November 6, 2025 Phibro Animal Health Corporation Financial Results Fiscal Year 2026 First Quarter Ended September 30, 2025 November 6, 2025 Webcast and Conference Call Webcast and ConferenceCall U.S. toll-free +1.888.330.2022 International toll +1.365.977.0051 Conference ID: 3927884 Important Information Cautionary Statement Regarding Forward-Looking Statements This communication contains forward-looking statements that are subject to risks and uncertainties, including with respect to any future debt and l ...

Core Insights - Phibro Animal Health (PAHC) reported a revenue of $363.9 million for the quarter ended September 2025, marking a year-over-year increase of 39.8% and an EPS of $0.73 compared to $0.35 a year ago, exceeding Zacks Consensus Estimate of $354.68 million by 2.6% [1] Revenue Performance - Net Sales by Region: - United States: $202.35 million, exceeding the average estimate of $172.57 million, a year-over-year increase of 41% [3] - Asia Pacific: $29.38 million, surpassing the average estimate of $18.44 million, a year-over-year increase of 101.1% [3] - Europe, Middle East and Africa: $44.94 million, above the average estimate of $37.31 million, a year-over-year increase of 44.4% [3] - Latin America and Canada: $87.23 million, below the average estimate of $130.56 million, a year-over-year increase of 22.6% [3] - Net Sales by Segment: - Animal Health: $283.5 million, exceeding the average estimate of $277.16 million, a year-over-year increase of 55.3% [3] - Mineral Nutrition: $63 million, above the average estimate of $58.29 million, a year-over-year increase of 6.7% [3] - Animal Health - Vaccines: $40.1 million, surpassing the average estimate of $37.23 million, a year-over-year increase of 25.2% [3] - Animal Health - MFAs and other: $195.2 million, slightly above the average estimate of $194.62 million, a year-over-year increase of 81% [3] - Animal Health - Nutritional specialties: $48.2 million, exceeding the average estimate of $45.31 million, a year-over-year increase of 13% [3] - Performance Products: $17.4 million, below the average estimate of $19.23 million, a year-over-year decrease of 7.7% [3] Profitability Metrics - Adjusted EBITDA for Animal Health: $74.9 million, exceeding the average estimate of $66.19 million [3] - Adjusted EBITDA for Corporate: $-19.1 million, worse than the average estimate of $-17.6 million [3]

Core Insights - Phibro Animal Health (PAHC) reported quarterly earnings of $0.73 per share, exceeding the Zacks Consensus Estimate of $0.59 per share, and showing significant growth from $0.35 per share a year ago [1][2] - The company achieved revenues of $363.9 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.60% and increasing from $260.4 million year-over-year [3] - Phibro's stock has appreciated approximately 100.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.1% [4] Earnings Performance - The earnings surprise for the recent quarter was +23.73%, following a previous surprise of +9.62% when actual earnings were $0.57 compared to an expected $0.52 [2] - Over the last four quarters, Phibro has consistently surpassed consensus EPS estimates [2] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [4] - Current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $357.21 million, and for the current fiscal year, it is $2.59 on revenues of $1.46 billion [8] - The estimate revisions trend for Phibro was favorable ahead of the earnings release, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [7]

Financial Performance - Net sales increased by 40% to $363.9 million, up $103.5 million compared to the same period last year[3] - Adjusted EBITDA rose by $31.2 million to $61.9 million, reflecting strong operational performance[20] - Net income for the quarter was $26.5 million, an increase of $19.6 million compared to the same quarter last year[19] - Adjusted diluted EPS doubled to $0.73, an increase of $0.38 from the prior year[23] - Gross profit increased to $119.8 million, representing a 43% increase compared to $83.5 million in the prior year[36] - Operating income surged to $51.3 million, up from $17.7 million, marking a significant increase[36] - Adjusted EBITDA for the total company was $61.9 million, an increase of 102% from $30.7 million in the same period last year[38] - Adjusted net income was $29.8 million, compared to $14.1 million in the same period last year, indicating a strong performance[41] - The company reported a diluted adjusted net income per share of $0.73, up from $0.35[41] Segment Performance - Animal Health segment net sales grew by 55% to $283.5 million, driven by high demand for MFAs, nutritional specialties, and vaccines[5] - The Animal Health segment saw net sales of $283.5 million, a 55% increase from $182.5 million[38] Guidance and Projections - The company raised its fiscal year 2026 adjusted EBITDA guidance to between $230 million and $240 million, representing a 28% growth[27] - The updated fiscal year 2026 guidance includes net sales of $1.43 billion to $1.48 billion, indicating a 12% growth[27] Cash Flow and Tax - Free cash flow for the twelve months ended September 30, 2025, was $34.3 million[24] - The effective income tax rate for the quarter was 26.9%, slightly lower than the previous year's rate of 27.5%[15] - The effective tax rate for the period was 26.9%, slightly down from 27.5% in the previous year[36] Product Development - The company announced the national launch of Restoris™, a new dental gel for dogs, enhancing its product portfolio in companion animal oral health[2]

