News Classic

TORONTO, Nov. 06, 2024 (GLOBE NEWSWIRE) — Sprott Inc. (NYSE/TSX:SII) (“Sprott” or the “Company”) today announced its financial results for the three and nine months ended September 30, 2024.

Management commentary

“Sprott’s Assets Under Management (“AUM”) was $33.4 billion as at September 30, 2024, up 8% from June 30, 2024 and up 16% from December 31, 2023,” said Whitney George, CEO of Sprott. “This is our third consecutive quarter of record high AUM, driven by strong gold and silver prices, as well as $589 million in net sales during the period. Given the strength of these results and our confidence in Sprott’s future, our Board has declared a third quarter dividend of $0.30 per share, an increase of 20%. Further, we now expect to repay the balance of our line of credit by the end of this month, resulting in a debt-free balance sheet.”

“With Sprott’s core positioning in precious metals and critical materials, we retain our constructive outlook and believe we are well positioned to navigate volatile market conditions and continue creating value for our clients and shareholders,” continued Mr. George.

Key AUM highlights¹

• AUM was $33.4 billion as at September 30, 2024, up 8% from $31.1 billion as at June 30, 2024 and up 16% from $28.7 billion as at December 31, 2023. On a three and nine months ended basis, we primarily benefited from strong market value appreciation in our precious metals physical trusts. We also benefited from net inflows to our exchange listed products and the launch of our Physical Copper Trust in the second quarter.

Key revenue highlights

• Management fees were $38.7 million in the quarter, up 18% from $32.9 million for the quarter ended September 30, 2023 and $113.1 million on a year-to-date basis, up 17% from $97 million for the nine months ended September 30, 2023. Carried interest and performance fees were $4.1 million in the quarter, up from $nil for the quarter ended September 30, 2023 and $4.8 million on a year-to-date basis, up from $0.4 million for the nine months ended September 30, 2023. Net fees were $38.9 million in the quarter, up 31% from $29.7 million for the quarter ended September 30, 2023 and $106.1 million on a year-to-date basis, up 21% from $87.7 million for the nine months ended September 30, 2023. Our revenue performance on both a three and nine months ended basis was primarily due to higher average AUM on strong market value appreciation in our precious metals physical trusts and continuous inflows to the majority of our exchange listed products. We also benefited from carried interest crystallization in a legacy fixed-term exploration LP in our managed equities segment.
• Commission revenues were $0.5 million in the quarter, down 8% from the quarter ended September 30, 2023 and $4.9 million on a year-to-date basis, down 30% from $7 million for the nine months ended September 30, 2023. Net commissions were $0.2 million in the quarter, down 31% from $0.4 million for the quarter ended September 30, 2023 and $2.3 million on a year-to-date basis, down 42% from $3.9 million for the nine months ended September 30, 2023. Commission revenue was lower in the quarter due to modest ATM activity in our critical materials physical trusts. On a year-to-date basis, the decline in commission revenue was due to the sale of our former Canadian broker-dealer in the second quarter of last year.
• Finance income was $1.6 million in the quarter, down 12% from $1.8 million for the quarter ended September 30, 2023 and $7.5 million on a year-to-date basis, up 46% from $5.1 million for the nine months ended September 30, 2023. The decrease in the quarter was due to lower income generation in co-investment positions we hold in our LPs managed in our private strategies segment. The increase on a year-to-date basis was due to higher income earned on streaming syndication activity in the second quarter.

Key expense highlights

• Net compensation expense was $16.9 million in the quarter, up 11% from $15.3 million for the quarter ended September 30, 2023 and $50.3 million on a year-to-date basis, up 9% from $46 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was primarily due to increased AIP accruals on higher net fee generation. Our net compensation ratio was 46% in the quarter (September 30, 2023 – 50%) and 45% on a year-to-date basis (September 30, 2023 – 50%).
• SG&A expense was $4.6 million in the quarter, up 21% from $3.8 million for the quarter ended September 30, 2023 and $13.8 million on a year-to-date basis, up 10% from $12.6 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was due to higher technology and professional services costs.

Earnings summary

• Net income for the quarter was $12.7 million ($0.50 per share), up 87% from $6.8 million ($0.27 per share) for the quarter ended September 30, 2023 and was $37.6 million ($1.48 per share) on a year-to-date basis, up 17% from $32.1 million ($1.27 per share) for the nine months ended September 30, 2023. Our earnings benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products. We also benefited from carried interest crystallization in our managed equities funds and market value appreciation of our co-investments.
• Adjusted base EBITDA was $20.7 million ($0.81 per share) in the quarter, up 16% from $17.9 million ($0.71 per share) for the quarter ended September 30, 2023 and $62.8 million ($2.47 per share) on a year-to-date basis, up 18% from $53.1 million ($2.10 per share) for the nine months ended September 30, 2023. Adjusted base EBITDA on both a three and nine months ended basis benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products.

1 See “non-IFRS financial measures” section in this press release and schedule 2 and 3 of “Supplemental financial information”

Subsequent events

• Subsequent to quarter-end, on November 1, 2024, AUM was $34.2 billion, up 2% from $33.4 billion at September 30, 2024.
• On November 5, 2024, the Sprott Board of Directors announced a quarterly dividend of $0.30 per share.

Supplemental financial information

Please refer to the September 30, 2024 quarterly financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details into the Company’s financial position as at September 30, 2024 and the Company’s financial performance for the three and nine months ended September 30, 2024.

Schedule 1 – AUM continuity

3 months results
(In millions $)	AUM Jun. 30, 2024	Net inflows (1)		Market value changes		Other net inflows (1)	AUM Sep. 30, 2024		Net management fee rate (2)
Exchange listed products
– Precious metals physical trusts and ETFs
– Physical Gold Trust	7,283	361		973		—	8,617		0.35	%
– Physical Silver Trust	4,994	224		348		—	5,566		0.45	%
– Physical Gold and Silver Trust	4,710	—		515		—	5,225		0.40	%
– Precious Metals ETFs	355	(11	)	60		—	404		0.33	%
– Physical Platinum & Palladium Trust	143	7		1		—	151		0.50	%
	17,485	581		1,897		—	19,963		0.39	%
– Critical materials physical trusts and ETFs
– Physical Uranium Trust	5,615	23		(230	)	—	5,408		0.32	%
– Critical Materials ETFs	2,408	56		(157	)	—	2,307		0.55	%
– Physical Copper Trust	98	2		3		—	103		0.32	%
	8,121	81		(384	)	—	7,818		0.38	%
Total exchange listed products	25,606	662		1,513		—	27,781		0.39	%
Managed equities (3)(4)	2,962	(55	)	369		—	3,276		0.90	%
Private strategies (4)	2,485	(18	)	(85	)	—	2,382		0.80	%
Total AUM (5)	31,053	589		1,797		—	33,439		0.47	%
9 months results
(In millions $)	AUM Dec. 31, 2023	Net inflows (1)		Market value changes		Other net inflows (1)	AUM Sep. 30, 2024		Net management fee rate (2)
Exchange listed products
– Precious metals physical trusts and ETFs
– Physical Gold Trust	6,532	316		1,769		—	8,617		0.35	%
– Physical Silver Trust	4,070	256		1,240		—	5,566		0.45	%
– Physical Gold and Silver Trust	4,230	(161	)	1,156		—	5,225		0.40	%
– Precious Metals ETFs	339	(14	)	79		—	404		0.33	%
– Physical Platinum & Palladium Trust	116	42		(7	)	—	151		0.50	%
	15,287	439		4,237		—	19,963		0.39	%
– Critical materials physical trusts and ETFs
– Physical Uranium Trust	5,773	266		(631	)	—	5,408		0.32	%
– Critical materials ETFs	2,143	294		(130	)	—	2,307		0.55	%
– Physical Copper Trust	—	2		(9	)	110	103		0.32	%
	7,916	562		(770	)	110	7,818		0.38	%
Total exchange listed products	23,203	1,001		3,467		110	27,781		0.39	%
Managed equities (3)(4)	2,874	(167	)	569		—	3,276		0.90	%
Private strategies (4)	2,661	(172	)	(107	)	—	2,382		0.80	%
Total AUM (5)	28,738	662		3,929		110	33,439		0.47	%
(1) See “Net inflows” and “Other net inflows” in the key performance indicators and non-IFRS and other financial measures section of the MD&A.
(2) Management fee rate represents the weighted average fees for all funds in the category, net of fund expenses.
(3) Managed equities is made up of primarily precious metal strategies (57%), high net worth managed accounts (35%) and U.S. value strategies (8%).
(4) Prior period figures have been reclassified to conform with current presentation.
(5) No performance fees are earned on exchange listed products. Performance fees are earned on certain of our managed equities products and are based on returns above relevant benchmarks. Private strategies      LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return.

Schedule 2 – Summary financial information

(In thousands $)	Q3 2024		Q2 2024		Q1 2024		Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022
Summary income statement
Management fees (1)	38,693		38,065		36,372		34,244		32,867		32,940		31,170		28,152
Fund expenses (2), (3)	(2,385	)	(2,657	)	(2,234	)	(2,200	)	(1,740	)	(1,871	)	(1,795	)	(1,470	)
Direct payouts	(1,483	)	(1,408	)	(1,461	)	(1,283	)	(1,472	)	(1,342	)	(1,187	)	(1,114	)
Carried interest and performance fees	4,110		698		—		503		—		388		—		1,219
Carried interest and performance fee payouts – internal	—		(251	)	—		(222	)	—		(236	)	—		(567	)
Carried interest and performance fee payouts – external (3)	—		—		—		—		—		—		—		(121	)
Net fees	38,935		34,447		32,677		31,042		29,655		29,879		28,188		26,099
Commissions	498		3,332		1,047		1,331		539		1,647		4,784		5,027
Commission expense – internal	(147	)	(380	)	(217	)	(161	)	(88	)	(494	)	(1,727	)	(1,579	)
Commission expense – external (3)	(103	)	(1,443	)	(312	)	(441	)	(92	)	(27	)	(642	)	(585	)
Net commissions	248		1,509		518		729		359		1,126		2,415		2,863
Finance income (2)	1,574		4,084		1,810		1,391		1,795		1,650		1,655		1,738
Gain (loss) on investments	937		1,133		1,809		2,808		(1,441	)	(1,950	)	1,958		(930	)
Co-investment income (2)	418		416		274		170		462		1,327		93		370
Total net revenues (2)	42,112		41,589		37,088		36,140		30,830		32,032		34,309		30,140
Compensation (2)	18,547		19,225		17,955		17,096		16,939		21,468		19,556		17,148
Direct payouts	(1,483	)	(1,408	)	(1,461	)	(1,283	)	(1,472	)	(1,342	)	(1,187	)	(1,114	)
Carried interest and performance fee payouts – internal	—		(251	)	—		(222	)	—		(236	)	—		(567	)
Commission expense – internal	(147	)	(380	)	(217	)	(161	)	(88	)	(494	)	(1,727	)	(1,579	)
Severance, new hire accruals and other	(58	)	—		—		(179	)	(122	)	(4,067	)	(1,257	)	(1,240	)
Net compensation	16,859		17,186		16,277		15,251		15,257		15,329		15,385		12,648
Net compensation ratio	46	%	44	%	47	%	47	%	50	%	48	%	52	%	44	%
Severance, new hire accruals and other	58		—		—		179		122		4,067		1,257		1,240
Selling, general and administrative (“SG&A”) (2)	4,612		5,040		4,173		3,963		3,817		4,752		4,026		3,814
SG&A recoveries from funds (1)	(275	)	(260	)	(231	)	(241	)	(249	)	(282	)	(264	)	(253	)
Interest expense	933		715		830		844		882		1,087		1,247		1,076
Depreciation and amortization	502		568		551		658		731		748		706		710
Foreign exchange (gain) loss (2)	1,028		122		168		1,295		37		1,440		440		(484	)
Other (income) and expenses (2)	—		(580	)	—		3,368		4,809		(18,890	)	1,249		1,686
Total expenses	23,717		22,791		21,768		25,317		25,406		8,251		24,046		20,437
Net income	12,697		13,360		11,557		9,664		6,773		17,724		7,638		7,331
Net income per share	0.50		0.53		0.45		0.38		0.27		0.70		0.30		0.29
Adjusted base EBITDA	20,675		22,375		19,751		18,759		17,854		17,953		17,321		18,083
Adjusted base EBITDA per share	0.81		0.88		0.78		0.75		0.71		0.71		0.68		0.72
Summary balance sheet
Total assets	412,477		406,265		389,784		378,835		375,948		381,519		386,765		383,748
Total liabilities	82,198		90,442		82,365		73,130		79,705		83,711		108,106		106,477
Total AUM	33,439,221		31,053,136		29,369,191		28,737,742		25,398,159		25,141,561		25,377,189		23,432,661
Average AUM	31,788,412		31,378,343		29,035,667		27,014,109		25,518,250		25,679,214		23,892,335		22,323,075

(1) Previously, management fees within the above summary financial information table included SG&A recoveries from funds consistent with IFRS 15. For management reporting purposes, these recoveries are now shown next to their associated expense as management believes this will enable readers to transparently identify the net economics of these recoveries. However, SG&A recoveries from funds are still shown within the “Management fees” line on the consolidated statement of operations. Prior year figures have been reclassified to conform with current presentation.

(2) Current and prior period figures on the consolidated statements of operations include the following adjustments: (1) trading costs incurred in managed accounts are now included within “Fund expenses” (previously included within “SG&A”); (2) interest income earned on cash deposits are now included within “Finance income” (previously included within “Other income”); (3) co-investment income and income attributable to non-controlling interest are now included as part of “Co-investment income” (previously included within “Other income”); (4) expenses attributable to non-controlling interest is now included within “Co-investment income” (previously included within “Other expenses”); (5) the mark-to-market expense of DSU issuances are now included within “Compensation” (previously included within “Other expenses”); (6) foreign exchange (gain) loss is now shown separately (previously included within “Other expenses”); and (7) shares received on a previously unrecorded contingent asset in Q2 2023 are now included within “Other (income) and expenses” (previously included within “Other income”). Prior year figures have been reclassified to conform with current presentation.

(3) These amounts are included in the “Fund expenses” line on the consolidated statements of operations.

