IntrinsicIntrinsic
← All summaries

BAXTER INTERNATIONAL INC

BAX
Financials & Chart →

Business Summary

Baxter International Inc. operates as a global medical technology company providing a broad portfolio of essential healthcare products, including sterile intravenous (IV) solutions, infusion systems and devices, parenteral nutrition therapies, inhaled anesthetics, generic injectable pharmaceuticals, surgical hemostat and sealant products, advanced surgical equipment, smart bed systems, patient monitoring and diagnostic technologies, and respiratory health devices. As of December 31, 2025, after giving effect to the sale of its Kidney Care business, the company manufactured products in over 20 countries and sold them in over 100 countries. The company's global footprint and the critical nature of its products and services play a key role in expanding access to healthcare in emerging and developed countries.

Baxter's businesses benefit from a number of competitive advantages, including the breadth and depth of its product offerings and strong relationships with customers, including hospitals and clinics, group purchasing organizations (GPOs), integrated delivery networks (IDNs), physicians, and patients. The company also benefits from efficiencies and cost advantages resulting from shared manufacturing facilities and the technological advantages of its products. Although no single company competes with Baxter in all of its businesses, the company faces substantial competition in each of its segments from international and domestic healthcare, medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across its businesses. The company believes customer purchasing decisions are primarily focused on cost-effectiveness, price, service, product performance and technological innovation.

Baxter generates revenue through the sale of its diversified portfolio of medical products and therapies, which are used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors' offices, kidney dialysis centers and patients at home under physician supervision. The company's revenue mix includes both product sales and service revenue, with a significant portion derived from recurring sales of consumable medical products and pharmaceuticals. The company's primary customers are hospitals, healthcare distribution companies and government agencies that purchase healthcare products on behalf of providers. Baxter has its own direct sales force and also makes sales to and through independent distributors, drug wholesalers acting as sales agents and specialty pharmacy or other alternate site providers.

Baxter's business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals. The Medical Products & Therapies segment includes sales of sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products. For the year ended December 31, 2025, this segment reported net sales of $5.299 billion , with Infusion Therapies & Technologies contributing $4.101 billion and Advanced Surgery contributing $1.198 billion . The Healthcare Systems & Technologies segment includes sales of connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space. This segment reported net sales of $3.071 billion for the year ended December 31, 2025, with Care and Connectivity Solutions contributing $1.911 billion and Front Line Care contributing $1.160 billion . The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services, reporting net sales of $2.493 billion for the year ended December 31, 2025, with Injectables and Anesthesia contributing $1.352 billion and Drug Compounding contributing $1.141 billion .

During the years ended December 31, 2025 and 2024, Baxter earned $381 million and $67 million , respectively, of revenues that were not attributable to its reportable segments. In the current year period, Other sales primarily represent revenue recognized under the Kidney Care Manufacturing and Supply Agreement (Kidney Care MSA), entered into upon the sale of the Kidney Care business in January 2025, and to a lesser extent, revenues earned by certain manufacturing facilities from contract manufacturing activities.

On January 31, 2025, Baxter completed the sale of its Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion in cash, subject to certain closing cash, working capital and debt adjustments. After giving effect to certain adjustments, the company received approximately $3.71 billion pre-tax cash proceeds at closing with net after tax proceeds of approximately $3.3 billion . As of December 31, 2025, Baxter repaid $3.81 billion of legacy indebtedness in 2025 (which repayment does not include $2.00 billion of indebtedness repaid with proceeds from a new notes offering) primarily with the net after-tax proceeds from the sale of the Kidney Care business. In the third quarter of 2023, the company completed the implementation of a new operating model intended to simplify and streamline operations. On September 29, 2023, Baxter completed the sale of its BioPharma Solutions (BPS) business and received cash proceeds of $3.96 billion from that transaction. In July 2025, Andrew Hider was appointed as President and Chief Executive Officer. Beginning in October 2025, the company launched the Baxter Growth and Performance system. In November 2025, Baxter announced a reduction in its quarterly dividend to $0.01 per share. During 2025, the company paid cash dividends to stockholders totaling $348 million . Capital expenditures totaled $513 million in 2025. The company did not repurchase any shares under its share repurchase authority in 2025, and the remaining authorization under this program totaled approximately $1.30 billion at December 31, 2025.

