ABBV — Q1 2026 Financial Report Analysis

Revenue grew 12%; reported profit fell 46% — and the same product caused both

AbbVie's first quarter of 2026 is a clean example of why a headline profit number can point the opposite way from the business underneath it. Revenue rose 12.4% to $15.002 billion. Net earnings attributable to AbbVie fell 46% to $695 million, and reported (GAAP) diluted earnings per share dropped from $0.72 to $0.39.

Almost the entire gap comes from two non-cash accounting charges and one cash payment for a drug licence, none of which reflect how the products sold in the quarter. The largest — a $2.387 billion charge for "change in fair value of contingent consideration" — exists precisely because Skyrizi is selling better than expected. More on that below.

Adjusted earnings per share, which strips those items out, rose 7.7% to $2.65. Management raised full-year guidance.

Source: AbbVie Form 10-Q for the quarter ended March 31, 2026 (filed May 8, 2026) and the Q1 2026 earnings release, Exhibit 99.1 to Form 8-K filed April 29, 2026. "Excluding currency" (AbbVie calls it "operational" or "constant currency") means the growth rate you would have seen if exchange rates had not moved — it removes the distortion from a weaker or stronger dollar.

Why reported profit fell while operating profit rose

Operating earnings — profit from selling products, before interest, tax and certain other items — actually rose 6.9% to $3.990 billion. Everything below that line is what broke the reported number. The bridge from $0.39 of GAAP EPS to $2.65 of adjusted EPS, per the earnings release reconciliation:

Two of those deserve explanation.

Contingent consideration ($1.31 per share). When AbbVie acquired businesses, it agreed to pay the sellers future royalties tied to how well the acquired drugs sell. Accounting rules require AbbVie to carry the estimated present value of those future payments as a liability and to re-measure it every quarter, running the change through earnings. The 10-Q states plainly what moved it: "the change in fair value reflected higher estimated Skyrizi sales and the passage of time, partially offset by higher discount rates." In other words, AbbVie raised its own forecast for Skyrizi and was charged $2.387 billion for doing so. A rising discount rate (weighted average 4.3% at March 31 versus 4.0% at December 31) pulled the other way, because future payments discounted at a higher rate are worth less today, but not enough to offset it.

This is not purely theoretical. The liability ended the quarter at $27.039 billion, up from $25.374 billion at year-end, and AbbVie paid out $722 million of it in cash during the quarter (versus $549 million a year earlier). The accounting charge is non-cash; the obligation behind it is not. As Skyrizi grows, this cash outflow grows with it.

Acquired IPR&D and milestones ($744 million, versus $248 million). IPR&D stands for in-process research and development — payments for drug candidates that are not yet approved. Accounting rules require these to be expensed immediately rather than capitalized as an asset, so a single licensing deal can dent a quarter's earnings. The bulk here was a $650 million upfront payment completed in March 2026 for a global licence (excluding China) from RemeGen Co., Ltd. to develop and sell RC148 (ABBV-1480), a bispecific antibody targeting PD-1 and VEGF for solid tumours. AbbVie could owe up to $5.0 billion more in development, regulatory and commercial milestones plus tiered royalties.

Note that AbbVie does not add this back in its adjusted figures: the $744 million charge costs $0.41 of adjusted EPS this quarter, against $0.13 a year ago. Strip that consistent drag out of both periods and adjusted EPS would be roughly $3.06 versus $2.59 — about 18% growth rather than 7.7%. The same adjustment reframes the margin story: adjusted operating margin fell from 42.3% to 40.8%, but excluding acquired IPR&D from both years it expanded, from roughly 44.2% to 45.8%.

The tax rate compounded the optics. The GAAP rate jumped to 32.9% from 22.4%, because the contingent-consideration and business-development charges reduce pre-tax profit by more than they reduce tax. The adjusted tax rate was 15.4%.

Immunology: Skyrizi and Rinvoq have finished filling the Humira hole

Immunology revenue was $7.290 billion, up 16.4% (+14.3% excluding currency).