Schedule 3 – EBITDA reconciliation

	3 months ended				9 months ended
(in thousands $)	Sep. 30, 2024		Sep. 30, 2023		Sep. 30, 2024		Sep. 30, 2023
Net income for the period	12,697		6,773		37,614		32,135
Net income margin (1)	27	%	20	%	28	%	29	%
Adjustments:
Interest expense	933		882		2,478		3,216
Provision for income taxes	5,698		(1,349	)	14,899		7,333
Depreciation and amortization	502		731		1,621		2,185
EBITDA	19,830		7,037		56,612		44,869
Adjustments:
(Gain) loss on investments (2)	(937	)	1,441		(3,879	)	1,433
Stock-based compensation (3)	4,806		4,408		13,829		12,447
Foreign exchange (gain) loss (4)	1,028		37		1,318		1,917
Severance, new hire accruals and other (4)	58		122		58		5,446
Revaluation of contingent consideration (4)	—		—		(580	)	(2,254	)
Costs relating to exit of non-core business (4)	—		3,615		—		4,987
Non-recurring regulatory, professional fees and other (4)	—		1,194		—		3,023
Shares received on recognition of contingent asset (4)	—		—		—		(18,588	)
Carried interest and performance fees	(4,110	)	—		(4,808	)	(388	)
Carried interest and performance fee payouts – internal	—		—		251		236
Carried interest and performance fee payouts – external	—		—		—		—
Adjusted base EBITDA	20,675		17,854		62,801		53,128
Adjusted base EBITDA margin (5)	58	%	56	%	58	%	57	%

(1) Calculated as IFRS net income divided by IFRS total revenue.

(2) This adjustment removes the income effects of certain gains or losses on short-term investments, co-investments, and digital gold strategies to ensure the reporting objectives of our EBITDA metric as described below are met.

(3) In prior years, the mark-to-market expense of DSU issuances were included with “other (income) and expenses”. In the current period, these costs are included as part of “stock based compensation”. Prior year figures have been reclassified to conform with current presentation.

(4) Foreign exchange (gain) and loss, severance, new hire accruals and other; revaluation of contingent consideration; costs relating to exit of non-core business; non-recurring regulatory, professional fees and other; and shares received on recognition of contingent asset were previously included with “other (income) and expenses” and are now shown separately in the reconciliation of adjusted base EBITDA above. Prior year figures have been reclassified to conform with current presentation.

(5) Prior year figures have been restated to remove the adjustment of depreciation and amortization.

Conference Call and Webcast

A webcast will be held today, November 6, 2024 at 10:00 am ET to discuss the Company’s financial results.

To listen to the webcast, please register at: https://edge.media-server.com/mmc/p/7nbc4pms

Please note, analysts who cover the Company should register at: https://register.vevent.com/register/BIecf4c3c925374bf19a6ce5051f64dd6d

This press release includes financial terms (including AUM, net commissions, net fees, expenses, adjusted base EBITDA, adjusted base EBITDA margin and net compensation) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards (“IFRS”). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. Non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the “Supplemental financial information” section of this press release.

Net fees

Management fees, net of fund expenses and direct payouts, and carried interest and performance fees, net of carried interest and performance fee payouts (internal and external), are key revenue indicators as they represent the net revenue contribution after directly associated costs that we generate from our AUM.

Net commissions

Commissions, net of commission expenses (internal and external), arise primarily from purchases and sales of critical materials in our exchange listed products segment and transaction-based service offerings by our broker dealers.

Net compensation & net compensation ratio

Net compensation excludes commission expenses paid to employees, other direct payouts to employees, carried interest and performance fee payouts to employees, which are all presented net of their related revenues in this MD&A, and severance, new hire accruals and other which are non-recurring. Net compensation ratio is calculated as net compensation divided by net revenues.

EBITDA, adjusted base EBITDA and adjusted base EBITDA margin

EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry. While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto), the Company believes its adjusted base EBITDA metric results in a better comparison of the Company’s underlying operations against its peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Adjusted base EBITDA margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the financial services sector by analysts, investors and management.

Forward Looking Statements

Certain statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein as the “Forward-Looking Statements”) within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) our constructive outlook in precious metals and critical materials; (ii) our expectation to repay the balance of our line of credit by the end of this month, resulting in a debt-free balance sheet at that time; and (iii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without impacting our ability to fund future growth initiatives.

Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; (iv) the impact of public health outbreaks; and (v) those assumptions disclosed under the heading “Critical Accounting Estimates, Judgments and Changes in Accounting Policies” in the Company’s MD&A for the period ended September 30, 2024. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favorable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company’s proprietary investments; (xxvi) risks relating to the Company’s private strategies business; (xxvii) those risks described under the heading “Risk Factors” in the Company’s annual information form dated February 20, 2024; and (xxviii) those risks described under the headings “Managing Financial Risks” and “Managing Non-Financial Risks” in the Company’s MD&A for the period ended September 30, 2024. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company’s earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

About Sprott

Sprott is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products, Managed Equities and Private Strategies. Sprott has offices in Toronto, New York, Connecticut and California and the company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com.

Investor contact information:

Glen Williams
Managing Partner
Investor and Institutional Client Relations
(416) 943-4394
gwilliams@sprott.com

NEW YORK, Nov. 06, 2024 (GLOBE NEWSWIRE) — Kaltura, Inc. (“Kaltura” or the “Company”), the video experience cloud, today announced financial results for the third quarter ended September 30, 2024, as well as outlook for the fourth quarter and full year 2024.

“We delivered record subscription revenue and ARR in the third quarter, making it our eighth consecutive quarter of year-over-year revenue growth. Cash flow was at a record high, and Adjusted EBITDA was positive for the fifth consecutive quarter and at its highest level since the second quarter of 2020, fueled by a record gross margin. We also posted a sequential and year-over-year increase in new bookings for the second consecutive quarter, continued year-over-year improvement in gross retention, and record RPO. In light of these results, we are once again increasing our revenue and Adjusted EBITDA guidance for the full year and are expecting to post positive cash flow from operations in the fourth quarter and for the full year, which would translate to over a $46 million improvement in cash flow from operations in 2024 as compared to the same period only two years ago,” said Ron Yekutiel, Kaltura Co-founder, Chairman, President and CEO.

Mr. Yekutiel continued, “We believe that the tide is gradually turning on the industry and Kaltura, and that the improved booking and retention trend that we started seeing in recent quarters will continue and strengthen in 2025 and beyond, fueled by renewed industry and macroeconomic tailwinds as well as product enhancements harnessing Gen-AI that are expected to bring about further digital transformation and proliferation of video experiences. We expect that as the market gradually regrows, customers will further accelerate the consolidation of their video needs around Kaltura to boost all of their employee and customer experiences.”

Third Quarter 2024 Financial Highlights:

• Revenue for the third quarter of 2024 was $44.3 million, an increase of 2% compared to $43.5 million for the third quarter of 2023.
• Subscription revenue for the third quarter of 2024 was $42.1 million, an increase of 3% compared to $40.8 million for the third quarter of 2023.
• Annualized Recurring Revenue (ARR) for the third quarter of 2024 was $168.9 million, an increase of 4% compared to $163.1 million for the third quarter of 2023.
• GAAP Gross profit for the third quarter of 2024 was $29.5 million, representing a gross margin of 67%, compared to a GAAP gross profit of $27.7 million and gross margin of 64% for the third quarter of 2023. 
• Non-GAAP Gross profit for the third quarter of 2024 was $29.9 million, representing a non-GAAP gross margin of 68%, compared to a non-GAAP gross profit of $28.1 million and non-GAAP gross margin of 65% for the third quarter of 2023. 
• GAAP Operating loss was $4.5 million for the third quarter of 2024, compared to an operating loss of $8.3 million for the third quarter of 2023.
• Non-GAAP Operating income was $1.3 million for the third quarter of 2024, compared to a non-GAAP operating loss of $0.8 million for the third quarter of 2023.
• GAAP Net loss was $3.6 million or $0.02 per diluted share, for the third quarter of 2024, compared to a GAAP net loss of $10.7 million, or $0.08 per diluted share, for the third quarter of 2023.
• Non-GAAP Net income was $2.1 million or $0.01 per diluted share for the third quarter of 2024, compared to a non-GAAP net loss of $3.2 million, or $(0.02) per diluted share, for the third quarter of 2023.
• Adjusted EBITDA was $2.4 million for the third quarter of 2024, compared to adjusted EBITDA of $0.3 million for the third quarter of 2023.
• Net Cash Provided By Operating Activities was $10.7 million for the third quarter of 2024, compared to $1.7 million for the third quarter of 2023.

Third Quarter 2024 Business Highlights:

• Closed 2 seven-digit deals and 22 six-digit deals across a diverse array of industries, use-cases, and geographies.
• Highest new bookings since the fourth quarter of 2022.
• Improved gross retention year-over-year, and re-growth of Net Dollar Retention to 101% after posting 98% in the last three quarters.
• Started productizing our “Content Lab” where Gen-AI is used to analyze video captions and viewership engagement data to create in real-time new clips, highlight reels, and other immersive experiences that are hyper-personalized and hyper-contextualized. Also showcased a beta version of our Gen-AI offerings for Media and Telecom customers at the IBC 2024 conference in Amsterdam, including AI-generated metadata enrichment, subtitles, dubbing, chaptering, highlights, and content recommendation for live streaming, VOD assets, and user generated content.
• Won two additional significant industry awards: the “best overall event management solution award” in the 7th annual international Martech Breakthrough Awards Program, and “best video management platform award” in the 2024 Digiday Technology Awards.

Financial Outlook:

For the fourth quarter of 2024, Kaltura currently expects:

• Subscription Revenue to grow by 2%-4% year-over-year to between $41.8 million and $42.5 million.
• Total Revenue to grow (decline) by (1)% – 1% year-over-year to between $44.0 million and $44.7 million.
• Adjusted EBITDA to be in the range of $0.5 million to $1.5 million.

For the full year ending December 31, 2024, Kaltura currently expects:

• Subscription Revenue to grow by 2% year-over-year to between $166.1 million and $166.8 million.
• Total Revenue to grow by 1% – 2% year-over-year to between $177.1 million and $177.8 million.
• Adjusted EBITDA to be in the range of $5.1 million to $6.1 million.

The guidance provided above contains forward-looking statements and actual results may differ materially. Refer to “Forward-Looking Statements” below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Kaltura has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss within this press release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. The reconciliation for Adjusted EBITDA includes but is not limited to the following items: stock-based compensation expenses, depreciation, amortization, financial expenses (income), net, provision for income tax, and other non-recurring operating expenses. These items, which could materially affect the computation of forward-looking GAAP net loss, are inherently uncertain and depend on various factors, some of which are outside of the Company’s control.

Additional information on Kaltura’s reported results, including a reconciliation of the non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below.

Conference Call

Kaltura will host a conference call today on November 6, 2024 to review its third quarter 2024 financial results and to discuss its financial outlook.

	Time:	8:00 a.m. ET
	United States/Canada Toll Free:	1-877-407-0789
	International Toll:	1-201-689-8562

A live webcast will also be available in the Investor Relations section of Kaltura’s website at: https://investors.kaltura.com/news-and-events/events. 

A replay of the webcast will be available in the Investor Relations section of the company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Kaltura

Kaltura’s mission is to power any video experience for any organization. Our Video Experience Cloud offers live, real-time, and on-demand video products for enterprises of all industries, as well as specialized industry solutions, currently for educational institutions and for media and telecom companies. Underlying our products and solutions is a broad set of Media Services that are also used by other cloud platforms and companies to power video experiences and workflows for their own products. Kaltura’s Video Experience Cloud is used by leading brands reaching millions of users, at home, at school and at work, for communication, collaboration, training, marketing, sales, customer care, teaching, learning, virtual events, and entertainment experiences.

Investor Contacts:
Kaltura
John Doherty
Chief Financial Officer
IR@Kaltura.com 

Sapphire Investor Relations
Erica Mannion and Michael Funari
+1 617 542 6180
IR@Kaltura.com 

Media Contacts:
Kaltura
Nohar Zmora
pr.team@kaltura.com 

Headline Media
Raanan Loew
raanan@headline.media 
+1 347 897 9276

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including but not limited to, statements regarding our future financial and operating performance, including our guidance; our business strategy, plans and objectives for future operations; and general economic, business and industry conditions, including expectations with respect to trends in our market and industry and the impact of Gen-AI adoption.

In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations.

Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the current volatile economic climate and its direct and indirect impact on our business and operations; political, economic, and military conditions in Israel and other geographies; our ability to retain our customers and meet demand; our ability to achieve and maintain profitability; the evolution of the markets for our offerings; our ability to keep pace with technological and competitive developments; risks associated with our use of certain artificial intelligence and machine learning models; our ability to maintain the interoperability of our offerings across devices, operating systems and third-party applications; risks associated with our Application Programming Interfaces, other components in our offerings and other intellectual property; our ability to compete successfully against current and future competitors; our ability to increase customer revenue; risks related to our approach to revenue recognition; our potential exposure to cybersecurity threats; our compliance with data privacy and data protection laws; our ability to meet our contractual commitments; our reliance on third parties; our ability to retain our key personnel; risks related to our revenue mix and customer base; risks related to our international operations; risks related to potential acquisitions; our ability to generate or raise additional capital; and the other risks under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investor Relations page of our website at investors.kaltura.com.

Non-GAAP Financial Measures

Kaltura has provided in this press release and the accompanying tables measures of financial information that have not been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”), including non-GAAP gross profit, non-GAAP gross margin (calculated as a percentage of revenue), non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP operating margin (calculated as a percentage of revenue), non-GAAP net loss, non-GAAP net loss per share and Adjusted EBITDA. Kaltura defines these non-GAAP financial measures as the respective corresponding GAAP measure, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) facility exit and transition costs; (4) restructuring charges; and (5) war-related costs. Kaltura defines EBITDA as net profit (loss) before financial expenses (income), net, provision for income taxes, and depreciation and amortization expenses. Adjusted EBITDA is defined as EBITDA (as defined above), adjusted for the impact of certain non-cash and other items that we believe are not indicative of our core operating performance, such as non-cash stock-based compensation expenses, facility exit and transition costs, restructuring charges and other non-recurring operating expenses. We believe these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Kaltura’s financial condition and results of operations. These non-GAAP metrics are a supplemental measure of our performance, are not defined by or presented in accordance with GAAP, and should not be considered in isolation or as an alternative to net profit (loss) or any other performance measure prepared in accordance with GAAP. Non-GAAP financial measures are presented because we believe that they provide useful supplemental information to investors and analysts regarding our operating performance and are frequently used by these parties in evaluating companies in our industry. By presenting these non-GAAP financial measures, we provide a basis for comparison of our business operations between periods by excluding items that we do not believe are indicative of our core operating performance. We believe that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Additionally, our management uses these non-GAAP financial measures as supplemental measures of our performance because they assist us in comparing the operating performance of our business on a consistent basis between periods, as described above. Although we use the non-GAAP financial measures described above, such measures have significant limitations as analytical tools and only supplement but do not replace, our financial statements in accordance with GAAP. See the tables below regarding reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

Key Financial and Operating Metrics

Annualized Recurring Revenue. We use Annualized Recurring Revenue (“ARR”) as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring customer contracts. We calculate ARR by annualizing our recurring revenue for the most recently completed fiscal quarter. Recurring revenues are generated from SaaS and PaaS subscriptions, as well as term licenses for software installed on the customer’s premises (“On-Prem”). For the SaaS and PaaS components, we calculate ARR by annualizing the actual recurring revenue recognized for the latest fiscal quarter. For the On-Prem components for which revenue recognition is not ratable across the license term, we calculate ARR for each contract by dividing the total contract value (excluding professional services) as of the last day of the specified period by the number of days in the contract term and then multiplying by 365. Recurring revenue excludes revenue from one-time professional services and setup fees. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to new bookings, cancellations, upgrades or downgrades, pending renewals, professional services revenue, foreign exchange rate fluctuations and acquisitions or divestitures. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.