Financial Performance - Net sales for the three months ended September 30, 2025, were $363.9 million, a 40% increase from $260.4 million in the same period of 2024[118] - Gross profit increased to $119.8 million, representing a 43% increase from $83.5 million year-over-year[118] - Operating income rose significantly to $51.3 million, compared to $17.7 million in the prior year[118] - Adjusted EBITDA for the three months ended September 30, 2025, was $61.9 million, an increase of $31.2 million compared to $30.7 million in 2024[139] - Net income for the three months ended September 30, 2025, was $26.5 million, an increase of $19.6 million compared to $7.0 million in 2024[139] - Adjusted net income for the three months ended September 30, 2025, was $29.8 million, an increase of $15.8 million compared to $14.1 million in 2024[141] Sales and Revenue Contributions - The acquisition of Zoetis's medicated feed additive portfolio contributed $288.7 million to overall net sales, with $80.5 million recorded in the three months ended September 30, 2025[104] - Animal Health segment net sales increased by $100.9 million or 55%, driven by an $87.4 million increase in MFAs and other products due to the acquisition and higher demand in North and South America[125] - Sales of Mecadox (carbadox) for the twelve months ended September 30, 2025, were approximately $22 million[116] - Performance Products segment net sales decreased by $1.4 million or 7% due to lower demand for ingredients used in personal care products[128] Expenses and Financial Obligations - Interest expense increased by 58% to $12.1 million from $7.6 million in the previous year[118] - Selling, general and administrative expenses increased by 4% to $68.5 million from $65.8 million year-over-year[118] - Selling, general and administrative expenses (SG&A) increased by $2.7 million or 4% to $68.5 million, with a significant portion attributed to employee-related costs[131] - Interest expense for the three months ended September 30, 2025, was $12.1 million, an increase of $4.4 million due to higher debt levels from the acquisition financing[133] Taxation - The effective tax rate for the three months ended September 30, 2025, was 26.9%, slightly lower than 27.5% in the prior year[118] - The effective income tax rate for the three months ended September 30, 2025, was 26.9%, slightly lower than 27.5% in 2024[135] Cash Flow and Liquidity - For the three months ended September 30, 2025, the company reported a net cash provided by operating activities of $9.3 million, a decrease of $3.3 million compared to $12.6 million in the same period of 2024[144] - Total cash used in investing activities was $21.0 million, which included capital expenditures of $13.8 million aimed at expanding production capacity[146] - Financing activities generated $16.3 million in net cash, primarily from net revolver borrowings of $28.0 million[147] - As of September 30, 2025, the company had cash and cash equivalents and short-term investments totaling $85.3 million, an increase from $77.0 million as of June 30, 2025[149] - The company's working capital increased to $498.8 million, up from $456.3 million as of June 30, 2025, with a current assets to current liabilities ratio of 2.98:1[149] - The company expects adequate liquidity for at least the next twelve months, despite potential risks from macroeconomic conditions[148] Regulatory and Market Risks - The company has requested a full evidentiary hearing regarding the regulatory status of carbadox, which could impact future sales[116] - A material portion of the company's sales and gross profits are generated by antibacterials and related products, which are subject to regulatory scrutiny[167] - The company faces risks from outbreaks of animal diseases that could significantly reduce demand for its products or availability of raw materials[167] - The company is exposed to market risks from adverse changes in interest rates, foreign currency exchange rates, and commodity prices[171] - The company has substantial levels of indebtedness and related debt-service obligations, which may impact financial stability[170] - The company is dependent on suppliers having current regulatory approvals, which can impact raw material availability[170] - The company is subject to risks related to changes in tax rates and exposure, which could affect profitability[170] Strategic Initiatives - The company has acquired a medicated feed additive product portfolio from Zoetis Inc., which it aims to successfully integrate[170] - The company utilizes foreign currency contracts and interest rate swaps to hedge exposure to market risks, but does not eliminate the effects of changing market conditions[171] - The company relies on the continued operation of its manufacturing facilities and the application of its intellectual property for business continuity[170] - The company is affected by competition from both large and small companies, some of which have greater resources[167] Dividends - The company declared a cash dividend of $0.12 per share on Class A and Class B common stock, payable on December 17, 2025[151]

