Company Overview - Avantor is a life science tools company providing critical products and services to life sciences and advanced technology industries, with segments including laboratory solutions and bioscience production [1] - The laboratory solutions segment accounts for 67% of revenue, while bioscience production makes up 33% [4] Financial Performance - Avantor's share price has declined by 53.96%, 59.69%, and 43.41% over the past 1, 3, and 5 years, respectively [5] - The company projected earnings per share above $2 for 2025, but current estimates stand at 96 cents per share, with an EBITDA margin of 11.8% compared to a target of over 20% [5] Management and Operational Issues - Engine Capital highlights significant underperformance attributed to a flawed leadership team and a complex organizational structure leading to high turnover, including the CEO and CFO [6] - The laboratory solutions segment has lost profitability and market share due to poor capital allocation decisions, with $3.8 billion spent on acquisitions during the pandemic peak [7] Strategic Recommendations - Engine Capital urges Avantor's board to focus on operational excellence, organic growth, cost reduction, and portfolio optimization, including potential divestitures of non-core assets [3][12] - The company should consider using free cash flow for share repurchases and debt reduction rather than pursuing further M&A [13] Valuation and Market Position - Avantor's revenue of $6.8 billion is spread across 6 million stock keeping units, indicating a need for portfolio optimization [11] - The company trades at roughly 8x EBITDA, while peers trade at higher multiples, suggesting potential for value unlocking through strategic actions [17] Future Outlook - Engine believes that with proper implementation of changes, Avantor shares could be valued between $22 and $26 by the end of 2027 [15] - If standalone improvements are not viable, Engine suggests considering a sale of the company or splitting its segments [16]

Group 1 - Avantor, Inc. is set to appoint Emmanuel Ligner as the new CEO starting August 18, 2025, indicating a leadership change aimed at enhancing value creation in the life sciences sector [1][4] - The Board of Directors is actively engaged in overseeing the company's strategy, focusing on growth, margin expansion, and sustained shareholder value [1][3] - Avantor has implemented a $400 million cost transformation program and reduced leverage by nearly $1.5 billion over the past 18 months, demonstrating a commitment to improving financial health [3] Group 2 - Avantor's portfolio is well-positioned to meet the needs of the life sciences and advanced technology industries, supported by a global distribution platform and strong customer relationships [2][6] - The company is prioritizing growth and profitability in its Laboratory Solutions and Bioscience Production segments, reflecting a strategic focus on key operational areas [3][4] - Avantor is enhancing transparency and accountability through business resegmentation and ongoing portfolio optimization efforts [3]

Core Insights - Avantor reported mixed Q2 2025 results, with GAAP revenue exceeding analyst expectations but non-GAAP EPS falling short [1][5] - The company faces ongoing operational and competitive pressures, alongside a pending CEO transition [1][9] Financial Performance - GAAP revenue for Q2 2025 was $1,683.4 million, slightly above the estimate of $1,674.6 million, but down 1.1% year-over-year [2][5] - Non-GAAP EPS was $0.24, missing the consensus estimate of $0.25 and reflecting a 4% decline from Q2 2024 [2][5] - Adjusted EBITDA was $279.8 million, down 8.4% from $305.6 million in Q2 2024 [2][5] - Free cash flow decreased by 46.7% to $125.4 million compared to $235.3 million in Q2 2024 [2][7] - Net income (GAAP) fell to $64.7 million from $92.9 million in Q2 2024 [7] Segment Performance - The Laboratory Solutions segment experienced a 3% drop in net sales, with an organic decline of 1.0% [6] - The Bioscience Production segment achieved a 3% increase in reported sales, but its adjusted operating margin declined due to maintenance and regulatory challenges [6] Strategic Focus - Avantor's business relies on a diverse product mix, global presence, strong customer relationships, and commitment to ESG standards [4] - The company is targeting $400 million in run-rate cost savings by the end of 2027 as part of its multiyear transformation plan [7] Future Outlook - No updated financial guidance was provided for the remainder of fiscal 2025, but management emphasized the importance of recurring revenue contracts and efficiency programs [9][10] - Key areas to monitor include revenue trends in Laboratory Solutions, margin developments, and progress in cost-saving initiatives [10]