Net Dollar Retention Rate. Our Net Dollar Retention Rate, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our Net Dollar Retention Rate for a given period as the recognized recurring revenue from the latest reported fiscal quarter from the set of customers whose revenue existed in the reported fiscal quarter from the prior year (the numerator), divided by recognized recurring revenue from such customers for the same fiscal quarter in the prior year (denominator). For annual periods, we report Net Dollar Retention Rate as the arithmetic average of the Net Dollar Retention Rate for all fiscal quarters included in the period. We consider subdivisions of the same legal entity (for example, divisions of a parent company or separate campuses that are part of the same state university system) ,as well as Value-add Resellers (“VARs”) (meaning resellers that directly manage the relationship with the customer) and the customers they manage, to be a single customer for purposes of calculating our Net Dollar Retention Rate. Our calculation of Net Dollar Retention Rate for any fiscal period includes the positive recognized recurring revenue impacts of selling new services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our Net Dollar Retention Rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, and our ability to retain our customers. Our calculation of Net Dollar Retention Rate may differ from similarly titled metrics presented by other companies.

Remaining Performance Obligations. Remaining Performance Obligations represents the amount of contracted future revenue that has not yet been delivered, including both subscription and professional services revenues. Remaining Performance Obligations consists of both deferred revenue and contracted non-cancelable amounts that will be invoiced and recognized in future periods. We expect to recognize 59% of our Remaining Performance Obligations as revenue over the next 12 months, and the remainder thereafter, in each case, in accordance with our revenue recognition policy; however, we cannot guarantee that any portion of our Remaining Performance Obligations will be recognized as revenue within the timeframe we expect or at all.

Consolidated Balance Sheets (U.S. dollars in thousands)

		As of
		September 30, 2024				December 31, 2023
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	36,840			$	36,684
Marketable securities			40,873				32,692
Trade receivables			22,646				23,312
Prepaid expenses and other current assets			7,916				8,410
Deferred contract acquisition and fulfillment costs, current			10,274				10,636
Total current assets			118,549				111,734
LONG-TERM ASSETS:
Marketable securities			2,229				5,844
Property and equipment, net			17,062				20,113
Other assets, noncurrent			2,916				3,100
Deferred contract acquisition and fulfillment costs, noncurrent			13,766				17,314
Operating lease right-of-use assets			12,659				13,872
Intangible assets, net			332				689
Goodwill			11,070				11,070
Total noncurrent assets			60,034				72,002
TOTAL ASSETS		$	178,583			$	183,736
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term loans		$	2,499			$	1,612
Trade payables			5,819				3,629
Employees and payroll accruals			12,005				12,651
Accrued expenses and other current liabilities			20,138				17,279
Operating lease liabilities			2,448				2,374
Deferred revenue, current			63,214				62,364
Total current liabilities			106,123				99,909
NONCURRENT LIABILITIES:
Deferred revenue, noncurrent			78				369
Long-term loans, net of current portion			30,481				33,047
Operating lease liabilities, noncurrent			15,652				17,796
Other liabilities, noncurrent			2,108				2,295
Total noncurrent liabilities			48,319				53,507
TOTAL LIABILITIES		$	154,442			$	153,416
STOCKHOLDERS’ EQUITY:
Common stock			15				14
Treasury stock			(7,114	)			(4,881	)
Additional paid-in capital			493,148				471,635
Accumulated other comprehensive income			297				1,047
Accumulated deficit			(462,205	)			(437,495	)
Total stockholders’ equity			24,141				30,320
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	178,583			$	183,736

Consolidated Statements of Operations (U.S. dollars in thousands, except for share data)

		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
		(Unaudited)
Revenue:
Subscription		$	42,085			$	40,847			$	124,267			$	121,962
Professional services			2,210				2,695				8,841				8,732
Total revenue			44,295				43,542				133,108				130,694
Cost of revenue:
Subscription			10,437				11,004				32,699				33,106
Professional services			4,317				4,839				13,584				14,001
Total cost of revenue			14,754				15,843				46,283				47,107
Gross profit			29,541				27,699				86,825				83,587
Operating expenses:
Research and development			12,427				12,558				36,460				39,663
Sales and marketing			11,830				11,683				35,421				36,489
General and administrative			9,750				11,767				35,250				36,298
Restructuring			—				5				—				973
Total operating expenses			34,007				36,013				107,131				113,423
Operating loss			4,466				8,314				20,306				29,836
Financial expenses, net			(2,160	)			(95	)			(1,672	)			(3,047	)
Loss before provision for income taxes			2,306				8,219				18,634				26,789
Provision for income taxes			1,304				2,507				6,076				7,510
Net loss			3,610				10,726				24,710				34,299
Net loss per share attributable to common stockholders, basic and diluted		$	0.02			$	0.08			$	0.17			$	0.25
Weighted average number of shares used in computing basic net loss per share attributable to common stockholders			149,306,274				139,186,364				147,074,320				137,033,800

Stock-based compensation included in above line items:

		Three Months Ended September 30,						Nine Months Ended September 30,
			2024			2023			2024			2023
		(Unaudited)
Cost of revenue		$	259		$	295		$	807		$	827
Research and development			1,268			1,162			3,597			3,439
Sales and marketing			684			776			2,183			2,347
General and administrative			3,424			5,137			14,478			15,343
Total		$	5,635		$	7,370		$	21,065		$	21,956

Revenue by Segment (U.S. dollars in thousands):

		Three Months Ended September 30,						Nine Months Ended September 30,
			2024			2023			2024			2023
		(Unaudited)
Enterprise, Education and Technology		$	32,341		$	31,095		$	95,746		$	93,583
Media and Telecom			11,954			12,447			37,362			37,111
Total		$	44,295		$	43,542		$	133,108		$	130,694

Gross Profit by Segment (U.S. dollars in thousands):

		Three Months Ended September 30,						Nine Months Ended September 30,
			2024			2023			2024			2023
		(Unaudited)
Enterprise, Education and Technology		$	24,539		$	22,762		$	71,026		$	68,625
Media and Telecom			5,002			4,937			15,799			14,962
Total		$	29,541		$	27,699		$	86,825		$	83,587

Consolidated Statement of Cash Flows (U.S. dollars in thousands)

		Nine Months Ended September 30,
			2024				2023
Cash flows from operating activities:
Net loss		$	(24,710	)		$	(34,299	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			3,834				3,409
Stock-based compensation expenses			21,065				21,956
Amortization of deferred contract acquisition and fulfillment costs			8,550				8,774
Non-cash interest income, net			(713	)			(705	)
Gain on foreign exchange			(285	)			(439	)
Changes in operating assets and liabilities:
Decrease in trade receivables			666				6,921
Increase in prepaid expenses and other current assets and other assets, noncurrent			(73	)			(193	)
Increase in deferred contract acquisition and fulfillment costs			(4,367	)			(4,853	)
Increase (Decrease) in trade payables			2,182				(5,575	)
Increase in accrued expenses and other current liabilities			2,742				91
Decrease in employees and payroll accruals			(646	)			(2,504	)
Increase (Decrease) in other liabilities, noncurrent			(27	)			411
Increase (Decrease) in deferred revenue			559				(1,285	)
Operating lease right-of-use assets and lease liabilities, net			(857	)			(1,613	)
Net cash provided by (used in) operating activities			7,920				(9,904	)
Cash flows from investing activities:
Investment in available-for-sale marketable securities			(37,745	)			(33,609	)
Proceeds from sales and maturities of available-for-sale marketable securities			33,982				38,976
Purchases of property and equipment			(421	)			(1,792	)
Capitalized internal-use software			—				(1,493	)
Investment in restricted bank deposit			—				(1,001	)
Net cash provided by (used in) investing activities			(4,184	)			1,081
Cash flows from financing activities:
Repayment of long-term loans			(1,750	)			(4,500	)
Proceeds from exercise of stock options			245				1,224
Payment of debt issuance costs			(10	)			—
Repurchase of common stock			(2,233	)			—
Payments on account of repurchase of common stock			(117	)			—
Net cash used in financing activities			(3,865	)			(3,276	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			285				439
Net increase (decrease) in cash, cash equivalents and restricted cash			156				(11,660	)
Cash, cash equivalents and restricted cash at the beginning of the period			36,784				45,833
Cash, cash equivalents and restricted cash at the end of the period		$	36,940			$	34,173

Reconciliation from GAAP to Non-GAAP Results (U.S. dollars in thousands)

		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Reconciliation of gross profit and gross margin
GAAP gross profit		$	29,541			$	27,699			$	86,825			$	83,587
Stock-based compensation expense			259				295				807				827
Amortization of acquired intangibles			107				107				320				319
Non-GAAP gross profit		$	29,907			$	28,101			$	87,952			$	84,733
GAAP gross margin			67	%			64	%			65	%			64	%
Non-GAAP gross margin			68	%			65	%			66	%			65	%
Reconciliation of operating expenses
GAAP research and development expenses		$	12,427			$	12,558			$	36,460			$	39,663
Stock-based compensation expense			1,268				1,162				3,597				3,439
Amortization of acquired intangibles			—				—				—				—
Non-GAAP research and development expenses		$	11,159			$	11,396			$	32,863			$	36,224
GAAP sales and marketing		$	11,830			$	11,683			$	35,421			$	36,489
Stock-based compensation expense			684				776				2,183				2,347
Amortization of acquired intangibles			13				13				39				115
Non-GAAP sales and marketing expenses		$	11,133			$	10,894			$	33,199			$	34,027
GAAP general and administrative expenses		$	9,750			$	11,767			$	35,250			$	36,298
Stock-based compensation expense			3,424				5,137				14,478				15,343
Amortization of acquired intangibles			—				—				—				—
Facility exit and transition costs (b)		$	—			$	—			$	—			$	154
War related costs(d)		$	—			$	—			$	22			$	—
Non-GAAP general and administrative expenses		$	6,326			$	6,630			$	20,750			$	20,801
Reconciliation of operating income (loss) and operating margin
GAAP operating loss		$	(4,466	)		$	(8,314	)		$	(20,306	)		$	(29,836	)
Stock-based compensation expense			5,635				7,370				21,065				21,956
Amortization of acquired intangibles			120				120				359				434
Restructuring (c)			—				5				—				973
Facility exit and transition costs (b)			—				—				—				154
War related costs(d)			—				—				22				—
Non-GAAP operating income (loss)		$	1,289			$	(819	)		$	1,140			$	(6,319	)
GAAP operating margin		(10)%				(19)%				(15)%				(23)%
Non-GAAP operating margin			3	%		(2)%					1	%		(5)%
Reconciliation of net loss
GAAP net loss attributable to common stockholders		$	(3,610	)		$	(10,726	)		$	(24,710	)		$	(34,299	)
Stock-based compensation expense			5,635				7,370				21,065				21,956
Amortization of acquired intangibles			120				120				359				434
Restructuring (c)			—				5				—				973
Facility exit and transition costs (b)			—				—				—				154
War related costs(d)			—				—				22				—
Non-GAAP net income (loss) attributable to common stockholders		$	2,145			$	(3,231	)		$	(3,264	)		$	(10,782	)
Non-GAAP net income (loss) per share – basic and diluted		$	0.01			$	(0.02	)		$	(0.02	)		$	(0.08	)
Shares used in non-GAAP per share calculations:
GAAP weighted-average shares used to compute net income per share – basic and diluted			149,306,274				139,186,364				147,074,320				137,033,800
Weighted average number of ordinary shares outstanding used in computing basic and diluted net loss per share (non-GAAP)			149,306,274				139,186,364				147,074,320				137,033,800

Adjusted EBITDA (U.S. dollars in thousands)

	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net loss	$	(3,610	)		$	(10,726	)		$	(24,710	)		$	(34,299	)
Financial expenses (income), net (a)		(2,160	)			(95	)			(1,672	)			(3,047	)
Provision for income taxes		1,304				2,507				6,076				7,510
Depreciation and amortization		1,254				1,248				3,834				3,409
EBITDA		(3,212	)			(7,066	)			(16,472	)			(26,427	)
Non-cash stock-based compensation expense		5,635				7,370				21,065				21,956
Facility exit and transition costs (b)		—				—				—				154
Restructuring (c)		—				5				—				973
War related costs (d)		—				—				22				—
Adjusted EBITDA	$	2,423			$	309			$	4,615			$	(3,344	)

(a)	The three months ended September 30, 2024 and 2023, and the nine months ended September 30, 2024, and 2023, include $725, $789, $2,131 and $2,400 respectively, of interest expenses.
(b)	Facility exit and transition costs for the nine months ended September 30, 2023, include losses from sale of fixed assets and other costs associated with moving to our temporary office in Israel.
(c)	The three and nine months ended September 30, 2023 include one-time employee termination benefits incurred in connection with the 2023 Reorganization Plan and the 2022 Restructuring Plan.
(d)	The nine months ended September 30, 2024 include costs related to conflicts in Israel, attributable to temporary relocation of key employees from Israel for business continuity purposes, purchase of emergency equipment for key employees for business continuity purposes, and charitable donation to communities directly impacted by the war.

