BAXTER REPORTS THIRD-QUARTER 2026 RESULTS
• Third-quarter sales of $2.98 billion increased 5% on both a reported and organic basis, 1,2 reflecting growth in all segments and divisions
• Third-quarter U.S. GAAP 3 diluted earnings per share (EPS) of $0.57; adjusted diluted EPS of $0.58 1
– Baxter International Inc. (NYSE:BAX), a global medtech leader, today reported results for the third quarter of 2026.
“We delivered a strong third quarter, with growth across all segments and divisions globally,” said Andrew Hider, president and CEO. “We continue to make steady progress stabilizing the business, strengthening the balance sheet and driving continuous improvement. Our results reinforce our confidence in this direction as we build a stronger foundation for sustainable growth and long-term value creation.”
1 Sales growth on an organic basis and adjusted diluted EPS are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section below for information about the non-GAAP financial measures included in this release and see the accompanying tables to this press release for reconciliations of those non-GAAP measures to the corresponding U.S. GAAP measures.
2 Organic sales growth excludes the impact of the Kidney Care Manufacturing and Supply agreement (Kidney Care MSA) not reflected in reportable segments, impacts associated with business acquisitions or divestitures, and is calculated at constant currency rates.
Unless otherwise noted, all financial results reflect continuing operations and exclude Baxter’s former Kidney Care business, which is reported as discontinued operations.
• Worldwide sales in the third quarter totaled approximately $2.98 billion, increasing 5% on both a reported and organic basis.
• U.S. sales in the third quarter totaled approximately $1.6 billion, increasing 3% on a reported basis and 5% on an organic basis.
• International sales in the third quarter totaled approximately $1.4 billion, increasing 7% on a reported basis and 6% on an organic basis.
• On a U.S. GAAP basis, net income totaled $298 million, or $0.57 per diluted share.
• On an adjusted basis, net income in the third quarter was $0.58 per diluted share, decreasing 16% due to a higher effective tax rate, year-over-year.
• Free cash flow was $448 million in the third quarter and totaled $705 million year-to-date.
• During the third quarter, the company completed a $600 million cash tender offer , retiring $864 million of debt and accelerating deleveraging while supporting its investment-grade credit objectives.
Please see the attached schedules accompanying this press release for additional details on sales performance in the quarter, including breakouts by Baxter’s segments. 2
Beginning in the second quarter of 2026, Baxter updated its segment reporting structure to align with changes to the company’s operating model. 4 Previously reported segment results have been recast to conform to the updated reporting structure and are available on the Investor Relations section at www.baxter.com . In the third quarter, growth continued across all segments and divisions.
sales for the third quarter totaled approximately $2.1 billion, increasing 6% on both a reported and organic basis. Performance in the quarter reflected strength within the Infusion Therapies & Platforms division, driven primarily by Infusion Systems, Drug Compounding and IV Solutions. This growth was partially offset by reduced sales within Injectables. Continued strong global demand for Advanced Surgery products also contributed to performance.
sales for the third quarter totaled approximately $806 million, increasing 4% on both a reported and organic basis. Performance in the quarter reflected strong demand for Care & Connectivity Solutions products, driven by growth in Global Surgical Solutions and Patient Support Systems. Results also reflected growth in Front Line Care.
4 The former Pharmaceuticals segment is now reported within the Infusion Therapies & Platforms (ITP) division of the Medical Products & Therapies (MPT) segment. Additionally, sales of products and services provided directly through certain of the company's manufacturing facilities related to ITP that were previously reported in Other, are now reported in the ITP division of its MPT segment. The remaining Other sales not allocated to a segment consist of sales to Vantive Health LLC (Vantive), pursuant to the related Kidney Care MSA. 3
• Reported sales growth from continuing operations: 4% to 5% (previously 3% to 4%)
• Organic sales growth from continuing operations: 3% to 4% (previously 2% to 3%)
• Adjusted earnings from continuing operations per diluted share: $2.05 to $2.15 (previously $1.95 to $2.15)
See the "Non-GAAP Financial Measures" section for explanations of the company’s non-GAAP financial measures.
Baxter will host a conference call today, Oct. 29, 2026, at 7:30 a.m. CDT to discuss its third-quarter 2026 results and provide an update on the business. The conference call for investors can be accessed live from a link in the Investor Relations section of the company’s website at www.baxter.com . Please see www.baxter.com for more information regarding this and future investor events and webcasts.
At Baxter, we are everywhere healthcare happens – and everywhere it is going, with essential solutions in the hospital, physician's office and other sites of care. For nearly a century, our customers have counted on us as a vital and trusted partner. And every day, millions of patients and healthcare providers rely on our unmatched portfolio of connected solutions, medical devices, and advanced injectable technologies. Approximately 37,500 Baxter team members live our enduring Mission: to Save and Sustain Lives. Together, we are redefining how care is delivered to make a greater impact today, tomorrow, and beyond. To learn more, visit www.baxter.com and follow us on X , LinkedIn and Facebook . 4
Non-GAAP financial measures may enhance an understanding of the company's operations and may facilitate an analysis of those operations, particularly in evaluating performance from one period to another. Management believes that non- GAAP financial measures, when used in conjunction with the results presented in accordance with U.S. GAAP and the company's reconciliations to corresponding U.S. GAAP financial measures (which are included in the tables accompanying this release), may enhance an investor’s overall understanding of the company's past financial performance and prospects for the future. Management uses these non- GAAP measures internally in financial planning, to monitor business unit performance, and, in some cases, for purposes of determining incentive compensation. This information should be considered in addition to, and not as substitutes for, information prepared in accordance with U.S. GAAP.
Organic sales growth is a non-GAAP measure that excludes the impact of the Kidney Care MSA not reflected in reportable segments, impacts associated with business acquisitions or divestitures, and is calculated on a constant currency basis, as if foreign currency exchange rates had remained constant between the prior and current periods .
Other non-GAAP financial measures included in this release and the accompanying tables (including within the tables that provide the company's detailed reconciliations to the corresponding U.S. GAAP financial measures) are: adjusted gross margin; adjusted selling, general and administrative expenses; adjusted research and development expenses; adjusted other operating income, net; adjusted operating income (loss); adjusted other income (expense), net; adjusted income (loss) from continuing operations before income taxes; adjusted income tax expense (benefit); adjusted income (loss) from continuing operations; adjusted income (loss) from discontinued operations; adjusted net income (loss); adjusted net income (loss) attributable to Baxter stockholders; adjusted diluted earnings per share from continuing operations; adjusted diluted earnings per share from discontinued operations; and adjusted diluted earnings per share. Those non-GAAP financial measures exclude the impact of special items. For the quarters and nine-month periods ended September 30, 2026 and 2025, special items for one or more periods included intangible asset amortization, business optimization charges, acquisition and integration costs, separation-related costs, expenses related to European medical devices regulation, certain legal matters, investment impairments, product-related items, business transformation costs, the gain on debt extinguishment, the gain on the sale of the Kidney Care business, Hurricane Helene costs, and certain tax matters. These items are excluded because they are highly variable or unusual and of a size that may substantially impact the company's reported operations for a period. Additionally, intangible asset amortization is excluded as a special item to facilitate an evaluation of current and past operating performance and is consistent with how management and the company's Board of Directors assess performance.
