"Our fourth quarter results were largely in line with our expectations, with revenue lower year over year due to several items we had previously anticipated, including the impact of advanced distributor ordering in the fourth quarter of fiscal year 2024 in advance of a potential U.S. port strike; the impact of advanced distributor ordering in the third quarter of fiscal year 2025 in advance of the U.S. July 4th holiday; and the continuing business dynamics in China," said Devdatt (Dev) Kurdikar, Chief Executive Officer of embecta.
Mr. Kurdikar continued: "Meanwhile, in terms of profitability, our GAAP operating margin and net income were higher year over year, and we exceeded our previously provided fiscal year 2025 adjusted operating and adjusted EBITDA margin ranges. Also, our GAAP diluted earnings per share was higher year over year and our adjusted diluted earnings per share was at the top-end of our previously provided guidance range."
Mr. Kurdikar concluded: "Fiscal year 2025 marked the completion of the first phase of our strategic roadmap: one focused on major separation and stand-up activities, including implementing a global ERP system and operationalizing our own distribution network and shared services. We also initiated the second phase: seeding growth. By focusing on operational efficiency and executing restructuring, we were able to accelerate debt reduction and decrease our net leverage, creating additional financial flexibility for our goal to invest in growth. We remain committed to the initiatives announced at our 2025 Analyst and Investor Day, and in fiscal year 2026, we intend to maintain our global leadership position in our core product categories, execute on our new product programs, and generate strong adjusted operating margin and free cash flow. While the broader geopolitical and trade environment remains dynamic, we believe our global scale, resilient supply chain, and experienced teams position us well to build value for all stakeholders."
Fourth Quarter Fiscal Year 2025 Financial Highlights:
Reported Revenues of $264.0 million, down 7.7%;
Adjusted Revenues of $263.3 million, down 10.4% on an adjusted constant currency basis
U.S. revenues decreased 15.2% on both a reported and adjusted constant currency basis
International revenues increased 2.8% on a reported basis, and decreased 4.0% on an adjusted constant currency basis
Gross profit and margin of $158.5 million and 60.0%, compared to $173.8 million and 60.7% in the prior year period
Adjusted gross profit and margin of $159.5 million and 60.6% compared to $178.3 million and 61.4% in the prior year period
Operating income and margin of $56.5 million and 21.4%, compared to $26.2 million and 9.2% in the prior year period
Adjusted operating income and margin of $66.7 million and 25.3%, compared to $61.2 million and 21.1% in the prior year period
Net income of $26.4 million and earnings per diluted share of $0.45. This compares to net income of $14.6 million and earnings per diluted share of $0.25 in the prior year period
Adjusted net income and adjusted earnings per diluted share of $29.4 million and $0.50, compared to $25.9 million and $0.45 in the prior year period
Adjusted EBITDA and margin of $89.9 million and 34.1%, compared to $73.0 million and 25.2% in the prior year period
Announced a dividend of $0.15 per share
Twelve Months Ended September 30 Fiscal Year 2025 Financial Highlights:
Reported Revenues of $1,080.4 million, down 3.8%;
Adjusted Revenues of $1,079.7 million, down 3.9% on an adjusted constant currency basis
U.S. revenues decreased 4.6% on both a reported and adjusted constant currency basis
International revenues decreased 2.8% on a reported basis, and decreased 3.1% on an adjusted constant currency basis
Gross profit and margin of $676.8 million and 62.6%, compared to $735.2 million and 65.5% in the prior year period
Adjusted gross profit and margin of $687.3 million and 63.7%, compared to $740.7 million and 65.7% in the prior year period
Operating income and margin of $242.1 million and 22.4%, compared to $166.8 million and 14.9% in the prior year period
Adjusted operating income and margin of $337.7 million and 31.3%, compared to $296.9 million and 26.3% in the prior year period
Net income and earnings per diluted share of $95.4 million and $1.62, respectively. This compares to net income and earnings per diluted share of $78.3 million and $1.34, respectively, in the prior year period
