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Mar 31
Solventum Q1 2025 Earnings Report
Solventum reported steady sales growth in Q1 2025 with strong organic growth, though earnings declined due to margin compression and increased operating expenses.
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
Revenue by Segment
MedSurg Revenue
CapyFin.comDental Solutions Revenue
CapyFin.comHealth Info Systems Revenue
CapyFin.comPurification & Filtration Revenue
CapyFin.com 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