Core Insights - Avantor, Inc. reported second-quarter 2025 adjusted earnings per share (EPS) of 24 cents, a decrease of 4% year-over-year, and missed the Zacks Consensus Estimate by 4% [1][7] - The company's revenues for the quarter were $1.68 billion, down 1.1% year-over-year, but exceeded the Zacks Consensus Estimate by 0.4% [2][7] - The company has updated its 2025 guidance, projecting adjusted EPS to be in the range of 94 cents to 98 cents, down from the previous guidance of $1.02 to $1.10 [16] Revenue and Earnings Analysis - Revenues grossed $1.68 billion, reflecting a 1.1% decline year-over-year, with organic sales remaining flat [2][7] - GAAP EPS for the quarter was 9 cents, down 35.7% year-over-year [1][7] - The gross profit declined 4.7% year-over-year to $554.1 million, with a gross margin of 32.9%, down 120 basis points [12] Segment Performance - The Laboratory Solutions segment reported net sales of $1.12 billion, a decrease of 2.9% year-over-year, with organic sales down 1% [4] - Bioscience Production's net sales were $561.3 million, reflecting a 2.6% increase, with organic sales up 1.5% year-over-year [9] - The company faced challenges in bioprocessing, which was flat year-over-year due to maintenance and disruptions from key customers [10] Market Position and Competitive Landscape - Avantor's shares have declined 15.5% in the recent trading period and 46.1% year-to-date, compared to an 8.5% decline in the industry [3] - Management noted ongoing competitive intensity, particularly among large biopharma accounts, and has taken strategic pricing actions to protect market share [5][18] Financial Position - At the end of Q2 2025, Avantor had cash and cash equivalents of $449.4 million, up from $315.7 million at the end of Q1 2025, while total debt increased to $4.24 billion [13] - Cumulative net cash provided by operating activities was $263.7 million, down from $422.7 million a year ago [13] Strategic Initiatives - The company is focusing on digital tools to enhance customer experience, including the launch of Avantor Navigator, an AI-powered application [18][19] - Avantor is also implementing a cost transformation program aimed at achieving $400 million in run-rate savings by the end of 2027 [20] - Efforts are underway to optimize supply chain performance and improve operational efficiency, particularly in the Bioscience Production segment [21]

Core Viewpoint - Avantor Inc. reported worse-than-expected second-quarter 2025 adjusted EPS, leading to a decline in stock price, with shares nearing their 52-week low [1]. Financial Performance - The company reported adjusted EPS of 24 cents, slightly below the consensus estimate of 25 cents [1]. - Sales for the quarter were $1.68 billion, nearly in line with the consensus of $1.675 billion, but fell 1% compared to the second quarter of 2024 [1][2]. - Net income decreased to $64.7 million from $92.9 million a year ago, while adjusted net income was $161.2 million compared to $168 million [5]. - Adjusted EBITDA was $279.8 million, down from $305.6 million, with a margin of 16.6% [5]. - Adjusted operating income fell from $277.2 million to $252.2 million, with a margin of 15.0% [6]. Segment Performance - Laboratory Solutions sales were $1.12 billion, a reported decrease of 3%, with a 1% organic decline [2]. - Bioscience Production sales were $561.3 million, also a reported decrease of 3%, but showed a 2% increase on an organic basis [3]. - The bioprocessing performance did not meet expectations due to planned maintenance at a manufacturing facility, despite strong demand for the monoclonal antibody platform [4]. Strategic Developments - The company announced significant actions to accelerate growth and enhance its cost structure, targeting $400 million in gross run-rate savings by the end of 2027 [6]. - A five-year contract extension with BIO Business Solutions was executed, positioning the company to benefit from future funding levels in the biotech industry [7]. Market Position - Avantor stock trades at approximately 10.8 times the 2025 EBITDA estimate, compared to peers at 15.4 times and its own average of 15.9 times as a public company [8]. - The company's growth and margin profile are considered below peer levels, justifying the current discount to peers [8].

For the quarter ended June 2025, Avantor, Inc. (AVTR) reported revenue of $1.68 billion, down 1.1% over the same period last year. EPS came in at $0.24, compared to $0.25 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.68 billion, representing a surprise of +0.38%. The company delivered an EPS surprise of -4%, with the consensus EPS estimate being $0.25.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they ...