Adjusted net income and adjusted earnings per diluted share of $173.9 million and $2.95, compared to $143.1 million and $2.45 in the prior year period
Adjusted EBITDA and margin of $415.3 million and 38.5%, compared to $353.4 million and 31.4% in the prior year period
Strategic Highlights:
Strengthen core business
Substantially completed the brand transition program in the U.S. and Canada; commenced the next phase of the initiative globally, with significant completion in the majority of international markets anticipated by the end of calendar year 2026
Expand product portfolio
Continue to progress on GLP-1 strategy by signing additional contracts and receiving new purchase orders from pharmaceutical partners to co-package embecta pen needles with potential generic GLP-1 therapies
embecta pen needles now included in multiple GLP-1 partner managed regulatory submissions, with generic GLP-1 commercial launches anticipated in select countries potentially beginning in calendar year 2026
Expanded availability of smaller pack configurations for GLP-1 administration in Canada and select European markets in fiscal year 2026
Increase financial flexibility
Reduced debt during the fiscal year 2025 fourth quarter by paying down approximately $72.4 million of outstanding principal under the term loan B facility that had an interest rate of 300 basis points over the secured overnight financing rate ("SOFR"), with a 0.50% SOFR floor, bringing total fiscal year 2025 debt reduction to approximately $184.5 million, thereby exceeding the Company's original fiscal year 2025 debt reduction target of approximately $110 million
Generated strong free cash flow of approximately $77 million in the fiscal year 2025 fourth quarter and approximately $182 million of free cash flow for fiscal year 2025. This compares to free cash flow of approximately $27 million in the prior year quarter and approximately $20 million for fiscal year 2024
Adjusted Constant Currency Revenue Growth is based upon Reported Revenues, adjusted to exclude, depending on the period presented, the items described in Adjusted Revenues and to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and such changes generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on an adjusted constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
Fourth Quarter Fiscal Year 2025 Results:
Revenues by geographic region are as follows:
Three months ended September 30,
Dollars in millions
% Increase/(Decrease)
2025
2024
Reported Revenue Growth
Currency Impact
Adjustment Impact
Adjusted Constant Currency Revenue Growth
Reported Revenues
Adjustment
Adjusted Revenues
Reported Revenues
Adjustment
Adjusted Revenues
%
United States
$
142.0
$
—
$
142.0
$
167.4
$
—
$
167.4
(15.2
)%
—
%
—
%
(15.2
)%
International1
122.0
0.7
121.3
118.7
(4.1
)
122.8
2.8
2.8
4.0
(4.0
)
Total
$
264.0
$
0.7
$
263.3
$
286.1
$
(4.1
)
$
290.2
(7.7
)%
1.2
%
1.5
%
(10.4
)%
Revenues by product family are as follows:
Three months ended September 30,
Dollars in millions
% Increase/(Decrease)
2025
2024
Reported Revenue Growth
Currency Impact
Adjustment Impact
Adjusted Constant Currency Revenue Growth
Reported Revenues
Adjustment
Adjusted Revenues
Reported Revenues
Adjustment
Adjusted Revenues
%
Pen Needles
$
187.8
$
—
$
187.8
$
215.2
$
—
$
215.2
(12.7
)%
1.2
%
—
%
(13.9
)%
Syringes
32.3
—
32.3
33.7
—
33.7
(4.2
)
0.3
—
(4.5
)
Safety
34.5
—
34.5
32.8
—
32.8
5.2
1.5
—
3.7
Other2
4.1
0.7
3.4
(0.3
)
(4.1
)
3.8
(1,466.7
)
(33.3
)
(1,420.2
)
(13.2
)
Contract Manufacturing
5.3
—
5.3
4.7
—
4.7
12.8
4.3
—
8.5
Total
$
264.0
$
0.7
$
263.3
$
286.1
$
(4.1
)
$
290.2
(7.7
)%
1.2
%
1.5
%
(10.4
)%
The Company's reported revenues decreased by $22.1 million, or 7.7%, to $264.0 million for the fourth quarter of 2025 as compared to reported revenues of $286.1 million for the fourth quarter of 2024. Changes in the Company's reported revenues are driven by the volume of goods that embecta sells, the prices it negotiates with customers, and changes in foreign exchange rates. The decrease in reported revenues was driven by $21.9 million of unfavorable changes in volume and $8.9 million associated with unfavorable changes in price. This was partially offset by $4.8 million of favorable changes in gross-to-net adjustments attributed to the recognition of higher incremental Italian payback accruals in the prior year as compared to the current year, $3.5 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar, and a $0.4 million increase in contract manufacturing revenues related to sales of non-diabetes products to Becton, Dickinson and Company ("BD").
