Embecta (EMBC) Q1 2026 earnings summary

Executive summary

• Completed transition to an independent company, advancing brand transition with over 95% of U.S. and Canadian revenue under the new brand and targeting substantial international completion by end of 2026.

• Strengthened Medicare Part D access with exclusive and renewed contracts, and expanded B2B partnerships and GLP-1 packaging initiatives.

• Progressed product design and manufacturing for pen needles and syringes, with manufacturing validation underway.

• Paid down $37.5M–$38M in debt in Q1, reducing net leverage to 2.8x from 3.7x year-over-year.

• First quarter results aligned with transformation into a broader medical supplies company focused on chronic care and drug delivery partnerships.

Financial highlights

• Q1 FY26 revenue was $261.2M, down 0.3% year-over-year as reported, or down 2% on an adjusted constant currency basis.

• U.S. revenue declined 7.6% year-over-year (adjusted constant currency), while international revenue grew 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%).

• Adjusted net income was $42.3M ($0.71 EPS), up from $38.3M ($0.65 EPS); GAAP net income was $44.1M ($0.74–$0.75 EPS), up from break-even.

• Free cash flow for Q1 was $16.6M–$17M; adjusted EBITDA was $97.2M (37.2% margin), flat year-over-year.

Outlook and guidance

• FY26 reported revenue guidance: $1,071M–$1,093M, with 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, likely at the lower end.

• Free cash flow expected between $180M–$200M, and $150M in debt repayment, both likely near the low end.

• Revenue cadence expected to shift, with 46% in H1 and 54% in H2, reflecting U.S. headwinds and international momentum.

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