Takeda Pharmaceutical Company Limited American Depositary Shares (each representing 1/2 of a share of
TAK · NYSE
Next quarter
Reports Oct 29, 2026.
Consensus is $0.46 EPS for Sep 2026 across 2 estimates, ranging $0.33 to $0.59.
TAK Jun 2026
- 17.07%
- -0.93%
- $0.41
- $0.48
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Highlights
- EPS beat Reported EPS was $0.48, 17.1% above the $0.41 consensus estimate.
- Core earnings growth Core operating profit rose 11.5% year over year to ¥358.9 billion, while core EPS increased 1.5% to ¥154.
- Revenue and margin Revenue increased 10.2% at actual exchange rates to ¥1,219.9 billion, with gross margin expanding 1.4 percentage points to 66.7%.
- Reported profit pressure Reported net profit attributable to owners fell 8.9% to ¥113.2 billion and reported EPS declined 9.8% to ¥71.65, reflecting lower finance income and higher taxes.
- Cash flow deterioration Operating cash flow fell 40.8% to ¥127.6 billion, while adjusted free cash flow dropped 63.9% to ¥68.6 billion, mainly because trade working capital consumed ¥127.3 billion.
- Leverage Adjusted net debt was ¥4,012.6 billion at June 30, and the adjusted net debt-to-adjusted EBITDA ratio increased to 2.7x from 2.6x at FY2025 year-end.
- Guidance maintained Takeda kept its FY2026 forecast of ¥4,640.0 billion revenue, ¥1,160.0 billion core operating profit, ¥472 core EPS and ¥650-750 billion adjusted free cash flow.
Analysis
Takeda’s June 2026 quarter was an operating beat but a weaker cash and reported-profit quarter. Reported EPS of $0.48 exceeded the $0.41 consensus by 17.1%, while revenue rose 10.2% year over year to ¥1,219.9 billion and core operating profit increased 11.5% to ¥358.9 billion. Core EPS rose only 1.5% to ¥154, as higher SG&A and R&D spending absorbed much of the gross-profit benefit. The supplied material does not provide a comparable prior-quarter income statement, so a sequential assessment is not available.
The main distinction was between underlying operations and IFRS earnings. Reported operating profit grew 9.1% to ¥201.4 billion, but reported net profit attributable to owners fell 8.9% to ¥113.2 billion as finance income declined from ¥73.8 billion to ¥24.6 billion and income-tax expense increased to ¥49.5 billion. Cash conversion was notably weaker: operating cash flow fell ¥87.8 billion year over year, and adjusted free cash flow declined ¥121.5 billion to ¥68.6 billion, driven chiefly by working-capital use. Takeda maintained its full-year outlook, including ¥1,160.0 billion of core operating profit and ¥650-750 billion of adjusted free cash flow.
Underlying earnings
- Revenue Revenue rose ¥113.2 billion, or 10.2% at actual exchange rates, to ¥1,219.9 billion. At constant exchange rates, revenue declined 0.5%, indicating that reported growth was primarily supported by currency translation.
- Core operating profit Core operating profit increased 11.5% to ¥358.9 billion, and the margin improved modestly to 29.4% from 29.1%. Core net profit attributable to owners rose 2.5% to ¥242.9 billion.
- Expense investment SG&A increased 12.0% to ¥286.6 billion and R&D rose 16.3% to ¥167.4 billion at actual exchange rates. At constant exchange rates, those increases were 1.6% and 6.8%, respectively, limiting the flow-through from revenue growth.
Reported profit bridge
Reported operating profit rose 9.1% to ¥201.4 billion, but the bottom line declined. Finance income fell ¥49.2 billion year over year to ¥24.6 billion, while finance expenses improved by ¥43.3 billion to ¥63.8 billion; the net finance result nonetheless moved from a ¥33.4 billion expense to a ¥39.2 billion expense. Income-tax expense increased to ¥49.5 billion from ¥26.4 billion. As a result, reported net profit attributable to owners fell to ¥113.2 billion from ¥124.2 billion, and basic EPS declined to ¥71.65 from ¥79.40. The reported-to-core bridge added ¥105.5 billion for product-intangible amortization, ¥5.4 billion for impairment and ¥47.0 billion for other operating items to arrive at ¥358.9 billion of core operating profit.
Cash flow and leverage
- Operating cash flow Net cash from operating activities fell 40.8% to ¥127.6 billion from ¥215.4 billion. The largest driver was a ¥127.3 billion use of trade working capital, versus a ¥7.2 billion source in the year-ago quarter.
- Free cash flow Free cash flow fell 55.9% to ¥73.8 billion after ¥53.8 billion of PP&E spending. Adjusted free cash flow declined 63.9% to ¥68.6 billion after ¥49.4 billion of intangible-asset acquisitions and only ¥10.5 billion of business-sale proceeds.
- Debt Adjusted net debt stood at ¥4,012.6 billion against last-twelve-month adjusted EBITDA of ¥1,503.8 billion, producing a 2.7x leverage ratio versus 2.6x at FY2025 year-end. Cash and cash equivalents were ¥461.0 billion.
FY2026 outlook
- Guidance Takeda retained its FY2026 revenue forecast of ¥4,640.0 billion, up 3.0% from FY2025, and its core operating profit forecast of ¥1,160.0 billion, down 1.1%.
- Earnings mix The company continues to expect core EPS of ¥472, down 8.7% from ¥517 in FY2025, despite revenue growth, because of higher operating expenses and a less favorable tax comparison.
- Cash priorities Adjusted free cash flow guidance remains ¥650-750 billion, compared with ¥684.5 billion in FY2025. Cash-flow-base capital expenditure is forecast at ¥330-380 billion, below FY2025’s ¥410.9 billion.
