Abbott Laboratories makes money by selling things people use over and over again. It runs four businesses at once: diagnostic tests that hospitals and clinics order constantly, medical devices like the FreeStyle Libre continuous glucose monitor that diabetes patients wear every day, nutritional products like Similac baby formula and Ensure drinks that families buy week after week, and branded generic medicines sold to pharmacies and governments in emerging markets around the world. None of these four segments depends on a single blockbuster drug patent. Instead, Abbott collects steady, recurring revenue from consumable products, test strips, sensor patches, formula cans, and medicine bottles, that customers need to repurchase on a regular schedule. The diagram below traces where the money goes.

Five years of financial data tell a clear story about where Abbott is strong, where it stumbled, and where the momentum is heading now. Revenue peaked at $43.7 billion in 2022, then dropped to $40.1 billion in 2023. That drop was not a sign of a broken business. It was almost entirely explained by one thing: COVID-19 testing sales collapsed as the pandemic faded. Abbott had sold $1.6 billion worth of COVID tests in 2023, down from much higher levels in prior years, and by 2025 that number had shrunk further to just $297 million. Strip out that fading tailwind and the underlying business kept growing.

By 2025, total revenue had recovered to $44.3 billion, a new five-year high. The engine driving that recovery was Medical Devices, and inside Medical Devices, one product stood out above everything else. FreeStyle Libre, Abbott's continuous glucose monitoring system, generated $7.6 billion in sales in 2025, up from $6.4 billion in 2024 and $5.8 billion in 2023. That single product line now accounts for more revenue than Abbott's entire Nutritional Products segment. It grew 16.3 percent in 2025 excluding foreign exchange effects, with double-digit growth in both the United States and internationally. The Medical Devices segment as a whole grew 11.9 percent in 2025, and its operating margin reached 33.7 percent, the highest of any Abbott segment.

Cash generation tells the same story. Operating cash flow was $10.5 billion in 2021, dipped to $7.3 billion in 2023 as COVID revenues faded, then climbed back to $9.6 billion in 2025. Free cash flow, which is what is left after the company pays for equipment and facilities, followed the same arc: $8.6 billion in 2021, a low of $5.1 billion in 2023, and $7.4 billion in 2025. Net debt has been falling steadily, from $9.1 billion in 2022 to $7.4 billion in 2025, showing that Abbott has been paying down what it owes while still funding dividends and research. Gross margins have stayed remarkably stable across all five years, ranging from 55.2 percent to 57.0 percent, which means the business has not had to sacrifice pricing power to chase volume.

That financial stability is about to be tested. In November 2025, Abbott signed a deal to acquire Exact Sciences, a company that makes cancer diagnostic tests. The price tag is roughly $21 billion in equity value, with an estimated enterprise value of $23 billion. To fund it, Abbott arranged a bridge loan of up to $20 billion. That would push total debt to over $32 billion, a dramatic increase from the $12.9 billion in long-term debt Abbott carried at the end of 2025. The rationale is strategic: Abbott wants to enter cancer diagnostics, a market it does not currently serve. But the financial consequences are significant and immediate.

Beyond the Exact Sciences deal, Abbott faces several documented risks that are worth naming precisely. Manufacturing is always a vulnerability for a company this complex. Abbott relies on intricate production processes and global suppliers across four different business segments. A failure in one facility can mean product recalls, lost revenue, and damaged relationships with hospital customers. Abbott learned this the hard way in 2022 when it voluntarily recalled certain infant formula products and entered a consent decree with the United States Food and Drug Administration. That event forced a temporary shutdown of a major manufacturing facility and cost Abbott meaningful market share in the U.S. infant formula business, share it spent 2024 working to recover.

International exposure adds another layer of complexity. About 61 percent of Abbott's sales come from outside the United States. That means foreign exchange rates, government price controls, tariffs, and geopolitical events all flow directly into Abbott's financial results. The company noted that operations in Russia and Ukraine represent roughly 2 percent of total revenues. China is a separate concern: Abbott's Diagnostics segment saw challenging conditions in China in both 2024 and 2025, partly because the Chinese government has been pushing hospitals to use volume-based procurement programs that squeeze prices down. Core Laboratory diagnostics sales in China fell even as sales grew outside China. Abbott is also contesting tax assessments from the United States Internal Revenue Service totaling over $1 billion across several tax years, as well as a $413 million assessment from Malaysian tax authorities. These are disputed, not settled, but they represent real financial uncertainty.

Abbott's Diagnostics segment is the clearest example of a business under pressure. Operating margin there fell from 24.4 percent in 2023 to 19.5 percent in 2025, driven by the fade in COVID testing and the China headwinds. Rapid Diagnostics sales fell 18.0 percent in 2025 and 17.8 percent in 2024, excluding foreign exchange effects. Abbott is trying to offset this by expanding the Alinity testing platform into more hospitals and growing its digital health solutions, but the segment has not yet found a new revenue source large enough to replace what COVID testing contributed at its peak.