Revenue growth has stalled near zero (latest quarter +2.2%), while gross margin improved to 58.2% but operating margin compressed to 8.2% from 18.9% in 2024Q1, reflecting a 55% rise in SG&A costs.
Solventum Corporation (SOLV) annual income statement — 5-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 |
|---|
| Sales/Revenue | 8.16B | 8.32B | 8.25B | 8.2B | 8.13B | 8.17B |
| Revenue Growth % | -2.84% | 0.86% | 0.7% | 0.82% | -0.5% | - |
| Cost of Goods Sold | 3.73B | 3.87B | 3.66B | 3.5B | 3.44B | 3.25B |
| COGS % of Revenue | - | 46.53% | 44.35% | 42.75% | 42.25% | 39.75% |
| Gross Profit | 4.43B | 4.45B | 4.59B | 4.69B | 4.7B | 4.92B |
| Gross Margin % | 54.27% | 53.47% | 55.65% | 57.25% | 57.75% | 60.25% |
| Gross Profit Growth % | - | -3.09% | -2.13% | -0.04% | -4.63% | - |
| Operating Expenses | 2.42B | 2.27B | 3.56B | 3B | 3B | 3.04B |
| OpEx % of Revenue | - | 27.27% | 43.09% | 36.61% | 36.93% | 37.25% |
| Selling, General & Admin | 3.33B | 3.08B | 2.78B | 2.24B | 2.23B | 2.28B |
| SG&A % of Revenue | - | 37% | 33.7% | 27.36% | 27.49% | 27.88% |
| Research & Development | 724M | 739M | 775M | 758M | 767M | 766M |
| R&D % of Revenue | - | 8.88% | 9.39% | 9.25% | 9.43% | 9.37% |
| Other Operating Expenses | -1000K | -1.55B | 0 | 0 | 0 | 0 |
| Operating Income | 2.01B | 2.18B | 1.04B | 1.69B | 1.69B | 1.88B |
| Operating Margin % | 24.6% | 26.2% | 12.55% | 20.64% | 20.82% | 23% |
| Operating Income Growth % | - | 110.52% | -38.77% | -0.06% | -9.9% | - |
| EBITDA | 2.38B | 2.67B | 1.59B | 2.25B | 2.27B | 2.48B |
| EBITDA Margin % | 29.18% | 32.07% | 19.28% | 27.49% | 27.93% | 30.3% |
| EBITDA Growth % | 105.17% | 67.82% | -29.38% | -0.79% | -8.28% | - |
| D&A (Non-Cash Add-back) | 385M | 489M | 555M | 561M | 578M | 597M |
| EBIT | 416M | 2.06B | 972M | 1.67B | 1.69B | 1.88B |
| Net Interest Income | -245M | -347M | -367M | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 245M | 347M | 367M | 0 | 0 | 0 |
| Other Income/Expense | -1.84B | -468M | -431M | -25M | -1M | 3M |
| Pretax Income | 171M | 1.71B | 605M | 1.67B | 1.69B | 1.88B |
| Pretax Margin % | 2.09% | 20.58% | 7.33% | 20.34% | 20.81% | 23.03% |
| Income Tax | 14M | 157M | 127M | 321M | 349M | 422M |
| Effective Tax Rate % | 8.19% | 9.17% | 20.99% | 19.26% | 20.63% | 22.42% |
| Net Income | 156M | 1.56B | 479M | 1.35B | 1.34B | 1.46B |
| Net Margin % | 1.91% | 18.69% | 5.8% | 16.42% | 16.52% | 17.87% |
| Net Income Growth % | -89.76% | 224.84% | -64.41% | 0.22% | -8.01% | - |
| Net Income (Continuing) | 157M | 1.56B | 478M | 1.35B | 1.34B | 1.46B |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.91 | 8.88 | 2.76 | 7.79 | 7.79 | 8.47 |
| EPS Growth % | -89.64% | 221.74% | -64.57% | 0% | -8.03% | - |
| EPS (Basic) | - | 8.94 | 2.77 | 7.79 | 7.79 | 8.47 |
| Diluted Shares Outstanding | 170.8M | 175.3M | 173.7M | 172.71M | 172.47M | 172.47M |
| Basic Shares Outstanding | 170.8M | 174.1M | 173.2M | 172.71M | 172.47M | 172.47M |
| Dividend Payout Ratio | - | - | - | - | - | - |
Quick answers to the most common questions about buying SOLV stock.
For fiscal year 2025, Solventum Corporation (SOLV) reported total revenue of $8.32B. This represents a 1.9% increase compared to $8.17B in 2021.
