Phibro Animal Health Corp’s Earnings Call Highlights Robust Growth

Phibro Animal Health Corp ((PAHC)) has held its Q3 earnings call. Read on for the main highlights of the call.

Phibro Animal Health Corp’s recent earnings call painted a picture of robust financial health and optimism for the future. The company reported significant growth across key segments, particularly in Animal Health and Performance Products, despite facing challenges such as declining legacy MFA sales and anticipated tariff pressures. The overall sentiment was positive, buoyed by strong growth, improved operating leverage, and raised financial guidance.

Strong Financial Performance

Phibro Animal Health Corp reported a remarkable 32% increase in total sales year-over-year, with adjusted EBITDA rising by 85% and adjusted diluted EPS more than doubling. This impressive performance underscores both top-line growth and improved operating leverage, highlighting the company’s strong financial footing.

Animal Health Segment Growth

The Animal Health segment was a standout performer, achieving a 42% revenue growth. This was largely driven by a 68% increase in sales of newly integrated MFA and other products, showcasing the success of Phibro’s strategic initiatives in this sector.

Nutritional Specialties and Performance Products

The Nutritional Specialties segment showed a steady 8% revenue growth, while the Performance Products segment posted a robust gain of 28%. These figures reflect the company’s diversified growth strategy and its ability to capitalize on market opportunities.

Positive Free Cash Flow

Phibro generated $49 million of positive free cash flow for the 12 months ended March 31, 2025. This strong cash flow position provides the company with the flexibility to invest in growth initiatives and manage potential challenges effectively.

Legacy MFA Sales Decline

Despite the overall positive performance, legacy MFA and other sales saw a decline of 3% due to the timing of specific customer orders. This highlights a potential area for improvement as the company navigates market dynamics.

Tariff Pressures

Looking ahead, Phibro anticipates some pressure on certain inputs and markets in fiscal 2026, with potential impacts ranging from $5 million to $10 million due to the evolving tariff environment. The company remains vigilant in managing these external challenges.

Increased SG&A Costs

The company experienced higher SG&A costs, attributed to increased employee-related expenses. This reflects Phibro’s investment in its workforce to support its growth trajectory.

Updated Financial Guidance

Phibro Animal Health Corp provided updated financial guidance for the fiscal year ending June 30, 2025. The company expects net sales to range from $1.26 billion to $1.29 billion, reflecting a growth of 24% to 27%. Adjusted EBITDA is projected to be between $177 million and $183 million, with adjusted EPS anticipated to be between $1.96 and $2.09. The integration of the Zoetis medicated feed additive portfolio and the Phibro Forward initiative are expected to drive further growth and cost savings.

In conclusion, Phibro Animal Health Corp’s earnings call highlighted a strong financial performance and a positive outlook for the future. Despite some challenges, the company’s strategic initiatives and updated guidance reflect confidence in continued growth and profitability. Investors and stakeholders can look forward to Phibro’s ability to navigate market dynamics and deliver strong financial results.