A fixed rule set over this filing's XBRL figures and the number of high-severity risks found in it — no model judgement.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
In Q2 FY2026, Baxter International reported a 5.3% YoY revenue increase to $2.96B and a 38.5% surge in net income to $126M, supported by segment realignments and $75M in tariff refund credits.
Revenue
$2.96B
+5.34% YoY
EPS (Diluted)
$0.24
+33.33% YoY
Gross Margin
34.9%
-0.4 pts YoY
Operating Income
$217M
+13.61% YoY
Baxter International (BAX) reported Q2 FY2026 revenue of $2.96B, up 5.3% year over year. The company posted net income of $126M, up 38.5% from a year earlier, with diluted EPS of $0.24. Gross margin was 34.9%. Operating income was $217M, up 13.6% year over year. BAX's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Baxter generated $2.96B in Q2 FY2026 sales (+5.3% YoY) with net income reaching $126M (+38.5% YoY), driven by medical product demand and $75M in tariff refund credits.
Last 4 quarters: 3 beats, 1 miss
Adjusted (non-GAAP) EPS of $0.56 versus the $0.37 analyst consensus — a +52.2% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.24.
Following the January 2025 sale of its Kidney Care business (Vantive) for $3.2B in after-tax proceeds, Baxter implemented a new operating model reorganized into two primary reportable segments: Medical Products & Therapies ($2.08B sales, +7% YoY) and Healthcare Systems & Technologies ($801M sales, +4% YoY).
Source: 10-Q Item 2 MD&A, p.30-33
Baxter maintained its voluntary hold on shipments and installations of the Novum IQ Large Volume Pump in the U.S. and Canada following Class I recall classifications by the FDA, expecting no meaningful sales from the product while the hold remains in effect.
Source: 10-Q Item 2 MD&A, p.30
Cost of goods sold in Q2 FY2026 benefited from $75M in tariff refunds related to court rulings invalidating IEEPA tariffs, partially offsetting inflationary supply chain pressure and ongoing Section 301 tariff costs.
Source: 10-Q Item 2 MD&A, p.30-31
Baxter incurred $75M in six-month business optimization charges to address post-divestiture cost structure dis-synergies and launched enterprise-wide digital and automation initiatives to enhance operating margins.
Source: 10-Q Item 2 MD&A, p.30, 35
Ongoing Class I recalls and the voluntary shipment hold on the Novum IQ LVP could lead to customer defections, increased remediation expenses, and prolonged regulatory delays before normal sales resume.
Source: 10-Q Item 2 MD&A, p.30
Despite $75M in recent IEEPA tariff refunds, proposed global tariffs, potential pharmaceutical/medical device duties, and long-term customer contract constraints limit Baxter's ability to pass on rising manufacturing costs.
Source: 10-Q Item 2 MD&A, p.30-31
The reduced scale of Baxter post-Kidney Care separation creates corporate dis-synergies that must be offset by restructuring programs; failure to optimize operations could weigh on profitability given a Debt to Equity ratio of 2.19.
Source: 10-Q Item 2 MD&A, p.30; 10-Q Balance Sheet (XBRL)
This analysis does not extract a guidance section. Companies issue revenue and EPS outlook in the 8-K press release and on the earnings call rather than in the 10-Q itself — though the filing's management discussion can contain forward-looking statements, which appear in the highlights above where they were material.
Baxter International (BAX) is next expected to report on , when the following quarter's results and any updated outlook will be available.
See the BAX earnings preview — expected date, analyst estimates and what to watch →
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $2.96B | $2.81B | +5.34% |
Cost of Revenue | $1.93B | $1.82B | +5.99% |
Gross Profit | $1.03B | $991M | +4.14% |
Operating Income | $217M | $191M | +13.61% |
Net Income | $126M | $91M | +38.46% |
EPS (Basic) | $0.24 | $0.18 | +33.33% |
EPS (Diluted) | $0.24 | $0.18 | +33.33% |
R&D Expense | $129M | $134M | -3.73% |
SG&A Expense | $735M | $718M | +2.37% |
Baxter reported Q2 FY2026 revenue of $2.96B (+5.3% YoY) and net income of $126M ($0.24 per diluted share), up 38.5% YoY. Performance was bolstered by growth in Advanced Surgery (+12%) and $75M in cost-of-goods-sold credits from IEEPA tariff refunds.
Medical Products & Therapies net sales increased 7% YoY to $2.08B, driven by Advanced Surgery. Healthcare Systems & Technologies net sales grew 4% YoY to $801M, supported by patient support systems backlog execution in Care & Connectivity Solutions.
Baxter maintained its temporary hold on distributing and installing Novum IQ Large Volume Pumps in the U.S. and Canada following FDA Class I recall designations. The company expects no meaningful sales from the product while verification testing and regulatory clearances remain underway.
Baxter International (BAX) is next expected to report earnings on Oct 28, 2026. The date comes from the analyst earnings calendar and can shift until the company confirms it.
Expected release date, analyst estimates & what to watch
BAX posted Q1 FY2026 revenue of $2.70B (+2.9% YoY) with improving operating income, but swung to a net loss of -$15M versus net income of $126M a year ago, driven by below-the-line charges that masked otherwise steady operational progress.
BAX (Baxter International) reported a deeply challenging FY2025, with revenue growing 5.7% to $11.24B but gross margin collapsing 740 basis points to 30.1%, driving an operating loss of $308M and a net loss of $957M as cost pressures overwhelmed top-line gains.
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