Baxter's global net sales totaled $11.24 billion in 2025, an increase of 6% over 2024 on a reported basis and 3% on an operational sales basis. International sales totaled $5.12 billion in 2025, an increase of 7% compared to 2024 on a reported basis and 5% on an operational sales basis. Sales in the United States totaled $6.12 billion in 2025, an increase of 5% compared to 2024 on a reported basis and 1% on an operational basis. Net income (loss) attributable to Baxter stockholders totaled $(957) million , or $(1.87) per diluted share, in 2025. Net income (loss) from continuing operations totaled $(900) million , or $(1.75) per diluted share, in 2025. Operating cash flows from continuing operations totaled $951 million in 2025. Research and development (R&D) expenses totaled $518 million in 2025.

Business Outlook

Baxter's innovation strategy, which encompasses both organic and inorganic initiatives over the longer term, is focused on accelerating sales growth through the introduction of new customer centric connected care and core therapy offerings. Connected care offerings include devices or software that can digitally connect, communicate and/or analyze data to help transform healthcare and improve patient outcomes, and the company is continuing to build out its connected care portfolio offerings, which includes smart bed systems, infusion pumps, patient monitoring and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space. Core therapy product offerings include pharmaceuticals and consumable medical products designed to address essential patient and provider needs across the continuum of care. As part of this strategy, Baxter is prioritizing investments that drive innovation in product areas where it believes it has compelling opportunities to better serve patients and healthcare professionals, particularly in markets with higher growth rates.

Baxter's strategy also involves active portfolio management in the interest of maximizing value for stockholders and best positioning the company for long-term success, consistent with its profitability objectives. The company regularly assesses the strategic fit of businesses in its portfolio and the geographies in which it has operations. Portfolio changes may also result from channel expansion or market development activities. The company expects to continue to actively manage its cost structure and strive to commit resources to the highest value uses, such as supporting innovation, actively managing the portfolio, expanding patient access and accelerating growth for stockholders.

Baxter continues to focus on increasing efficiencies through increased automation and digitization, including through its thoughtful exploration of artificial intelligence initiatives. The company intends to continue to actively manage its cost structure and strive to commit resources to the highest value uses. Beginning in October 2025, the company launched the Baxter Growth and Performance system, its high performance business system grounded in continuous improvement and management by objectives. The company is working to streamline the organization through the elimination of managerial layers intended to simplify the organization, accelerate innovation, bring it closer to customers and improve performance. Baxter expects to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $2 million through the completion of initiatives that were launched prior to December 31, 2025.

Baxter's capital allocation strategies currently include debt repayments to support its deleveraging commitments, active portfolio management through the identification of attractive acquisition and divestiture transactions, and returning capital to stockholders through dividends and eventually share repurchases, while balancing returns with strategic actions. The company is committed to retaining its investment grade rating, including taking actions toward achieving a net leverage target of approximately 3.0x by the end of 2026 through ongoing debt repayment and financing activities. During this deleveraging period, the company currently intends to continue paying a dividend (which it reduced in November 2025 to $0.01 per share), not make any share repurchases and be highly selective with respect to any potential acquisitions. Expenditures for R&D activities were $518 million in 2025, $590 million in 2024, and $518 million in 2023. Capital expenditures totaled $513 million in 2025. The remaining authorization under the share repurchase program totaled approximately $1.30 billion at December 31, 2025.

Baxter has experienced significant challenges to its global supply chain in recent periods, including production delays and interruptions, increased costs and shortages of raw materials and component parts, heightened inventory levels, elevated inflation levels, and geopolitical events. The company expects to experience some of these and other challenges related to its supply chain in future periods. Announcements regarding changes in U.S. trade policies and practices, including the implementation of global tariffs and proposed further tariffs, have significantly affected financial markets and economic conditions. While the company is in the process of implementing select tariff offsets and working to identify additional mitigation opportunities, its results have been adversely affected by these events and it expects for its results to continue to be negatively affected by tariffs. Additionally, continued global macroeconomic uncertainty, including in trade policies and practices, elevated tariffs and operational and policy changes in the governments of the U.S. and other countries and other geopolitical events or conflicts, could contribute to further market volatility, deteriorating or prolonged weakened economic conditions and decreased hospital capital spending levels.

