Solventum Q1 2025 Earnings Report
Key Takeaways
Solventum achieved 4.3% organic sales growth in Q1 2025, driven by strong performance in MedSurg and Health Information Systems. Despite the increase in revenue, net income and operating income fell sharply year-over-year due to higher costs and margin pressures. Free cash flow turned negative, reflecting investment and operating dynamics post-spin-off.
Revenue reached $2.07 billion, growing 2.6% overall and 4.3% organically.
Net income declined to $137 million from $237 million in Q1 2024.
GAAP EPS was $0.78; adjusted EPS was $1.34.
Free cash flow was negative at -$80 million, down from $340 million last year.
Solventum
Solventum
Solventum Revenue by Segment
Solventum Revenue by Geographic Location
Forward Guidance
Solventum raised its full-year 2025 organic sales growth guidance by 50 basis points while maintaining adjusted EPS and free cash flow targets.
Positive Outlook
- Raised full-year organic sales growth outlook to 1.5%–2.5%.
- Maintained adjusted EPS guidance of $5.45 to $5.65.
- Maintained free cash flow forecast of $450M–$550M.
- MedSurg and HIS segments performed well in Q1.
- Introduced long-term strategic plan to support transformation.
Challenges Ahead
- Net income dropped 42.2% year-over-year.
- Free cash flow turned negative at -$80 million.
- GAAP and adjusted operating margins declined significantly.
- Higher SG&A costs due to public company stand-up expenses.
- Ongoing margin compression from supply agreement mark-ups.
Revenue & Expenses
Visualization of income flow from segment revenue to net income