Organon Q3 adjusted diluted EPS falls to $0.94
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Organon & Co. furnished supplemental non-GAAP financial measures for the quarter ended September 30, 2026 alongside its Form 10-Q. In light of its pending merger with Sun Pharmaceutical Industries Limited, Organon suspended its customary quarterly earnings press release and conference call.
For the quarter, GAAP net income was $164 million, compared with $160 million in 2025; non-GAAP Adjusted EBITDA was $502 million versus $518 million, with an Adjusted EBITDA margin of 31.9% versus 32.3%. Non-GAAP adjusted net income was $256 million versus $263 million, and non-GAAP adjusted diluted EPS was $0.94 versus $1.01. For the nine months ended September 30, 2026, GAAP net income was $418 million versus $392 million in 2025, while non-GAAP adjusted net income was $674 million versus $789 million, Adjusted EBITDA was $1,378 million versus $1,524 million, and adjusted diluted EPS was $2.51 versus $3.03. Organon says these supplemental measures should be considered with GAAP results, not as substitutes, and notes similarly titled non-GAAP measures may not be comparable across companies.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month GAAP net income was $418 million, compared with $392 million in 2025.
Negative
- Moderate pointNine-month non-GAAP Adjusted EBITDA was $1,378 million, versus $1,524 million in 2025.
- Moderate pointNine-month non-GAAP adjusted net income was $674 million, versus $789 million in 2025.
Filing Explained
The reconciliation adds back
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA margin financial
Non-GAAP Adjusted Net Income financial
contingent consideration financial
working capital matter financial
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| incorporation) | ||||
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 7.01. | Regulation FD Disclosure. |
On October 30, 2026, Organon & Co. (the “Company”) released its financial results for the quarter ended September 30, 2026 with the filing of the Company’s Quarterly Report on Form 10-Q (the “Form 10-Q”) with the Securities and Exchange Commission (the “SEC”). As previously disclosed, in light of the Company’s pending merger with Sun Pharmaceutical Industries Limited, the Company has suspended its customary practice of issuing a quarterly earnings press release and hosting an earnings conference call.
As part of the information provided in historic Company earnings press releases, the Company would furnish, together with its U.S. generally accepted accounting principles (“GAAP”) financial information for the reported quarterly period, certain supplemental non-GAAP financial metrics for the same reported period. These supplemental measures have been made available by the Company based on the belief that this information assists in understanding the Company’s financial performance, but not as a substitute for the Company’s financial results under GAAP.
To continue this practice, the Company is furnishing certain supplemental non-GAAP metrics for the quarter ended September 30, 2026 that are included in Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. The non-GAAP financial metrics for the quarter ended September 30, 2026 that are furnished in this Form 8-K should be read together with the Company’s GAAP financial statements and other disclosures that are contained in Exhibit 99.1 and that are more fully disclosed in the Form 10-Q filed with the SEC on October 30, 2026.
The information contained in this Item 7.01, including Exhibit 99.1 attached hereto, is considered to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that Section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document. The Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements regarding the Company and includes a cautionary statement identifying important factors that could cause actual results to differ materially from those anticipated.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Supplemental Financial Information of Organon & Co. for the quarterly period ended September 30, 2026. | |
| 104 | The cover page of this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Organon & Co. | |||
| By: | /s/ Matthew Walsh | ||
| Name: | Matthew Walsh | ||
| Title: | Chief Financial Officer | ||
Dated: October 30, 2026
Exhibit 99.1
Supplemental Financial Information
This exhibit provides certain supplemental non-GAAP financial measures for the quarter ended September 30, 2026. As disclosed in the accompanying Current Report on Form 8-K, Organon & Co. (the “Company”) is furnishing this information in lieu of including such supplemental measures in a quarterly earnings release. As referenced below, the Company believes that these supplemental measures assist in understanding its financial performance, but that such measures should not be considered as a substitute for the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Accordingly, these supplemental measures are intended by the Company to accompany, and should be considered together with, the Company’s GAAP financial results and disclosures referenced in this Exhibit, as well as contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 that has been filed with the Securities and Exchange Commission on October 30, 2026.
