Embecta Corp. Reports Q4 2025 Financials

By Tamara Parker • Tuesday, November 25 15:36 • Permanent Link

Embecta Corp. ("Embecta" or the "Company") has released its financial results for the fourth quarter and full year of fiscal 2025, along with initial financial guidance for fiscal year 2026. Here are the key highlights:

Fourth Quarter Fiscal Year 2025 Financial Highlights:

Reported revenues: $264.0 million, down 7.7%
Adjusted revenues: $263.3 million, down 10.4% on an adjusted constant currency basis
Gross profit and margin: $158.5 million and 60.0%, compared to $173.8 million and 60.7% in the prior year period
Adjusted gross profit and margin: $159.5 million and 60.6% compared to $178.3 million and 61.4% in the prior year period
Operating income and margin: $56.5 million and 21.4%, compared to $26.2 million and 9.2% in the prior year period
Adjusted operating income and margin: $66.7 million and 25.3%, compared to $61.2 million and 21.1% in the prior year period
Net income: $26.4 million and earnings per diluted share of $0.45, compared to net income of $14.6 million and earnings per diluted share of $0.25 in the prior year period
Adjusted net income and adjusted earnings per diluted share: $29.4 million and $0.50, compared to $25.9 million and $0.45 in the prior year period
Adjusted EBITDA and margin: $89.9 million and 34.1%, compared to $73.0 million and 25.2% in the prior year period
Announced a dividend of $0.15 per share

Twelve Months Ended September 30 Fiscal Year 2025 Financial Highlights:

Reported revenues: $1,080.4 million, down 3.8%
Adjusted revenues: $1,079.7 million, down 3.9% on an adjusted constant currency basis
Gross profit and margin: $676.8 million and 62.6%, compared to $735.2 million and 65.5% in the prior year period
Adjusted gross profit and margin: $687.3 million and 63.7%, compared to $740.7 million and 65.7% in the prior year period
Operating income and margin: $242.1 million and 22.4%, compared to $166.8 million and 14.9% in the prior year period
Adjusted operating income and margin: $337.7 million and 31.3%, compared to $296.9 million and 26.3% in the prior year period
Net income and earnings per diluted share: $95.4 million and $1.62, compared to net income of $78.3 million and earnings per diluted share of $1.34 in the prior year period
Adjusted net income and adjusted earnings per diluted share: $173.9 million and $2.95, compared to $143.1 million and $2.45 in the prior year period
Adjusted EBITDA and margin: $415.3 million and 38.5%, compared to $353.4 million and 31.4% in the prior year period

Preliminary Fiscal Year 2026 Financial Guidance:

Reported revenues: Expected range of $1,071 million to $1,093 million
Reported revenue growth: Expected range of (0.9)% to 1.1%
Adjusted constant currency revenue growth: Expected range of (2.0)% to 0.0%
Adjusted operating margin: Expected range of 29.0% to 30.0%
Adjusted earnings per diluted share: Expected range of $2.80 to $3.00

Balance Sheet and Liquidity:

As of September 30, 2025, the company had $228.6 million in cash and equivalents and restricted cash, and $1.417 billion of debt principal outstanding, with no amount drawn on its $500 million revolving credit facility
The company repaid an aggregate principal amount of approximately $72.4 million outstanding under its term loan b facility during the fourth quarter

These figures indicate a challenging year for Embecta, with decreases in both reported and adjusted revenues. However, the company's adjusted operating margin and adjusted EBITDA margins have shown improvement compared to the prior year period. The company also demonstrated its commitment to strengthening its financial position by reducing debt and generating strong free cash flow. Moving forward, the company's fiscal year 2026 guidance reflects a cautious outlook, with an expected decline in reported revenues and adjusted constant currency revenue growth.

Embecta's strategic initiatives, including expanding its product portfolio and increasing financial flexibility, will be crucial in navigating the challenging market environment and achieving its long-term growth goals. The market has reacted to these announcements by moving the company's shares -8.78% to a price of $13.355. For the full picture, make sure to review Embecta's 8-K report.

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