This release and the accompanying tables also include free cash flow, a non-GAAP financial measure that Baxter defines as operating cash flow less capital expenditures. Free cash flow is used by management and the company's Board of Directors to evaluate the cash generated from Baxter's operating activities each period after deducting its capital spending. 5 This release also includes forecasts of certain of the aforementioned non-GAAP measures on a forward-looking basis as part of the company's financial outlook for upcoming periods. Baxter calculates forward-looking non-GAAP financial measures based on forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, forward-looking organic sales growth represents the company's targeted future sales growth excluding sales to Vantive under the Kidney Care MSA not reflected in reportable segments, reflects impacts associated with business acquisitions or divestitures, and assumes foreign currency exchange rates remain constant in future periods. Additionally, forward-looking adjusted diluted EPS guidance excludes potential charges or gains that would be reflected as non-GAAP adjustments to earnings. Baxter provides forward-looking organic sales growth guidance and adjusted diluted EPS guidance because it believes that these measures provide useful information for the reasons noted above. Baxter has not provided reconciliations of forward- looking adjusted EPS guidance to forward-looking GAAP EPS guidance because the company is unable to predict with reasonable certainty the impact of legal proceedings, future business optimization actions, separation-related costs, integration-related costs, separation-related costs, business transformation costs, asset impairments and unusual gains and losses, and the related amounts are unavailable without unreasonable efforts (as specified in the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter believes that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
This release includes forward-looking statements concerning the company’s financial results (including the updated outlook for full-year 2026) and certain product development activities. These forward-looking statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: there is substantial competition in the product markets in which the company operates and the risk of declining demand and pricing pressures could adversely affect the company’s business, results of operations, financial condition and cash flows; the company may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology; global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, the company’s operations; the company is subject to risks associated with doing business globally, including changes in tariffs and trade policies and treaties (including with respect to the validity of previously issued tariffs and the availability of any related refunds) as well as the ongoing Iran conflict and other geopolitical events; the company may not achieve its financial goals; the company’s operating results and financial condition have fluctuated and may in the future continue to fluctuate; the company is exposed to risks as a result of its previously completed strategic actions; the company may not achieve the anticipated benefits of its significant transactions, including the sale of its Kidney Care business and its acquisition of Hill-Rom Holdings, Inc.; the company may not be successful in achieving expected operating 6 efficiencies and sustaining or improving operating expense reductions; the company has experienced and may continue to experience issues with quality management or product quality, including with respect to the Novum IQ large volume pump and a recently issued U.S. Food and Drug Administration Warning Letter; the company has experienced disruptions in its supply chain and may experience additional disruptions in the future; the company has experienced and may continue to experience manufacturing, sterilization, supply, or distribution difficulties; the company may be unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price; the company’s significant indebtedness requires it to use a substantial amount of its cash flow for debt service and constrains the company’s ability to pursue growth strategies and advance its R&D capabilities; continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate the company’s ability to sell to certain of its significant market segments; segments of the company’s business are significantly dependent on major contracts with group purchasing organizations, integrated delivery networks, and certain other distributors and purchasers; management transition creates uncertainties, and the company may experience difficulties in managing such transitions, including attracting and retaining key employees; changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on the company’s results of operations, financial condition, cash flows, and liquidity; future material impairments in the value of the company’s goodwill, intangible assets, and other long-lived assets would negatively affect the company’s operating results; the company has experienced and may in the future experience breaches and other incidents affecting its information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage; the company is exposed to risks associated with incorporating artificial intelligence (AI), machine learning and other emerging technologies into our products, services and operations; a portion of the company’s workforce is unionized, and the company could face labor disruptions that would interfere with its operations; the effects of climate change, including evolving legal, regulatory, or market measures related to climate change and other sustainability topics, could adversely affect the company’s business, results of operations, financial condition, and cash flows; the company’s goals, activities, and disclosures related to sustainability and corporate responsibility matters, and the perception of the company’s activities in these areas, may fail to satisfy the differing expectations of key stakeholders on these matters; the company is subject to laws and regulations globally, and its failure to comply with rapidly changing and increasingly divergent expectations of regulators in different jurisdictions could adversely impact the company; if reimbursement or other payment for our current or future products is reduced or modified in the U.S. or in foreign countries, or there are changes to policies with respect to pricing, taxation, or rebates, the company’s business could suffer; increasing regulatory focus on, and expanding laws relating to, privacy, AI, and cybersecurity could impact the company’s business and expose it to increased liability; the company is party to a number of pending lawsuits and other disputes which may adversely impact it; changes in tax laws or exposure to additional income tax liabilities may have a negative impact on the company’s operating results; the company could be subject to fines or damages and possible exclusion from participation in federal or state healthcare programs if it fails to comply with the laws and regulations applicable to its business; if the company is unable to protect or enforce its patents or other proprietary rights, or if the company becomes subject to claims or litigation alleging 7 infringement of the patents or other proprietary rights of others, the company’s competitiveness and business prospects may be materially damaged; the company’s Amended and Restated Bylaws could limit its stockholders’ ability to choose their preferred judicial forum for disputes with the company or its directors, officers, or employees; the company decreased its quarterly dividend to $0.01 per share and cannot guarantee that it will increase the amount of dividends it pays, or that it will not cease paying dividends, in the future; the company’s common stock price has fluctuated significantly and may continue to do so; and other risks discussed in Baxter’s most recent filings on Form 10-K and Form 10-Q and other SEC filings, all of which are available on Baxter’s website. Baxter does not undertake to update its forward-looking statements unless otherwise required by the federal securities laws.
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── NET SALES $ 2,976 $ 2,835 5% COST OF SALES 1,982 1,885 5% GROSS MARGIN 994 950 5% % of Net Sales 33.4 % 33.5 % (0.1) pts SELLING, GENERAL AND 730 708 3% ADMINISTRATIVE EXPENSES % of Net Sales 24.5 % 25.0 % (0.5) pts RESEARCH AND DEVELOPMENT 125 118 6% EXPENSES % of Net Sales 4.2 % 4.2 % 0.0 pts OTHER OPERATING -86 -48 79% INCOME, NET OPERATING 225 172 31% INCOME % of Net Sales 7.6 % 6.1 % 1.5 pts INTEREST 61 58 5% EXPENSE, NET OTHER (INCOME) -253 -7 NM EXPENSE, NET INCOME (LOSS) FROM CONTINUING OPERATIONS 417 121 NM BEFORE INCOME TAXES INCOME TAX EXPENSE 119 172 (31)% (BENEFIT) % of Income (loss) from Continuing 28.5 % 142.1 % (113.6) pts Operations Before Income Taxes INCOME (LOSS) FROM CONTINUING 298 -51 NM OPERATIONS INCOME (LOSS) FROM DISCONTINUED -4 5 NM OPERATIONS, NET OF TAX NET INCOME 294 -46 NM (LOSS) NET INCOME ATTRIBUTABLE TO — — NM NONCONTROLLING INTERESTS NET INCOME (LOSS) ATTRIBUTABLE TO $ 294 $ -46 NM BAXTER STOCKHOLDERS INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE Basic $ 0.58 $ -0.10 NM Diluted $ 0.57 $ -0.10 NM INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE Basic $ -0.01 $ 0.01 NM Diluted $ 0.00 $ 0.01 NM INCOME (LOSS) PER COMMON SHARE Basic $ 0.57 $ -0.09 NM Diluted $ 0.57 $ -0.09 NM WEIGHTED-AVERA… NUMBER OF SHARES OUTSTANDING Basic 517 514 Diluted 520 514 ADJUSTED OPERATING INCOME $ 432 $ 423 2% (excluding special items)¹ ADJUSTED INCOME (LOSS) FROM CONTINUING $ 303 $ 353 (14)% OPERATIONS (excluding special items)¹ ADJUSTED INCOME (LOSS) FROM DISCONTINUED $ -4 $ 2 NM OPERATIONS (excluding special items)1 ADJUSTED NET INCOME ATTRIBUTABLE TO BAXTER $ 299 $ 355 (16)% STOCKHOLDERS (excluding special items)¹ ADJUSTED DILUTED EPS FROM CONTINUING $ 0.58 $ 0.69 (16)% OPERATIONS (excluding special items)¹ ADJUSTED DILUTED EPS FROM DISCONTINUED $ 0.00 $ 0.00 NM OPERATIONS (excluding special items)¹ ADJUSTED DILUTED EPS (excluding $ 0.58 $ 0.69 (16)% special items)¹
1 Refer to page 10 for a description of the adjustments and a reconciliation to U.S. GAAP measures.
(unaudited, in millions) The company’s U.S. GAAP results for the three months ended September 30, 2026 included special items which impacted the U.S. GAAP measures as follows:
The company’s U.S. GAAP results for the three months ended September 30, 2025 included special items which impacted the U.S. GAAP measures as follows:
1 The company's results of continuing operations in 2026 and 2025 included costs related to programs to optimize its organization and cost structure. These restructuring and business optimization costs in 2026 included costs primarily related to its initiatives to reduce its cost structure following the sale of its former Kidney Care business and the cessation of production of certain products at one of its specialty injectables manufacturing facilities. These restructuring and business optimization costs in 2025 included costs primarily related to its initiatives to reduce its cost structure following the sale of its former Kidney Care business and costs related to the exit of a product line at one of its manufacturing facilities.
2 The company’s results of continuing operations in 2026 and 2025 included incremental costs to comply with the European Union’s medical device regulations for previously registered products, which primarily consisted of contractor costs and other direct third-party costs. The company considers the adoption of these regulations to be a significant one-time regulatory change and believes that the costs of initial compliance for previously registered products over the implementation period are not indicative of its core operating results.
3 The company's results of continuing operations in 2026 and 2025 included charges related to Hurricane Helene which primarily consisted of remediation, air freight and other costs.
4 The company’s results of continuing operations in 2026 and 2025 included separation-related costs primarily related to external advisors supporting its activities related to the sale of its former Kidney Care business.
5 The company's results of continuing operations in 2026 included business transformation costs which include external expenses incurred in connection with discrete, recently launched enterprise‑wide initiatives to modernize and simplify systems, redesign operating models, and enhance process efficiency and digital capabilities. These costs are distinct from restructuring‑related charges (which are included in footnote 1 above as Business Optimization items) and are excluded to provide investors with greater comparability of underlying operating performance.
