APTARGROUP, INC. (ATR)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered modest top-line growth with leverage: revenue rose 6% to $961.1M, adjusted EPS increased 4% to $1.62, and adjusted EBITDA grew 7% to $222.6M with margin expansion to 23.2% .
• Results modestly beat S&P Global consensus: revenue $961.1M vs $951.9M* and adjusted EPS $1.62 vs $1.572*; drivers were strong injectables (+18% YoY) and steady prescription systems, offset by softer consumer healthcare and lower tooling in Closures and Beauty .
• Q4 2025 adjusted EPS guidance of $1.20–$1.28 (tax 19.5%–21.5%, 1.17 EUR/USD) implies “in line” with consensus ($1.236*) as mix headwinds from lower emergency-use systems offset strength in injectables; management also flagged a 2026 step-down (~35% YoY) in emergency-use revenue .
• Potential stock catalysts: accelerating injectables (GLP-1, Annex I, biologics), capital returns (buybacks, dividend to $0.48/qtr), and clarity on emergency-use normalization pace into 2026 .

What Went Well and What Went Wrong

• What Went Well

  • Injectables strength: sales +18% YoY on GLP-1/bio demand; pharma adjusted EBITDA margin expanded 120 bps to 37.2% on higher value mix and royalties .
  • Company-level operating leverage: adjusted EBITDA +7% with margin up 30 bps YoY to 23.2% despite gross margin pressure; adjusted EPS +4% .
  • Capital returns and dividend growth: Q3 buybacks $40M; quarterly dividend raised to $0.48 (nearly +7%) with confidence in long-term pharma growth .
  • Management quote (CEO): “We are seeing the steady ramp in sales in our injectables division… positions us well… while expanding our third quarter adjusted EBITDA margin.”

• What Went Wrong

  • Consumer healthcare softness: -11% due to weaker nasal/cold demand in Europe; Beauty margins -120 bps on mix/tooling and Beauty core sales flat .
  • Closures core sales -1% as lower tooling sales and pass-through of lower resin pricing offset volume growth; Closures margin -110 bps on unscheduled maintenance and lower tooling .
  • Emergency-use (e.g., naloxone) normalization: Q4 deceleration expected; FY26 emergency-use revenue ~35% lower YoY, pressuring mix and margins before mitigation .

Financial Results

Quarterly trend (oldest → newest)

Beat/miss vs S&P Global consensus – Q3 2025

Segment breakdown – Q3 2025

Additional KPIs

Non-GAAP adjustments (Q3): adjusted EPS/EBITDA excluded litigation costs (~$4.4M) and a ~$26.5M non-taxable gain from remeasurement of a previously held minority interest; see reconciliations .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO (press release): “We are seeing the steady ramp in sales in our injectables division, which grew 18% in the third quarter, indicating an expected strong finish to the year for elastomeric components.”
• CFO (call): “Emergency medicine… amongst the highest of our margin products… we anticipate 2026 revenues from this end market to be approximately 35% lower than 2025.”
• CEO (call): “We are on all of the auto injectors… GLP-1 is a solid driver… Annex I closely behind… everything’s been fully validated, and we can catch up with demand.”
• CFO (call): “We expect to fully utilize [the remaining ~$270M] authorization over the next couple of quarters.”

Q&A Highlights

• Emergency-use normalization: Inventory at a large customer drives Q4 deceleration; FY26 revenue ~35% lower YoY; segment carries premium margins, thus mix headwind pre-mitigation .
• GLP-1/Annex I momentum: GLP-1 cited as top growth driver near term; GLP-1 YTD through September up >40%; Annex I supports migration to higher-value sterile components .
• Beauty margin path: Volume is the primary lever; NA indie skincare weakness and mix/tooling pressure weighed on Q3; destocking not the primary issue .
• D&A step-up: Model Q4 D&A $75–$80M and carry forward due to BTY intangibles amortization .
• Litigation costs treatment: Atypical and excluded from adjusted metrics; Q3 actual ~$4.4M vs earlier expectation of ~$5–6M per quarter .

Estimates Context

• Q3 2025 beats: revenue $961.1M vs $951.9M*; adjusted EPS $1.62 vs $1.572*; Q2 also beat on both; Q1 missed on revenue but beat on EPS* (see table above). Values retrieved from S&P Global*.
• Q4 2025: guidance $1.20–$1.28 brackets S&P Global EPS consensus $1.236*; implies “inline” at the midpoint as injectables strength offsets emergency-use deceleration and less favorable sales mix . Values retrieved from S&P Global*.

Guidance Changes – Detail and Implications

• Q4 adjusted EPS $1.20–$1.28; tax 19.5%–21.5%; FX 1.17 EUR/USD; D&A $75–$80M. Mix less favorable from emergency-use decline; injectables expected to remain strong .
• FY25 emergency-use ~5% of sales; FY26 ~35% lower YoY (directional). Expect margin compression from mix before mitigation; management reiterates robust pharma pipeline and multi-year injectables tailwinds .

Key Takeaways for Investors

• Pharma remains the growth/margin engine with accelerating injectables (GLP-1/Annex I/biologics) and high-value proprietary systems; pharma margin expanded to 37.2% .
• Near-term headwind: emergency-use normalization will pressure mix and margins into 1H’26; company telegraphed ~35% YoY decline in FY26 for this category .
• Beauty/Closures mixed: Beauty core flat with margin pressure; Closures volumes up but core -1% due to tooling and resin pass-throughs; watch for tooling normalization and NA beauty demand .
• Capital deployment supportive: buybacks ($40M Q3; plan to use remaining ~$270M) and dividend raised to $0.48 bolster TSR and signal confidence .
• Q4 guide aligns with consensus amid mixed sales mix; execution on injectables ramp and cost discipline should be central to sustaining margin improvements .
• Legal expense is atypical and excluded from adjusted results; monitor litigation developments tied to pharma IP .

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Footnote: *Estimates (consensus and surprises) retrieved from S&P Global via tool: Primary EPS Consensus Mean and Revenue Consensus Mean for ATR (Q4 2024–Q4 2025).