Bristol Myers Squibb (BMY) Q1 2026 earnings review
Top-Line Growth Masks Severe Margin Squeeze
Bristol Myers Squibb started 2026 with a split narrative: Revenue grew 3% to $11.5B on the back of a strong 12% expansion in the Growth Portfolio, but profitability took a significant hit. Non-GAAP EPS declined 12% YoY to $1.58, driven heavily by a 280-basis-point compression in gross margin due to product mix. While management reaffirmed FY26 guidance and signaled confidence in hitting the upper end of the range, the core structural problem remains: the legacy portfolio is bleeding (Revlimid down 63%), and the current cash-cow, Eliquis, faces a massive $1.5B-$2.0B patent cliff in 2027. BMY is successfully rotating its revenue base, but the earnings transition will be painful.
🐂 Bull Case
The Growth Portfolio reached $6.2B (+12% YoY) and now comprises 54% of total sales. Camzyos (+97%), Breyanzi (+56%), and Reblozyl (+16%) are demonstrating durable, accelerating momentum capable of offsetting base business decay.
Opdivo Qvantig (subcutaneous) sales surged to $163M from just $9M a year ago. This successful lifecycle management is protecting the franchise and converting patients before the looming loss of exclusivity.
🐻 Bear Case
Non-GAAP gross margin collapsed to 70.3% from 73.1% a year ago. The shifting product mix toward lower-margin partnered or complex manufactured assets is structurally depressing the bottom line.
Eliquis grew 16% YoY to $4.1B, papering over the Legacy Portfolio's weakness. However, management previously guided for a $1.5B to $2B revenue step-down in 2027 due to European generic entry, creating an enormous earnings hole that new launches may not fill in time.
⚖️ Verdict: ⚪
Neutral. BMY is executing perfectly on the things it can control—launching new drugs and transitioning to subcutaneous Opdivo—but the math is unforgiving. Margin compression and impending 2027 patent cliffs cap the near-term upside.
Key Themes
Gross Margin Squeeze Accelerating
The most troubling data point in Q1 was the sharp deceleration in gross margin, which fell 280 bps YoY to 70.3% (Non-GAAP). Management attributed this to "product mix." As high-margin legacy drugs like Revlimid (-63% YoY) vanish and are replaced by complex cell therapies (Breyanzi) and partnered assets, profitability is structurally resetting at a lower floor.
Opdivo Franchise Successfully Pivoting to Subcutaneous
Opdivo's base IV revenue declined 5% YoY to $2.14B, but this was a planned deceleration. The real story is the accelerating adoption of Opdivo Qvantig (subcutaneous), which generated $163M, up >200% YoY and up from $133M in Q4 2025. This rapid conversion is a masterclass in franchise defense ahead of the impending patent cliff.
Revlimid Collapse Creates Massive Headwind
The legacy portfolio drag is accelerating. Revlimid sales collapsed 63% YoY to $349M. While expected, the sheer velocity of this decline means the Growth Portfolio has to work twice as hard just to keep total revenues flat. With Sprycel (-58%) and Abraxane (-53%) following suit, the legacy base is rapidly evaporating.
Cobenfy Launch Shows Steady, Unspectacular Growth
Cobenfy recorded $56M in Q1 2026 sales. While YoY growth is technically 107% (vs a near-zero base), the sequential trajectory is stable but not explosive: 25Q1 ($27M) -> 25Q2 ($35M) -> 25Q3 ($43M) -> 25Q4 ($51M) -> 26Q1 ($56M). The sequential dollar growth is actually decelerating slightly. To become the foundational multi-billion dollar asset management expects, prescription breadth needs a steeper inflection point.
Other KPIs
Stable. Selling, General and Administrative expenses were $1.61B (+2% YoY), while Non-GAAP R&D was $2.23B (flat YoY). The company is successfully exercising extreme financial discipline to fund its new launches without blowing up the P&L, tracking perfectly toward its $16.3B FY target.
Accelerating compared to 15.1% in the prior year period. Management attributes this 320 bps jump to jurisdictional earnings mix. This higher tax burden further exacerbated the YoY EPS decline.
Guidance
Stable. Reaffirmed, with management noting it is trending toward the upper end. Reaching the midpoint implies ~0% YoY growth compared to FY25 actuals ($46.75B). This assumes Eliquis growth and the Growth Portfolio expansion entirely offset the remaining Revlimid/Pomalyst generic erosion.
Stable. Reaffirmed, trending toward the upper end. The midpoint ($6.20) represents a meager ~1% growth over FY25's $6.15. This confirms that 2026 is an earnings trough year, entirely dependent on expense control to keep EPS afloat amid gross margin deterioration.
Accelerating/Stable. A critical metric reaffirmed. Q1 delivered a 16% YoY increase, meaning Eliquis is tracking at or slightly above the guided range. This asset is currently the solitary bridge keeping total company revenue positive until the pipeline matures.
Key Questions
Gross Margin Floor
With gross margins dropping 280 bps YoY to 70.3%, where is the structural floor? As the portfolio mix permanently shifts away from small molecules like Revlimid toward biologics, cell therapies, and partnered assets, is a high-60s margin the new normal?
Cobenfy Sequential Deceleration
Cobenfy added $8M sequentially in Q3, $8M in Q4, but only $5M sequentially in 26Q1. What is causing this slight deceleration in quarter-over-quarter dollar growth, and what is the catalyst to trigger an inflection in prescriber breadth?
Mitigating the 2027 Eliquis Cliff
With Eliquis generating over $4.1B this quarter, the guided $1.5B-$2.0B European step-down in 2027 is a massive headwind. Which specific pipeline assets reading out in 2026 (e.g., milvexian, iberdomide) carry the highest probability of filling this specific revenue gap?