6 The company's results of continuing operations in 2026 included a net benefit related to certain legal matters. This included a gain recognized primarily from the settlement of certain patent infringement claims, partially offset with a loss recognized from the settlement of certain patent infringement claims and related fees associated with these matters.
7 The company's results of continuing operations in 2026 included a gain on the early extinguishment of debt.
8 The company's results of continuing operations in 2025 included charges related to estimates of warranty and remediation activities arising from field corrective actions across its infusion pump category and a revised estimate of warranty and remediation activities arising from a field corrective action on certain of its infusion pumps initially recorded in 2022.
9 The company’s results of continuing operations in 2025 included integration- related items comprised of Hill-Rom Holdings, Inc. (Hillrom) acquisition and integration expenses.
10 The company's results of discontinued operations in 2025 included the final settlement of certain net working capital adjustments reducing the gain on sale of its former Kidney Care business made in accordance with the terms of the related Equity Purchase Agreement (Kidney Care EPA).
11 The company's results of continuing operations in 2026 included income tax expense primarily related to the application of intraperiod tax allocation to it adjusted results in an interim period. The company's results of continuing operations in 2025 included an income tax expenses primarily related to an increase in reserves for uncertain tax positions and a step-up in Swiss valuation allowances, partially offset by the release of valuation allowances on foreign tax credits. The company's results of discontinued operations in 2025 included an income tax benefit attributable to the allocation of reserves for uncertain tax positions to discontinued operations and indirect impacts of the carryback of the tax benefits generated by the sale of its former Kidney Care business to prior years.
For more information on the company's use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
Nine Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── NET SALES $ 8,637 $ 8,270 4% COST OF SALES 5,720 5,468 5% GROSS MARGIN 2,917 2,802 4% % of Net Sales 33.8 % 33.9 % (0.1) pts SELLING, GENERAL AND 2,193 2,129 3% ADMINISTRATIVE EXPENSES % of Net Sales 25.4 % 25.7 % (0.3) pts RESEARCH AND DEVELOPMENT 393 392 0% EXPENSES % of Net Sales 4.6 % 4.7 % (0.1) pts OTHER OPERATING -177 -140 26% INCOME, NET OPERATING INCOME 508 421 21% % of Net Sales 5.9 % 5.1 % 0.8 pts INTEREST 191 180 6% EXPENSE, NET OTHER (INCOME) -252 -10 NM EXPENSE, NET INCOME (LOSS) FROM CONTINUING OPERATIONS 569 251 NM BEFORE INCOME TAXES INCOME TAX EXPENSE 153 116 32% (BENEFIT) % of Income from Continuing Operations 26.9 % 46.2 % (19.3) pts Before Income Taxes INCOME (LOSS) FROM CONTINUING 416 135 NM OPERATIONS INCOME (LOSS) FROM DISCONTINUED -11 36 NM OPERATIONS, NET OF TAX NET INCOME 405 171 NM (LOSS) NET INCOME ATTRIBUTABLE TO — — NM NONCONTROLLING INTERESTS NET INCOME (LOSS) ATTRIBUTABLE TO $ 405 $ 171 NM BAXTER STOCKHOLDERS INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE Basic $ 0.81 $ 0.26 NM Diluted $ 0.80 $ 0.26 NM INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE Basic $ -0.03 $ 0.07 NM Diluted $ -0.02 $ 0.07 NM NET INCOME (LOSS) PER COMMON SHARE Basic $ 0.78 $ 0.33 NM Diluted $ 0.78 $ 0.33 NM WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING Basic 516 513 Diluted 518 514 ADJUSTED OPERATING INCOME $ 1,150 $ 1,238 (7)% (excluding special items)¹ ADJUSTED INCOME FROM CONTINUING OPERATIONS $ 781 $ 942 (17)% (excluding special items)¹ ADJUSTED INCOME FROM DISCONTINUED $ -11 $ 9 NM OPERATIONS (excluding special items)1 ADJUSTED NET INCOME ATTRIBUTABLE TO BAXTER $ 770 $ 951 (19)% STOCKHOLDERS (excluding special items)¹ ADJUSTED DILUTED EPS FROM CONTINUING $ 1.51 $ 1.83 (17)% OPERATIONS (excluding special items)1 ADJUSTED DILUTED EPS FROM DISCONTINUED $ -0.02 $ 0.02 NM OPERATIONS (excluding special items)1 ADJUSTED DILUTED EPS (excluding $ 1.49 $ 1.85 (19)% special items)¹
1 Refer to page 12 for a description of the adjustments and a reconciliation to U.S. GAAP measures.
(unaudited, in millions) The company’s U.S. GAAP results for the nine months ended September 30, 2026 included special items which impacted the U.S. GAAP measures as follows:
The company’s U.S. GAAP results for the nine months ended September 30, 2025 included special items which impacted the U.S. GAAP measures as follows:
1 The company's results of continuing operations in 2026 and 2025 included costs related to programs to optimize its organization and cost structure. These restructuring and business optimization costs in 2026 included costs primarily related to its initiatives to reduce its cost structure following the sale of its former Kidney Care business and the cessation of production of certain products at one of its specialty injectables manufacturing facilities. These restructuring and business optimization costs in 2025 included costs primarily related to its initiatives to reduce its cost structure following the sale of its former Kidney Care business and costs related to the exit of a product line at one of its manufacturing facilities.
2 The company’s results of continuing operations in 2026 and 2025 included incremental costs to comply with the European Union’s medical device regulations for previously registered products, which primarily consist of contractor costs and other direct third-party costs. The company considers the adoption of these regulations to be a significant one-time regulatory change and believes that the costs of initial compliance for previously registered products over the implementation period are not indicative of its core operating results.
3 The company's results of continuing operations in 2026 included a benefit related to a revised estimate of warranty and remediation activities from field corrective actions across our infusion pump category initially recorded in 2025. The company's results of continuing operations in 2025 included charges related to estimates of warranty and remediation activities arising from field corrective actions across its infusion pump category and a revised estimate of warranty and remediation activities arising from a field corrective action on certain of its infusion pumps initially recorded in 2022.
4 The company's results of continuing operations in 2026 and 2025 included charges related to Hurricane Helene, which consisted of remediation, air freight and other costs. The company's results of discontinued operations in 2025 included charges related to Hurricane Helene, which consisted of air freight and other costs.
5 The company's results of continuing operations in 2026 and 2025 included separation-related costs primarily related to external advisors supporting its activities related to the sale of its former Kidney Care business. The company's results of discontinued operations in 2025 included separation-related costs related to external advisors supporting its activities related to the sale of its former Kidney Care business.
6 The company's results of continuing operations in 2026 included business transformation costs which include external expenses incurred in connection with discrete, recently launched enterprise‑wide initiatives to modernize and simplify systems, redesign operating models, and enhance process efficiency and digital capabilities. These costs are distinct from restructuring‑related charges (which are included in footnote 1 above as Business Optimization items) and are excluded to provide investors with greater comparability of underlying operating performance.
7 The company's results of continuing operations in 2026 included a net benefit related to certain legal matters. This included a gain recognized primarily from the settlement of certain patent infringement claims, partially offset with a loss recognized from the settlement of certain patent infringement claims and related fees associated with these matters. The company's results of continuing operations in 2025 included charges related to matters involving alleged injury from environmental exposure.
8 The company's results of continuing operations in 2026 and 2025 included investment impairments which include losses from noncash impairment write-downs of investments.
9 The company's results of continuing operations in 2026 included a gain on the early extinguishment of debt.
10 The company’s results of continuing operations in 2025 included integration- related items comprised of Hillrom acquisition and integration expenses consisting of third-party consulting costs and the recognition of a noncash impairment of property, plant and equipment related to integration activities.
11 The company's results of discontinued operations in 2025 included a gain from the sale of its former Kidney Care business, partially offset by the final settlement of certain net working capital adjustments made in accordance with the Kidney Care EPA.
12 The company's results of continuing operations in 2026 included income tax expense primarily related to differences arising from the use of a forecasted effective tax rate to compute income tax expense during the period, partially offset by the settlement of certain income tax audits and adjustments to the U.S. valuation allowance. The company's results of continuing operations in 2025 included an income tax expense primarily related to an increase in reserves for uncertain tax positions and a step-up in Swiss valuation allowances, partially offset by the release of valuation allowances on foreign tax credits and a tax benefit primarily driven by an entity classification election that it made for U.S. tax purposes, which resulted in a capital loss. The company's results of discontinued operations in 2025 included indirect impacts of the carryback of tax benefits generated by the sale of its former Kidney Care business to prior years and an income tax benefit attributable to the allocation of reserves for uncertain tax positions to discontinued operations.