Reported KPIs

		As of September 30,
			2024			2023
		(U.S. dollars, amounts in thousands)
Annualized Recurring Revenue		$	168,879		$	163,069
Remaining Performance Obligations		$	187,846		$	163,995

		Three Months Ended September 30,
		2024			2023
Net Dollar Retention Rate		101	%		101	%

• Worldwide revenue of $378.7 million, an increase of 18.4% from third quarter 2023
• GAAP fully diluted earnings per share of $1.79, compared to $1.88 in the third quarter of 2023. Adjusted fully diluted earnings per share of $1.70 compared to $1.47 in the third quarter of 2023
• Company narrows full year 2024 revenue and fully diluted earnings per share guidance towards higher end of the previously issued guidance
• Company applauds CMS’ CY25 rule to improve payment for specialized diagnostic radiopharmaceuticals, including PYLARIFY, advancing patient access and care
• Company announced that it expanded its Alzheimer’s disease radiodiagnostics portfolio with NAV-4694, a novel, next generation late-stage beta-amyloid imaging agent

BEDFORD, Mass., Nov. 06, 2024 (GLOBE NEWSWIRE) — Lantheus Holdings, Inc. (Lantheus or the Company) LNTH, the leading radiopharmaceutical-focused company committed to enabling clinicians to Find, Fight and Follow disease to deliver better patient outcomes, today reported financial results for its third quarter ended September 30, 2024.

“PYLARIFY is on track to exceed $1 billion in sales in 2024 and maintain its market leadership and blockbuster status in 2025,” said Brian Markison, Chief Executive Officer of Lantheus. “The success of our flagship diagnostic agents enables us to invest, organically and inorganically in our pipeline to advance our radiopharmaceutical leadership. We are excited about our growing portfolio, especially oncology radiotherapeutics and Alzheimer’s disease radiodiagnostics, and will continue to expand our portfolio of late-stage and high potential early-stage product candidates. We are driving growth and shareholder value through operational excellence, financial discipline and prudent capital deployment.”

Summary Financial Results

(in millions, except per share data – unaudited)		Three Months Ended September 30,
			2024				2023			% Change
Worldwide revenue		$	378.7			$	319.9				18.4	%
GAAP net income		$	131.1			$	132.0				(0.7	)%
GAAP fully diluted earnings per share		$	1.79			$	1.88				(4.8	)%
Adj. net income (non-GAAP)		$	124.1			$	103.1				20.4	%
Adj. fully diluted earnings per share (non-GAAP)		$	1.70			$	1.47				15.6	%

Third Quarter 2024

• Worldwide revenue increased 18.4% to $378.7 million compared to the same period in 2023.
• Sales of PYLARIFY were $259.8 million, an increase of 20.6%. Growth was driven by increasing volumes at existing accounts with a slight net price offset as we secured strategic partnerships.
• Sales of DEFINITY were $77.0 million, an increase of 14.3%. Growth was driven by market growth and opportunistic sales due to competitor supply challenges.
• Operating income increased 19.0% to $133.7 million. Adjusted operating income (non-GAAP) increased 18.3% to $165.1 million.
• Fully diluted earnings per share decreased to $1.79, compared to $1.88 in the prior year period. Adjusted fully diluted earnings per share (non-GAAP) increased 15.6% to $1.70, compared to $1.47 in the prior year period.
• Net cash provided by operating activities and free cash flow were $175.1 million and $159.3 million, respectively.

Balance Sheet

• At September 30, 2024, the Company’s cash and cash equivalents grew to $866.4 million, compared to $713.7 million at December 31, 2023, even after accounting for the $35.0 million net investment related to the acquisition of RM2 from Life Molecular, a $5 million equity investment in Radiopharm Theranostics as well as a $10 million milestone payment related to the NAV-4694 asset in the third quarter 2024.
• The Company currently has access to up to $350.0 million from a revolving line of credit.

Recent Business Highlights

Radiopharmaceutical Pipeline Progress   

• The Company announced an expansion of its Alzheimer’s disease portfolio in the third quarter, acquiring NAV-4694, a novel, next generation beta-amyloid imaging agent in Phase 3 clinical development. NAV-4694 complements MK-6240, Lantheus’ novel, next-generation, tau radiodiagnostic. The Company plans to submit New Drug Applications for MK-6240 in 2025 and NAV-4694 in 2026.
• With respect to the SPLASH Phase 3 registrational study of PNT2002, the second interim analysis performed at 75% of protocol specified events demonstrated results for radiographic progression free survival (rPFS) and overall survival (OS) that did not materially change from the initial interim analysis conducted at 46% of specified events. PNT2002 is an investigational PSMA-targeted radiotherapeutic for the treatment of patients with metastatic castration-resistant prostate cancer. The SPLASH study met its primary endpoint of rPFS, which was a meaningful and statistically significant improvement for the PNT2002 arm vs. the alternate androgen receptor pathway inhibitor (ARPI) or hormone therapy. The OS results and hazard ratio in the intention-to-treat (ITT) population remain confounded by the overwhelming number of patients who crossed over to receive PNT2002. Crossover adjusted analyses are post-hoc, and the Company will continue to review the data and perform additional sub-set analyses with our partner, Eli Lilly, that may be compelling to the FDA in preparation for an interaction on our path forward.

Other Key Updates

• The Centers for Medicare & Medicaid Services (CMS) released its final Medicare Hospital Outpatient Prospective Payment System (OPPS) rule for calendar year 2025 which included improved payment for specialized diagnostic radiopharmaceuticals to support patient access for Medicare fee-for-service (FFS) beneficiaries. In the rule, innovative diagnostic radiopharmaceuticals, including PYLARIFY, will be paid separately by CMS for traditional Medicare FFS patients in the hospital outpatient setting following the expiry of transitional pass-through payment status. The final rule will take effect January 1, 2025.

Full Year 2024 Financial Guidance

	Guidance Issued November 6, 2024	Guidance Issued July 31, 2024
FY 2024 Revenue	$1.51 billion – $1.52 billion	$1.50 billion – $1.52 billion
FY 2024 Adjusted Fully Diluted EPS	$6.65 – $6.70	$6.60 – $6.70

On a forward-looking basis, the Company does not provide GAAP income per common share guidance or a reconciliation of GAAP income per common share to adjusted fully diluted EPS because the Company is unable to predict with reasonable certainty business development and acquisition related expenses, purchase accounting fair value adjustments, and any one-time, non-recurring charges. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. As a result, it is the Company’s view that a quantitative reconciliation of adjusted fully diluted EPS on a forward-looking basis is not available without unreasonable effort.  

Conference Call and Webcast

As previously announced, the Company will host a conference call and webcast on Wednesday, November 6, 2024, at 8:00 a.m. ET. To access the conference call or webcast, participants should register online at https://investor.lantheus.com/news-events/calendar-of-events.

A replay will be available approximately two hours after completion of the webcast and will be archived on the same web page for at least 30 days.

The conference call will include a discussion of non-GAAP financial measures. Reference is made to the most directly comparable GAAP financial measures, the reconciliation of the differences between the two financial measures, and the other information included in this press release, our Form 8-K filed with the SEC today, or otherwise available in the Investor Relations section of our website located at www.lantheus.com.

The conference call may include forward-looking statements. See the cautionary information about forward-looking statements in the safe-harbor section of this press release.

About Lantheus Holdings, Inc.

Lantheus is the leading radiopharmaceutical-focused company, delivering life-changing science to enable clinicians to Find, Fight and Follow disease to deliver better patient outcomes. Headquartered in Massachusetts with offices in Canada and Sweden, Lantheus has been providing radiopharmaceutical solutions for more than 65 years. For more information, visit www.lantheus.com. 

Internet Posting of Information

The Company routinely posts information that may be important to investors in the “Investors” section of its website at www.lantheus.com. The Company encourages investors and potential investors to consult its website regularly for important information about the Company. 

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as adjusted net income and its line components; adjusted net income per share – fully diluted; adjusted operating income and free cash flow. The Company’s management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the Company’s operations, period over period. However, these measures may exclude items that may be highly variable, difficult to predict and of a size that could have a substantial impact on the Company’s reported results of operations for a particular period. Management uses these and other non-GAAP measures internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to employee performance compensation targets. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.  

Safe Harbor for Forward-Looking and Cautionary Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by their use of terms such as “advance,” “believe,” “continue,” “could,” “driving,” “guidance,” “maintain,” “may,” “on track,” “plan,” “potential,” “predict,” “progress,” “should,” “target,” “will,” “would” and other similar terms. Such forward-looking statements include our guidance for the fiscal year 2024 and our plans to expand our portfolio of late-stage assets and high potential early-stage candidates and are based upon current plans, estimates and expectations that are subject to risks and uncertainties that could cause actual results to materially differ from those described in the forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation that such plans, estimates and expectations will be achieved. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements include: (i) continued market expansion and penetration for our established commercial products, particularly PYLARIFY and DEFINITY, in a competitive environment in which other imaging agents have been approved and are being commercialized, and our ability to clinically and commercially differentiate our products; (ii) our ability to have third parties manufacture our products and our ability to manufacture DEFINITY in our in-house manufacturing facility; (iii) the global availability of Molybdenum-99 (“Mo-99”) and other raw material and key components; (iv) our strategies, future prospects, and our projected growth, including revenue related to our collaboration agreements with POINT Biopharma Global Inc., including our ability to obtain FDA approval for PNT2002 and PNT2003; (v) our ability to satisfy our obligations under our existing clinical development partnerships using MK-6240 or NAV-4694 as a research tool and under the license agreements through which we have rights to MK-6240 and NAV-4694, and to further develop and commercialize MK-6240 and NAV-4694 as approved products; (vi) our ability to successfully execute on our agreements with Perspective Therapeutics, Inc. (“Perspective”), including finalizing the license agreements in the event we exercise our options to do so, the value of our current and any future equity interest in Perspective, and Perspective’s ability to successfully develop its alpha-particle therapy and innovative platform technology; (vii) our ability to successfully identify strategic transaction opportunities, such as our investment in Radiopharm Theranostics Limited (“Radiopharm”) common stock, and the value of such current and any future equity interests; (viii) the efforts and timing for clinical development, regulatory approval, adequate coding, coverage and payment and successful commercialization of our product candidates and new clinical applications and territories for our products, in each case, that we or our strategic partners may undertake; (ix) our ability to identify and acquire or in-license additional diagnostic and therapeutic product opportunities in oncology, Alzheimer’s disease and other strategic areas and continue to grow and advance our pipeline of products; and (x) the risk and uncertainties discussed in our filings with the Securities and Exchange Commission (including those described in the Risk Factors section in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q).

– Tables Follow –

Lantheus Holdings, Inc. Consolidated Statements of Operations (in thousands, except per share data – unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Revenues	$	378,734			$	319,946			$	1,142,800			$	942,430
Cost of goods sold		136,608				119,995				403,054				462,756
Gross profit		242,126				199,951				739,746				479,674
Operating expenses
Sales and marketing		43,719				37,399				134,300				106,472
General and administrative		40,516				35,741				135,820				85,163
Research and development		24,148				14,450				132,773				60,883
Total operating expenses		108,383				87,590				402,893				252,518
Gain on sale of assets		—				—				6,254				—
Operating income		133,743				112,361				343,107				227,156
Interest expense		4,903				5,054				14,624				14,978
Investment in equity securities – unrealized gain		(37,325	)			—				(75,492	)			—
Other income		(9,953	)			(52,649	)			(27,785	)			(60,362	)
Income before income taxes		176,118				159,956				431,760				272,540
Income tax expense		45,025				27,999				107,528				49,259
Net income	$	131,093			$	131,957			$	324,232			$	223,281
Net income per common share:
Basic	$	1.89			$	1.93			$	4.69			$	3.27
Diluted	$	1.79			$	1.88			$	4.55			$	3.18
Weighted-average common shares outstanding:
Basic		69,464				68,436				69,193				68,188
Diluted		73,065				70,046				71,331				70,268

Lantheus Holdings, Inc. Consolidated Revenues Analysis (in thousands – unaudited)
		Three Months Ended September 30,												Nine Months Ended September 30,
			2024				2023			% Change					2024				2023			% Change
PYLARIFY		$	259,756			$	215,428				20.6	%		$	791,881			$	621,419				27.4	%
Other radiopharmaceutical oncology			—				848				(100.0	)%			384				2,383				(83.9	)%
Total radiopharmaceutical oncology			259,756				216,276				20.1	%			792,265				623,802				27.0	%
DEFINITY			76,965				67,336				14.3	%			231,629				206,688				12.1	%
TechneLite			20,480				23,272				(12.0	)%			70,380				65,853				6.9	%
Other precision diagnostics			6,282				5,740				9.4	%			18,039				17,002				6.1	%
Total precision diagnostics			103,727				96,348				7.7	%			320,048				289,543				10.5	%
Strategic partnerships and other revenue			15,251				7,322				108.3	%			30,487				29,085				4.8	%
Total revenues		$	378,734			$	319,946				18.4	%		$	1,142,800			$	942,430				21.3	%

Lantheus Holdings, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data – unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net income	$	131,093			$	131,957			$	324,232			$	223,281
Stock and incentive plan compensation		20,366				13,976				54,229				36,335
Amortization of acquired intangible assets		11,908				11,659				31,961				35,132
Campus consolidation costs		23				45				37				3,185
Contingent consideration fair value adjustments		(1,505	)			(500	)			(1,405	)			(9,475	)
Non-recurring refinancing related fees		—				3				—				216
Non-recurring fees		—				(51,789	)			—				(54,523	)
Gain on sale of assets		—				—				(6,254	)			—
Strategic collaboration and license costs		30				—				66,221				—
Investment in equity securities – unrealized gain		(37,325	)			—				(75,492	)			—
Acquisition-related costs		(263	)			169				1,346				507
Impairment of long-lived assets		—				—				—				138,050
ARO Acceleration and other related costs		—				320				—				1,045
Other		805				1,510				2,273				2,194
Income tax effect of non-GAAP adjustments(a)		(1,048	)			(4,256	)			(27,907	)			(61,093	)
Adjusted net income	$	124,084			$	103,094			$	369,241			$	314,854
Adjusted net income, as a percentage of revenues		32.8	%			32.2	%			32.3	%			33.4	%

	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net income per share – diluted	$	1.79			$	1.88			$	4.55			$	3.18
Stock and incentive plan compensation		0.28				0.20				0.76				0.52
Amortization of acquired intangible assets		0.16				0.17				0.45				0.50
Campus consolidation costs		—				—				—				0.05
Contingent consideration fair value adjustments		(0.02	)			(0.01	)			(0.02	)			(0.13	)
Non-recurring refinancing related fees		—				—				—				—
Non-recurring fees		—				(0.74	)			—				(0.78	)
Gain on sale of assets		—				—				(0.09	)			—
Strategic collaboration and license costs		—				—				0.93				—
Investment in equity securities – unrealized gain		(0.51	)			—				(1.06	)			—
Acquisition-related costs		—				—				0.02				0.01
Impairment of long-lived assets		—				—				—				1.96
ARO Acceleration and other related costs		—				0.01				—				0.01
Other		0.01				0.02				0.03				0.03
Income tax effect of non-GAAP adjustments(a)		(0.01	)			(0.06	)			(0.39	)			(0.87	)
Adjusted net income per share – diluted	$	1.70			$	1.47			$	5.18			$	4.48
Weighted-average common shares outstanding – diluted		73,065				70,046				71,331				70,268

(a) The income tax effect of the adjustments between GAAP net income and adjusted net income (non-GAAP) takes into account the tax treatment and related tax rate that apply to each adjustment in the applicable tax jurisdiction.