Humira's decline continues at full speed: $688 million globally, down 40.3% excluding currency, with the U.S. down 52.0% to $357 million against international's milder 17.4% decline. The 10-Q attributes this to "continued impact of direct biosimilar competition following the loss of exclusivity" — biosimilars being near-copies of a biologic drug that competitors may sell once patent protection lapses. The scale of what has happened is easier to see in proportions: Humira was 8.4% of AbbVie's revenue in Q1 2025 and is 4.6% now. It is smaller than Botox Therapeutic.

Against a $433 million year-on-year loss from Humira, Skyrizi added $1.058 billion and Rinvoq added $401 million. Together those two are $6.602 billion, 44% of total company revenue. AbbVie attributes both to "continued strong market share uptake as well as market growth across all indications" — that is, they are taking share from rivals and the underlying markets are expanding, rather than one at the other's expense.

Worth flagging in the international figures: Skyrizi's overseas revenue grew 39.8% as reported but 28.0% excluding currency, and Rinvoq's 43.4% versus 32.6%. Roughly 11 points of each is a weaker-dollar effect, not extra volume. Company-wide, currency added about 2.1 points to reported growth and 8.5 points to international growth.

Neuroscience is now the fastest-growing franchise

Neuroscience revenue was $2.875 billion, up 26.0% (+24.3% excluding currency) — outgrowing immunology. The migraine pair led: Ubrelvy $339 million (+41.2% excluding currency, on "favorable pricing, continued market share uptake as well as market growth") and Qulipta $296 million (+51.3%). Vraylar reached $905 million (+18.4%), Botox Therapeutic $1.009 billion (+14.9% excluding currency).

Vyalev, the Parkinson's infusion therapy, went from $63 million to $201 million — the clearest new-launch contributor in the portfolio, and now roughly the size of Elahere.

One forward risk sits in this segment: in January 2026 the Centers for Medicare and Medicaid Services selected Botox as one of 15 medicines subject to government-set prices in Medicare Parts B and D starting in 2028. That does not affect 2026 revenue, but it puts a dated price ceiling on a $1 billion-per-quarter therapeutic franchise.

Oncology shrank

Oncology was $1.631 billion, down 0.2% as reported and down 3.0% excluding currency — the only major portfolio in decline. Imbruvica did the damage at $556 million, down 24.7%, which the 10-Q attributes to "unfavorable pricing and decreased demand in the United States, partially offset by increased collaboration revenues." U.S. product revenue fell 37.4% to $332 million while the share of overseas profits from the Janssen partnership rose 7.2% to $224 million. The deterioration also shows up in AbbVie's cost line: Janssen's share of U.S. Imbruvica profits, booked in cost of products sold, fell to $153 million from $247 million.

Venclexta ($770 million, +9.7% excluding currency on increased demand) and Epkinly ($83 million, +57.6%) grew but are too small to offset it. Elahere at $198 million (+8.3%) is growing more slowly than its launch trajectory implied, with U.S. revenue actually down 2.9%.

The pipeline news was mixed: Venclexta plus acalabrutinib won FDA approval in February for previously untreated chronic lymphocytic leukaemia, the first all-oral fixed-duration regimen in that setting. But the Phase 3 Epkinly trial in relapsed/refractory diffuse large B-cell lymphoma improved progression-free survival without a statistically significant overall-survival benefit — a result that typically limits commercial uptake.

Aesthetics: the headline number is better than the demand

Aesthetics revenue was $1.186 billion, up 7.6% as reported but only 5.1% excluding currency, and the composition matters more than the total. Botox Cosmetic rose 17.0% excluding currency, but the 10-Q's stated cause is not more procedures: it was "favorable pricing due to customer loyalty program changes in the United States in the prior year and the timing of customer inventory stocking." That is a comparison effect — last year's quarter was depressed by loyalty-programme pricing, making this year's look strong — plus distributors stocking up, which pulls sales forward rather than creating them.