For more information on the company's use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
($ in millions) The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products, specialty injectable pharmaceuticals, inhaled anesthesia, drug compounding and sales of products and services provided directly through certain of our manufacturing facilities. The Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, connected monitoring systems, formerly known as patient monitoring systems, and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including operating room integration technologies, precision positioning devices and other accessories. Other sales not allocated to a segment includes sales to Vantive, pursuant to the Kidney Care Manufacturing and Supply Agreement (Kidney Care MSA).
Organic sales growth is a non-GAAP measure. For more information on the company’s use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
Three Months Ended September 30, 2026 ────────────────────────────────────────────────────────────────────────────── Cash flows from (used in) operations - $ 558 continuing operations Cash flows from (used in) investing -110 activities - continuing operations Cash flows from (used in) financing -620 activities Cash flows from (used in) operations - $ 558 continuing operations Capital expenditures - continuing -110 operations Free cash flow - continuing $ 448 operations
Nine Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Cash flows from (used in) operations - $ 1,068 $ 355 continuing operations Cash flows from (used in) investing -360 -350 activities - continuing operations Cash flows from (used in) financing -662 -4,069 activities Cash flows from (used in) operations - $ 1,068 $ 355 continuing operations Capital expenditures - continuing -363 -373 operations Free cash flow - continuing $ 705 $ -18 operations
Free cash flow is a non-GAAP measure. For more information on the company’s use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
From the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2026
Net Sales Kidney Organic Growth Care MSA FX Sales As Growth* Reported Infusion Therapi… 5 % 0 % -1 % 4 % & Platfor… Advanced 12 % 0 % 0 % 12 % Surgery Medical Products 6 % 0 % -0 % 6 % & Therapi… Care & Connect… 5 % 0 % 0 % 5 % Solutio… Front Line 3 % 0 % 0 % 3 % Care Healthc… Systems 4 % 0 % 0 % 4 % & Technol… Other -20 % 21 % -1 % 0 % Total - Continu… 5 % 1 % -1 % 5 % Operati…
Organic sales growth is a non-GAAP measure. For more information on the company’s use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
From The Nine Months Ended September 30, 2025 to The Nine Months Ended September 30, 2026
Net Sales Organic Growth Kidney FX Sales As Care MSA Growth* Reported Infusion Therapi… 4 % 0 % -2 % 2 % & Platfor… Advanced 12 % 0 % -1 % 11 % Surgery Medical Products 6 % 0 % -3 % 3 % & Therapi… Care & Connect… 4 % 0 % -0 % 4 % Solutio… Front Line 1 % 0 % -1 % 0 % Care Healthc… Systems 3 % 0 % -1 % 2 % & Technol… Other -8 % 10 % -2 % 0 % Total - Continu… 4 % 1 % -2 % 3 % Operati…
Organic sales growth is a non-GAAP measure. For more information on the company’s use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.
Projected Full Year 2026 U.S. GAAP Sales Growth to Projected Organic Sales Growth and
Sales Growth Guidance FY 2026* Sales growth - U.S. GAAP 4% - 5% Kidney Care MSA ~30 bps Foreign Exchange -~100 bps Organic sales growth 3% - 4%
Baxter calculates forward-looking non-GAAP financial measures based on forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, forward-looking organic sales growth represents the company’s targeted future sales growth excluding the impact of the Kidney Care MSA not reflected in reportable segments, impacts associated with business acquisitions or divestitures, and is calculated on a constant currency basis, as if foreign currency exchange rates had remained constant between the prior and current periods. Additionally, forward-looking adjusted diluted EPS guidance excludes potential charges or gains that would be reflected as non-GAAP adjustments to earnings. Baxter provides forward-looking organic sales growth guidance and adjusted diluted EPS guidance because it believes that these measures provide useful information for the reasons noted above. Baxter has not provided reconciliations of forward-looking adjusted EPS guidance to forward-looking GAAP EPS guidance because the company is unable to predict with reasonable certainty the impact of legal proceedings, future business optimization actions, separation-related costs, business transformation-related costs, asset impairments and unusual gains and losses, and the related amounts are unavailable without unreasonable efforts (as specified in the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter believes that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
Full text with the tables
Exhibit 99.1
FOR IMMEDIATE RELEASE
BAXTER REPORTS THIRD-QUARTER 2026 RESULTS
• Third-quarter sales of $2.98 billion increased 5% on both a reported and
organic basis, 1,2 reflecting growth in all segments and divisions
• Third-quarter U.S. GAAP 3 diluted earnings per share (EPS) of $0.57; adjusted
diluted EPS of $0.58 1
• Company raises full-year 2026 financial outlook
DEERFIELD, Ill., OCT. 29, 2026
– Baxter International Inc. (NYSE:BAX), a global medtech leader, today reported
results for the third quarter of 2026.
“We delivered a strong third quarter, with growth across all segments and
divisions globally,” said Andrew Hider, president and CEO. “We continue to make
steady progress stabilizing the business, strengthening the balance sheet and
driving continuous improvement. Our results reinforce our confidence in this
direction as we build a stronger foundation for sustainable growth and long-term
value creation.”
______________________
1 Sales growth on an organic basis and adjusted diluted EPS are non-GAAP
financial measures. See the “Non-GAAP Financial Measures” section below for
information about the non-GAAP financial measures included in this release and
see the accompanying tables to this press release for reconciliations of those
non-GAAP measures to the corresponding U.S. GAAP measures.
2 Organic sales growth excludes the impact of the Kidney Care Manufacturing and
Supply agreement (Kidney Care MSA) not reflected in reportable segments, impacts
associated with business acquisitions or divestitures, and is calculated at
constant currency rates.
3 Generally Accepted Accounting Principles
1
Third-Quarter 2026 Companywide Financial Results
Unless otherwise noted, all financial results reflect continuing operations and
exclude Baxter’s former Kidney Care business, which is reported as discontinued
operations.
• Worldwide sales in the third quarter totaled approximately $2.98 billion,
increasing 5% on both a reported and organic basis.
• U.S. sales in the third quarter totaled approximately $1.6 billion, increasing
3% on a reported basis and 5% on an organic basis.
• International sales in the third quarter totaled approximately $1.4 billion,
increasing 7% on a reported basis and 6% on an organic basis.
• On a U.S. GAAP basis, net income totaled $298 million, or $0.57 per diluted
share.
• On an adjusted basis, net income in the third quarter was $0.58 per diluted
share, decreasing 16% due to a higher effective tax rate, year-over-year.
• Free cash flow was $448 million in the third quarter and totaled $705 million
year-to-date.
• During the third quarter, the company completed a $600 million cash tender
offer , retiring $864 million of debt and accelerating deleveraging while
supporting its investment-grade credit objectives.
Please see the attached schedules accompanying this press release for additional
details on sales performance in the quarter, including breakouts by Baxter’s
segments.
2
Third-Quarter 2026 Segment Results
Beginning in the second quarter of 2026, Baxter updated its segment reporting
structure to align with changes to the company’s operating model. 4 Previously
reported segment results have been recast to conform to the updated reporting
structure and are available on the Investor Relations section at www.baxter.com
. In the third quarter, growth continued across all segments and divisions.
•
Medical Products & Therapies
sales for the third quarter totaled approximately $2.1 billion, increasing 6% on
both a reported and organic basis. Performance in the quarter reflected strength
within the Infusion Therapies & Platforms division, driven primarily by Infusion
Systems, Drug Compounding and IV Solutions. This growth was partially offset by
reduced sales within Injectables. Continued strong global demand for Advanced
Surgery products also contributed to performance.
•
Healthcare Systems & Technologies
sales for the third quarter totaled approximately $806 million, increasing 4% on
both a reported and organic basis. Performance in the quarter reflected strong
demand for Care & Connectivity Solutions products, driven by growth in Global
Surgical Solutions and Patient Support Systems. Results also reflected growth in
Front Line Care.
______________________
4 The former Pharmaceuticals segment is now reported within the Infusion
Therapies & Platforms (ITP) division of the Medical Products & Therapies (MPT)
segment. Additionally, sales of products and services provided directly through
certain of the company's manufacturing facilities related to ITP that were
previously reported in Other, are now reported in the ITP division of its MPT
segment. The remaining Other sales not allocated to a segment consist of sales
to Vantive Health LLC (Vantive), pursuant to the related Kidney Care MSA.
3
Full-Year 2026 Financial Outlook
The company raised its full-year financial outlook:
• Reported sales growth from continuing operations: 4% to 5% (previously 3% to
4%)
• Organic sales growth from continuing operations: 3% to 4% (previously 2% to
3%)
• Adjusted earnings from continuing operations per diluted share: $2.05 to $2.15
(previously $1.95 to $2.15)
See the "Non-GAAP Financial Measures" section for explanations of the company’s
non-GAAP financial measures.
Earnings Conference Call
Baxter will host a conference call today, Oct. 29, 2026, at 7:30 a.m. CDT to
discuss its third-quarter 2026 results and provide an update on the business.