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $1.68 billion, flat year-over-year on an organic basis [19] - Adjusted EBITDA margin contracted to 16.6%, with adjusted EPS for the quarter at $0.24, reflecting a year-over-year decline of $0.01 [8][21] - Free cash flow was $125 million, with adjusted conversion at 100% [8][21] - The company remains on track with its cost transformation program, expecting $400 million in run rate savings by 2027 [8] Business Line Data and Key Metrics Changes - Laboratory Solutions, which constitutes roughly two-thirds of the business, saw organic revenue growth in line with expectations, increasing sequentially compared to Q1 but finishing modestly down year-over-year [8][22] - Bioscience production revenue was $561 million, up 2% organically year-over-year and up 7% sequentially, with bioprocessing performance flat year-over-year due to customer headwinds [24][26] Market Data and Key Metrics Changes - The European business in Laboratory Solutions was nearly flat, outperforming The Americas and Asia, which faced greater policy headwinds [22] - The company experienced significant contract extensions with several top global pharma accounts, expected to yield over $100 million in share gains once fully commercialized [12] Company Strategy and Development Direction - The company is focused on executing strategic initiatives to drive growth, improve operating efficiency, and deliver long-term value despite ongoing challenges in the operating environment [7][32] - The leadership transition to Emanuel Ligner as the new CEO is expected to bring additional expertise, particularly in bioprocessing [6][104] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing competitive intensity and the need to protect and grow market share while preserving profitability [13][32] - The full-year organic revenue growth expectation has been reduced to negative 2% to flat, reflecting current trends and headwinds [27][28] Other Important Information - The company is implementing several digital initiatives to enhance customer experience, including the Avantor Navigator AI application and a new digital buying experience platform [11] - Adjusted EBITDA margin expectations have been updated to between 16.5% and 17% for the full year [30] Q&A Session Summary Question: Guidance for third quarter organic growth - Management indicated that the guidance reflects consistency in performance across segments, with some seasonality and timing issues impacting bioprocessing [36][37] Question: Impact of pricing and mix on margins - The decline in EBITDA margins was attributed primarily to pricing actions and mix, particularly in the lab business [38][39] Question: Long-term growth outlook for bioprocessing - Management remains confident in the long-term growth potential of bioprocessing, despite recent headwinds, citing strong demand for the monoclonal antibody platform [44][45] Question: Free cash flow reduction and contract dynamics - The reduction in free cash flow guidance is linked to significant contract extensions that involve upfront rebate payments [86][87] Question: Customer-specific challenges in bioprocessing - Management acknowledged unexpected customer headwinds impacting bioprocessing performance, but emphasized the overall strength of the platform and ongoing recovery in the end market [100][101]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ━━━━━━━━━ FORM 10-Q ━━━━━━━━━ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 001-38912 Avantor, Inc. (Exact name of registrant as specified in its charter) Delaware 82-2758923 (Stat ...

Financial Data and Key Metrics Changes - Organic revenue growth improved sequentially by 200 basis points and was flat year over year [6] - Adjusted EBITDA margin contracted to 16.6% [7] - Adjusted EPS for the quarter was $0.24, a decline of $0.01 year over year [18] - Free cash flow was $125 million with adjusted conversion at 100% [7][18] - Adjusted net leverage ended the quarter at 3.2 times adjusted EBITDA, unchanged from Q1 [18] Business Line Data and Key Metrics Changes - Laboratory Solutions revenue was $1,122 million, declining 1% year over year but growing 2% sequentially [19] - Bioscience production revenue was $561 million, up 2% organically year over year and up 7% sequentially [21] - Bioprocessing performance was flat year over year, impacted by customer headwinds and extended maintenance [12][21] Market Data and Key Metrics Changes - European business was nearly flat, outperforming The Americas and Asia, which faced greater policy headwinds [20] - Demand for core monoclonal antibody platform remains strong despite challenges faced by large customers [13][44] Company Strategy and Development Direction - The company remains focused on executing strategic initiatives to drive growth, improve operating efficiency, and deliver long-term value [6][30] - Significant contract extensions with top global pharma accounts are expected to result in over $100 million in share gains [11] - The company is committed to protecting and growing market share while preserving profitability [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the operating environment but expressed confidence in the company's ability to expand margins over time [12][30] - The outlook for full-year organic revenue growth has been reduced to negative 2% to flat, reflecting current trends [23] - Management expects continued strong demand for the core monoclonal antibody platform despite headwinds [44] Other Important Information - A leadership transition was announced, with Emanuel Ligner appointed as the next CEO effective August 18 [5] - The company is on track with its cost transformation program, expecting $400 million in run rate savings by 2027 [7] Q&A Session Summary Question: What is the assumption for the segments in the third quarter guidance? - Management indicated that performance is expected to be consistent across segments, with some seasonality affecting results [34] Question: How much of the EBITDA margin decline was due to mix versus pricing? - The decline was primarily driven by pricing actions in the lab business, with some impact from underperformance in bioprocessing [36] Question: What are the expectations for bioprocessing growth long-term? - Management remains confident that bioprocessing can grow at mid to high single digits, despite recent challenges [46] Question: What actions are being taken to improve bioprocessing performance? - The team is focusing on optimizing supply chain, increasing field intensity, and expanding product offerings [14][93] Question: How are the recent contract extensions linked to share gains? - The extensions are expected to result in increased commitments from existing customers, contributing to share gains [105] Question: What is the outlook for margins in the lab business? - Management expects margins to improve as share gains materialize and operational efficiencies are realized [88]

Company Performance - Avantor, Inc. reported quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.25 per share, and down from $0.25 per share a year ago, representing an earnings surprise of -4.00% [1] - The company posted revenues of $1.68 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.38%, but down from year-ago revenues of $1.7 billion [2] - Over the last four quarters, Avantor has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Avantor shares have lost approximately 36.2% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The current Zacks Rank for Avantor is 5 (Strong Sell), indicating expectations for the stock to underperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.27 on revenues of $1.7 billion, and for the current fiscal year, it is $1.03 on revenues of $6.69 billion [7] - The outlook for the Medical Services industry, where Avantor operates, is currently in the top 35% of over 250 Zacks industries, suggesting potential for better performance compared to lower-ranked industries [8]