Date of Call: May 7, 2026

Financials Results

  • Revenue: $383.5 million, up 10% YOY
  • EPS: Adjusted diluted EPS increased 19% YOY

Guidance:

  • Net sales updated to a range of $1.46 billion-$1.5 billion, representing 13%-16% growth.
  • Total adjusted EBITDA updated to a range of $247 million-$255 million, representing 34%-39% growth.
  • Adjusted net income updated to a range of $122 million-$127 million, representing 44%-49% growth.
  • Guidance includes any additional shipping costs related to the Middle East conflict and potential business downsides there.
  • Virginiamycin in Brazil sales were $26 million in fiscal 2025; margin profile is above company average.

Business Commentary:

Phibro Animal Health’s Q3 Revenue Cadence and Legacy MFA Recovery Timeline Contradict Prior Guidance

Revenue and EBITDA Growth:

  • Phibro Animal Health reported net sales of $383.5 million for Q3 2026, reflecting an increase of 10% over the same quarter the previous year. Adjusted EBITDA also increased by 11% to $60 million.
  • The growth was primarily driven by a 13% increase in Animal Health segment sales, influenced by strong demand for MFAs, nutritional specialties, and vaccines.

Segment Performance:

  • The Animal Health segment's net sales reached $291.2 million, a 13% increase year-on-year. Within this segment, legacy MFA net sales increased by 5%, and new MFA business contributed a 25% growth.
  • The increase in sales was supported by demand in North America and certain antimicrobials, alongside higher sales of vaccines, particularly in Israel and for autogenous vaccines.

Brazilian Regulatory Impact:

  • Brazil implemented a new regulatory framework affecting certain antimicrobials, impacting sales of virginiamycin, which was $26 million in fiscal year 2025. The margin profile of this product in Brazil is above the company's average.
  • This regulatory shift is viewed as a culmination of a long-term process, aligning Brazil with existing regulatory approaches in other major markets, and is expected to be managed through the company's diversified portfolio and compliance-focused platforms like PhibroVet.

Sustainability Initiative:

  • Phibro launched Verratain, a sustainable solution in partnership with VAXA Technologies, to help customers address supply chain emissions. The market potential for such solutions is substantial, given corporate sustainability pledges.
  • The initiative is designed to be scalable and fit into existing systems without requiring major overhauls, positioning Phibro to capitalize on growing demand for credible sustainability solutions.

Financial Flexibility:

  • The company enhanced its financial flexibility by upsizing its revolving credit facility by $125 million, reflecting a strong financial position and oversubscribed process.
  • This move supports the company's strategic initiatives and growth opportunities, including managing potential regulatory changes and market fluctuations.

Sentiment Analysis:

Overall Tone: Positive

  • Management stated, 'We had a strong third quarter. Net sales increased 10% to $383 million, and adjusted EBITDA increased 11% to $60 million.' They also noted, 'We are confident in the demand for our products around the world and look forward to seeing continued growth in our business.'

Q&A:

  • Question from Ekaterina Knyazkova (J.P. Morgan): First, just on the sustainability offering you’ve recently announced, just how are you thinking about the size of that opportunity, and how does the offering fit into relative to some of the other products out there like Experior and Bovaer? The second question is just on the conflict in the Middle East. Just any exposure there as you think about shipping costs and higher oil prices?
    Response: Daniel Bendheim stated the sustainability market is huge, with Verratain helping companies achieve their Scope 3 pledges. It differs from Experior (ammonia-focused) and Bovaer (methane for dairy), as Verratain works across species. Glenn David said guidance for FY2027 includes any additional shipping costs or potential business downsides in the Middle East, though no major impact has been seen yet.

  • Question from Luis Higuera (Citi): The fourth implied guidance does imply a notable slowdown. Was there any pull-forward dynamics that may have occurred in this quarter or anything else you’d call out that may be causing this cadence?
    Response: Glenn David stated there was no pull-forward in Q3. The stronger Q4 2025 comparator ($379 million) impacts the growth rate. He also noted the revenue guidance was conservative due to Middle East conflict unknowns, but expects to be towards the higher end.