Cautionary Note Regarding Non-GAAP Financial Measures
As discussed above, this exhibit contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are correspondingly not excluded or included in the most directly comparable measures calculated and presented in accordance with GAAP. Specifically, the Company makes use of the non-GAAP financial measures Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Gross Margin, Adjusted Gross Profit, Adjusted net income, Adjusted diluted EPS, Adjusted Selling, general and administrative expenses, and Adjusted Research and development expenses, which are not recognized terms under GAAP and are presented only as a supplement to the Company’s GAAP financial statements. The Company believes that these non-GAAP financial measures, which exclude certain items, help to enhance its ability to meaningfully communicate its underlying business performance, financial condition and results of operations. The Company’s management uses the non-GAAP financial measures described above to evaluate the Company’s performance and to guide operational and financial decision making. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the Company’s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Please refer to the tables below for reconciliations of the non-GAAP financial measures presented herein to the most directly comparable GAAP measures.
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| Organon & Co. | ||||||||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Metrics | ||||||||||||||||
| (Unaudited, $ in millions) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Gross Profit | $ | 869 | $ | 857 | $ | 2,499 | $ | 2,572 | ||||||||
| Adjusted for: | ||||||||||||||||
| Manufacturing network costs (1) | 17 | 39 | 56 | 101 | ||||||||||||
| Stock-based compensation | 4 | 4 | 11 | 12 | ||||||||||||
| Amortization | 48 | 52 | 141 | 155 | ||||||||||||
| Acquisition-related costs (2) | — | 12 | 7 | 31 | ||||||||||||
| Other | — | 2 | — | 12 | ||||||||||||
| Adjusted Non-GAAP Gross Profit | $ | 938 | $ | 966 | $ | 2,714 | $ | 2,883 | ||||||||
|
(1) Manufacturing network related costs include costs from exiting manufacturing and supply agreements with Merck & Co., Inc., Rahway NJ, US. For additional details refer to the line item Manufacturing network related in the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. (2) Acquisition-related costs reflect the amortization pertaining to the fair value inventory purchase accounting adjustment for the Dermavant Sciences Ltd. (“Dermavant”) transaction. For additional details refer to the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Gross Margin | 55.2 | % | 53.5 | % | 54.4 | % | 54.6 | % | ||||||||
| Total impact of Non-GAAP adjustments | 4.4 | % | 6.8 | % | 4.7 | % | 6.6 | % | ||||||||
| Adjusted Non-GAAP Gross Margin | 59.6 | % | 60.3 | % | 59.1 | % | 61.2 | % | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Selling, general and administrative expenses | $ | 421 | $ | 415 | $ | 1,279 | $ | 1,288 | ||||||||
| Adjusted for: | ||||||||||||||||
| Stock-based compensation | (14 | ) | (16 | ) | (43 | ) | (46 | ) | ||||||||
| Restructuring related charges | — | — | — | (10 | ) | |||||||||||
| Other (1) | (21 | ) | (5 | ) | (48 | ) | (34 | ) | ||||||||
| Adjusted Non-GAAP Selling, general and administrative expenses | $ | 386 | $ | 394 | $ | 1,188 | $ | 1,198 | ||||||||
| (1) For additional details refer to the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. | ||||||||||||||||
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| Organon & Co. | ||||||||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Metrics (Continued) | ||||||||||||||||
| (Unaudited, $ in millions except per share amounts) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Research and development expenses | $ | 83 | $ | 84 | $ | 266 | $ | 275 | ||||||||
| Adjusted for: | ||||||||||||||||
| Manufacturing network costs (1) | (3 | ) | (2 | ) | (10 | ) | (8 | ) | ||||||||
| Stock-based compensation | (3 | ) | (4 | ) | (11 | ) | (12 | ) | ||||||||
| Other (2) | (1 | ) | (2 | ) | (2 | ) | (3 | ) | ||||||||
| Adjusted Non-GAAP Research and development expenses | $ | 76 | $ | 76 | $ | 243 | $ | 252 | ||||||||
| (1) Manufacturing network related costs include costs from exiting manufacturing and supply agreements with Merck & Co., Inc., Rahway NJ, US. For additional details refer to the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. | |||||||
| (2) For additional details refer to the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Reported Net Income | $ | 164 | $ | 160 | $ | 418 | $ | 392 | ||||||||