Twelve Months Fiscal Year 2025 Results:
Revenues by geographic region are as follows:
Twelve months ended September 30,
Dollars in millions
% Increase/(Decrease)
2025
2024
Reported Revenue Growth
Currency Impact
Adjustment Impact
Adjusted Constant Currency Revenue Growth
Reported Revenues
Adjustment
Adjusted Revenues
Reported Revenues
Adjustment
Adjusted Revenues
%
United States
$
579.1
$
—
$
579.1
$
607.2
$
—
$
607.2
(4.6
)%
—
%
—
%
(4.6
)%
International3
501.3
0.7
500.6
515.9
(4.1
)
520.0
(2.8
)
(0.7
)
1.0
(3.1
)
Total
$
1,080.4
$
0.7
$
1,079.7
$
1,123.1
$
(4.1
)
$
1,127.2
(3.8
)%
(0.3
)%
0.4
%
(3.9
)%
Revenues by product family are as follows:
Twelve months ended September 30,
Dollars in millions
% Increase/(Decrease)
2025
2024
Reported Revenue Growth
Currency Impact
Adjustment Impact
Adjusted Constant Currency Revenue Growth
Reported Revenues
Adjustment
Adjusted Revenues
Reported Revenues
Adjustment
Adjusted Revenues
%
Pen Needles
$
784.1
$
—
$
784.1
$
844.4
$
—
$
844.4
(7.1
)%
—
%
—
%
(7.1
)%
Syringes
124.6
—
124.6
126.2
—
126.2
(1.3
)
(3.0
)
—
1.7
%
Safety
137.8
—
137.8
129.4
—
129.4
6.5
0.2
—
6.3
%
Other4
14.0
0.7
13.3
10.3
(4.1
)
14.4
35.9
(1.9
)
44.1
(6.3
)%
Contract Manufacturing
19.9
—
19.9
12.8
—
12.8
55.5
1.6
—
53.9
%
Total
$
1,080.4
$
0.7
$
1,079.7
$
1,123.1
$
(4.1
)
$
1,127.2
(3.8
)%
(0.3
)%
0.4
%
(3.9
)%
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 as compared to reported revenues of $1,123.1 million for the year ended September 30, 2024. The decrease in reported revenues was primarily driven by $52.9 million of unfavorable changes in volume and $3.5 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar. This was partially offset by a $6.9 million increase in contract manufacturing revenues related to sales of non-diabetes products to BD, $4.8 million of favorable changes in gross-to-net adjustments attributed to the recognition of higher incremental Italian payback accruals in the prior year as compared to the current year, and a $2.0 million increase associated with favorable changes in price.
Preliminary Fiscal Year 2026 Financial Guidance:
For fiscal year 2026, the Company expects:
Dollars in millions, except percentages and per share data
Reported Revenues
$1,071 - $1,093
Reported Revenue Growth (%)
(0.9)% - 1.1%
Impact of F/X (%)
1.2
%
Impact of Italian Payback Measure (1) (%)
(0.1
)%
Adjusted Constant Currency Revenue Growth (%)
(2.0)% - 0.0%
Adjusted Operating Margin (%)
29.0% - 30.0%
Adjusted Earnings per Diluted Share
$2.80 - $3.00
(1) Reflects the recognition of changes in estimates associated with the Italian payback measure relating to certain prior years since 2015 recorded in Revenues.
embecta is unable to present a quantitative reconciliation of its expected adjusted earnings per diluted share and expected adjusted operating margin as it is unable to predict with reasonable certainty and without unreasonable effort the impact and timing of any one-time items. The financial impact of these one-time items is uncertain and is dependent on various factors, including timing, and could be material to the Company's Condensed Consolidated Statements of Income.
Balance Sheet, Liquidity and Other Updates
During the fourth quarter, the Company repaid an aggregate principal amount of approximately $72.4 million outstanding under its term loan B facility that had an interest rate of 300 basis points over the SOFR, with a 0.50% SOFR floor.
As of September 30, 2025, the Company had $228.6 million in cash and equivalents and restricted cash and $1.417 billion of debt principal outstanding, and no amount drawn on its $500 million Revolving Credit Facility.
The Company's Board of Directors declared a quarterly cash dividend of $0.15 for each issued and outstanding share of the Company's common stock. The dividend is payable on December 18, 2025 to stockholders of record at the close of business on December 5, 2025.
Fiscal 2025 Fourth Quarter and Full Year Earnings Conference Call:
Management will host a conference call at 8:00 a.m. Eastern Time (ET) on November 25, 2025 to discuss the results of the quarter and full year, provide an update on its business, and host a question and answer session. Those who would like to participate may access the live webcast here, or access the teleconference here. The live webcast can also be accessed via the Company's website at investors.embecta.com.
A webcast replay of the call will be available beginning at 11:00 a.m. ET on November 25, 2025, via the embecta investor relations website and archived on the website for one year.
Condensed Consolidated Statements of IncomeEmbecta Corp.(Unaudited, in millions, except per share data)
Three Months EndedSeptember 30,
Twelve Months EndedSeptember 30,
2025
2024
