Pfizer Inc. Delivers Resilient Q3 and 9M 2025 Performance with Strong EPS Outperformance, Cost Discipline and Strategic Repositioning

Analyst: Qudus Adebara

Executive Summary

Pfizer Inc. delivered a resilient performance for the third quarter and nine months ended September 28, 2025, navigating a challenging post-COVID normalization phase with disciplined cost management, portfolio optimization, and strong execution across its non-COVID franchises.

For Q3 2025, total revenue declined 6% YoY to $16.7 billion, reflecting continued normalization of COVID-related products. Despite the softer top line, Pfizer beat market expectations, with revenue modestly above consensus and diluted EPS of $0.62, materially higher than the $0.52 estimate. Net income attributable to common shareholders declined 21% YoY to $3.54 billion, primarily due to lower revenues and higher acquisition-related charges.

For the nine-month period, revenues remained broadly stable at $45.0 billion (vs. $45.9 billion in 9M 2024), while net income attributable to Pfizer shareholders increased 24% YoY to $9.42 billion, reflecting lower restructuring costs, improved operating leverage, and favorable tax movements.

Management reaffirmed confidence in its strategic direction by raising and narrowing FY 2025 adjusted EPS guidance to $3.00–$3.15, underpinned by progress on its $7.2 billion cost-savings program, growth in the non-COVID portfolio (+4% operational growth), and continued capital returns to shareholders.

Financial Highlights – Statement of Operations ($’million)

$’million       Q3 2025       Q3 2024       % YoY          9M 2025       9M 2024          % YoY

Total Revenue       16,654          17,702          -6%    45,022          45,864          -2%

Income from Continuing Ops (Pre-Tax)        3,334  4,715  -29%   9,162          8,033  +14%

Net Income Attributable to Pfizer       3,541  4,465  -21%   9,419  7,621          +24%

Diluted EPS ($)       0.62    0.78    -21%   1.65    1.34    +23%

Revenue Performance

Pfizer’s revenue performance reflects a transition year, as the company continues to rebalance away from COVID-driven earnings toward a more diversified, innovation-led growth profile.

Revenue Mix (9M 2025)

• Product Revenues: $37.2bn (↓4% YoY)
• Alliance Revenues: $6.7bn (↑9% YoY)
• Royalty Revenues: $1.2bn (↑18% YoY)

Key Growth Drivers

• Non-COVID portfolio delivered 4% operational growth, led by strong demand for:
  • Eliquis
  • Vyndaqel
• Alliance and royalty revenues expanded, reflecting improved collaboration economics and intellectual property monetization.
• COVID-related headwinds continue to fade but are increasingly offset by core franchise growth.

Profitability and Margins

Cost Discipline

Pfizer continued to make visible progress on its multi-year efficiency drive:

• SG&A expenses declined YoY for the nine-month period.
• R&D spending reduced modestly, reflecting portfolio prioritization rather than innovation pullback.
• Restructuring and acquisition-related costs fell 43% YoY (9M), supporting margin expansion.

Cost Savings Program

• On track to achieve ~$7.2 billion in net cost savings by end-2027.
• Productivity gains are improving operating margins and cash generation capacity.

Earnings Quality

• Despite lower Q3 net income, EPS outperformance highlights:
  • Favorable tax outcomes
  • Share count discipline
  • Strong operating leverage in core businesses

Balance Sheet Overview ($’million)

$’million       Sept 2025     Dec 2024     % Δ

Total Assets  208,731        213,396        -2%

Cash & Short-Term Investments 14,984          20,477          -27%

Total Debt (ST + LT) 61,712          64,351          -4%

Total Equity  93,096          88,497          +5%

Interpretation

• Asset base moderated as Pfizer optimized liquidity and investment balances.
• Equity expanded on the back of strong retained earnings generation.
• Debt levels edged lower, maintaining balance sheet flexibility and investment-grade strength.

Cash Flow Highlights (9M 2025, $’million)

Metric          9M 2025       9M 2024

Operating Cash Flow      6,356  6,023

Investing Cash Flow        4,795  4,275

Financing Cash Flow       (10,900)        (12,026)

Cash Dividends Paid       (7,326)          (7,132)

• Operating cash flow remained stable, reflecting resilient earnings quality.
• Investing inflows were supported by partial divestment of Haleon.
• Pfizer maintained strong shareholder returns via dividends, even in a transition earnings year.

Key Ratios & Indicators

Metric          Performance

Q3 Revenue Growth YoY          -6%

9M Net Income Growth YoY     +24%

Diluted EPS (9M)    $1.65

Dividend Payout (9M)     $7.3bn

Non-COVID Revenue Growth   +4%

Strategic Insights

• Portfolio Reset: Pfizer is accelerating its shift toward high-value specialty and chronic therapies.
• M&A and Pipeline Expansion: Early FTC clearance for the Metsera acquisition positions Pfizer strategically in the obesity market.
• Regulatory Clarity: Landmark agreement with the U.S. Government enhances long-term visibility and pricing stability.
• Cost Transformation: Ongoing efficiency initiatives are structurally improving margins.

Strengths

• Global scale and diversified pharmaceutical portfolio.
• Strong non-COVID product momentum.
• Disciplined cost management and margin protection.
• Resilient cash flows and shareholder returns.

Weaknesses

• Revenue drag from declining COVID-related products.
• Earnings volatility tied to acquisition and restructuring charges.

Opportunities

• Obesity and metabolic disease market expansion.
• Late-stage pipeline commercialization.
• Operating leverage from cost savings realization.

Threats

• Pricing and reimbursement pressure in key markets.
• Patent expirations and competitive generics.
• Regulatory and political scrutiny on drug pricing.

Outlook

Pfizer enters FY 2026 with a clearer strategic focus, improved cost structure, and strengthening non-COVID growth profile. Management’s upward revision to adjusted EPS guidance reflects confidence in execution, cost savings realization, and pipeline contribution. While near-term revenue growth remains modest, earnings quality, balance sheet strength, and capital returns underpin a stable-to-improving medium-term outlook.

Analyst View

“Pfizer’s Q3 2025 results highlight a company firmly in transition but executing well. EPS outperformance, disciplined cost control, and strengthening non-COVID franchises signal that the earnings base is stabilizing. Strategic acquisitions and regulatory clarity further support confidence in Pfizer’s long-term growth trajectory.”

Conclusion

Pfizer Inc.’s Q3 and 9M 2025 results demonstrate resilience in the face of post-pandemic normalization. With improving earnings quality, a reinforced cost base, strategic pipeline investments, and sustained shareholder returns, Pfizer remains well positioned to rebuild sustainable growth and enhance long-term shareholder value.