Phibro Animal Health Corporation

Third-quarter consolidated net sales were $383.5 million, up $35.7 million or 10% year over year. Adjusted EBITDA was $60 million, up $5.9 million or 11%, while adjusted net income and adjusted diluted EPS both increased 19%. Gross profit was higher, but SG&A rose on higher employee-related costs, and interest expense increased because an interest rate swap expired. For FY2026, Phibro lifted sales guidance to $1.46 billion-$1.5 billion from $1.45 billion-$1.5 billion, adjusted EBITDA to $247 million-$255 million from $245 million-$255 million, and adjusted net income to $122 million-$127 million from $120 million-$127 million. Management said the Brazil virginiamycin change creates a fiscal 2027 headwind, but final therapeutic approval is expected during the transition period and other growth areas should more than offset it.

Jack Bendheim called the quarter strong and pointed to diversified momentum across the portfolio despite a complex protein backdrop, including tight beef supply, early dairy stabilization, and geopolitical volatility in the Middle East. He emphasized that Phibro has navigated regulatory transitions before, saying the Brazil antimicrobials change is the culmination of a long process rather than the start of a new wave. He also highlighted the launch of the sustainable solutions platform and Verratain as a long-term growth opportunity and said the company strengthened liquidity through the upsized revolver.

Glenn David reported Q3 net sales of $383.5 million, up 10%, with Animal Health up 13%, Mineral Nutrition up 10%, and Performance Products down 17%. He said the quarter’s adjusted EBITDA of $60 million and adjusted EPS growth were driven by higher sales and gross profit, partially offset by higher SG&A and interest expense. On cash flow, he noted $13 million of positive free cash flow over the last 12 months, $66 million of operating cash flow, $53 million of capex, $77.5 million of cash and short-term investments, gross leverage of 3.1x, and net leverage of 2.8x. He also said inventory buildup ahead of tariffs and to meet customer demand had pressured cash generation, but inventory is expected to stabilize in coming quarters.

Analysts asked about the new sustainability offering and how large the market could be, as well as how Verratain compares with products like Experior and Bovaer. Daniel Bendheim said the addressable market tied to Scope 3 pledges could be very large, but the real opportunity depends on whether customers can act on those pledges; he also said Verratain is different because it is designed to help companies actually execute on sustainability goals and works across species. On the Middle East, management said any added shipping or freight costs and some downside risk to vaccine sales there are already embedded in guidance, though they have not seen much impact so far. When asked about the implied Q4 slowdown, Glenn David said there was no pull-forward in Q3 and that tougher comparisons, plus some conservatism around Middle East uncertainty, explain the cadence.