Lantheus Holdings, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) (in thousands, except per share data – unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Operating income	$	133,743			$	112,361			$	343,107			$	227,156
Stock and incentive plan compensation		20,366				13,976				54,229				36,335
Amortization of acquired intangible assets		11,908				11,659				31,961				35,132
Campus consolidation costs		23				45				37				3,185
Contingent consideration fair value adjustments		(1,505	)			(500	)			(1,405	)			(9,475	)
Non-recurring refinancing related fees		—				3				—				216
Non-recurring fees		—				—				—				(2,734	)
Gain on sale of assets		—				—				(6,254	)			—
Strategic collaboration and license costs		30				—				66,221				—
Acquisition-related costs		(263	)			169				1,346				507
Impairment of long-lived assets		—				—				—				138,050
ARO Acceleration and other related costs		—				320				—				1,045
Other		805				1,510				2,273				2,194
Adjusted operating income	$	165,107			$	139,543			$	491,515			$	431,611
Adjusted operating income, as a percentage of revenues		43.6	%			43.6	%			43.0	%			45.8	%

Lantheus Holdings, Inc. Reconciliation of Free Cash Flow (in thousands – unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net cash provided by operating activities	$	175,062			$	116,739			$	387,020			$	192,973
Capital expenditures		(15,808	)			(14,621	)			(35,256	)			(34,486	)
Free cash flow	$	159,254			$	102,118			$	351,764			$	158,487
Net cash (used in) provided by investing activities	$	(67,798	)		$	83,218			$	(219,413	)		$	18,008
Net cash provided by (used in) financing activities	$	1,869			$	108			$	(14,877	)		$	(12,612	)

Lantheus Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands – unaudited)
	September 30, 2024				December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	866,386			$	713,656
Accounts receivable, net		329,336				284,292
Inventory		70,835				64,029
Other current assets		21,998				16,683
Assets held for sale		7,159				7,159
Total current assets		1,295,714				1,085,819
Investment in equity securities		158,791				—
Property, plant and equipment, net		169,512				146,697
Intangibles, net		173,606				151,985
Goodwill		61,189				61,189
Deferred tax assets, net		144,641				150,198
Other long-term assets		46,177				55,261
Total assets	$	2,049,630			$	1,651,149
Liabilities and stockholders’ equity
Current liabilities
Current portion of long-term debt and other borrowings	$	564,713			$	823
Accounts payable		44,914				41,189
Accrued expenses and other liabilities		174,452				145,338
Total current liabilities		784,079				187,350
Asset retirement obligations		23,237				22,916
Long-term debt, net and other borrowings		613				561,670
Other long-term liabilities		61,993				63,321
Total liabilities		869,922				835,257
Commitments and contingencies (See Note 18)
Stockholders’ equity
Preferred stock ($0.01 par value, 25,000 shares authorized; no shares issued and outstanding)		—				—
Common stock ($0.01 par value, 250,000 shares authorized; 70,854 and 69,863 shares issued as of September 30, 2024 and December 31, 2023, respectively)		709				699
Additional paid-in capital		797,430				757,727
Treasury Stock at cost – 1,339 shares as of September 30, 2024 and December 31, 2023		(75,000	)			(75,000	)
Retained earnings		457,735				133,503
Accumulated other comprehensive loss		(1,166	)			(1,037	)
Total stockholders’ equity		1,179,708				815,892
Total liabilities and stockholders’ equity	$	2,049,630			$	1,651,149

Contacts:
Mark Kinarney
Vice President, Investor Relations
978-671-8842
ir@lantheus.com

Melissa Downs
Senior Director, External Communications
646-975-2533
media@lantheus.com

This press release was published by a CLEAR® Verified individual.

For an accessible version of this Press Release, please visit www.tevapharm.com

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• Intention to divest Teva api on track, targeting completion in the first half of 2025.

Q3 2024 Highlights:

• Revenues of $4.3 billion
• GAAP loss per share of $0.39
• Non-GAAP diluted EPS of $0.69
• Cash flow generated from operating activities of $693 million
• Free cash flow of $922 million
• Building on Teva’s strong performance in the first nine months of 2024 and expected developments in the fourth quarter, Teva’s full year 2024 business outlook is raised to:
  • Revenues of $16.1 – $16.5 billion
  • UZEDY revenues of ~$100 million
  • COPAXONE^® revenues of ~$500 million
  • Operating income of $4.2-$4.5 billion 
  • Adjusted EBITDA of $4.7 – $5.0 billion
  • Non-GAAP diluted EPS of $2.40- $2.50

TEL AVIV, Israel, Nov. 06, 2024 (GLOBE NEWSWIRE) — Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today reported results for the quarter ended September 30, 2024.

Mr. Richard Francis, Teva’s President and CEO, said, “The third quarter of 2024 marks our seventh consecutive quarter of growth, with global revenues reaching $4.3 billion, an increase of 15% in local currency terms compared to the third quarter of 2023. Our innovative portfolio and generics business drove strong performance in the third quarter of 2024, reflecting the successful execution of our Pivot to Growth Strategy. Due to our effort and commitment, we are consistently delivering on our growth strategy, executing on our ambitious targets by following our strategic framework, as we remain laser focused on its four key pillars.”

Mr. Francis continued, “I am confident that with our newly accelerated innovative pipeline, both early- and late-stage, we are well-positioned to provide meaningful access to medicines for patients who need them, while also delivering continued growth for our shareholders.

“With these strong results, we are raising our 2024 financial outlook, including on revenues, Adjusted EBITDA, and Non-GAAP EPS.”

Pivot to Growth Strategy

In May 2023, we introduced our “Pivot to Growth” strategy, which is based on four key pillars: (i) delivering on our growth engines, mainly AUSTEDO, AJOVY, UZEDY and our late-stage pipeline of biosimilars; (ii) stepping up innovation through delivering on our late-stage innovative pipeline assets as well as building up our early-stage pipeline organically and potentially through business development activities; (iii) sustaining our generics medicines powerhouse with a global commercial footprint, focused portfolio, pipeline and manufacturing footprint; and (iv) focusing our business by optimizing our portfolio and global manufacturing footprint to enable strategic capital deployment to accelerate our near and long-term growth engines and reorganizing certain of our business units to a more optimal structure, while also reorganizing key business units to enhance operational efficiency.

Third Quarter 2024 Consolidated Results

The data presented in this press release with respect to operating income (loss), income (loss) before income taxes, income taxes (benefit), net income (loss) attributable to Teva and earnings (loss) per share for prior period has been revised to reflect a revision in relation to a contingent consideration and related expenses. For additional information, see note 1b to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 and note 1c to our consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended September 30, 2024.

Revenues in the third quarter of 2024 were $4,332 million, an increase of 13% in U.S. dollars or 15% in local currency terms, compared to the third quarter of 2023. This increase was mainly due to higher revenues from generic products in all our segments, from AUSTEDO in our United States segment and from sale of product rights in our Europe and International Markets segments.

Exchange rate movements during the third quarter of 2024, including hedging effects, negatively impacted revenues by $88 million, compared to the third quarter of 2023.

Gross profit in the third quarter of 2024 was $2,148 million, an increase of 16% compared to $1,851 million in the third quarter of 2023. Gross profit margin was 49.6% in the third quarter of 2024, compared to 48.1% in the third quarter of 2023. Non-GAAP gross profit was $2,327 million in in the third quarter of 2024, an increase of 13% compared to $2,060 million in the third quarter of 2023. Non-GAAP gross profit margin was 53.7% in the third quarter of 2024, compared to 53.5% in the third quarter of 2023. The increase in both gross profit margin and non-GAAP gross profit margin was mainly due to a favorable mix of products, primarily AUSTEDO, partially offset by a negative impact from foreign exchange rate movements including hedging effects.

Research and Development (R&D) expenses, net in the third quarter of 2024 were $240 million, a decrease of 5% compared to $253 million in the third quarter of 2023. Our lower R&D expenses, net in the third quarter of 2024 were largely driven by reimbursements from our strategic partnerships, reflecting a decrease related to our late-stage innovative pipeline, partially offset by an increase in R&D expenses relating to immunology projects. As we continue to execute on our Pivot to Growth strategy, we see a higher R&D spend in some of our late-stage innovative pipeline assets.

Selling and Marketing (S&M) expenses in the third quarter of 2024 were $626 million, an increase of 9% compared to the third quarter of 2023. This increase was mainly to support revenue growth in generic products, AUSTEDO and AJOVY.

General and Administrative (G&A) expenses in the third quarter of 2024 were $298 million, an increase of 11% compared to the third quarter of 2023.

Other income in the third quarter of 2024 was $21 million, compared to $9 million in the third quarter of 2023. Other income in the third quarter of 2024 included a capital gain from the sale of a business in our International Markets segment.

Operating loss in the third quarter of 2024 was $51 million, compared to an operating income of $344 million in the third quarter of 2023. Operating loss as a percentage of revenues was 1.2% in the third quarter of 2024, compared to an operating income as a percentage of revenues 8.9% in the third quarter of 2023. This decrease was mainly due to a goodwill impairment charge and higher legal settlements and loss contingencies, partially offset by higher gross profit during the third quarter of 2024. Non-GAAP operating income in the third quarter of 2024 was $1,214 million representing a non-GAAP operating margin of 28.0% compared to non-GAAP operating income of $1,020 million representing a non-GAAP operating margin of 26.5% in the third quarter of 2023. The increase in non-GAAP operating margin in the third quarter of 2024 was mainly due to lower operating expenses as a percentage of revenues.

Exchange rate movements during the third quarter of 2024, including hedging effects, negatively impacted our operating loss by $57 million and non-GAAP operating income by $58 million compared to the third quarter of 2023.

Financial expenses, net in the third quarter of 2024 were $272 million, mainly comprised of net-interest expenses of $225 million and a negative exchange rate impact driven mainly from currencies which we were unable to hedge. In the third quarter of 2023, financial expenses, net were $280 million, mainly comprised of net-interest expenses of $247 million and a negative exchange rate impact driven mainly from currencies which we were unable to hedge.

In the third quarter of 2024, we recognized a tax expense of $69 million, on a pre-tax loss of $324 million. In the third quarter of 2023, we recognized a tax benefit of $12 million, on a pre-tax income of $64 million. Our tax rate for the third quarter of 2024 was mainly impacted by impairment charges with no corresponding tax effects, an adjustment to Teva’s corporate tax rate in Israel on losses related to non-qualified tax incentive activities in Israel, legal expenses with no corresponding tax effect related to the fine issued by the European Commission in connection with its antitrust investigation into COPAXONE, and recording of valuation allowance with respect to certain carry over credits outside of Israel. Teva’s tax rate for the third quarter for 2023 was mainly affected by deferred tax benefits resulting from intellectual property related integration plans, which have been adopted, among others, in an effort of addressing the global adoption of the Organization for Economic Co-operation and Development (OECD) Pillar Two minimum effective corporate tax.

Non-GAAP tax rate in the third quarter of 2024 was 16.0%, compared to 9.0% in the third quarter of 2023. Our non-GAAP tax rate in the third quarter of 2024 was mainly impacted by the generation of profits in various jurisdictions with different tax rates, an adjustment to Teva’s corporate tax rate in Israel on losses related to non-qualified tax incentive activities in Israel, recording of valuation allowance with respect to certain carry over credits outside of Israel, as well as infrequent or non-recurring items. Our non-GAAP tax rate in the third quarter of 2023 was mainly impacted by the generation of profits in various jurisdictions with different tax rates, tax benefits, deferred tax benefits resulting from intellectual property related integration plans, as well as infrequent or non-recurring items.

We expect our annual non-GAAP tax rate for 2024 to be between 14%-17%, slightly higher than our non-GAAP tax rate for 2023, which was 13%, mainly due to a lower net tax benefit related to deferred tax assets resulting from intellectual property-related integration plans in 2023.

Net loss attributable to Teva and loss per share in the third quarter of 2024were $437 million and $0.39, respectively, compared to net income attributable to Teva and diluted earnings per share $69 million and $0.06, respectively, in the third quarter of 2023. This decrease was mainly due to the changes in operating (income) loss discussed above.

Non-GAAP net income attributable to Teva and non-GAAP diluted earnings per share in the third quarter of 2024 were $798 million and $0.69, respectively, compared to $677 million and $0.60, respectively, in the third quarter of 2023.

Adjusted EBITDA was $1,327 million in the third quarter of 2024, an increase of 17%, compared to $1,134 million in the third quarter of 2023.

As of September 30, 2024 and 2023, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,167 million shares and 1,157 million shares, respectively.

Non-GAAP information: net non-GAAP adjustments in the third quarter of 2024 were $1,235 million. Non-GAAP net income attributable to Teva and non-GAAP diluted EPS for the third quarter of 2024 were adjusted to exclude the following items:

• Amortization of purchased intangible assets of $146 million, of which $136 million is included in cost of sales and the remaining $10 million in S&M expenses;
• An adjustment to impairment of long-lived assets in an amount of $51 million;
• Goodwill impairment charge of $600 million related to the Teva’s API reporting unit;
• Legal settlements and loss contingencies of $450 million mainly related to a provision of $350 million recorded in connection with a decision by the European Commission in its antitrust investigation into COPAXONE (which we intend to appeal), and to an update to the estimated settlement provision of $121 million for the opioid cases (mainly related to the settlement agreement with the city of Baltimore and the effect of the passage of time on the net present value of the discounted payments);
• Contingent consideration expenses of $34million;
• Equity compensation expenses of $29 million;
• Restructuring expenses of $21 million;
• Financial expenses of $11 million;
• Gain on sale of business of $20 million;
• Other non-GAAP items of 56 million;
• Items attributable to non-controlling interests of $41 million; and
• Corresponding tax effects and unusual tax items of $83 million

We believe that excluding such items facilitates investors’ understanding of our business including underlying performance trends, thereby improving the comparability of our business performance results between reporting periods.

