TEVA PHARMACEUTICAL INDUSTRIES LTDTEVA
TEVA PHARMACEUTICAL INDUSTRIES LTD Revenue Disclosure
NOTE 3 – Revenue from contracts with customers:
Disaggregation of revenue
The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 19.
In conjunction with a recent shift in executive management responsibilities and in alignment with Teva’s Pivot to Growth strategy, Teva decided that Canada is no longer included as part of Teva’s North America segment as of January 1, 2024. From that date Canada is reported as part of the Company’s International Markets segment and Teva’s North America segment has been renamed the United States segment. Teva aligned its internal financial and segment reporting and its reporting units in accordance with this change effective January 1, 2024. Amounts for the year ended December 31, 2023 have been recast to conform to the reporting structure.
Year ended December 31, 2025 |
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United States |
Europe |
International Markets |
Other Activities |
Total |
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(U.S.$ in millions) |
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| Sale of goods |
7,081 | 4,959 | 2,039 | 526 | 14,605 | |||||||||||||||
| Licensing arrangements* |
607 | 39 | 28 | 4 | 678 | |||||||||||||||
| Distribution |
1,496 | 1 | 54 | — | 1,551 | |||||||||||||||
| Other** |
2 | 41 | 41 | 339 | 423 | |||||||||||||||
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| $ | 9,186 | $ | 5,040 | $ | 2,162 | $ | 870 | $ | 17,258 | |||||||||||
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| * | Revenues from licensing arrangements in United States segment were mainly comprised of development milestone payments of $500 million received in the fourth quarter of 2025, in connection with the initiation of Phase 3 studies for duvakitug ( anti-TL1A). See note 2. |
| ** | “Other” revenues in Europe and International Markets segments include revenues related to sales of certain product rights. |
Year ended December 31, 2024 |
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United States |
Europe |
International Markets |
Other Activities |
Total |
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(U.S.$ in millions) |
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| Sale of goods |
6,327 | 4,891 | 2,280 | 553 | 14,050 | |||||||||||||||
| Licensing arrangements |
103 | 35 | 24 | 11 | 173 | |||||||||||||||
| Distribution |
1,536 | 1 | 39 | — | 1,576 | |||||||||||||||
| Other* |
68 | 176 | 121 | 380 | 745 | |||||||||||||||
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| $ | 8,034 | $ | 5,103 | $ | 2,463 | $ | 944 | $ | 16,544 | |||||||||||
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| * | “Other” revenues in United States, Europe and International Markets segments include revenues related to sales of certain product rights. |
Year ended December 31, 2023 |
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United States |
Europe |
International Markets |
Other Activities |
Total |
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(U.S.$ in millions) |
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| Sale of goods |
5,554 | 4,631 | 2,229 | 565 | 12,979 | |||||||||||||||
| Licensing arrangements* |
597 | 51 | 28 | 5 | 681 | |||||||||||||||
| Distribution |
1,577 | § | 38 | — | 1,615 | |||||||||||||||
| Other** |
2 | 155 | 57 | 357 | 570 | |||||||||||||||
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| $ | 7,731 | $ | 4,837 | $ | 2,351 | $ | 926 | $ | 15,846 | |||||||||||
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| * | Revenues from licensing arrangements in United States segment were mainly comprised of $500 million upfront payment received in connection with the collaboration on Teva’s anti-TL1A asset. See note 2. |
| ** | “Other” revenues in Europe segment mainly related to the sale of certain product rights. |
| § | Represents an amount less than $0.5 million. |
Variable consideration
Variable consideration mainly includes SR&A, comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against trade receivables.
The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions. For description of the nature of each deduction and how provisions are estimated see note 1.
SR&A to U.S. customers comprised approximately 70% of the Company’s total SR&A as of December 31, 2025, with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the years ended December 31, 2025 and 2024 were as follows:
Sales Reserves and Allowances |
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Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in Sales Reserves and Allowances |
Total |
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(U.S.$ in millions) |
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| Balance at January 1, 2025 |
$ | 56 | $ | 1,674 | $ | 561 | $ | 936 | $ | 399 | $ | 108 | $ | 3,678 | $ | 3,734 | ||||||||||||||||
| Provisions related to sales made in current year period |
412 | 5,129 | 1,050 | 8,005 | 289 | 124 | 14,597 | 15,009 | ||||||||||||||||||||||||
| Provisions related to sales made in prior periods |
— | (46 | ) | 44 | (29 | ) | (15 | ) | (12 | ) | (58 | ) | (58 | ) | ||||||||||||||||||
| Credits and payments |
(405 | ) | (4,869 | ) | (970 | ) | (7,995 | ) | (233 | ) | (131 | ) | (14,198 | ) | (14,603 | ) | ||||||||||||||||
| Translation differences |
— | 66 | 16 | 20 | 5 | 17 | 124 | 124 | ||||||||||||||||||||||||
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| Balance at December 31, 2025 |
$ | 63 | $ | 1,954 | $ | 701 | $ | 937 | $ | 445 | $ | 106 | $ | 4,143 | $ | 4,206 | ||||||||||||||||
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Sales Reserves and Allowances |
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Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in Sales Reserves and Allowances |
Total |
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(U.S.$ in millions) |
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| Balance at January 1, 2024 |
$ | 61 | 1,603 | 540 | 859 | 436 | 97 | $ | 3,535 | $ | 3,596 | |||||||||||||||||||||
| Provisions related to sales made in current year period |
390 | 4,640 | 787 | 7,952 | 276 | 149 | 13,804 | 14,194 | ||||||||||||||||||||||||
| Provisions related to sales made in prior periods |
— | 5 | 22 | (11 | ) | (22 | ) | (3 | ) | (9 | ) | (9 | ) | |||||||||||||||||||
| Credits and payments |
(395 | ) | (4,531 | ) | (781 | ) | (7,851 | ) | (286 | ) | (126 | ) | (13,575 | ) | (13,970 | ) | ||||||||||||||||
| Translation differences |
— | (43 | ) | (7 | ) | (13 | ) | (5 | ) | (9 | ) | (77 | ) | (77 | ) | |||||||||||||||||
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| Balance at December 31, 2024 |
$ | 56 | $ | 1,674 | $ | 561 | $ | 936 | $ | 399 | $ | 108 | $ | 3,678 | $ | 3,734 | ||||||||||||||||
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About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.