| Adjusted for: | ||||||||||||||||
| Cost of sales adjustments | 69 | 109 | 215 | 311 | ||||||||||||
| Selling, general and administrative adjustments | 35 | 21 | 91 | 90 | ||||||||||||
| Research and development adjustments | 7 | 8 | 23 | 23 | ||||||||||||
| Jada divestiture | — | — | (81 | ) | — | |||||||||||
| Restructuring | — | — | 31 | 88 | ||||||||||||
| Change in fair value of contingent consideration | (10 | ) | (32 | ) | (6 | ) | (9 | ) | ||||||||
| Other expense (gain), net (1) | 8 | 4 | 27 | (37 | ) | |||||||||||
| Tax impact on adjustments above(2) | (17 | ) | (7 | ) | (44 | ) | (69 | ) | ||||||||
| Non-GAAP Adjusted Net Income | $ | 256 | $ | 263 | $ | 674 | $ | 789 | ||||||||
| (1) For additional details refer to the Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA. | |||||||
| (2) For the three months ended September 30, 2026 and 2025, the GAAP income tax rates were 35.7% and 34.0%, respectively, and the non-GAAP income tax rates were 29.9% and 25.3%, respectively. For the nine months ended September 30, 2026 and 2025, the GAAP income tax rates were 35.8% and 31.6%, respectively, and the non-GAAP income tax rates were 29.2% and 24.0%, respectively. These adjustments represent the estimated tax impacts on the reconciling items by applying the statutory rate and applicable law of the originating territory of the non-GAAP adjustments. | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Diluted Earnings per Share | $ | 0.60 | $ | 0.61 | $ | 1.56 | $ | 1.50 | ||||||||
| Total impact of Non-GAAP adjustments | 0.34 | 0.40 | 0.95 | 1.53 | ||||||||||||
| Non-GAAP Adjusted Diluted Earnings per Share | $ | 0.94 | $ | 1.01 | $ | 2.51 | $ | 3.03 | ||||||||
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Organon & Co.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
(Unaudited, $ in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| GAAP Reported Net Income | $ | 164 | $ | 160 | $ | 418 | $ | 392 | ||||||||
| Depreciation (1) | 32 | 37 | 102 | 102 | ||||||||||||
| Amortization | 48 | 52 | 141 | 155 | ||||||||||||
| Interest expense | 106 | 128 | 325 | 383 | ||||||||||||
| Income tax expense | 91 | 83 | 233 | 181 | ||||||||||||
| EBITDA (Non-GAAP) | $ | 441 | $ | 460 | $ | 1,219 | $ | 1,213 | ||||||||
| Restructuring and related charges | — | — | 31 | 98 | ||||||||||||
| Manufacturing network related (2) | 23 | 46 | 76 | 118 | ||||||||||||
| Acquisition-related costs (3) | — | 12 | 7 | 31 | ||||||||||||
| Change in contingent consideration | (10 | ) | (32 | ) | (6 | ) | (9 | ) | ||||||||
| Jada divestiture | — | — | (81 | ) | — | |||||||||||
| Other costs (4) | 27 | 8 | 67 | 3 | ||||||||||||
| Stock-based compensation | 21 | 24 | 65 | 70 | ||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 502 | $ | 518 | $ | 1,378 | $ | 1,524 | ||||||||
| Adjusted EBITDA margin (Non-GAAP) | 31.9 | % | 32.3 | % | 30.0 | % | 32.4 | % | ||||||||
| (1) Excludes accelerated depreciation included in one-time costs. | |||||||
| (2) Manufacturing network related costs, which include costs of exiting of temporary manufacturing and supply agreements with Merck & Co., Inc., Rahway, NJ, US, reflect accelerated depreciation, exit premiums, technology transfer costs, stability and qualification batch costs, and third-party contractor costs. | |||||||
| (3) Acquisition related costs for the three months ended September 30, 2025 and the nine months ended September 30, 2026 and 2025, respectively, reflect the amortization pertaining to the fair value inventory purchase accounting adjustment for the Dermavant transaction. | |||||||
| (4) Other costs for the three months ended September 30, 2026 include $19 million related to the pending transaction with Sun Pharmaceutical Industries Limited. Other costs for the nine months ended September 30, 2026 include $30 million related to the pending transaction with Sun Pharmaceutical Industries Limited and $17 million related to an unfavorable resolution of a working capital matter related to the Dermavant acquisition. | |||||||
| As the costs described in (1) through (4) above are directly related to the separation of Organon and acquisition related activities and therefore arise from a one-time event outside of the ordinary course of the company’s operations, the adjustment of these items provides meaningful, supplemental, information that the company believes will enhance an investor's understanding of the company's ongoing operating performance. | |||||||
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