The conference call for investors can be accessed live from a link in the
Investor Relations section of the company’s website at www.baxter.com . Please
see www.baxter.com for more information regarding this and future investor
events and webcasts.
Upcoming Webcasted Investor Events (
to be made available on
www.baxter.com
)
• J.P. Morgan Healthcare Conference, January 11-13, 2027
About Baxter
At Baxter, we are everywhere healthcare happens – and everywhere it is going,
with essential solutions in the hospital, physician's office and other sites of
care. For nearly a century, our customers have counted on us as a vital and
trusted partner. And every day, millions of patients and healthcare providers
rely on our unmatched portfolio of connected solutions, medical devices, and
advanced injectable technologies. Approximately 37,500 Baxter team members live
our enduring Mission: to Save and Sustain Lives. Together, we are redefining how
care is delivered to make a greater impact today, tomorrow, and beyond. To learn
more, visit www.baxter.com and follow us on X , LinkedIn and Facebook .
4
Non-GAAP Financial Measures
Non-GAAP financial measures may enhance an understanding of the company's
operations and may facilitate an analysis of those operations, particularly in
evaluating performance from one period to another. Management believes that non-
GAAP financial measures, when used in conjunction with the results presented in
accordance with U.S. GAAP and the company's reconciliations to corresponding
U.S. GAAP financial measures (which are included in the tables accompanying this
release), may enhance an investor’s overall understanding of the company's past
financial performance and prospects for the future. Management uses these non-
GAAP measures internally in financial planning, to monitor business unit
performance, and, in some cases, for purposes of determining incentive
compensation. This information should be considered in addition to, and not as
substitutes for, information prepared in accordance with U.S. GAAP.
Organic sales growth is a non-GAAP measure that excludes the impact of the
Kidney Care MSA not reflected in reportable segments, impacts associated with
business acquisitions or divestitures, and is calculated on a constant currency
basis, as if foreign currency exchange rates had remained constant between the
prior and current periods .
Other non-GAAP financial measures included in this release and the accompanying
tables (including within the tables that provide the company's detailed
reconciliations to the corresponding U.S. GAAP financial measures) are: adjusted
gross margin; adjusted selling, general and administrative expenses; adjusted
research and development expenses; adjusted other operating income, net;
adjusted operating income (loss); adjusted other income (expense), net; adjusted
income (loss) from continuing operations before income taxes; adjusted income
tax expense (benefit); adjusted income (loss) from continuing operations;
adjusted income (loss) from discontinued operations; adjusted net income (loss);
adjusted net income (loss) attributable to Baxter stockholders; adjusted diluted
earnings per share from continuing operations; adjusted diluted earnings per
share from discontinued operations; and adjusted diluted earnings per share.
Those non-GAAP financial measures exclude the impact of special items. For the
quarters and nine-month periods ended September 30, 2026 and 2025, special items
for one or more periods included intangible asset amortization, business
optimization charges, acquisition and integration costs, separation-related
costs, expenses related to European medical devices regulation, certain legal
matters, investment impairments, product-related items, business transformation
costs, the gain on debt extinguishment, the gain on the sale of the Kidney Care
business, Hurricane Helene costs, and certain tax matters. These items are
excluded because they are highly variable or unusual and of a size that may
substantially impact the company's reported operations for a period.
Additionally, intangible asset amortization is excluded as a special item to
facilitate an evaluation of current and past operating performance and is
consistent with how management and the company's Board of Directors assess
performance.
This release and the accompanying tables also include free cash flow, a non-GAAP
financial measure that Baxter defines as operating cash flow less capital
expenditures. Free cash flow is used by management and the company's Board of
Directors to evaluate the cash generated from Baxter's operating activities each
period after deducting its capital spending.
5
This release also includes forecasts of certain of the aforementioned non-GAAP
measures on a forward-looking basis as part of the company's financial outlook
for upcoming periods. Baxter calculates forward-looking non-GAAP financial
measures based on forecasts that omit certain amounts that would be included in
GAAP financial measures. For instance, forward-looking organic sales growth
represents the company's targeted future sales growth excluding sales to Vantive
under the Kidney Care MSA not reflected in reportable segments, reflects impacts
associated with business acquisitions or divestitures, and assumes foreign
currency exchange rates remain constant in future periods. Additionally,
forward-looking adjusted diluted EPS guidance excludes potential charges or
gains that would be reflected as non-GAAP adjustments to earnings. Baxter
provides forward-looking organic sales growth guidance and adjusted diluted EPS
guidance because it believes that these measures provide useful information for
the reasons noted above. Baxter has not provided reconciliations of forward-
looking adjusted EPS guidance to forward-looking GAAP EPS guidance because the
company is unable to predict with reasonable certainty the impact of legal
proceedings, future business optimization actions, separation-related costs,
integration-related costs, separation-related costs, business transformation
costs, asset impairments and unusual gains and losses, and the related amounts
are unavailable without unreasonable efforts (as specified in the exception
provided by Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter believes
that such reconciliations would imply a degree of precision and certainty that
could be confusing to investors. Such items could have a substantial impact on
GAAP measures of financial performance.
Forward-Looking Statements
This release includes forward-looking statements concerning the company’s
financial results (including the updated outlook for full-year 2026) and certain
product development activities. These forward-looking statements are based on
assumptions about many important factors, including the following, which could
cause actual results to differ materially from those in the forward-looking
statements: there is substantial competition in the product markets in which the
company operates and the risk of declining demand and pricing pressures could
adversely affect the company’s business, results of operations, financial
condition and cash flows; the company may be unable to successfully introduce or
monetize new and existing products or services or keep pace with changing
consumer preferences and needs or advances in technology; global economic
conditions, including inflation, have adversely affected, and could continue to
adversely affect, the company’s operations; the company is subject to risks
associated with doing business globally, including changes in tariffs and trade
policies and treaties (including with respect to the validity of previously
issued tariffs and the availability of any related refunds) as well as the
ongoing Iran conflict and other geopolitical events; the company may not achieve
its financial goals; the company’s operating results and financial condition
have fluctuated and may in the future continue to fluctuate; the company is
exposed to risks as a result of its previously completed strategic actions; the
company may not achieve the anticipated benefits of its significant
transactions, including the sale of its Kidney Care business and its acquisition
of Hill-Rom Holdings, Inc.; the company may not be successful in achieving
expected operating
6
efficiencies and sustaining or improving operating expense reductions; the
company has experienced and may continue to experience issues with quality
management or product quality, including with respect to the Novum IQ large
volume pump and a recently issued U.S. Food and Drug Administration Warning
Letter; the company has experienced disruptions in its supply chain and may
experience additional disruptions in the future; the company has experienced and
may continue to experience manufacturing, sterilization, supply, or distribution
difficulties; the company may be unable to obtain sufficient components or raw
materials on a timely basis or for a cost-effective price; the company’s
significant indebtedness requires it to use a substantial amount of its cash
flow for debt service and constrains the company’s ability to pursue growth
strategies and advance its R&D capabilities; continued consolidation in the
health care industry or additional governmental controls exerted over pricing
and access in key markets could lead to increased demands for price concessions
or limit or eliminate the company’s ability to sell to certain of its
significant market segments; segments of the company’s business are
significantly dependent on major contracts with group purchasing organizations,
integrated delivery networks, and certain other distributors and purchasers;
management transition creates uncertainties, and the company may experience
difficulties in managing such transitions, including attracting and retaining
key employees; changes in foreign currency exchange rates and interest rates
have had, and may in the future have, an adverse effect on the company’s results
of operations, financial condition, cash flows, and liquidity; future material
impairments in the value of the company’s goodwill, intangible assets, and other
long-lived assets would negatively affect the company’s operating results; the
company has experienced and may in the future experience breaches and other
incidents affecting its information technology systems or protected information,
including from obsolescence, cyber security breaches and data leakage; the
company is exposed to risks associated with incorporating artificial
intelligence (AI), machine learning and other emerging technologies into our
products, services and operations; a portion of the company’s workforce is
unionized, and the company could face labor disruptions that would interfere
with its operations; the effects of climate change, including evolving legal,
regulatory, or market measures related to climate change and other
sustainability topics, could adversely affect the company’s business, results of
operations, financial condition, and cash flows; the company’s goals,
activities, and disclosures related to sustainability and corporate
responsibility matters, and the perception of the company’s activities in these
areas, may fail to satisfy the differing expectations of key stakeholders on
these matters; the company is subject to laws and regulations globally, and its
failure to comply with rapidly changing and increasingly divergent expectations
of regulators in different jurisdictions could adversely impact the company; if
reimbursement or other payment for our current or future products is reduced or
modified in the U.S. or in foreign countries, or there are changes to policies
with respect to pricing, taxation, or rebates, the company’s business could
suffer; increasing regulatory focus on, and expanding laws relating to, privacy,
AI, and cybersecurity could impact the company’s business and expose it to
increased liability; the company is party to a number of pending lawsuits and
other disputes which may adversely impact it; changes in tax laws or exposure to
additional income tax liabilities may have a negative impact on the company’s
operating results; the company could be subject to fines or damages and possible
exclusion from participation in federal or state healthcare programs if it fails
to comply with the laws and regulations applicable to its business; if the
company is unable to protect or enforce its patents or other proprietary rights,
or if the company becomes subject to claims or litigation alleging
7
infringement of the patents or other proprietary rights of others, the company’s
competitiveness and business prospects may be materially damaged; the company’s
Amended and Restated Bylaws could limit its stockholders’ ability to choose
their preferred judicial forum for disputes with the company or its directors,
officers, or employees; the company decreased its quarterly dividend to $0.01
per share and cannot guarantee that it will increase the amount of dividends it
pays, or that it will not cease paying dividends, in the future; the company’s
common stock price has fluctuated significantly and may continue to do so; and
other risks discussed in Baxter’s most recent filings on Form 10-K and Form 10-Q
and other SEC filings, all of which are available on Baxter’s website. Baxter
does not undertake to update its forward-looking statements unless otherwise
required by the federal securities laws.
