West Pharmaceutical Services (NYSE:WST) Q4 2025 Earnings call February 12, 2026 08:00 AM ET Company ParticipantsBob McMahon - CFODan Leonard - Managing Director of Equity ResearchDaniel Markowitz - VPDavid Windley - Managing DirectorDoug Schenkel - Managing DirectorEric Green - CEOJohn Sweeney - VP of Investor RelationsMichael Ryskin - Managing DirectorPatrick Donnelly - Managing Director of Equity ResearchConference Call ParticipantsBrendan Smith - Director and Senior AnalystJustin Bowers - Equity Research ...

West Pharmaceutical Services (NYSE:WST) Q4 2025 Earnings call February 12, 2026 08:00 AM ET Company ParticipantsBob McMahon - CFODan Leonard - Managing Director of Equity ResearchDaniel Markowitz - VPDavid Windley - Managing DirectorDoug Schenkel - Managing DirectorEric Green - CEOJohn Sweeney - VP of Investor RelationsMichael Ryskin - Managing DirectorPatrick Donnelly - Managing Director of Equity ResearchConference Call ParticipantsBrendan Smith - Director and Senior AnalystJustin Bowers - Equity Research ...

Financial Data and Key Metrics Changes - The company reported fourth quarter revenues of $805 million, representing a 7.5% increase on a reported basis and a 3.3% increase organically [8][17] - Adjusted EPS for the fourth quarter was $2.04, up 12% compared to the prior year [8][22] - Free cash flow in the fourth quarter was $175 million, more than double the prior year level, contributing to a full year free cash flow of $469 million, up 70% year-on-year [8][23] Business Segment Data and Key Metrics Changes - HVP components, representing 48% of total net sales, grew over 15% in the fourth quarter and 9% for the full year of 2025 [9][18] - HVP delivery devices, accounting for 14% of sales, saw a decline of 18.1% year-over-year organically, primarily due to an incentive payment received in the prior year [10][18] - Standard Products, which represent 20% of the business, declined 1.7% on an organic basis during the fourth quarter [10][18] - Contract manufacturing revenues increased 1.9% organically in Q4, driven by self-injected devices for obesity and diabetes [10][18] Market Data and Key Metrics Changes - The company noted strong demand for high-value product components driven by the rise of biologics and biosimilars, increasing global regulatory requirements, and the expanding GLP-1 market [5][11] - The company has initiated over 700 Annex 1 projects, with over half completed and generating revenues, representing less than 15% of the 6 billion components targeted for upgrades [12][80] Company Strategy and Development Direction - The company aims to leverage growth drivers such as biologics, Annex 1, and GLP-1s to advance its strategies and expects robust momentum entering 2026 [11][17] - The launch of the West Synchrony Prefillable Syringe System is a significant step in drug delivery solutions, designed specifically for biologics [5][72] - The company plans to continue investing in high-value product components while exploring potential technologies for inorganic growth [39][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth strategy, highlighting a strong order book and demand from biologic customers [42][59] - The company anticipates organic revenue growth of 5%-7% and adjusted EPS growth of 10% at the midpoint for 2026 [17][28] - Management remains cautious about GLP-1 growth, projecting a 10% increase year-on-year, which is considered conservative given the previous year's growth of over 50% [26][76] Other Important Information - The company expects to close the SmartDose transaction mid-year, which will impact revenue guidance for 2026 [24][25] - Capital expenditures for 2026 are expected to decrease to a range of $250 million-$275 million, reflecting a focus on efficiency [23][28] Q&A Session Summary Question: Insights on GLP-1 customer demand and guidance conservatism - Management indicated no changes in customer behavior and characterized the initial guidance as conservative, emphasizing strength in the overall business beyond GLP-1s [35][36] Question: Potential for share buybacks or M&A - Management confirmed that capital deployment will prioritize organic growth but remains open to technologies that could enhance the HVP components business [39][40] Question: Demand outstripping supply in HVP components - Management acknowledged that demand continues to outpace supply, particularly in the HVP components business, and is actively expanding capacity [42][43] Question: Clarification on new GLP-1 molecules and HVP components - Management noted that new GLP-1 molecules are expected to use similar elastomeric HVP components, with a mix of new combination molecules requiring proprietary technologies [46][49] Question: Progress on Annex 1 upgrades - Management stated that less than 15% of the 6 billion components have been commercialized, with expectations for continued revenue growth from these projects in 2026 [80]