Core Viewpoint - Phibro Animal Health Corporation has declared a quarterly cash dividend of $0.12 per share for its Class A and Class B common stock, payable on December 17, 2025, to stockholders of record as of November 26, 2025 [1] Company Overview - Phibro Animal Health Corporation is a leading global diversified animal health and nutrition company, aiming to be a trusted partner for livestock producers, farmers, veterinarians, and consumers by providing solutions to enhance animal health [2] Recent Developments - The company announced the national launch of Restoris™ piezoelectric dental gel for dogs, designed to support long-term oral health in dogs with periodontal disease, developed in collaboration with a leading U.S. dental school [3][5] - Phibro has entered into a licensing agreement with Lighthouse Pharmaceuticals, Inc. for a novel therapeutic asset targeting periodontal health in companion animals, granting Phibro exclusive rights to develop, manufacture, and commercialize the proprietary compound [7]

Core Insights - Phibro Animal Health Corporation has launched Restoris™ piezoelectric dental gel, aimed at improving oral health in dogs suffering from periodontal disease [1] - The product was developed in collaboration with a prominent U.S. dental school and is licensed to Phibro, indicating a strong foundation in veterinary dental care innovation [1] - Restoris™ employs a dual mechanism of action to restore oral health, marking a significant advancement in the veterinary dental care market [1] Company Overview - Phibro Animal Health Corporation is positioning itself as a leader in veterinary dental care with the introduction of Restoris™, highlighting its commitment to enhancing animal health [1] - The collaboration with a leading dental school underscores the company's focus on research and development in the veterinary sector [1] Industry Impact - The launch of Restoris™ is expected to address a critical need in the veterinary market for effective treatments for periodontal disease in dogs, potentially expanding the company's market share [1] - This innovation may set a new standard in veterinary dental care, influencing competitors and driving further advancements in the industry [1]

Core Insights - Zacks Premium offers various tools to enhance stock market investment confidence and knowledge [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E, PEG, and Price/Sales [4] Growth Score - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Score assesses stocks based on price trends and earnings outlook changes, indicating optimal times to invest in high-momentum stocks [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for selecting stocks with attractive value, growth forecasts, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.81%, significantly outperforming the S&P 500 [9] Stock Highlight: Phibro Animal Health (PAHC) - Phibro Animal Health Corporation is a global leader in animal health and mineral nutrition, offering nearly 770 product lines across more than 80 countries [12] - PAHC holds a 1 (Strong Buy) Zacks Rank and a VGM Score of B, with a Growth Style Score of A, indicating a projected year-over-year earnings growth of 21.1% for the current fiscal year [13][14] - Recent analyst revisions have increased the earnings estimate for fiscal 2026 by $0.23 to $2.53 per share, with an average earnings surprise of +27.9% [13]

Core Insights - Phibro Animal Health Corporation has entered into a licensing agreement with Lighthouse Pharmaceuticals for a novel therapeutic asset aimed at periodontal health in companion animals [1] - The agreement provides Phibro with exclusive rights to develop, manufacture, and commercialize Lighthouse Pharma's proprietary compound specifically for canine periodontal care [1] - The compound is described as promising, indicating potential for significant impact in the animal health market [1]

Core Insights - Phibro Animal Health Corporation (NASDAQ:PAHC) has demonstrated strong growth in 2025, driven by expanded product lines and rising global demand [1] - The company reported a significant increase in net sales and net income, particularly in its Animal Health segment [2] Financial Performance - For fiscal Q4 2025, net sales surged 39% to $378.7 million, with a 53% increase in the Animal Health segment [2] - Overall, fiscal 2025 net sales rose 27% to $1.29 billion, with notable improvements in net income and adjusted EBITDA [2] - The company projects revenue of $1.43 to $1.48 billion and adjusted EBITDA of $225–$235 million for fiscal 2026 [4] Strategic Acquisitions - The acquisition of Zoetis' MFA portfolio has been central to Phibro's recent momentum, adding over 37 products and six manufacturing sites worldwide [3] - The successful integration of the Zoetis portfolio has contributed to a 77% increase in MFA sales, particularly benefiting from robust demand in Latin America [2][3] Market Performance - PAHC's stock has increased by more than 80% year-to-date in 2025, outperforming both peers and the broader market [4] - Investor confidence has been bolstered by strong financial results and raised earnings forecasts for fiscal 2025 and 2026 [4]