Juvederm, the dermal filler line, tells the unflattered version: down 2.9% excluding currency, which the filing attributes to "decreased consumer demand," partly masked by the same favourable pricing comparison. Other Aesthetics fell 10.1%. Underlying consumer demand for discretionary aesthetic procedures is not recovering; the segment's growth this quarter is largely comparison and stocking.

AbbVie also received a Complete Response Letter from the FDA in April on trenibotulinumtoxinE, its fast-onset, short-duration toxin for frown lines. The FDA asked only for more information on manufacturing processes — no safety, efficacy or additional-trial requirements — so this is a delay rather than a rejection, but it pushes out the aesthetics portfolio's main near-term new product.

Cash, debt and capital returns

Operating cash flow more than doubled to $3.829 billion from $1.635 billion. Most of that improvement is not operational: last year's quarter absorbed large litigation cash payments (the cash flow statement shows non-cash litigation reserve adjustments net of cash payments of negative $729 million in Q1 2025 versus positive $150 million this year — a $879 million swing), alongside higher revenue and working-capital timing.

AbbVie issued $8.0 billion of senior notes in the quarter and repaid a $2.0 billion term loan, paid $3.1 billion of dividends (the quarterly rate rose to $1.73 per share from the May 2026 payment) and repurchased 5 million shares for $1.1 billion. Net interest expense was $645 million, roughly flat.

One genuine credit improvement: Moody's upgraded AbbVie's senior unsecured rating to A2 (stable) from A3 (positive) and its short-term rating to Prime-1 in February 2026.

Separately, AbbVie disclosed a voluntary agreement with the U.S. government committing to lower Medicaid prices and expanded direct-to-patient offerings, plus a pledge of $100 billion in U.S. R&D and capital investment over a decade, in exchange for a three-year exemption from tariffs and future price mandates. The near-term trade is lower U.S. government-channel pricing for tariff and policy certainty through roughly 2029 — announced capital projects so far include a $1.4 billion campus in Durham, North Carolina and $380 million for two active-ingredient plants in North Chicago.

Takeaway: The $2.4 billion charge that erased most of AbbVie's reported profit is a direct consequence of raising its own Skyrizi forecast — the better that drug performs, the larger the royalty liability AbbVie must carry and the worse GAAP earnings look. The number that should concern investors is not that charge but the $722 million of contingent consideration actually paid in cash this quarter, up 32% year over year and growing in step with Skyrizi, because that one is real money leaving the business.

Guidance and trajectory

AbbVie raised full-year 2026 adjusted diluted EPS guidance to $14.08–$14.28 from $13.96–$14.16. The comparison needs one piece of context: the original range issued with FY2025 results in February was $14.37–$14.57 and explicitly excluded any acquired IPR&D charges. Subtract the $0.41 of IPR&D actually incurred in Q1 and that becomes exactly $13.96–$14.16 — so the "prior" range is the original one restated, and the genuine operational raise is $0.12 at both ends. Guidance still excludes any IPR&D incurred after Q1, which AbbVie says it cannot reliably forecast; given the company completed a $650 million deal in a single quarter, expect that exclusion to matter again.

A $0.12 raise one quarter into the year is modest relative to a quarter that management called "exceeding our expectations," which suggests a deliberately conservative posture on the rest of the year rather than a flow-through of the beat.

On trajectory, three things stand out. First, the Humira transition is effectively finished as a swing factor — at 4.6% of revenue, even another 40% decline costs less than one quarter of Skyrizi's growth, which removes the dominant overhang of the last three years. Second, growth is broadening past immunology: neuroscience grew faster than immunology this quarter, and Vyalev, Qulipta and Ubrelvy are compounding off small bases. Third, the drags are concentrated and identifiable — oncology in decline on Imbruvica, aesthetics flattered by comparisons, and a contingent-consideration cash obligation that scales with the company's best product. None of the three is large enough to reverse the top line, but the aesthetics number in particular is worth watching next quarter, when the favourable prior-year pricing comparison no longer helps.