Embecta (US:EMBC)2025-11-25 12:01Revenue Performance - Reported revenues for Q4 2025 were $264.0 million, a decrease of 7.7% compared to $286.1 million in Q4 2024[9] - Adjusted revenues for Q4 2025 were $263.3 million, down 10.4% on an adjusted constant currency basis[5] - U.S. revenues decreased by 15.2% on both a reported and adjusted constant currency basis[5] - International revenues increased by 2.8% on a reported basis but decreased by 4.0% on an adjusted constant currency basis[5] - The company's reported revenues decreased by $42.7 million, or 3.8%, to $1,080.4 million for the year ended September 30, 2025, compared to $1,123.1 million for the year ended September 30, 2024[11] - The decrease in reported revenues was primarily driven by $52.9 million of unfavorable changes in volume and $3.5 million associated with negative foreign currency translation impacts[11] - For fiscal year 2026, the company expects reported revenues to be between $1,071 million and $1,093 million, reflecting a growth rate of (0.9)% to 1.1%[12] - Adjusted revenues for the twelve months ended September 30, 2025, were $1,079.7 million, a decrease of 4.2% from $1,127.2 million in 2024[27] Profitability Metrics - Gross profit for Q4 2025 was $158.5 million, with a margin of 60.0%, compared to $173.8 million and 60.7% in the prior year[5] - Operating income for Q4 2025 was $56.5 million, with a margin of 21.4%, compared to $26.2 million and 9.2% in the prior year[5] - Net income for Q4 2025 was $26.4 million, with diluted earnings per share of $0.45, compared to $14.6 million and $0.25 in the prior year[5] - The company's net income for the year ended September 30, 2025, was $95.4 million, compared to $78.3 million for the previous year[19] - Net income for the twelve months ended September 30, 2025, was $95.4 million, an increase of 22.7% compared to $78.3 million in 2024[23] - Adjusted Operating Income for the twelve months ended September 30, 2025, reached $337.7 million, compared to $296.9 million for the same period in 2024, reflecting a 13.8% growth[36] - Adjusted Net Income for the twelve months ended September 30, 2025, was $173.9 million, compared to $143.1 million in 2024, reflecting a 21.5% growth[36] Cash Flow and Debt Management - Free cash flow for Q4 2025 was approximately $77 million, compared to $27 million in the prior year quarter[6] - The company reduced debt by approximately $72.4 million in Q4 2025, bringing total fiscal year 2025 debt reduction to approximately $184.5 million[6] - As of September 30, 2025, the company had $228.6 million in cash and equivalents and $1.417 billion of debt principal outstanding[14] - The company repaid approximately $72.4 million under its term loan B facility during the fourth quarter[14] - Payments on long-term debt increased significantly to $184.6 million in 2025 from $34.6 million in 2024[23] - Non-GAAP Free Cash Flow for the twelve months ended September 30, 2025, was $182.4 million, compared to $19.9 million in the previous year, indicating a substantial increase[38] - The company aims to prioritize free cash flow towards paying down debt and creating financial flexibility for future investments[42] Asset and Liability Management - Total current assets decreased from $761.0 million as of September 30, 2024, to $631.4 million as of September 30, 2025[21] - The total liabilities and equity decreased from $1,285.3 million as of September 30, 2024, to $1,090.9 million as of September 30, 2025[21] - Closing cash and equivalents decreased to $228.6 million in 2025 from $274.2 million in 2024[23] Capital Expenditures and Investments - Capital expenditures for the twelve months ended September 30, 2025, were $9.3 million, a decrease from $15.8 million in 2024[23] Other Financial Metrics - Adjusted EBITDA for the twelve months ended September 30, 2025, was $415.3 million, representing a 17.5% increase from $353.4 million in 2024[27] - The adjusted EBITDA margin improved to 38.5% in 2025 from 31.4% in 2024[27] - The company reported a GAAP gross profit margin of 62.6% for the twelve months ended September 30, 2025, down from 65.5% in 2024[32] - Stock-based compensation expense for the twelve months ended September 30, 2025, was $31.6 million, up from $26.3 million in 2024[23] Future Outlook - The company plans to maintain its global leadership position and execute on new product programs in fiscal year 2026[2]