OneSource Specialty Pharma (ONESOURCE) Q3 25/26 earnings summary

Executive summary

• Q3 FY 2026 results were impacted by deferred revenues and regulatory delays, especially in Canada, leading to a significant revenue and EBITDA decline compared to the previous quarter.

• Despite short-term challenges, the company remains focused on capacity expansion, executing MSAs, and preparing for scale, with FY 2028 guidance of $400 million revenue and $160 million EBITDA reaffirmed.

• Strong momentum in biologics with new global biosimilar customers, a historic high in the project funnel, and 20 new MSAs/licensing deals signed, two-thirds as repeat business.

• Unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2025, were reviewed and approved by the Board and auditors, with an unmodified conclusion.

• The company completed the divestment of Unit-3 to Syngene and approved a Composite Scheme of Arrangement and Amalgamation involving subsidiaries, pending regulatory approval.

Financial highlights

• Q3 FY 2026 revenue was INR 2,903 million (or $33.1 million), a 26% year-over-year decline, mainly due to delayed semaglutide approvals.

• EBITDA for the quarter was INR 173 million ($2.0 million), with an 88% YoY drop and margin falling to 6% from 36% YoY.

• Adjusted PAT was a loss of INR 472 million ($(5.4)m), and adjusted EPS was negative INR 4.1 per share ($(0.05)).

• Consolidated net loss after tax for the quarter was Rs. 886.99 million, compared to a profit of Rs. 104.85 million in the previous quarter.

• Exceptional items for the quarter included Rs. 70.90 million in legal and restructuring expenses.

Outlook and guidance

• FY 2028 guidance of $400 million revenue and $160 million EBITDA is reiterated, with revenue CAGR expected to exceed 30% and steady-state EBITDA margins around 40%.

• No near-term guidance for FY 2026 or 2027 due to regulatory uncertainties; Q4 FY 2027 annualized run rate expected to reflect FY 2028 targets.

• Debt-free status expected by 2028, with net debt/EBITDA guidance below 1.5x and targeted ROCE above 50%.

• Management expects no material impact from the amalgamation of wholly owned subsidiaries.

• Two soft quarters are expected until regulatory approvals are received, after which sequential improvement is anticipated.