For a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures and for additional information, see the tables below and the information included under “Non-GAAP Financial Measures.” Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operating activities during the third quarter of 2024 was $693 million, compared to $5 million in the third quarter of 2023. The higher cash flow generated from operating activities in the third quarter of 2024 resulted mainly from higher profit in our United States segment, as well as changes in working capital items, including a positive impact from accounts receivables, net of SR&A, and from accounts payables and inventory levels, partially offset by higher legal payments during the third quarter of 2024.

During the third quarter of 2024, we generated free cash flow of $922 million, which we define as comprising $693 million in cash flow generated from operating activities, $339 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program), and $38 million in divestitures of businesses and other assets, partially offset by $148 million in cash used for capital investment. During the third quarter of 2023, we generated free cash flow of $229 million, which we define as comprising $5 million in cash flow generated from operating activities, $362 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program), and $10 million in proceeds from divestitures of businesses and other assets, partially offset by $149 million in cash used for capital investment. The increase in the third quarter of 2024 resulted mainly from higher cash flow generated from operating activities.

As of September 30, 2024, our debt was $18,980 million, compared to $19,833 million as of December 31, 2023. This decrease was mainly due to repayment at maturity of $956 million of 6% senior notes due in 2024, partially offset by $88 million of exchange rate fluctuations. The portion of total debt classified as short-term as of September 30, 2024 was 14% compared to 8% as of December 31, 2023.

Our average debt maturity was approximately 5.5 years as of September 30, 2024, compared to 6.0 years as of December 31, 2023.

Segment Results for the Third Quarter of 2024

United States Segment

As part of a recent shift in executive management responsibilities and in line with our Pivot to Growth strategy, commencing January 1, 2024, Canada is reported as part of our International Markets segment. Prior period amounts were recast to reflect this change.

The following table presents revenues, expenses and profit for our United States segment for the three months ended September 30, 2024 and 2023:

	Three months ended September 30,
	2024				2023
	(U.S. $ in millions / % of Segment Revenues)
Revenues	$	2,225	100%	$	1,896	100%
Gross profit		1,265	56.9%		1,060	55.9%
R&D expenses		151	6.8%		156	8.2%
S&M expenses		259	11.6%		243	12.8%
G&A expenses		107	4.8%		93	4.9%
Other loss (income)		§	§		(2)	§
Segment profit*	$	748	33.6%	$	571	30.1%
* Segment profit does not include amortization and certain other items. § Represents an amount less than $0.5 million or 0.5%, as applicable.

Revenues from our United States segment in the third quarter of 2024 were $2,225 million, an increase of $329 million, or 17%, compared to the third quarter of 2023. This increase was mainly due to higher revenues from generic products, AUSTEDO and UZEDY, partially offset by lower revenues from certain innovative products, primarily COPAXONE and BENDEKA^® and TREANDA^®.

Revenues by Major Products and Activities

The following table presents revenues for our United States segment by major products and activities for the three months ended September 30, 2024 and 2023:

		Three months ended September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S. $ in millions)
Generic products		$	1,094		$	839		30%
AJOVY			58			56		4%
AUSTEDO			435			339		28%
BENDEKA and TREANDA			40			56		(28%)
COPAXONE			69			98		(30%)
UZEDY			35			2		N/A
Anda			380			367		3%
Other			115			140		(18%)
Total		$	2,225		$	1,896		17%

Generic products revenues in our United States segment (including biosimilars) in the third quarter of 2024 were $1,094 million, an increase of 30% compared to the third quarter of 2023, the majority of which was driven by higher revenues from lenalidomide capsules (the generic version of Revlimid^®), and the remaining, primarily by the launch of liraglutide injection 1.8mg (an authorized generic of Victoza^®) and higher revenues from epinephrine injectable solution (the generic equivalent of EpiPen^® and EpiPen Jr^®).

Among the most significant generic products we sold in the United States in the third quarter of 2024 were lenalidomide capsules (the generic version of Revlimid^®), epinephrine injectable solution (the generic equivalent of EpiPen^® and EpiPen Jr^®), Truxima^® (the biosimilar to Rituxan^®) and liraglutide 1.8 mg injection (an authorized generic of Victoza^®). In the third quarter of 2024, our total prescriptions were approximately 292 million (based on trailing twelve months), representing 7.6% of total U.S. generic prescriptions, compared to approximately 320 million (based on trailing twelve months), representing 8.4% of total U.S. generic prescriptions in the third quarter of 2023, all according to IQVIA data.

On October 1, 2024, Teva launched octreotide acetate for injectable suspension, the first generic version of Sandostatin^® LAR Depot. Octreotide acetate for injectable suspension is indicated for the treatment of acromegaly and severe diarrhea associated with carcinoid syndrome, and is available to patients in the U.S.

AJOVY revenues in our United States segment in the third quarter of 2024 were $58 million, an increase of 4% compared to the third quarter of 2023, mainly due to growth in volume. In the third quarter of 2024, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 29.1% compared to 24.9% in the third quarter of 2023.

AUSTEDO revenues in our United States segment in the third quarter of 2024 increased by 28% to $435 million, compared to $339 million in the third quarter of 2023, mainly due to growth in volume and expanded access for patients.

AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023, in three doses of 6, 12 and 24 mg, and became commercially available in the U.S. in May 2023. In May 2024, the FDA approved AUSTEDO XR as a one pill, once-daily treatment option in doses of 30, 36, 42, and 48 mg. In July 2024, the FDA approved the 18 mg dosage for AUSTEDO XR, making it a one pill, once-daily option for all available doses. AUSTEDO XR is a once-daily formulation indicated in adults for tardive dyskinesia and chorea associated with Huntington’s disease, which is additional to the currently marketed twice-daily AUSTEDO. AUSTEDO XR is protected by 11 Orange Book patents expiring between 2031 and 2041.

UZEDY (risperidone) extended-release injectable suspension revenues in our United States segment in the third quarter of 2024 were $35 million. UZEDY was approved by the FDA on April 28, 2023 for the treatment of schizophrenia in adults, and was launched in the U.S. in May 2023. UZEDY is a subcutaneous, long-acting formulation of risperidone that controls the steady release of risperidone. UZEDY is protected by nine Orange Book patents expiring between 2025 and 2033. We are moving forward with plans to launch UZEDY in other countries around the world. UZEDY faces competition from multiple other products.

BENDEKA and TREANDA combined revenues in our United States segment in the third quarter of 2024 were $40 million, a decrease of 28% compared to the third quarter of 2023, mainly due to competition from alternative therapies, as well as the entry of generic bendamustine products into the market. The orphan drug exclusivity that had attached to bendamustine products expired in December 2022.

COPAXONE revenues in our United States segment in the third quarter of 2024 were $69 million, a decrease of 30% compared to the third quarter of 2023, mainly due to market share erosion and competition.

Anda revenues from third-party products in our United States segment in the third quarter of 2024 increased by 3% to $380 million, compared to $367 million in the third quarter of 2023, mainly due to higher volumes. Anda, our distribution business in the United States, distributes generic and innovative medicines and OTC pharmaceutical products from Teva and various third-party manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda is able to compete in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

United States Gross Profit

Gross profit from our United States segment in the third quarter of 2024 was $1,265 million, an increase of 19%, compared to $1,060 million in the third quarter of 2023.

Gross profit margin for our United States segment in the third quarter of 2024 increased to 56.9%, compared to 55.9% in the third quarter of 2023. This increase was mainly due to a favorable mix of products primarily driven by higher revenues from lenalidomide capsules (the generic version of Revlimid^®) and AUSTEDO.

United States Profit

Profit from our United States segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our United States segment in the third quarter of 2024 was $748 million, an increase of 31% compared to $571 million in the third quarter of 2023. This increase was mainly due to higher gross profit, partially offset by higher S&M and G&A expenses, as discussed above.

Europe Segment

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

The following table presents revenues, expenses and profit for our Europe segment for the three months ended September 30, 2024 and 2023:

	Three months ended September 30,
	2024				2023
	(U.S. $ in millions / % of Segment Revenues)
Revenues	$	1,265	100%	$	1,146	100%
Gross profit		698	55.2%		648	56.6%
R&D expenses		55	4.3%		62	5.4%
S&M expenses		203	16.0%		184	16.0%
G&A expenses		67	5.3%		66	5.7%
Other loss (income)		1	§		§	§
Segment profit*	$	373	29.5%	$	338	29.5%
___________
* Segment profit does not include amortization and certain other items. § Represents an amount less than $0.5 million or 0.5%, as applicable.

Revenues from our Europe segment in the third quarter of 2024 were $1,265 million, an increase of 10%, or $119 million, compared to the third quarter of 2023. In local currency terms, revenues increased by 11% compared to the third quarter of 2023, mainly due to higher revenues from generic and OTC products as well as from AJOVY. Our higher revenues in the third quarter of 2024 were also partly driven by the sale of certain product rights.

In the third quarter of 2024, revenues were negatively impacted by exchange rate fluctuations of $6 million, net of hedging effects, compared to the third quarter of 2023. Revenues in the third quarter of 2024, included $10 million from a negative hedging impact, which is included in “Other” in the table below. Revenues in the third quarter of 2023 included $15 million from a positive hedging impact, which is included in “Other” in the table below.

Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the three months ended September 30, 2024 and 2023:

		Three months ended September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S. $ in millions)
Generic products		$	973		$	886		10%
AJOVY			56			41		37%
COPAXONE			53			55		(5%)
Respiratory products			60			61		(1%)
Other*			124			104		19%
Total		$	1,265		$	1,146		10%
* Other revenues in the third quarter of 2024 include the sale of certain product rights.

Generic products revenues (including OTC and biosimilar products) in our Europe segment in the third quarter of 2024, were $973 million, an increase of 10% compared to the third quarter of 2023. In local currency terms, revenues increased by 8%, mainly due to price increases as a result of market conditions such as inflationary pressures in certain markets, as well as higher revenues from recently launched products.

AJOVY revenues in our Europe segment in the third quarter of 2024 increased by 37% to $56 million, compared to $41 million in the third quarter of 2023. In local currency terms, revenues increased by 36%, due to growth in volume.

COPAXONE revenues in our Europe segment in the third quarter of 2024 were $53 million, a decrease of 5%. in both U.S. dollars and local currency terms compared to the third quarter of 2023, due to price reductions and a decline in volume resulting from the availability of alternative therapies and competing glatiramer acetate products.

Respiratory products revenues in our Europe segment in the third quarter of 2024 were $60 million, a decrease of 1% compared to the third quarter of 2023. In local currency terms, revenues decreased by 3% compared to the third quarter of 2023, mainly due to net price reductions and lower volumes.

Europe Gross Profit

Gross profit from our Europe segment in the third quarter of 2024 was $698 million, an increase of 8% compared to $648 million in the third quarter of 2023.

Gross profit margin for our Europe segment in the third quarter of 2024 decreased to 55.2%, compared to 56.6% in the third quarter of 2023. This decrease was mainly due to negative exchange rate impact from hedging activities.

Europe Profit

Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in the third quarter of 2024 was $373 million, an increase of 10%, compared to $338 million in the third quarter of 2023. This increase was mainly due to higher gross profit resulting mainly from proceeds from the sale of certain product rights, partially offset by S&M expenses.

International Markets Segment

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment. The International Markets segment includes more than 35 countries, covering a substantial portion of the global pharmaceutical industry.

As part of a recent shift in executive management responsibilities, commencing January 1, 2024, Canada is reported under our International Markets segment and is no longer included as part of our United States segment. Prior period amounts were recast to reflect this change.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended September 30, 2024 and 2023:

	Three months ended September 30,
	2024				2023
	(U.S. $ in millions / % of Segment Revenues)
Revenues	$	613	100%	$	591	100%
Gross profit		306	49.9%		293	49.6%
R&D expenses		27	4.4%		30	5.1%
S&M expenses		134	21.9%		116	19.6%
G&A expenses		36	5.8%		33	5.5%
Other loss (income)		§	§		(2)	§
Segment profit*	$	109	17.8%	$	117	19.7%
* Segment profit does not include amortization and certain other items. § Represents an amount less than $0.5 million or 0.5%, as applicable.

Revenues from our International Markets segment in the third quarter of 2024 were $613 million, an increase of 4% compared to the third quarter of 2023. In local currency terms, revenues increased by 18% compared to the third quarter of 2023, mainly due to higher revenues from generic products in most markets, partially offset by regulatory price reductions and generic competition to off-patented products in Japan. Our higher revenues in the third quarter of 2024 were also partly driven by the sale of certain product rights.

In the third quarter of 2024, revenues were negatively impacted by exchange rate fluctuations of $84 million, including hedging effects, compared to the third quarter of 2023. Revenues in the third quarter of 2024 included $1 million from a positive hedging impact, compared to a positive hedging impact of $7 million in the third quarter of 2023, which are included in “Other” in the table below.

Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the three months ended September 30, 2024 and 2023:

		Three months ended September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S. $ in millions)
Generic products		$	477		$	470		1%
AJOVY			24			18		35%
COPAXONE			13			16		(18%)
Other*			99			87		14%
Total		$	613		$	591		4%
* Other revenues in the third quarter of 2024 include the sale of certain product rights.

Generic products revenues (including OTC and biosimilar products) in our International Markets segment were $477 million in the third quarter of 2024, an increase of 1% compared to the third quarter of 2023. In local currency terms, revenues increased by 13% compared to the third quarter of 2023, mainly due to higher revenues in most markets, largely driven by price increases as a result of higher costs due to inflationary pressure in certain markets and higher volumes, partially offset by regulatory price reductions and generic competition to off-patented products in Japan.

AJOVY was launched in certain markets in our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others. AJOVY revenues in our International Markets segment in the third quarter of 2024 were $24 million, compared to $18 million in the third quarter of 2023, due to growth in existing markets in which AJOVY was launched.

COPAXONE revenues in our International Markets segment in the third quarter of 2024 were $13 million compared to $16 million in the third quarter of 2023.

AUSTEDO was launched in China and Israel in 2021 and in Brazil in 2022, for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia. In February 2024, we announced a strategic partnership for the marketing and distribution of AUSTEDO in China. We continue with additional submissions in various other markets.

International Markets Gross Profit

Gross profit from our International Markets segment in the third quarter of 2024 was $306 million, an increase of 4% compared to $293 million in the third quarter of 2023.

