NYSE$OGN

Organon & Co. · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Organon's revenue decreased slightly, with mixed performance across segments, while profitability declined due to various factors.

Organon reported a slight decrease in revenue for Q3 2023, with Women's Health declining but Biosimilars and Established Brands showing growth. Profitability margins decreased due to foreign exchange, inflation, and product mix. The company narrowed and lowered its full-year revenue guidance.

  • Total revenue decreased by 1% compared to Q3 2022.
  • Women's Health revenue declined, impacted by generic competition for NuvaRing and unfavorable discount rates for fertility products and Nexplanon.
  • Biosimilars revenue increased by 10%, driven by Renflexis and Ontruzant.
  • Established Brands revenue increased by 2%, driven by Atozet, Nasonex, and Dulera.

Headline financials

Total Revenue

$1.52B

Previous: $1.54B-1.2%
EPS (adj)

$0.87

Previous: $1.32-34.1%
Gross Margin

59.7%

Previous: 64.2%-7.0%
Non-GAAP Adjusted Gross Margin

62.6%

Previous: 67.1%-6.7%
Adjusted EBITDA Margin

29.4%

Previous: 35.5%-17.2%
Capital Expenditures

-$172M

Previous: -$133M-29.3%
Free Cash Flow

-$114M

Previous: $94M-221.3%
Net Income

$58M

Previous: $227M-74.4%
Operating Income

$232M

Previous: $399M-41.9%
Gross Profit

$907M

Previous: $986M-8.0%
Cash & Equivalents

$414M

Previous: $499M-17.0%
Total Assets

$11B

Previous: $10.4B+5.5%
R&D Expense

$137M

No prior period
Stock-Based Comp

$27M

Previous: $18M+50.0%

Revenue & EPS history

Organon · Revenue · Quarterly

$1.52B

Q3 2023-1.2%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Organon · $1.52B total across 4 segments · Q3 2023

  • Established Brands
    $959M
  • Women's Health
    $376M
  • Biosimilars
    $144M
  • Other
    $40M

Forward guidance

Organon is updating its full year 2023 guidance ranges. The range for full year 2023 revenue is narrowed and lowered to $6.15 billion to $6.25 billion. The range for full year Adjusted EBITDA margin is now 30.5% to 31.5%.

Tailwinds

  • Established Brands franchise to achieve flat to slightly better revenue growth on a constant currency basis for the full year 2023.
  • Focus on reducing leverage as we move into 2024.
  • Continue to add products that could enhance growth profile.
  • Existing products produce strong cash flows
  • Pursuing opportunities to collaborate with biopharmaceutical innovators

Headwinds

  • Revenue guidance narrowed and lowered to $6.15B - $6.25B due to foreign currency exchange rates.
  • Changes to the go-to-market model for Nexplanon.
  • Slower uptake of Hadlima.
  • Macroeconomic factors in China.
  • Adjusted EBITDA margin now 30.5% to 31.5% to reflect a lower gross margin stemming from the impacts of foreign exchange on revenue.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

-0.9%

Avg return

Earnings day

-1.6%

Avg return

5 days after

-4.8%

Avg return

30 days after

40%

10 / 25 earnings

Positive

+14.4%

Q4 2023

Best reaction

-26.9%

Q1 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.6%+0.1%+0.1%
Q4 2025-8.2%-5.3%-17.4%
Q3 2025+14.0%+11.1%+5.9%
Q1 2025-26.9%-29.4%-28.7%
Q4 2024+11.0%+5.3%+4.1%
Q3 2024+0.8%-8.2%-11.5%
Q2 2024-5.6%-0.2%+5.8%
Q1 2024+4.1%+8.3%+13.3%
Q4 2023+14.4%+13.0%+11.7%
Q3 2023-9.2%-15.3%-21.5%
Q2 2023+6.2%+6.2%-10.7%
Q1 2023-7.1%-12.4%-18.5%
Q4 2022-11.1%-7.6%-25.9%
Q3 2022-6.1%-9.1%+3.0%
Q2 2022-3.3%-3.6%-12.5%
Q1 2022+4.8%+4.7%+12.0%
Q4 2019+0.8%-0.3%-4.9%
Q4 2021-0.7%-1.0%-3.5%
Q3 2020-3.9%-5.1%-17.2%
Q3 2021-8.0%-8.4%-21.5%
Q2 2020+3.4%-2.9%-1.4%
Q2 2021+14.3%+18.2%+13.2%
Q4 2020-1.5%+0.7%+1.6%
Q1 2020-1.5%+0.7%+1.6%
Q1 2021-1.5%+0.7%+1.6%

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