Solventum Corporation (SOLV) is profitable, generating $1.56B in net income for the fiscal year ending 2025 with a net profit margin of 18.7%.
Solventum Corporation (SOLV) reported an operating income of $2.18B, resulting in an operating profit margin of 26.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Solventum Corporation (SOLV) generated $4.45B in gross profit for the year, representing a gross profit margin of 53.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue stagnation and margin volatility
Metrics are mathematically derived from official filings.
Revenue Growth Stalls Near Zero
Solventum's revenue has been essentially flat, with quarterly growth ranging from -3.7% to +3.8% over the past two years, as reported in financial statements, indicating a mature portfolio with limited organic expansion.
The most recent quarter (2026Q2) shows a modest 2.2% year-over-year increase, but the preceding quarter contracted by 3.0%, suggesting no clear upward trend. This stagnation appears consistent with a company in a low-growth medical supplies niche, where volume gains are offset by pricing pressures. Investors should monitor whether new product launches or market share gains can break this pattern, as the current trajectory implies limited top-line momentum.
Gross Margin Resilience Amid Fluctuations
Gross margin has hovered between 49.3% and 58.2% over the last ten quarters, with the latest quarter at 58.2%, according to SEC filings, indicating pricing power but also notable volatility.
The gross margin in 2026Q2 improved to 58.2%, up from 54.4% in the year-ago quarter, suggesting better cost management or product mix. However, the 2025Q4 dip to 49.3% highlights susceptibility to input cost swings or one-off charges. Compared to peers like BDX (45.4%) and COO (60.7%), Solventum's margin sits in a competitive range, but the variability warrants close attention to cost of goods sold trends.
Operating Leverage Weakens as Costs Rise
Operating income has been erratic, with operating margin swinging from 4.0% to 84.0% in recent quarters, as reported in financial statements, suggesting that SG&A and R&D expenses are not scaling efficiently with revenue.
In 2026Q2, operating income of $181M on $2.2B revenue yields an 8.2% margin, but this is below the 9.9% achieved in 2025Q2, despite higher revenue. SG&A expenses have grown from $701M in 2024Q2 to $927M in 2026Q2, a 32% increase, while revenue only rose about 5% over the same period. This suggests that overhead is expanding faster than sales, potentially eroding operating leverage. The 84% operating margin in 2025Q4 appears to be an anomaly, likely due to a one-time gain, and should not be interpreted as sustainable.
Earnings Volatility Masks Core Profitability
Net income has swung from $1.3B in 2025Q3 to just $13M in 2026Q1, with EPS ranging from $0.07 to $7.22, based on reported figures, indicating significant non-operating items and tax effects.
The 2025Q3 net income of $1.3B and EPS of $7.22 are clearly outliers, likely driven by a one-time tax benefit or gain, as operating income that quarter was only $137M. Conversely, 2026Q1's net income of $13M on $81M operating income suggests a high effective tax rate or other charges. Stock-based compensation has also been rising, from $4M in 2024Q1 to $89M in 2026Q2, which dilutes shareholders and reduces reported earnings quality. Investors should focus on operating income trends rather than net income, which is heavily distorted by non-recurring items.
SG&A Escalation Pressures Profitability
SG&A expenses have climbed from $596M in 2024Q1 to $927M in 2026Q2, a 55% increase, as disclosed in financial statements, outpacing revenue growth and compressing operating margins.
While R&D spending has remained relatively stable around $180-195M per quarter, SG&A has surged, particularly in the last two quarters. This increase may reflect investments in sales force, marketing, or administrative infrastructure, but it has not translated into proportional revenue gains. The operating margin in 2026Q2 (8.2%) is below the 18.9% seen in 2024Q1, indicating that cost discipline has weakened. If SG&A continues to grow at this pace, profitability could face further pressure unless revenue accelerates.
Margin Compression and Revenue Stagnation Risks
Despite a recent gross margin uptick, Solventum's operating margin has halved from 18.9% in 2024Q1 to 8.2% in 2026Q2, as per financial statements, raising concerns about cost control and competitive pressures.
Short-sellers might argue that the company's revenue growth is anemic, with a 1-year growth rate of only 2.2%, and that rising SG&A indicates a lack of pricing power or operational inefficiency. The erratic net income, driven by one-time items, could mask underlying weakness. Additionally, the high stock-based compensation suggests that shareholder dilution is a persistent drag on EPS. If the company cannot stabilize margins or reignite growth, the current valuation may be unjustified. Investors should monitor whether management can reverse the SG&A trend and deliver consistent operating leverage.