Earnings Call Insights: AbbVie Inc. (ABBV) Q3 2025
Management View
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CEO Robert Michael stated that “AbbVie’s business continues to perform above our expectations. We delivered another excellent quarter, including strong financial results, pipeline advancement across all stages of development and strategic investments to drive sustainable long-term growth.” He announced an adjusted EPS of $1.86, $0.10 above guidance midpoint, and total net revenues of nearly $15.8 billion, exceeding expectations by about $300 million. He highlighted over 40% combined growth from Skyrizi and Rinvoq and double-digit neuroscience revenue growth, with no significant LOE events in the near term and raised the 2025 outlook for the third time this year. Michael emphasized a robust pipeline with approximately 90 programs and recent acquisitions, including Gilgamesh’s bretisilocin and Capstan Therapeutics. He confirmed a 5.5% increase in the quarterly cash dividend beginning February 2026.
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CFO Scott Reents said, “Starting with our third quarter results, we reported adjusted earnings per share of $1.86, which is $0.10 above our guidance midpoint. These results include a $1.50 unfavorable impact from acquired IPR&D expense, primarily reflecting upfront charges for the acquisition of Capstan Therapeutics and our license agreement with IGI. Total net revenues were nearly $15.8 billion, reflecting growth of 8.4% on an operational basis, excluding a modestly favorable impact from foreign exchange. Importantly, our ex-Humira growth platform delivered reported sales growth of more than 20%, once again exceeding our expectations.”
Outlook
- AbbVie raised its full-year adjusted EPS guidance to between $10.61 and $10.65. The company now expects total net revenues of approximately $16.9 billion, reflecting an increase of $400 million. Skyrizi global sales are forecast at $17.3 billion, neuroscience revenues at $10.7 billion, and aesthetics sales at $4.9 billion. Fourth quarter net revenues are anticipated at more than $16.3 billion, with adjusted EPS guidance between $3.32 and $3.36. Michael indicated that “this guidance does not include an estimate for acquired IPR&D expense that may be incurred beyond the third quarter.”
Financial Results
- AbbVie delivered adjusted EPS of $1.86 and nearly $15.8 billion in net revenues for Q3, with operational revenue growth of 8.4%. Ex-Humira sales grew more than 20%. Adjusted gross margin was 83.9% of sales, adjusted R&D expense was 14.3% of sales, and adjusted SG&A expense was 21.6% of sales. The adjusted operating margin was 30.9% of sales, impacted by acquired IPR&D expense. Net interest expense was $667 million and the adjusted tax rate was 24.5%. The company reported a cash balance of more than $5.6 billion and free cash flow of approximately $13 billion for the first nine months of the year.
Q&A
- Terence Flynn, Morgan Stanley: Asked about implications of the new PBM model and IRA price negotiations. CEO Michael responded that AbbVie is “very good at utilizing the tools that are available to us” and adaptable to PBM changes, and that outcomes for Vraylar and Linzess will not impact long-term guidance.
- Christopher Schott, JPMorgan: Inquired about IL-23 market dynamics and 2026 outlook. Stewart stated, “Skyrizi is performing very, very well and we’ll continue to do so,” while Michael said, “momentum should allow us to deliver strong growth next year despite headwinds from continued Humira erosion and Imbruvica IRA pricing.”
- Vamil Divan, Guggenheim: Asked about Skyrizi/Rinvoq 2027 guidance and aesthetics market share. Michael said, “it’s reasonable to assume that we will exceed that long-term guidance,” and Stewart noted BOTOX share in the low 60s and HA fillers around 45%, while sequential share is growing.
- David Amsellem, Piper Sandler: Asked about the Parkinson’s franchise. Stewart reported VYALEV in-play capture at roughly 80-85% and highlighted its 24-hour coverage. Thakkar cited “very favorable feedback” and described tavapadon’s differentiators.
Sentiment Analysis
- Analysts expressed interest in pipeline depth, policy impacts, and market dynamics, with a generally positive but probing tone, especially on competitive positioning and policy risks.
- Management’s sentiment was confident, with Michael stating, “we are very confident in our competitive position,” and Stewart highlighting, “our commercial execution has been outstanding.” Prepared remarks were assertive, while Q&A maintained confidence but with more detailed clarifications. Compared to the previous quarter, management continued a confident stance while acknowledging ongoing market and policy challenges.
Quarter-over-Quarter Comparison
- Guidance was raised for EPS and net revenues compared to Q2, though the EPS range is lower due to IPR&D impacts. Skyrizi and neuroscience forecast increases were highlighted; aesthetics guidance was lowered. Management’s tone remained confident, with continued focus on pipeline advancement and external innovation. Analysts’ focus shifted slightly towards long-term product performance and competitive responses, with recurring questions about Skyrizi/Rinvoq, aesthetics recovery, and policy impact.
Risks and Concerns
- Management flagged ongoing Humira erosion and Imbruvica IRA pricing as headwinds, with Michael noting, “Humira access in the U.S. will decrease throughout the remainder of this year and into 2026.” Aesthetics faces continued challenging market conditions and low consumer sentiment. IRA negotiations and PBM reforms were also discussed as areas of uncertainty, but management emphasized adaptability and ongoing engagement with policymakers.
Final Takeaway
AbbVie management underscored a quarter of strong revenue and adjusted EPS growth, continued outperformance from its growth platform, and robust pipeline progress. The company raised guidance for the third time in 2025, reinforced confidence in its competitive positioning, and highlighted strategic investments and acquisitions intended to drive sustainable growth into the next decade, with a clear focus on innovation and adaptability in the face of industry and policy changes.