Baxter is a trademark of Baxter International Inc.
Media Contact
Andrea Johnson, (224) 948-5353
media@baxter.com
Investor Contact
Kevin Moran, (224) 948-3085
global_corp_investor_relations@baxter.com
###
8
BAXTER — PAGE 9
BAXTER INTERNATIONAL INC.
Consolidated Statements of Income (Loss)
(unaudited)
(in millions, except per share and percentage data)
Three Months
Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
NET SALES $ 2,976 $ 2,835 5%
COST OF SALES 1,982 1,885 5%
GROSS MARGIN 994 950 5%
% of Net Sales 33.4 % 33.5 % (0.1) pts
SELLING,
GENERAL AND 730 708 3%
ADMINISTRATIVE
EXPENSES
% of Net Sales 24.5 % 25.0 % (0.5) pts
RESEARCH AND
DEVELOPMENT 125 118 6%
EXPENSES
% of Net Sales 4.2 % 4.2 % 0.0 pts
OTHER OPERATING -86 -48 79%
INCOME, NET
OPERATING 225 172 31%
INCOME
% of Net Sales 7.6 % 6.1 % 1.5 pts
INTEREST 61 58 5%
EXPENSE, NET
OTHER (INCOME) -253 -7 NM
EXPENSE, NET
INCOME (LOSS)
FROM CONTINUING
OPERATIONS 417 121 NM
BEFORE INCOME
TAXES
INCOME TAX
EXPENSE 119 172 (31)%
(BENEFIT)
% of Income
(loss) from
Continuing 28.5 % 142.1 % (113.6) pts
Operations
Before Income
Taxes
INCOME (LOSS)
FROM CONTINUING 298 -51 NM
OPERATIONS
INCOME (LOSS)
FROM
DISCONTINUED -4 5 NM
OPERATIONS, NET
OF TAX
NET INCOME 294 -46 NM
(LOSS)
NET INCOME
ATTRIBUTABLE TO — — NM
NONCONTROLLING
INTERESTS
NET INCOME
(LOSS)
ATTRIBUTABLE TO $ 294 $ -46 NM
BAXTER
STOCKHOLDERS
INCOME (LOSS)
FROM CONTINUING
OPERATIONS
PER COMMON
SHARE
Basic $ 0.58 $ -0.10 NM
Diluted $ 0.57 $ -0.10 NM
INCOME (LOSS)
FROM
DISCONTINUED
OPERATIONS PER
COMMON SHARE
Basic $ -0.01 $ 0.01 NM
Diluted $ 0.00 $ 0.01 NM
INCOME (LOSS)
PER COMMON
SHARE
Basic $ 0.57 $ -0.09 NM
Diluted $ 0.57 $ -0.09 NM
WEIGHTED-AVERA…
NUMBER OF
SHARES
OUTSTANDING
Basic 517 514
Diluted 520 514
ADJUSTED
OPERATING
INCOME $ 432 $ 423 2%
(excluding
special items)¹
ADJUSTED INCOME
(LOSS) FROM
CONTINUING $ 303 $ 353 (14)%
OPERATIONS
(excluding
special items)¹
ADJUSTED INCOME
(LOSS) FROM
DISCONTINUED $ -4 $ 2 NM
OPERATIONS
(excluding
special items)1
ADJUSTED NET
INCOME
ATTRIBUTABLE TO
BAXTER $ 299 $ 355 (16)%
STOCKHOLDERS
(excluding
special
items)¹
ADJUSTED
DILUTED EPS
FROM CONTINUING $ 0.58 $ 0.69 (16)%
OPERATIONS
(excluding
special items)¹
ADJUSTED
DILUTED EPS
FROM
DISCONTINUED $ 0.00 $ 0.00 NM
OPERATIONS
(excluding
special items)¹
ADJUSTED
DILUTED EPS
(excluding $ 0.58 $ 0.69 (16)%
special
items)¹
1 Refer to page 10 for a description of the adjustments and a reconciliation to
U.S. GAAP measures.
NM - Not Meaningful
BAXTER — PAGE 10
BAXTER INTERNATIONAL INC.
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures
(unaudited, in millions)
The company’s U.S. GAAP results for the three months ended September 30, 2026
included special items which impacted the U.S. GAAP measures as follows:
──────────────────────────────────────────────────────────────────────────────
The company’s U.S. GAAP results for the three months ended September 30, 2025
included special items which impacted the U.S. GAAP measures as follows:
──────────────────────────────────────────────────────────────────────────────
1 The company's results of continuing operations in 2026 and 2025 included costs
related to programs to optimize its organization and cost structure. These
restructuring and business optimization costs in 2026 included costs primarily
related to its initiatives to reduce its cost structure following the sale of
its former Kidney Care business and the cessation of production of certain
products at one of its specialty injectables manufacturing facilities. These
restructuring and business optimization costs in 2025 included costs primarily
related to its initiatives to reduce its cost structure following the sale of
its former Kidney Care business and costs related to the exit of a product line
at one of its manufacturing facilities.
2 The company’s results of continuing operations in 2026 and 2025 included
incremental costs to comply with the European Union’s medical device regulations
for previously registered products, which primarily consisted of contractor
costs and other direct third-party costs. The company considers the adoption of
these regulations to be a significant one-time regulatory change and believes
that the costs of initial compliance for previously registered products over the
implementation period are not indicative of its core operating results.
3 The company's results of continuing operations in 2026 and 2025 included
charges related to Hurricane Helene which primarily consisted of remediation,
air freight and other costs.
4 The company’s results of continuing operations in 2026 and 2025 included
separation-related costs primarily related to external advisors supporting its
activities related to the sale of its former Kidney Care business.
5 The company's results of continuing operations in 2026 included business
transformation costs which include external expenses incurred in connection with
discrete, recently launched enterprise‑wide initiatives to modernize and
simplify systems, redesign operating models, and enhance process efficiency and
digital capabilities. These costs are distinct from restructuring‑related
charges (which are included in footnote 1 above as Business Optimization items)
and are excluded to provide investors with greater comparability of underlying
operating performance.
6 The company's results of continuing operations in 2026 included a net benefit
related to certain legal matters. This included a gain recognized primarily from
the settlement of certain patent infringement claims, partially offset with a
loss recognized from the settlement of certain patent infringement claims and
related fees associated with these matters.
7 The company's results of continuing operations in 2026 included a gain on the
early extinguishment of debt.
8 The company's results of continuing operations in 2025 included charges
related to estimates of warranty and remediation activities arising from field
corrective actions across its infusion pump category and a revised estimate of
warranty and remediation activities arising from a field corrective action on
certain of its infusion pumps initially recorded in 2022.
9 The company’s results of continuing operations in 2025 included integration-
related items comprised of Hill-Rom Holdings, Inc. (Hillrom) acquisition and
integration expenses.
10 The company's results of discontinued operations in 2025 included the final
settlement of certain net working capital adjustments reducing the gain on sale
of its former Kidney Care business made in accordance with the terms of the
related Equity Purchase Agreement (Kidney Care EPA).
11 The company's results of continuing operations in 2026 included income tax
expense primarily related to the application of intraperiod tax allocation to it
adjusted results in an interim period. The company's results of continuing
operations in 2025 included an income tax expenses primarily related to an
increase in reserves for uncertain tax positions and a step-up in Swiss
valuation allowances, partially offset by the release of valuation allowances on
foreign tax credits. The company's results of discontinued operations in 2025
included an income tax benefit attributable to the allocation of reserves for
uncertain tax positions to discontinued operations and indirect impacts of the
carryback of the tax benefits generated by the sale of its former Kidney Care
business to prior years.
For more information on the company's use of non-GAAP financial measures, please
see the Non-GAAP Financial Measures section of this press release.