Baxter faces structural headwinds including the impact of Hurricane Helene, which caused damage to its North Cove facility and disrupted operations. In response to Hurricane Helene and the related supply disruption, certain customers have enacted fluid conservation practices embedded with clinical practice changes which have resulted in, and are currently expected to continue to result in, reduced demand in the intravenous (IV) solutions business. Additionally, beginning in April 2025, the company initiated a series of voluntary corrections for the Novum IQ Large Volume Pump (Novum LVP), and in July 2025, elected to temporarily stop distributing and installing the Novum LVP in the U.S. and Canada, except in the case of medical necessity. The timing of the release of the ship and installation hold remains uncertain, and as a result, the company expects no meaningful sales of Novum LVP while these holds are in effect. The company has recorded estimates for sales reductions, for returns or exchanges of Novum LVP, and certain other charges of approximately $105 million in the aggregate in 2025.

Risk Factors

Baxter faces material risks from its significant indebtedness, which as of December 31, 2025 totaled approximately $9.48 billion , requiring substantial cash flow for debt service and constraining the company's ability to pursue growth strategies and advance R&D capabilities. The company is exposed to risks as a result of strategic actions, including the sale of its Kidney Care business, and may not achieve the anticipated benefits of these transactions, with the company having incurred and expecting to continue to incur significant expenses related to transition services and stranded costs. The company has experienced disruptions in its supply chain, including from Hurricane Helene, which caused damage to its North Cove facility and resulted in pre-tax net charges of $133 million in 2025 and $110 million in 2024. Quality management issues have materialized with the Novum IQ Large Volume Pump, for which the company initiated voluntary corrections classified as Class I recalls by the FDA, recorded estimates for associated charges of approximately $105 million in the aggregate in 2025, and elected to temporarily stop distributing and installing the pump in the U.S. and Canada. The company is also subject to risks from pending lawsuits and disputes, including a Civil Investigative Demand and subpoena from the DOJ related to Hillrom's respiratory health business and compliance with the False Claims Act, and class action complaints related to statements about the Novum LVP.