Gross profit margin for our International Markets segment in the third quarter of 2024 increased to 49.9%, compared to 49.6% in the third quarter of 2023. This increase was mainly due to price increases largely as a result of inflationary pressures in certain markets, the sale of certain product rights and a favorable mix of products, partially offset by regulatory price reductions and generic competition to off-patented products in Japan, as well as higher costs due to inflationary and other macroeconomic pressures.

International Markets Profit

Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in the third quarter of 2024 was $109 million, a decrease of 7%, compared to $117 million in the third quarter of 2023. This decrease was mainly due to higher S&M expenses in the third quarter of 2024.

Other Activities

We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our United States, Europe or International Markets segments described above.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale, which divestment is expected to be completed in the first half of 2025. The intention to divest is in alignment with our Pivot to Growth strategy. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all.

Revenues from other activities in the third quarter of 2024 were $229 million, an increase of 6% in U.S. dollars or 5% in local currency terms, compared to the third quarter of 2023.

API sales to third parties in the third quarter of 2024 were $130 million, reflecting an increase of 4% in both U.S. dollars and local currency terms, compared to the third quarter of 2023, following a reallocation of an immaterial business within our other activities, in line with our intention to divest our API business.

Outlook for 2024 Non-GAAP Results

$ billions, except EPS or as noted	November 2024 Outlook	July 2024 Outlook	February 2024 Outlook
Revenues*	$16.1 – $16.5	$16.0 – $16.4	$15.7 – $16.3
AUSTEDO ($m)*	~1,600	~1,600	~1,500
AJOVY ($m)*	~500	~500	~500
UZEDY ($m)*	~100	~80	~80
COPAXONE ($m)*	~500	~450	~400
Operating Income	4.2 – 4.5	4.1 – 4.5	4.0 – 4.5
Adjusted EBITDA	4.7 – 5.0	4.6 – 5.0	4.5 – 5.0
Finance Expenses ($m)	~1,000	~1,000	~1,000
Tax Rate	14% – 17%	14% – 17%	14% – 17%
Diluted EPS ($)	2.40 – 2.50	2.30 – 2.50	2.20 – 2.50
Free Cash Flow**	1.7 – 2.0	1.7 – 2.0	1.7 – 2.0
CAPEX*	~0.5	~0.5	~0.5
Foreign Exchange		Volatile swings in FX can negatively impact revenue and income

* Revenues and CAPEX presented on a GAAP basis.

** Free Cash Flow includes cash flow generated from operating activities net of capital expenditures and deferred purchase price cash component collected for securitized trade receivables

Conference Call

Teva will host a conference call and live webcast including a slide presentation on November 6, 2024, at 8:00 a.m. ET to discuss its third quarter 2024 results and overall business environment. A question & answer session will follow.

In order to participate, please register in advance here to obtain a local or toll-free phone number and your personal pin.

A live webcast of the call will be available on Teva’s website at https://ir.tevapharm.com/Events-and-Presentations/events-and-presentations/default.aspx

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva’s website.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a global pharmaceutical leader with a category-defying portfolio, harnessing our generics expertise and stepping up innovation to continue the momentum behind the discovery, delivery, and expanded development of modern medicine. For over 120 years, Teva’s commitment to bettering health has never wavered. Today, the company’s global network of capabilities enables its 37,000 employees across 58 markets to push the boundaries of scientific innovation and deliver quality medicines to help improve health outcomes of millions of patients every day. To learn more about how Teva is all in for better health, visit www.tevapharm.com.

http://www.tevapharm.com.

Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.

Non-GAAP Financial Measures

This press release contains certain financial information that differs from what is reported under accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures, including, but not limited to, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross profit margin, Adjusted EBITDA, free cash flow, non-GAAP tax rate, non-GAAP net income (loss) attributable to Teva and non-GAAP diluted EPS, are presented in order to facilitate investors’ understanding of our business. We utilize certain non-GAAP financial measures to evaluate performance, in conjunction with other performance metrics. The following are examples of how we utilize the non-GAAP measures: our management and board of directors use the non-GAAP measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management; our annual budgets are prepared on a non-GAAP basis; and senior management’s annual compensation is derived, in part, using these non-GAAP measures. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP measures. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP. We are not providing forward looking guidance for GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items including, but not limited to, the amortization of purchased intangible assets, legal settlements and loss contingencies, impairment of long-lived assets and goodwill impairment, without unreasonable effort. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. You can identify these forward-looking statements by the use of words such as “should,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. Important factors that could cause or contribute to such differences include risks relating to:

• our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; concentration of our customer base and commercial alliances among our customers; delays in launches of new generic products; our ability to develop and commercialize biopharmaceutical products; competition for our innovative medicines; our ability to achieve expected results from investments in our product pipeline; our ability to develop and commercialize additional pharmaceutical products; our ability to successfully execute our Pivot to Growth strategy, including to expand our innovative and biosimilar medicines pipeline and profitably commercialize the innovative medicines and biosimilar portfolio, whether organically or through business development, and to sustain and focus our portfolio of generics medicines; and the effectiveness of our patents and other measures to protect our intellectual property rights, including any potential challenges to our Orange Book patent listings in the U.S.;
• our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a future downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us;
• our business and operations in general, including: the impact of global economic conditions and other macroeconomic developments and the governmental and societal responses thereto; the widespread outbreak of an illness or any other communicable disease, or any other public health crisis; effectiveness of our optimization efforts; our ability to attract, hire, integrate and retain highly skilled personnel; interruptions in our supply chain or problems with internal or third party manufacturing; disruptions of information technology systems; breaches of our data security; challenges associated with conducting business globally, including political or economic instability, major hostilities or terrorism, such as the ongoing conflict between Russia and Ukraine and the state of war declared in Israel; costs and delays resulting from the extensive pharmaceutical regulation to which we are subject; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; and our prospects and opportunities for growth if we sell assets or business units and close or divest plants and facilities, as well as our ability to successfully and cost-effectively consummate such sales and divestitures, including our planned divestiture of our API business;
• compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory environments; the effects of governmental and civil proceedings and litigation which we are, or in the future become, party to; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; increased legal and regulatory action in connection with public concern over the abuse of opioid medications; our ability to timely make payments required under our nationwide opioids settlement agreement and provide our generic version of Narcan^® (naloxone hydrochloride nasal spray) in the amounts and at the times required under the terms of such agreement; scrutiny from competition and pricing authorities around the world, including our ability to comply with and operate under our deferred prosecution agreement (DPA) with the U.S. Department of Justice; potential liability for intellectual property right infringement; product liability claims; failure to comply with complex Medicare, Medicaid and other governmental programs reporting and payment obligations; compliance with anti-corruption, sanctions and trade control laws; environmental risks; and the impact of sustainability issues;
• the impact of the state of war declared in Israel and the military activity in the region, including the risk of disruptions to our operations and facilities, such as our manufacturing and R&D facilities, located in Israel, the impact of our employees who are military reservists being called to active military duty, and the impact of the war on the economic, social and political stability of Israel;
• other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our long-lived assets; the impact of geopolitical conflicts including the state of war declared in Israel and the conflict between Russia and Ukraine; potential significant increases in tax liabilities; the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business and our ability to remediate an existing material weakness in our internal control over financial reporting;
  and other factors discussed in this press release, in our Quarterly Report on Form 10-Q for the third quarter of 2024 and in our Annual Report on Form 10-K for the year ended December 31, 2023, including in the sections captioned “Risk Factors.” Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.

Consolidated Statements of Income
(U.S. dollars in millions, except share and per share data)
(Unaudited)
		Three months ended					Nine months ended
		September 30,					September 30,
		2024		2023			2024		2023
Net revenues		4,332		3,850			12,315		11,389
Cost of sales		2,183		1,999			6,372		6,159
Gross profit		2,148		1,851			5,943		5,230
Research and development expenses		240		253			751		726
Selling and marketing expenses		626		576			1,891		1,726
General and administrative expenses		298		268			859		870
Intangible assets impairments		28		47			169		289
Goodwill impairment		600		–			1,000		700
Other asset impairments, restructuring and other items		(23)		57			931		276
Legal settlements and loss contingencies		450		314			638		1,009
Other loss (income)		(21)		(9)			(22)		(43)
Operating income (loss)		(51)		344			(274)		(323)
Financial expenses, net		272		280			763		808
Income (loss) before income taxes		(324)		64			(1,037)		(1,131)
Income taxes (benefit)		69		(12)			648		(48)
Share in (profits) losses of associated companies, net		(3)		§			(1)		(1)
Net income (loss)		(390)		77			(1,684)		(1,082)
Net income (loss) attributable to non-controlling interests		47		8			(262)		(60)
Net income (loss) attributable to Teva		(437)		69			(1,422)		(1,022)
Earnings (loss) per share attributable to Teva:	Basic ($)	(0.39)		0.06			(1.26)		(0.91)
	Diluted ($)	(0.39)		0.06			(1.26)		(0.91)
Weighted average number of shares (in millions):	Basic	1,133		1,121			1,130		1,119
	Diluted	1,133		1,135			1,130		1,119
Non-GAAP net income attributable to Teva for diluted earnings per share:*		798		677			2,043		1,762
Non-GAAP earnings per share attributable to Teva:*	Diluted ($)	0.69		0.60			1.78		1.56
Non-GAAP average number of shares (in millions):	Diluted	1,155		1,135			1,148		1,131
Amounts may not add up due to rounding.
§ Represents an amount less than $0.5 million.
* See reconciliation attached.

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in millions, except for share data)
(Unaudited)
						September 30,			December 31,
					2024			2023
ASSETS
Current assets:
Cash and cash equivalents					$	3,319		$	3,226
Accounts receivables, net of allowance for credit losses of $91 million and $95 million as of September 30, 2024 and December 31, 2023						3,462			3,408
Inventories						3,959			4,021
Prepaid expenses						1,127			1,255
Other current assets						445			504
Assets held for sale						2			70
Total current assets						12,314			12,485
Deferred income taxes						2,070			1,812
Other non-current assets						459			470
Property, plant and equipment, net						5,672			5,750
Operating lease right-of-use assets, net						364			397
Identifiable intangible assets, net						4,756			5,387
Goodwill						16,124			17,177
Total assets					$	41,758		$	43,479
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt					$	2,580		$	1,672
Sales reserves and allowances						3,785			3,535
Accounts payables						2,371			2,602
Employee-related obligations						619			611
Accrued expenses						2,984			2,771
Other current liabilities						1,241			1,044
Liabilities held for sale						216			13
Total current liabilities						13,797			12,247
Long-term liabilities:
Deferred income taxes						538			606
Other taxes and long-term liabilities						4,344			4,019
Senior notes and loans						16,400			18,161
Operating lease liabilities						295			320
Total long-term liabilities						21,578			23,106
Equity:
Teva shareholders’ equity:						6,065			7,506
Non-controlling interests						319			620
Total equity						6,383			8,126
Total liabilities and equity					$	41,758		$	43,479
Amounts may not add up due to rounding.

TEVA PHARMACEUTICAL INDUSTRIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in millions)
(Unaudited)
		Three months ended			Nine months ended
		September 30,			September 30,
	2024		2023		2024	2023
Operating activities:
Net income (loss)	$	(390)	77	$	(1,684)	(1,082)
Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization		259	283		790	887
Impairment of goodwill		600	–		1,000	700
Impairment of long-lived assets and assets held for sale		(51)	48		758	310
Net change in operating assets and liabilities		317	(227)		(190)	(364)
Deferred income taxes – net and uncertain tax positions		(53)	(199)		(666)	(349)
Stock-based compensation		29	31		89	93
Other items *		2	(5)		597	18
Net loss (gain) from sale of business and long-lived assets		(21)	(3)		(22)	(29)
Net cash provided by (used in) operating activities		693	5		672	184
Investing activities:
Beneficial interest collected in exchange for securitized account receivables		339	362		951	1,056
Purchases of property, plant and equipment and intangible assets		(148)	(149)		(369)	(407)
Proceeds from sale of business and long-lived assets		38	10		39	68
Acquisition of businesses, net of cash acquired		–	–		(15)	–
Purchases of investments and other assets .		(1)	(38)		(56)	(44)
Proceeds from sale of investments		40	–		40	–
Other investing activities		–	(1)		–	(6)
Net cash provided by (used in) investing activities		268	184		590	667
Financing activities:
Repayment of senior notes and loans and other long term liabilities		–	(1,000)		(956)	(4,152)
Purchase of shares from non-controlling interests		–	–		(64)	–
Dividends paid to non-controlling interests		–	–		(78)	–
Proceeds from senior notes, net of issuance costs		–	–		–	2,451
Proceeds from short term debt		–	700		–	700
Repayment of short term debt		–	(200)		–	(200)
Other financing activities		–	(76)		(19)	(136)
Net cash provided by (used in) financing activities		–	(576)		(1,117)	(1,337)
Translation adjustment on cash and cash equivalents		100	(33)		(53)	(98)
Net change in cash, cash equivalents and restricted cash		1,061	(420)	–	92	(584)
Balance of cash, cash equivalents and restricted cash at beginning of period		2,258	2,670		3,227	2,834
Balance of cash, cash equivalents and restricted cash at end of period	$	3,319	2,250		3,319	2,250
Cash and cash equivalents		3,319	2,249		3,319	2,249
Restricted cash included in other current assets		—	1		—	1
Total cash, cash equivalents and restricted cash shown in the statement of cash flows		3,319	2,250		3,319	2,250
Non-cash financing and investing activities:
Beneficial interest obtained in exchange for securitized accounts receivables	$	332	376	$	964	1,090
Dividend declared to non-controlling interests	$	–	67	$	–	67
* Adjustment in the nine-months period ended September 30, 2024 mainly relates to an agreement with the Israeli Tax Authorities to settle certain litigation in an amount of $495 million relating to taxes payable for the years 2008 through 2020.
Amounts may not add up due to rounding
The accompanying notes are an integral part of the financial statements.

