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PAHC
Earnings call · Jun 2026 (Q4 FY26)

PHIBRO ANIMAL HEALTH Q4 FY26 earnings call PAHC

Aug 27, 2026 Source

Executive summary

Phibro Animal Health Corporation Q4 FY26 — Record Sales and Strong EBITDA Growth

Phibro Animal Health concluded a strong Q4 and FY26, achieving record net sales and significant adjusted EBITDA growth, driven by its core animal health and mineral nutrition segments. The company successfully integrated its new MFA business and completed its FIBRA Forward transformation program. Looking ahead, Phibro is navigating regulatory uncertainty in Brazil for Virginia Myosin and optimizing its manufacturing footprint, while prioritizing organic growth and strategic business development.

Highlights

5

  • Achieved record net sales of more than $1.5 billion for fiscal year 2026.

  • Adjusted EBITDA increased 39% to $255 million for fiscal year 2026.

  • Fourth quarter sales grew 5% and adjusted EBITDA grew 29%.

  • Mineral Nutrition sales increased 20% in Q4 and 11% for the full year.

  • Successfully concluded the FIBRA Forward program, expected to contribute approximately $50 million in cumulative EBITDA by FY27.

Concerns

4

  • New MFA portfolio sales decreased 11% in Q4 due to a difficult prior-year comparison.

  • Regulatory uncertainty for Virginia Myosin in Brazil, with only minimal contribution assumed in FY27 guidance (FY26 sales of $27 million in Brazil).

  • Chicago Heights facility closure will provide only a small benefit to adjusted EBITDA in FY27, with the majority ($15M-$20M annually) expected in FY28 and beyond.

  • Q1 FY27 EBIT growth is expected to be negative due to a higher SG&A base carried forward from FY26.

Guidance & targets

CategoryTargetConfidence
Net sales
$1.55B to $1.6B
high materiality
High
Adjusted EBITDA
$258M to $268M
high materiality
High
Adjusted diluted EPS
$3.41 to $3.59
high materiality
High
Adjusted effective income tax rate
approximately 20%
medium materiality
Medium
Adjusted net income
$140M to $147M
high materiality
High
Chicago Heights facility closure annual benefit
$15M to $20M
medium materiality
High
Q1 FY27 EBIT growth
negative
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Animal Health
Q4 growth driven by increased demand for certain antimicrobials, increased dairy demand in North America, and continued growth of poultry products in Latin America and higher international demand. FY26 growth driven by the new MFA business, demand for MFAs in Mexico and Southeast Asia, and increased worldwide demand for nutritional specialties and vaccines.
Net sales increase (Q4): $5.1MAdjusted EBITDA growth (Q4): 25%Legacy MFA net sales increase (Q4): 11% ($11.7M)New MFA business sales (Q4): $83.9MNew MFA business sales decrease (Q4): 11% ($10.6M)Nutritional specialties net sales increase (Q4): 5% ($2.5M)Vaccine net sales growth (Q4): 4% ($1.5M)Net sales (FY26): $1.162BNet sales increase (FY26): $199.4MNet sales growth (FY26): 21%Adjusted EBITDA (FY26): $303.6MAdjusted EBITDA growth (FY26): 37%Legacy MFA and other net sales growth (FY26): 4% ($18.2M)New MFA business contribution (FY26): $354.3MNew MFA business growth (FY26): 70%Nutritional specialties net sales increase (FY26): 9% ($15.8M)Vaccine net sales growth (FY26): 14% ($19.3M)
$297.6M2%—$75.4M Adjusted EBITDA
Mineral Nutrition
Q4 growth due to demand for premixes and increased cost of underlying commodities like zinc and copper. FY26 growth due to increases in demand for copper, zinc, and trace minerals. EBITDA growth was slower than revenue growth due to inability to fully pass on increased commodity costs.
Net sales increase (Q4): $12.8MNet sales (FY26): $282.3MNet sales increase (FY26): $29.1MNet sales growth (FY26): 11%Adjusted EBITDA (FY26): $21.7MAdjusted EBITDA increase (FY26): $0.8MAdjusted EBITDA growth (FY26): 4%
$77M20%——
Performance Products
Q4 growth primarily from increased demand for copper-based products offset by lower demand for ingredients used in personal care products. FY26 decrease was a result of lower demand for ingredients used in personal care products.
Net sales increase (Q4): $0.1MAdjusted EBITDA growth (Q4): 12%Net sales (FY26): $73.5MNet sales decrease (FY26): $6.6MNet sales decrease (FY26): 8%Adjusted EBITDA (FY26): $8.1MAdjusted EBITDA decrease (FY26): $2.5M
$22.2M1%——

Deals & partnerships

Zoetis Acquisition of MFA portfolio

Integration of the acquired MFA portfolio is complete. The company will no longer report this portfolio separately after FY26.