Management Priorities

Management's message to shareholders emphasizes the company's focus on driving sustainable growth and innovation aligned with its mission to save and sustain lives and its vision to redefine healthcare delivery. The tone is forward-looking and centered on strategic transformation, with key themes including portfolio optimization following the sale of the Kidney Care business, operational simplification through the implementation of a new operating model and the Baxter Growth and Performance system, and maintaining disciplined and balanced capital allocation. The strategic priorities emphasized for the period ahead include accelerating innovation in connected care and core therapy offerings, actively managing the portfolio, streamlining the organization through the elimination of managerial layers, and achieving a net leverage target of approximately 3.0x by the end of 2026 through ongoing debt repayment and financing activities. Management also highlighted the commitment to retaining the company's investment grade rating and the intention to continue paying a dividend, not make any share repurchases, and be highly selective with respect to any potential acquisitions during the deleveraging period.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Net Sales by Segment
  2. [2] Item 7, MD&A — Net Sales by Segment
  3. [3] Item 7, MD&A — Net Sales by Segment
  4. [4] Item 7, MD&A — Net Sales by Segment
  5. [5] Item 7, MD&A — Net Sales by Segment
  6. [6] Item 7, MD&A — Net Sales by Segment
  7. [7] Item 7, MD&A — Net Sales by Segment
  8. [8] Item 7, MD&A — Net Sales by Segment
  9. [9] Item 7, MD&A — Net Sales by Segment
  10. [10] Item 7, MD&A — Other
  11. [11] Item 7, MD&A — Other
  12. [12] Item 1, Business — Recent Strategic Actions
  13. [13] Item 7, MD&A — Executive Overview
  14. [14] Item 7, MD&A — Executive Overview
  15. [15] Item 7, MD&A — Executive Overview
  16. [16] Item 7, MD&A — Executive Overview
  17. [17] Item 1, Business — Recent Strategic Actions
  18. [18] Item 1A, Risk Factors — Risks Relating to Our Common Stock
  19. [19] Item 7, MD&A — Executive Overview
  20. [20] Item 7, MD&A — Executive Overview
  21. [21] Item 5, Market for Registrant's Common Equity
  22. [22] Item 7, MD&A — Executive Overview
  23. [23] Item 7, MD&A — Consolidated Net Sales
  24. [24] Item 7, MD&A — Consolidated Net Sales
  25. [25] Item 7, MD&A — Executive Overview
  26. [26] Item 7, MD&A — Consolidated Net Sales
  27. [27] Item 7, MD&A — Consolidated Net Sales
  28. [28] Item 7, MD&A — Executive Overview
  29. [29] Item 7, MD&A — Consolidated Net Sales
  30. [30] Item 7, MD&A — Consolidated Net Sales
  31. [31] Item 8, Consolidated Statements of Income (Loss)
  32. [32] Item 8, Consolidated Statements of Income (Loss)
  33. [33] Item 7, MD&A — Executive Overview
  34. [34] Item 7, MD&A — Executive Overview
  35. [35] Item 7, MD&A — Executive Overview
  36. [36] Item 7, MD&A — Executive Overview
  37. [37] Item 7, MD&A — Business Optimization Items
  38. [38] Item 1, Business — Business Strategy
  39. [39] Item 1A, Risk Factors — Risks Relating to Our Common Stock
  40. [40] Item 1, Business — Research and Development
  41. [41] Item 1, Business — Research and Development
  42. [42] Item 1, Business — Research and Development
  43. [43] Item 7, MD&A — Executive Overview
  44. [44] Item 5, Market for Registrant's Common Equity
  45. [45] Item 7, MD&A — Novum IQ Large Volume Pump (Novum LVP)
  46. [46] Item 1A, Risk Factors — Risks Relating to Our Business and Financial Performance
  47. [47] Item 7, MD&A — Hurricane Helene
  48. [48] Item 7, MD&A — Hurricane Helene
  49. [49] Item 7, MD&A — Novum IQ Large Volume Pump (Novum LVP)
  50. [50] Item 1, Business — Business Strategy
  51. [51] Item 8, Consolidated Statements of Income (Loss)
  52. [52] Item 8, Consolidated Statements of Income (Loss)
  53. [53] Item 8, Consolidated Statements of Income (Loss)
  54. [54] Item 8, Consolidated Statements of Income (Loss)
  55. [55] Item 8, Consolidated Statements of Income (Loss)
  56. [56] Item 8, Consolidated Statements of Income (Loss)
  57. [57] Item 8, Consolidated Statements of Income (Loss)
  58. [58] Item 8, Consolidated Statements of Income (Loss)
  59. [59] Item 8, Consolidated Statements of Income (Loss)
  60. [60] Item 8, Consolidated Statements of Income (Loss)
  61. [61] Item 8, Consolidated Statements of Income (Loss)
  62. [62] Item 8, Consolidated Statements of Income (Loss)
  63. [63] Item 8, Consolidated Statements of Income (Loss)
  64. [64] Item 8, Consolidated Statements of Income (Loss)
  65. [65] Item 8, Consolidated Statements of Income (Loss)
  66. [66] Item 8, Consolidated Statements of Income (Loss)
  67. [67] Item 8, Consolidated Statements of Income (Loss)
  68. [68] Item 7, MD&A — Gross Margin and Expense Ratios
  69. [69] Item 7, MD&A — Gross Margin and Expense Ratios
  70. [70] Item 8, Consolidated Statements of Income (Loss)
  71. [71] Item 8, Consolidated Statements of Income (Loss)
  72. [72] Item 8, Consolidated Statements of Income (Loss)
  73. [73] Item 7, MD&A — Goodwill Impairments
  74. [74] Item 7, MD&A — Goodwill Impairments
  75. [75] Item 7, MD&A — Special Items
  76. [76] Item 7, MD&A — Executive Overview
  77. [77] Item 7, MD&A — Executive Overview
  78. [78] Item 7, MD&A — Cash Flows from Operations
  79. [79] Item 7, MD&A — Cash Flows from Operations
  80. [80] Item 8, Consolidated Balance Sheets
  81. [81] Item 8, Note 5 — Debt and Credit Facilities
  82. [82] Item 7, MD&A — Segment Operating Income (Loss)
  83. [83] Item 7, MD&A — Segment Operating Income (Loss)
  84. [84] Item 7, MD&A — Segment Operating Income (Loss)

Analysis on 6/21/2026