BAXTER — PAGE 11
BAXTER INTERNATIONAL INC.
Consolidated Statements of Income (Loss)
(unaudited)
(in millions, except per share and percentage data)
Nine Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
NET SALES $ 8,637 $ 8,270 4%
COST OF SALES 5,720 5,468 5%
GROSS MARGIN 2,917 2,802 4%
% of Net Sales 33.8 % 33.9 % (0.1) pts
SELLING, GENERAL
AND 2,193 2,129 3%
ADMINISTRATIVE
EXPENSES
% of Net Sales 25.4 % 25.7 % (0.3) pts
RESEARCH AND
DEVELOPMENT 393 392 0%
EXPENSES
% of Net Sales 4.6 % 4.7 % (0.1) pts
OTHER OPERATING -177 -140 26%
INCOME, NET
OPERATING INCOME 508 421 21%
% of Net Sales 5.9 % 5.1 % 0.8 pts
INTEREST 191 180 6%
EXPENSE, NET
OTHER (INCOME) -252 -10 NM
EXPENSE, NET
INCOME (LOSS)
FROM CONTINUING
OPERATIONS 569 251 NM
BEFORE INCOME
TAXES
INCOME TAX
EXPENSE 153 116 32%
(BENEFIT)
% of Income from
Continuing
Operations 26.9 % 46.2 % (19.3) pts
Before Income
Taxes
INCOME (LOSS)
FROM CONTINUING 416 135 NM
OPERATIONS
INCOME (LOSS)
FROM
DISCONTINUED -11 36 NM
OPERATIONS, NET
OF TAX
NET INCOME 405 171 NM
(LOSS)
NET INCOME
ATTRIBUTABLE TO — — NM
NONCONTROLLING
INTERESTS
NET INCOME
(LOSS)
ATTRIBUTABLE TO $ 405 $ 171 NM
BAXTER
STOCKHOLDERS
INCOME (LOSS)
FROM CONTINUING
OPERATIONS
PER COMMON SHARE
Basic $ 0.81 $ 0.26 NM
Diluted $ 0.80 $ 0.26 NM
INCOME (LOSS)
FROM
DISCONTINUED
OPERATIONS PER
COMMON SHARE
Basic $ -0.03 $ 0.07 NM
Diluted $ -0.02 $ 0.07 NM
NET INCOME
(LOSS) PER
COMMON SHARE
Basic $ 0.78 $ 0.33 NM
Diluted $ 0.78 $ 0.33 NM
WEIGHTED-AVERAGE
NUMBER OF SHARES
OUTSTANDING
Basic 516 513
Diluted 518 514
ADJUSTED
OPERATING INCOME $ 1,150 $ 1,238 (7)%
(excluding
special items)¹
ADJUSTED INCOME
FROM CONTINUING
OPERATIONS $ 781 $ 942 (17)%
(excluding
special items)¹
ADJUSTED INCOME
FROM
DISCONTINUED $ -11 $ 9 NM
OPERATIONS
(excluding
special items)1
ADJUSTED NET
INCOME
ATTRIBUTABLE TO
BAXTER $ 770 $ 951 (19)%
STOCKHOLDERS
(excluding
special
items)¹
ADJUSTED DILUTED
EPS FROM
CONTINUING $ 1.51 $ 1.83 (17)%
OPERATIONS
(excluding
special items)1
ADJUSTED DILUTED
EPS FROM
DISCONTINUED $ -0.02 $ 0.02 NM
OPERATIONS
(excluding
special items)1
ADJUSTED DILUTED
EPS (excluding $ 1.49 $ 1.85 (19)%
special
items)¹
1 Refer to page 12 for a description of the adjustments and a reconciliation to
U.S. GAAP measures.
NM - Not Meaningful
BAXTER — PAGE 12
BAXTER INTERNATIONAL INC.
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures
(unaudited, in millions)
The company’s U.S. GAAP results for the nine months ended September 30, 2026
included special items which impacted the U.S. GAAP measures as follows:
──────────────────────────────────────────────────────────────────────────────
The company’s U.S. GAAP results for the nine months ended September 30, 2025
included special items which impacted the U.S. GAAP measures as follows:
──────────────────────────────────────────────────────────────────────────────
1 The company's results of continuing operations in 2026 and 2025 included costs
related to programs to optimize its organization and cost structure. These
restructuring and business optimization costs in 2026 included costs primarily
related to its initiatives to reduce its cost structure following the sale of
its former Kidney Care business and the cessation of production of certain
products at one of its specialty injectables manufacturing facilities. These
restructuring and business optimization costs in 2025 included costs primarily
related to its initiatives to reduce its cost structure following the sale of
its former Kidney Care business and costs related to the exit of a product line
at one of its manufacturing facilities.
2 The company’s results of continuing operations in 2026 and 2025 included
incremental costs to comply with the European Union’s medical device regulations
for previously registered products, which primarily consist of contractor costs
and other direct third-party costs. The company considers the adoption of these
regulations to be a significant one-time regulatory change and believes that the
costs of initial compliance for previously registered products over the
implementation period are not indicative of its core operating results.
3 The company's results of continuing operations in 2026 included a benefit
related to a revised estimate of warranty and remediation activities from field
corrective actions across our infusion pump category initially recorded in 2025.
The company's results of continuing operations in 2025 included charges related
to estimates of warranty and remediation activities arising from field
corrective actions across its infusion pump category and a revised estimate of
warranty and remediation activities arising from a field corrective action on
certain of its infusion pumps initially recorded in 2022.
4 The company's results of continuing operations in 2026 and 2025 included
charges related to Hurricane Helene, which consisted of remediation, air freight
and other costs. The company's results of discontinued operations in 2025
included charges related to Hurricane Helene, which consisted of air freight and
other costs.
5 The company's results of continuing operations in 2026 and 2025 included
separation-related costs primarily related to external advisors supporting its
activities related to the sale of its former Kidney Care business. The company's
results of discontinued operations in 2025 included separation-related costs
related to external advisors supporting its activities related to the sale of
its former Kidney Care business.
6 The company's results of continuing operations in 2026 included business
transformation costs which include external expenses incurred in connection with
discrete, recently launched enterprise‑wide initiatives to modernize and
simplify systems, redesign operating models, and enhance process efficiency and
digital capabilities. These costs are distinct from restructuring‑related
charges (which are included in footnote 1 above as Business Optimization items)
and are excluded to provide investors with greater comparability of underlying
operating performance.
7 The company's results of continuing operations in 2026 included a net benefit
related to certain legal matters. This included a gain recognized primarily from
the settlement of certain patent infringement claims, partially offset with a
loss recognized from the settlement of certain patent infringement claims and
related fees associated with these matters. The company's results of continuing
operations in 2025 included charges related to matters involving alleged injury
from environmental exposure.
8 The company's results of continuing operations in 2026 and 2025 included
investment impairments which include losses from noncash impairment write-downs
of investments.
9 The company's results of continuing operations in 2026 included a gain on the
early extinguishment of debt.
10 The company’s results of continuing operations in 2025 included integration-
related items comprised of Hillrom acquisition and integration expenses
consisting of third-party consulting costs and the recognition of a noncash
impairment of property, plant and equipment related to integration activities.
11 The company's results of discontinued operations in 2025 included a gain from
the sale of its former Kidney Care business, partially offset by the final
settlement of certain net working capital adjustments made in accordance with
the Kidney Care EPA.
12 The company's results of continuing operations in 2026 included income tax
expense primarily related to differences arising from the use of a forecasted
effective tax rate to compute income tax expense during the period, partially
offset by the settlement of certain income tax audits and adjustments to the
U.S. valuation allowance. The company's results of continuing operations in 2025
included an income tax expense primarily related to an increase in reserves for
uncertain tax positions and a step-up in Swiss valuation allowances, partially
offset by the release of valuation allowances on foreign tax credits and a tax
benefit primarily driven by an entity classification election that it made for
U.S. tax purposes, which resulted in a capital loss. The company's results of
discontinued operations in 2025 included indirect impacts of the carryback of
tax benefits generated by the sale of its former Kidney Care business to prior
years and an income tax benefit attributable to the allocation of reserves for
uncertain tax positions to discontinued operations.
For more information on the company's use of non-GAAP financial measures, please
see the Non-GAAP Financial Measures section of this press release.
BAXTER — PAGE 13
BAXTER INTERNATIONAL INC.
Sales by Operating Segment
(unaudited)
($ in millions)
The Medical Products & Therapies segment includes sales of our sterile IV
solutions, infusion systems, administration sets, parenteral nutrition therapies
and surgical hemostat, sealant and adhesion prevention products, specialty
injectable pharmaceuticals, inhaled anesthesia, drug compounding and sales of
products and services provided directly through certain of our manufacturing
facilities. The Healthcare Systems & Technologies segment includes sales of our
connected care solutions and collaboration tools, including smart bed systems,
connected monitoring systems, formerly known as patient monitoring systems, and
diagnostic technologies, respiratory health devices and advanced equipment for
the surgical space, including operating room integration technologies, precision
positioning devices and other accessories. Other sales not allocated to a
segment includes sales to Vantive, pursuant to the Kidney Care Manufacturing and
Supply Agreement (Kidney Care MSA).