Risks & headwinds

Regulatory status of Virginia Myosin in Brazil 180-day transition period ends end of October; political football due to upcoming elections.

FY26 sales of $27M in Brazil. Minimal contribution assumed for FY27 guidance.

Mitigation:Working constructively with Brazilian regulatory authorities; optimistic for eventual approval.

Higher SG&A base impacting Q1 FY27 EBIT growth Q1 FY27

Q1 FY27 EBIT growth expected to be negative.

Mitigation:EBIT growth expected to be positive for the rest of the year.

Inability to fully pass on increased commodity costs in Mineral Nutrition FY26, potentially impacting FY27 revenue growth.

FY26 Mineral Nutrition EBITDA growth (1% Q4, 4% FY) much slower than revenue growth (20% Q4, 11% FY).

Mitigation:Expect stronger EBITDA growth next year with potentially lower revenue growth, implying better cost pass-through or stabilization.

What to watch in Q1 FY27

Virginia Myosin regulatory approval in Brazil

By end of October (180-day transition period).
Current Minimal contribution assumed in FY27 guidance, $27M sales in FY26.
Target Therapeutic use approval.

Why it matters

Significant upside to FY27 expectations if approved, given high margin profile.

We continue to work constructively with Brazilian regulatory authorities and remain very optimistic regarding the long-term outcome. However, we have assumed only a minimal contribution from Virginia Mice and Sales in Brazil in our planning for this fiscal year. As a result, a favorable outcome will represent upside to our expectations rather than something required to achieve our outlook.

Q&A highlights

What caused the Q4 decline in the new MFA business, and what are the growth expectations for this segment in FY27, given it will no longer be reported separately?

The Q4 decline was anticipated due to a difficult prior-year comparison, not negative underlying trends. The portfolio is expected to outpace overall company revenue growth in FY27, driven by strong momentum in North America and international markets. Specific product strategies in poultry and cattle were highlighted.

“We really continue to believe this portfolio will outpace the overall revenue growth. growth for Fibro in fiscal year 2027.”

asked by Aaron Wright · answered by Glenn David

2 min read 6 chapters

Detailed narrative

FIBRA Forward Program Conclusion

The company formally concluded its three-year FIBRA Forward transformation program in June 2026. While the program itself has ended, the capabilities it created, such as stronger execution, accountability, and discipline, remain embedded within the organization. The program is expected to deliver approximately $50 million in cumulative EBITDA contributions by fiscal year 2027, measured against a fiscal year 2024 baseline.

Chicago Heights Facility Closure

Following a comprehensive review of its manufacturing network, Phibro announced the planned closure of its Chicago Heights manufacturing facility. This decision aims to better align the company's manufacturing footprint with future needs and support stronger long-term returns. The closure is expected to yield an annual benefit of $15 million to $20 million, with the majority of this benefit materializing in fiscal year 2028 and beyond, and only a small positive contribution in FY27.

Virginia Myosin Regulatory Uncertainty in Brazil

A key uncertainty in the fiscal year 2027 outlook is the regulatory status of Virginia Myosin in Brazil. The company is working constructively with Brazilian regulatory authorities and remains optimistic about the long-term outcome. However, FY27 planning conservatively assumes only a minimal contribution from Virginia Myosin sales in Brazil, meaning a favorable resolution would represent upside to current expectations. FY26 sales of Virginia Myosin in Brazil were $27 million.

Zoetis MFA Portfolio Integration and Performance

The acquired Zoetis MFA portfolio grew 70% for the full fiscal year 2026. The integration of this business is now complete, and the company will no longer report its performance separately. Management expressed satisfaction with the integration and the strategic benefits the acquisition is bringing, expecting these to play out across the entire portfolio in the coming years. The Q4 FY26 sales decline of 11% for this portfolio was anticipated due to a strong comparative period in Q4 FY25.

Capital Allocation Priorities

Phibro's capital allocation priorities are focused on organic growth, business development, and shareholder returns. The company plans elevated capital expenditures in FY27 and FY28 to expand vaccine capacity in Ireland and Israel, and to support R&D for combination products and companion animal business. Business development efforts will target high-growth areas like vaccines, nutritional specialties, environmental, and companion animal segments. The company will also continue to support its dividend and pursue debt paydown.

Working Capital and Free Cash Flow Outlook

Free cash flow for fiscal year 2026 was $10 million, significantly impacted by an $86.3 million inventory build primarily related to the newly acquired MFA portfolio. For fiscal year 2027, the inventory build is expected to be limited to $25 million to $30 million, mainly for the Chicago Heights transition. This reduction in inventory build, combined with enhanced S&OP processes, is projected to result in significantly greater free cash flow in fiscal year 2027 compared to FY26.

AI-generated summary of the company's earnings call. Not investment advice.