Blau Farmacêutica (BLAU3) Q1 2026 earnings summary

Executive summary

• Net revenue grew 17% year-over-year to BRL 435 million in 1Q26, driven by strong performance in the hospital segment and resilient demand for mature products in both public and private channels; some sources report 33% growth, but 17% is most consistent.

• Recurring EBITDA increased 25% year-over-year to BRL 104 million, with margin expanding 170 bps to 23.9%.

• Recurring net income, excluding FX effects, was BRL 58 million, up 8% year-over-year; reported net income was BRL 36 million, impacted by FX volatility.

• Zero leverage maintained, with net cash position of BRL 15 million, providing flexibility for investments.

• Growth supported by launches up 33% year-over-year, now representing 7% of net revenue.

Financial highlights

• Gross margin expanded to 41.4%, up 130 bps year-over-year, driven by efficiency gains and favorable currency.

• Operating expenses grew in line with revenue, mainly due to higher G&A and R&D investments.

• Working capital cycle impacted by supplier financing and inventory build-up for new lines, expected to normalize.

• CAPEX totaled BRL 50 million in 1Q26, down 10% year-over-year, focused on new production lines and R&D.

• Free cash flow to firm was negative BRL 11 million in 1Q26, mainly due to lower operating results and CAPEX.

Outlook and guidance

• Management expects continued growth in both public and private channels, with new production lines and launches, especially monoclonal antibodies, expected to drive future revenue.

• Full effect of new production capacity expected in 2027, with partial contributions in 2026.

• Pipeline of drugs in ANVISA queue represents a BRL 2.7 billion addressable market; launches expected to accelerate as approvals come through.

• EBITDA margin expected to improve by 100-200 bps in 2026 as revenue grows and operational leverage increases.

• Expense dilution and cost optimization anticipated to contribute to margin growth in the second half of 2026.