Reconciliation of net income (loss) attributable to Teva
to Non-GAAP net income (loss) attributable to Teva
			Three months ended				Nine months ended
			September 30,				September 30,
($ in millions except per share amounts)			2024	2023			2024		2023
Net income (Loss) attributable to Teva(1)		($)	(437)	69		($)	(1,422)		(1,022)
Increase (decrease) for excluded items:
	Amortization of purchased intangible assets		146	145			444		471
	Legal settlements and loss contingencies(2)		450	314			638		1,009
	Goodwill impairment(3)		600	–			1,000		700
	Impairment of long-lived assets(4)		(51)	48			758		310
	Restructuring costs		21	27			52		93
	Equity compensation		29	31			89		93
	Contingent consideration(1)(5)		34	27			305		140
	Loss (Gain) on sale of business		(20)	(5)			(21)		(3)
	Accelerated depreciation		1	25			8		74
	Financial expenses		11	14			35		53
	Items attributable to non-controlling interests(4)		41	(1)			(276)		(91)
	Other non-GAAP items(6)		56	64			162		252
	Corresponding tax effects and unusual tax items(7)		(83)	(80)			270		(315)
Non-GAAP net income attributable to Teva		($)	798	677		($)	2,043		1,762
Non-GAAP tax rate(8)			16.0%	9.0%			15.5%		13.0%
GAAP diluted earnings (loss) per share attributable to Teva		($)	(0.39)	0.06		($)	(1.26)		(0.91)
EPS difference(9)			1.08	0.54			3.04		2.47
Non-GAAP diluted EPS attributable to Teva(9)		($)	0.69	0.60		($)	1.78		1.56
Non-GAAP average number of shares (in millions)(9)			1,155	1,135			1,148		1,131
(1)	The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1c to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(2)	Adjustments for legal settlements and loss contingencies in the third quarter of 2024 were mainly related to a provision of $350 million recorded in connection with a decision by the European Commission in its antitrust investigation into COPAXONE®, and to an update to the estimated settlement provision of $121 million for the opioid cases (mainly related to the settlement agreement with the city of Baltimore and the effect of the passage of time on the net present value of the discounted payments). Adjustments for legal settlements and loss contingencies in the third quarter of 2023 were mainly related to a provision of $270 million in connection with the U.S. DOJ patient assistance program litigation. Adjustments for legal settlements and loss contingencies in the nine months ended September 30, 2024 were mainly related to a provision of $350 million recorded in connection with a decision by the European Commission in its antitrust investigation into COPAXONE, and to an update to the estimated settlement provision of $239 million for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments and the settlement agreement with the city of Baltimore). Adjustments for legal settlements and loss contingencies in the nine months ended September 30, 2023 were mainly related to an update to the estimated provision of $370 million related to the DOJ patient assistance program litigation, an update to the estimated settlement provision of $248 million related to the remaining opioid cases, the provision of $204 million relating to the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products and the provision of $100 million related to the settlement of the reverse-payment antitrust litigation over certain HIV medicines.
(3)	Goodwill impairment charges of $600 million and $1,000 million related to Teva’s API reporting unit were recorded in the three and nine months ended September 30, 2024, respectively. A goodwill impairment charge of $700 million related to our International Markets reporting unit was recorded in the nine months ended September 30, 2023.
(4)	Adjustments for impairment of long-lived assets and items attributable to non-controlling interests, for the first nine months of 2024 primarily consisted of $561 million and $275 million, respectively, related to the classification of the business venture in Japan as held for sale. Adjustments for impairment of long-lived assets, for the first nine months of 2023 primarily consisted of $206 million related to impairments of identifiable product rights and $83 million related to impairments of IPR&D assets.
(5)	Adjustments for contingent consideration primarily related to a change in the estimated future royalty payments to Allergan in connection with lenalidomide capsules (the generic version of Revlimid®), of $28 million and $266 million, respectively for the three and nine months ended September 30, 2024, and of $23 million and $111 million, respectively for the three and nine months ended September 30, 2023.
(6)	Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events.
(7)	Adjustments for corresponding tax effects and unusual tax items for the nine months ended September 30, 2024, include a tax item in an amount of $495 million related to the settlement agreement with the ITA to settle certain litigation with respect to taxes payable for the Company’s taxable years 2008 through 2020.
(8)	Non-GAAP tax rate is tax expenses (benefit) excluding the impact of non-GAAP tax adjustments presented above as a percentage of income (loss) before income taxes excluding the impact of non-GAAP adjustments presented above. GAAP tax rate for the three and nine months ended September 30, 2024 was 21% and 62% respectively and for the three and nine months ended September 30, 2023 was 19% and 4% respectively.
(9)	EPS difference and diluted non-GAAP EPS are calculated by dividing our non-GAAP net income attributable to Teva by our non-GAAP diluted weighted average number of shares.

Reconciliation of gross profit to Non-GAAP gross profit
(Unaudited)
			Three months ended				Nine months ended
			September 30,				September 30,
($ in millions)			2024	2023			2024	2023
Gross profit		$	2,148	1,851		$	5,943	5,230
Gross profit margin			49.6%	48.1%			48.3%	45.9%
Increase (decrease) for excluded items: (1)
	Amortization of purchased intangible assets		136	130			409	420
	Equity compensation		5	5			17	15
	Accelerated depreciation		1	25			8	74
	Other non-GAAP items		37	48			117	140
Non-GAAP gross profit		$	2,327	2,060		$	6,495	5,878
Non-GAAP gross profit margin (2)			53.7%	53.5%			52.7%	51.6%
(1) For further explanations, refer to the footnotes under the “Reconciliation of net income (loss) attributable to Teva to Non-GAAP net income (loss) attributable to Teva” table.
(2) Non-GAAP gross profit margin is non-GAAP gross profit as a percentage of revenue.

Reconciliation of operating income (loss) to Non-GAAP operating income (loss)
(Unaudited)
			Three months ended				Nine months ended
			September 30,				September 30,
($ in millions)			2024	2023			2024	2023
Operating income (loss)(1)		($)	(51)	344		($)	(274)	(323)
Operating margin			(1.2%)	8.9%			(2.2%)	(2.8%)
Increase (decrease) for excluded items: (2)
	Amortization of purchased intangible assets		146	145			444	471
	Legal settlements and loss contingencies		450	314			638	1,009
	Goodwill impairment		600	–			1,000	700
	Impairment of long-lived assets		(51)	48			758	310
	Restructuring costs		21	27			52	93
	Equity compensation		29	31			89	93
	Contingent consideration(1)		34	27			305	140
	Loss (gain) on sale of business		(20)	(5)			(21)	(3)
	Accelerated depreciation		1	25			8	74
	Other non-GAAP items		56	64			162	252
Non-GAAP operating income (loss)		($)	1,214	1,020		($)	3,162	2,816
Non-GAAP operating margin(3)		($)	28.0%	26.5%		($)	25.7%	24.7%
(1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1c to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(2) For further explanations, refer to the footnotes under the “Reconciliation of net income (loss) attributable to Teva to Non-GAAP net income (loss) attributable to Teva” table.
(3) Non-GAAP operating margin is Non-GAAP operating income as a percentage of revenues.

	Reconciliation of net income (loss) to adjusted EBITDA
	(Unaudited)
			Three months ended				Nine months ended
			September 30,				September 30,
($ in millions)			2024	2023			2024	2023
Net income (loss)(1)		$	(390)	77		$	(1,684)	(1,082)
Increase (decrease) for excluded items:(2)
	Financial expenses		272	280			763	808
	Income taxes		69	(12)			648	(48)
	Share in profits (losses) of associated companies –net		(3)	§			(1)	(1)
	Depreciation		113	138			346	416
	Amortization		146	145			444	471
EBITDA			208	628			515	565
	Legal settlements and loss contingencies		450	314			638	1,009
	Goodwill impairment		600	–			1,000	700
	Impairment of long lived assets		(51)	48			758	310
	Restructuring costs		21	27			52	93
	Equity compensation		29	31			89	93
	Contingent consideration(1)		34	27			305	140
	Loss (Gain) on sale of Business		(20)	(5)			(21)	(3)
	Other non-GAAP items		56	64			162	252
Adjusted EBITDA		$	1,327	1,134		$	3,500	3,158
	§ Represents an amount less than $0.5 million.
	(1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1c to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
	(2) For further explanations, refer to the footnotes under the “Reconciliation of net income (loss) attributable to Teva to Non-GAAP net income (loss) attributable to Teva” table.

	Segment Information
		(Unaudited)
	United States						Europe						International Markets
	Three months ended September 30,						Three months ended September 30,						Three months ended September 30,
	2024			2023			2024			2023			2024			2023
	(U.S. $ in millions)						(U.S. $ in millions)						(U.S. $ in millions)
Revenues	$	2,225		$	1,896		$	1,265		$	1,146		$	613		$	591
Gross profit		1,265			1,060			698			648			306			293
R&D expenses		151			156			55			62			27			30
S&M expenses		259			243			203			184			134			116
G&A expenses		107			93			67			66			36			33
Other loss (income)		§			(2)			1			§			§			(2)
Segment profit	$	748		$	571		$	373		$	338		$	109		$	117
§ Represents an amount less than $0.5 million.

Segment Information
Unaudited
	United States						Europe						International Markets
	Nine months ended September 30,						Nine months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023			2024			2023
	(U.S. $ in millions)						(U.S. $ in millions)						(U.S. $ in millions)
Revenues	$	6,060		$	5,465		$	3,749		$	3,493		$	1,802		$	1,750
Gross profit		3,291			2,866			2,113			1,943			889			861
R&D expenses		475			460			173			168			85			81
S&M expenses		789			700			605			565			397			353
G&A expenses		300			289			197			196			109			105
Other loss (income)		(1)			(3)			1			(2)			(1)			(34)
Segment profit	$	1,727		$	1,421		$	1,137		$	1,017		$	299		$	356

Reconciliation of our segment profit
to consolidated income (loss) before income taxes
		Three months ended
		September 30,
		2024			2023
		(U.S.$ in millions)
United States profit		$	748		$	571
Europe profit			373			338
International Markets profit			109			117
Total reportable segment profit			1,230			1,025
Profit (loss) of other activities			(16)			(5)
			1,214			1,020
Amounts not allocated to segments:
Amortization			146			145
Other asset impairments, restructuring and other items*			(23)			57
Goodwill impairment			600			–
Intangible asset impairments			28			47
Legal settlements and loss contingencies			450			314
Other unallocated amounts			64			112
Consolidated operating income (loss)			(51)			344
Financial expenses – net			272			280
Consolidated income (loss) before income taxes*		$	(324)		$	64
*The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.

Reconciliation of our segment profit
to consolidated income (loss) before income taxes
		Nine months ended
		September 30,
		2024			2023
		(U.S.$ in millions)
United States profit		$	1,727		$	1,421
Europe profit			1,137			1,017
International Markets profit			299			356
Total reportable segment profit			3,163			2,794
Profit (loss) of other activities			(1)			22
Total segment profit			3,162			2,816
Amounts not allocated to segments:
Amortization			444			471
Other asset impairments, restructuring and other items*			931			276
Goodwill impairment			1,000			700
Intangible asset impairments			169			289
Legal settlements and loss contingencies			638			1,009
Other unallocated amounts			254			394
Consolidated operating income (loss)*			(274)			(323)
Financial expenses – net			763			808
Consolidated income (loss) before income taxes		$	(1,037)		$	(1,131)
*The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.

Segment revenues by major products and activities
(Unaudited)
		Three months ended
		September 30,						Percentage Change
		2024			2023			2023-2024
		(U.S.$ in millions)
United States segment
Generic products		$	1,094		$	839		30%
AJOVY			58			56		4%
AUSTEDO			435			339		28%
BENDEKA/TREANDA			40			56		(28%)
COPAXONE			69			98		(30%)
UZEDY			35			2		N/A
Anda			380			367		3%
Other			115			140		(18%)
Total			2,225			1,896		17%
		Three months ended
		September 30,						Percentage Change
		2024			2023			2023-2024
		(U.S.$ in millions)
Europe segment
Generic products		$	973		$	886		10%
AJOVY			56			41		37%
COPAXONE			53			55		(5%)
Respiratory products			60			61		(1%)
Other*			124			104		19%
Total			1,265			1,146		10%
* Other revenues in the third quarter of 2024 include the sale of certain product rights.
		Three months ended
		September 30,						Percentage Change
		2024			2023			2023-2024
		(U.S.$ in millions)
International Markets segment
Generic products		$	477		$	470		1%
AJOVY			24			18		35%
COPAXONE			13			16		(18%)
Other*			99			87		14%
Total			613			591		4%
* Other revenues in the third quarter of 2024 include the sale of certain product rights.

Segment revenues by major products and activities
(Unaudited)
		Nine months ended
		September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S.$ in millions)
United States segment
Generic products		$	2,924		$	2,471		18%
AJOVY			144			154		(6%)
AUSTEDO			1,124			817		38%
BENDEKA / TREANDA			127			185		(31%)
COPAXONE			179			224		(20%)
UZEDY			75			14		433%
Anda			1,134			1,183		(4%)
Other			352			417		(16%)
Total			6,060			5,465		11%
		Nine months ended
		September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S.$ in millions)
Europe segment
Generic products		$	2,947		$	2,727		8%
AJOVY			158			115		37%
COPAXONE			163			174		(6%)
Respiratory products			183			195		(6%)
Other*			299			282		6%
Total			3,749			3,493		7%
* Other revenues in the first nine months ended 2024 include the sale of certain product rights.
		Nine months ended
		September 30,						Percentage Change
		2024			2023			2024-2023
		(U.S.$ in millions)
International Markets segment
Generic products		$	1,440		$	1,425		1%
AJOVY			63			45		39%
COPAXONE			38			50		(23%)
Other*			261			229		14%
Total			1,802			1,750		3%
* Other revenues in the first nine months ended 2024 include the sale of certain product rights.

Free cash flow reconciliation
(Unaudited)
	Three months ended September 30,
	2024			2023
	(U.S. $ in millions)
Net cash provided by (used in) operating activities		693			5
Beneficial interest collected in exchange for securitized account receivables		339			362
Purchases of property, plant and equipment and intangible assets		(148)			(149)
Proceeds from divestitures of businesses and other assets		38			10
Free cash flow	$	922		$	229

Free cash flow reconciliation
(Unaudited)
	Nine months ended September 30,
	2024			2023
	(U.S. $ in millions)
Net cash provided by (used in) operating activities		672			184
Beneficial interest collected in exchange for securitized account receivables		951			1,056
Purchases of property, plant and equipment and intangible assets		(369)			(407)
Proceeds from sale of business and long lived assets		39			68
Acquisition of subsidiary, net of cash acquired		(15)			–
Free cash flow	$	1,278		$	902

IR Contacts
Ran Meir (215) 591-8912
Yael Ashman +972 (3) 914 8262
Sanjeev Sharma (267) 658-2700

Media Contacts
Kelley Dougherty (973) 832-2810
Eden Klein +972 (3) 906 2645

A PDF accompanying this announcement is available at http://ml-eu.globenewswire.com/Resource/Download/1ac2fc55-a186-4921-b2c9-dbec0de606f0