Embecta (EMBC) Q1 2026 earnings summary

Executive summary

• Completed transition to an independent company, advancing brand transition in North America and internationally, with substantial completion targeted by end of 2026.

• Strengthened U.S. Medicare business with new and renewed exclusive contracts, supporting stable share.

• Progressed product design and manufacturing for pen needles and syringes, and expanded B2B partnerships and GLP-1 packaging initiatives.

• Paid down $37.5M of term loan B, reducing net leverage to 2.8x from 3.7x year-over-year.

• Ongoing transformation to broaden product portfolio and adapt to evolving chronic care and drug delivery markets.

Financial highlights

• Q1 FY26 revenue was $261.2M, down 0.3% year-over-year; adjusted constant currency revenue declined 2.0%.

• U.S. revenue was $130.9M, down 7.6% year-over-year (adjusted constant currency); international revenue was $130.3M, up 8.4% reported and 4.6% adjusted constant currency.

• Gross profit was $161.7M (61.9% margin), up from $157.1M (60.0%) last year; adjusted gross profit was $163.5M (62.6% margin), slightly down from $164.2M (62.7%).

• Operating income was $83.3M (31.9% margin), up from $28.7M (11.0%) last year; adjusted operating income was $79.3M (30.4% margin), down from $80.5M (30.7%).

• Net income was $44.1M ($0.74–$0.75 per diluted share), up from break-even last year; adjusted net income was $42.3M ($0.71 per share), up from $38.3M ($0.65).

• Free cash flow for Q1 FY26 was $16.6M–$17M.

Outlook and guidance

• FY26 reported revenue guidance: $1,071M–$1,093M, growth of (0.9)% to 1.1%, expected near the lower end.

• Adjusted constant currency revenue growth expected between (2.0)% and 0.0%.

• Adjusted operating margin guidance: 29.0%–30.0%; adjusted EPS: $2.80–$3.00, both expected near the lower end.

• Anticipates $150M in debt repayment and $180–$200M in free cash flow for FY26, closer to the low end.

• Interest expense expected at ~$93M; adjusted tax rate ~23%.