charge to mark Tyrvaya down to its sale value. The buyer, Harrow, is paying $30 million upfront plus up to $70 million in sales milestones.
Litigation swing. Litigation and contingencies were a $73.2 million cost this quarter, including $51.9 million of settlements and a $21.3 million contingent-consideration adjustment. A year ago the same line was a $47.6 million gain, so this is a $121 million year-over-year swing.
Restructuring. Restructuring costs rose to $47.8 million from $26.6 million. The company's enterprise-wide review expects $700–850 million of total pre-tax charges over the life of the program.
What adjusted EPS excludes. Adjusted net earnings of $808.5 million add back purchase-accounting amortization ($586.4 million, the non-cash cost of intangible assets acquired in the Mylan/Upjohn merger), the Tyrvaya charge and other SG&A items ($241.1 million), restructuring ($47.8 million), acquisition and divestiture costs ($51.4 million), litigation ($73.2 million), share-based pay ($38.7 million) and plant-related special items in cost of sales ($56.3 million). The amortization add-back is a routine exclusion across the industry. The other items are presented as one-offs, but restructuring, divestiture, litigation and plant costs show up in both periods. Excluding amortization, adjustments came to about $464 million pre-tax in Q2 2026, including the Tyrvaya charge.
A one-off in the prior year flatters the below-the-line comparison. "Other (income) expense" swung from a $333.5 million expense to $50.4 million of income. Most of that is a $284.0 million loss in Q2 2025 on the fair value of its Biocon Biologics stake, compared with a $56.3 million gain this year on Biocon shares. Viatris then sold those shares in July for about $380 million. None of this reflects how the drug business performed.
Tax went the wrong way. GAAP tax was a $54.8 million provision on a pre-tax loss of $64.0 million. The 10-Q cites losses in countries where it can book little tax benefit, plus accruals for international tax matters. A year earlier it booked a $212.5 million tax benefit.
Where the EPS growth came from. Adjusted net earnings grew 11.4% while diluted share count fell only 0.4% (1,172.4 million vs 1,176.8 million), so buybacks contributed very little this quarter. Interest expense actually rose slightly ($120.7 million vs $116.6 million). Nearly all the adjusted EPS growth came from operations and a weaker dollar; management puts constant-currency adjusted EPS growth at 9%.
Cash conversion was solid. Operating cash flow was $381.8 million in the quarter against a GAAP net loss, and $770.1 million for the half-year against $57.6 million of GAAP net income. Free cash flow roughly doubled to $329.0 million, or $449 million before $120 million of transaction and restructuring cash costs. Receivables rose 3.1% since December ($3,126.2 million vs $3,031.3 million) and inventory fell 1.7%, so working capital shows no warning signs.
Deleveraging. Viatris repaid about $900 million of debt that matured in June and refinanced the rest with €650 million of 4.25% notes due 2033. Long-term debt plus the current portion of debt and other long-term obligations fell to $13.35 billion from $14.41 billion at year-end. Gross leverage (debt divided by adjusted EBITDA) is now 2.9x. It returned about $550 million to shareholders through August 5, including $270 million of buybacks at an average $16.42 per share and a $0.12 quarterly dividend.
Takeaway: Viatris's underlying business is growing: 3.5% at constant currency, with adjusted EPS up 11% on almost no help from buybacks. The GAAP loss comes from writing down a brand it is selling (Tyrvaya), not from the core business. What limits confidence is how narrow the growth is: Greater China supplied most of the base-business growth, while Emerging Markets and parts of Europe are losing sales to supply problems.
Guidance and what to watch
Management raised the midpoint of every 2026 guidance range:
The revenue raise is small ($50 million at the midpoint). With $7.27 billion booked in the first half, the new midpoint implies about $7.48 billion for the second half, and that has to absorb the $100–150 million supply hit the company expects from Nashik. That plant had a fire in February and then received FDA Form 483 inspection findings in May, which have caused intermittent shutdowns. The EPS midpoint implies about $1.24 of adjusted EPS in the second half, slightly below the first half's $1.28. The guidance therefore already allows for a slower second half.
What to watch next quarter:
Nashik. Whether the supply loss stays within $100–150 million, and whether the FDA's findings escalate to a warning letter.
Greater China. Whether growth near 16% at constant currency holds, since the base business depends on it.
The pipeline. The PDUFA date (the FDA's target decision date) for MR-107A-02, a non-opioid fast-acting meloxicam for acute pain, is December 27, 2026. The Gwyn Lo contraceptive patch is due to launch later this year. Both count toward the $450–550 million new-product revenue target, of which $172 million had been booked by mid-year.
Our view: the core business is growing modestly and generating cash, which supports continued debt paydown and buybacks. With about $278 million of new-product revenue still needed in the second half to reach the low end of the target, and with the Nashik disruption, the raised guidance leaves little room for error.