%
… … %
… % @ … % C…
… … … … … @
… @ … … @ O…
… … … … … S…
… … … … … … … G…
──────────────────────────────────────────────────────────────────────────────
$ … $ … 5 % 4 % $ … $ … 4 % 2 %
… … … % … % … … … % … %
… … 6 % 6 % … … 6 % 3 %
… … 5 % 5 % … … 4 % 4 %
… … 3 % 3 % … … 1 % 0 %
… … 4 % 4 % … … 3 % 2 %
… … … % 0 % … … … % 0 %
$ … $ … 5 % 5 % $ … $ … 4 % 3 %
Organic sales growth is a non-GAAP measure. For more information on the
company’s use of non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER — PAGE 14
BAXTER INTERNATIONAL INC.
Segment Operating Income
(unaudited)
($ in millions)
Three Nine
Months Months
Ended Ended
Septem… Septe…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Medic…
Produ… $ 439 $ 411 $ 1,189 $ 1,258
&
Thera…
% of
Segme… 20.9 % 20.8 % 19.5 % 21.8 %
Net
Sales
Healt…
Syste… 139 122 401 400
&
Techn…
% of
Segme… 17.2 % 15.8 % 17.3 % 17.8 %
Net
Sales
Other 10 5 23 17
Total 588 538 1,613 1,675
Unall…
corpo… -156 -115 -463 -437
costs
Intan…
asset -145 -147 -436 -453
amort…
expen…
Legal 27 — 27 -11
matte…
Busin…
optim… -61 -38 -136 -100
items
Acqui…
and — -8 — -14
integ…
items
Separ… -2 -13 -35 -40
costs
Europ…
Medic… -3 -5 -11 -15
Devic…
Regul…
Produ… — -32 12 -61
items
Busin… -20 — -54 —
trans…
Hurri…
Helene -3 -8 -9 -123
costs
Total
opera… 225 172 508 421
income
(loss)
Inter…
expen… 61 58 191 180
net
Other
(inco… -253 -7 -252 -10
expen…
net
Income
(Loss)
from
conti… $ 417 $ 121 $ 569 $ 251
opera…
before
income
taxes
BAXTER — PAGE 15
BAXTER INTERNATIONAL INC.
Operating Segment Sales by U.S. and International
(unaudited)
($ in millions)
…
…
…
…
… %
… … …
… … … … … … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ … $ … $ … $ … $ … 4 % 7 % 5
… … … … … … … % … % …
… … … … … … 5 % 7 % 6
… … … … … … 4 % 9 % 5
… … … … … … 4 % … % 3
… … … … … … 4 % 5 % 4
… … … … … … … % 8 % …
$ … $ … $ … $ … $ … $ … 3 % 7 % 5
BAXTER — PAGE 16
BAXTER INTERNATIONAL INC.
Operating Segment Sales by U.S. and International
(unaudited)
($ in millions)
…
…
…
…
… %
… … …
… … … … … … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ … $ … $ … $ … $ … … % 9 % 4
… … … … … … … % … % …
… … … … … … 1 % 9 % 6
… … … … … … 3 % 8 % 4
… … … … … … 2 % … % 1
… … … … … … 3 % 4 % 3
… … … … … … … % 1 % …
$ … $ … $ … $ … $ … $ … 1 % 8 % 4
BAXTER — PAGE 17
BAXTER INTERNATIONAL INC.
Reconciliation of Non-GAAP Financial Measure
Operating Cash Flow to Free Cash Flow
(unaudited)
($ in millions)
Three Months Ended September 30,
2026
──────────────────────────────────────────────────────────────────────────────
Cash flows from (used in)
operations - $ 558
continuing operations
Cash flows from (used in)
investing -110
activities - continuing operations
Cash flows from (used in)
financing -620
activities
Cash flows from (used in)
operations - $ 558
continuing operations
Capital expenditures - continuing -110
operations
Free cash flow - continuing $ 448
operations
Nine Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash flows from (used in)
operations - $ 1,068 $ 355
continuing operations
Cash flows from (used in) investing -360 -350
activities - continuing operations
Cash flows from (used in) financing -662 -4,069
activities
Cash flows from (used in)
operations - $ 1,068 $ 355
continuing operations
Capital expenditures - continuing -363 -373
operations
Free cash flow - continuing $ 705 $ -18
operations
Free cash flow is a non-GAAP measure. For more information on the company’s use
of non-GAAP financial measures, please see the Non-GAAP Financial Measures
section of this press release.
BAXTER — PAGE 18
BAXTER INTERNATIONAL INC.
Reconciliation of Non-GAAP Financial Measure
Change in Net Sales Growth As Reported to Organic Sales Growth
From the Three Months Ended September 30, 2025 to the Three Months Ended
September 30, 2026
(unaudited)
Net
Sales Kidney Organic
Growth Care MSA FX Sales
As Growth*
Reported
Infusion
Therapi… 5 % 0 % -1 % 4 %
&
Platfor…
Advanced 12 % 0 % 0 % 12 %
Surgery
Medical
Products 6 % 0 % -0 % 6 %
&
Therapi…
Care &
Connect… 5 % 0 % 0 % 5 %
Solutio…
Front
Line 3 % 0 % 0 % 3 %
Care
Healthc…
Systems 4 % 0 % 0 % 4 %
&
Technol…
Other -20 % 21 % -1 % 0 %
Total -
Continu… 5 % 1 % -1 % 5 %
Operati…
*Totals may not add across due to rounding
Organic sales growth is a non-GAAP measure. For more information on the
company’s use of non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER — PAGE 19
BAXTER INTERNATIONAL INC.
Reconciliation of Non-GAAP Financial Measure
Change in Net Sales Growth As Reported to Organic Sales Growth
From The Nine Months Ended September 30, 2025 to The Nine Months Ended September
30, 2026
(unaudited)
Net Sales Organic
Growth Kidney FX Sales
As Care MSA Growth*
Reported
Infusion
Therapi… 4 % 0 % -2 % 2 %
&
Platfor…
Advanced 12 % 0 % -1 % 11 %
Surgery
Medical
Products 6 % 0 % -3 % 3 %
&
Therapi…
Care &
Connect… 4 % 0 % -0 % 4 %
Solutio…
Front
Line 1 % 0 % -1 % 0 %
Care
Healthc…
Systems 3 % 0 % -1 % 2 %
&
Technol…
Other -8 % 10 % -2 % 0 %
Total -
Continu… 4 % 1 % -2 % 3 %
Operati…
*Totals may not add across due to rounding
Organic sales growth is a non-GAAP measure. For more information on the
company’s use of non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER — PAGE 20
BAXTER INTERNATIONAL INC.
Reconciliation of Non-GAAP Financial Measures
Projected Full Year 2026 U.S. GAAP Sales Growth to Projected Organic Sales
Growth and
Projected Full Year 2026 Adjusted Earnings Per Share
(unaudited)
Sales Growth Guidance FY 2026*
Sales growth - U.S. GAAP 4% - 5%
Kidney Care MSA ~30 bps
Foreign Exchange -~100 bps
Organic sales growth 3% - 4%
Adjusted Earnings Per Share Guidance FY 2026
Adjusted diluted EPS $2.05 - $2.15
* Totals may not foot due to rounding
Baxter calculates forward-looking non-GAAP financial measures based on forecasts
that omit certain amounts that would be included in GAAP financial measures. For
instance, forward-looking organic sales growth represents the company’s targeted
future sales growth excluding the impact of the Kidney Care MSA not reflected in
reportable segments, impacts associated with business acquisitions or
divestitures, and is calculated on a constant currency basis, as if foreign
currency exchange rates had remained constant between the prior and current
periods. Additionally, forward-looking adjusted diluted EPS guidance excludes
potential charges or gains that would be reflected as non-GAAP adjustments to
earnings. Baxter provides forward-looking organic sales growth guidance and
adjusted diluted EPS guidance because it believes that these measures provide
useful information for the reasons noted above. Baxter has not provided
reconciliations of forward-looking adjusted EPS guidance to forward-looking GAAP
EPS guidance because the company is unable to predict with reasonable certainty
the impact of legal proceedings, future business optimization actions,
separation-related costs, business transformation-related costs, asset
impairments and unusual gains and losses, and the related amounts are
unavailable without unreasonable efforts (as specified in the exception provided
by Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter believes that
such reconciliations would imply a degree of precision and certainty that could
be confusing to investors. Such items could have a substantial impact on GAAP
measures of financial performance.