Executive Summary

Q2 2025 revenue was $1.68B (flat organically), GAAP EPS $0.09 and adjusted EPS $0.24; adjusted EBITDA margin contracted to 16.6% on pricing/mix and under-absorption headwinds .
Versus consensus, revenue modestly beat ($1.683B vs $1.675B*), EPS was in line/slightly below ($0.24 vs $0.247*); S&P Global EBITDA consensus was above S&P actual, noting definitional differences with company adjusted EBITDA* .
Guidance cut: FY25 organic revenue now -2% to flat (prior -1% to +1%), adjusted EBITDA margin 16.5%–17.0%, adjusted EPS $0.94–$0.98, FCF $550–$600M; Q3 organic -4% to -2% and margin “low 16%” .
Catalysts: CEO transition to Emmanuel Ligner (Aug 18), >$100M share gains from large pharma contract extensions, but bioprocessing faces discrete customer/regulatory headwinds and H2 silicones inventory normalization .

What Went Well and What Went Wrong

What Went Well

Secured several major pharmaceutical contract extensions driving “more than $100 million in share gains” once commercialized .
Laboratory Solutions delivered sequential revenue growth and academic/government outperformance amid sector headwinds .
Silicones (NuSil) grew low double digits year-to-date; management continues to execute on cost transformation (target $400M run-rate savings by 2027) .

Management quotes:

“These awards will result in more than $100 million in share gains” – Michael Stubblefield (CEO) .
“Organic revenue growth improved sequentially by 200 basis points and was flat year over year” – Michael Stubblefield .

What Went Wrong

Adjusted gross margin down ~130 bps YoY on price actions to protect/grow share, unfavorable mix, and higher freight/under-absorption; adjusted EBITDA margin fell to 16.6% .
Bioprocessing fell short: extended maintenance led to backorders (1–2 pts growth impact) and discrete customer setbacks in gene therapy/mRNA and a negative Phase 3 readout for a MABS customer .
FY25 outlook reduced: organic revenue, segment growth for Bioscience Production, EPS and FCF all lowered; Q3 guide implies both segments down organically .

Financial Results

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$1.7028	$1.6866	$1.5814	$1.6834
GAAP Diluted EPS ($)	$0.14	$0.73	$0.09	$0.09
Adjusted EPS ($)	$0.25	$0.27	$0.23	$0.24
Adjusted EBITDA ($USD Millions)	$305.6	$307.7	$269.5	$279.8
Adjusted EBITDA Margin (%)	17.9%	18.2%	17.0%	16.6%
Gross Profit ($USD Millions)	$581.5	$562.9	$534.9	$554.1
Net Income ($USD Millions)	$92.9	$500.4	$64.5	$64.7

Segment performance

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Laboratory Solutions Net Sales ($USD Millions)	$1,155.7	$1,065.0	$1,122.1
Laboratory Solutions Adjusted Operating Income ($USD Millions)	$150.9	$139.0	$133.3
Laboratory Solutions Adjusted OI Margin (%)	13.1%	13.1%	11.9%
Bioscience Production Net Sales ($USD Millions)	$547.1	$516.4	$561.3
Bioscience Production Adjusted Operating Income ($USD Millions)	$144.0	$123.4	$139.7
Bioscience Production Adjusted OI Margin (%)	26.3%	23.9%	24.9%

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Operating Cash Flow ($USD Millions)	$173.3	$109.3	$154.4
Free Cash Flow ($USD Millions)	$222.1	$82.1	$125.4
Adjusted Net Leverage (x)	3.2x	3.2x	3.2x
Cash & Equivalents ($USD Millions)	$261.9	$315.7	$449.4

Estimate comparison (S&P Global)

Metric	Estimate	Actual
Q2 2025 Revenue ($USD)	$1,675,372,880*	$1,683,400,000
Q2 2025 Primary EPS ($)	$0.247*	$0.24
Q2 2025 EBITDA ($USD)	$288,622,480*	$231,200,000*

Values marked with * retrieved from S&P Global. Note: S&P Global “EBITDA actual” may differ from company-defined adjusted EBITDA; company reported adjusted EBITDA was $279.8M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth	FY 2025	-1% to +1% (prior)	-2% to 0%	Lowered
Lab Solutions Growth	FY 2025	Minus low single digits to flat (prior)	Minus low single digits	Lowered
Bioscience Production Growth	FY 2025	Up mid single digits (prior)	Flat	Lowered
Bioprocessing Growth	FY 2025	Up mid single digits (prior)	Flat to up low single digits	Lowered
Single-use Solutions	FY 2025	—	Up mid single digits (H2 and year)	Maintained positive
Process Ingredients	FY 2025	—	Up low single digits (H2 and year)	Maintained positive
Controlled Environment Consumables	FY 2025	—	Low single digit decline	Lowered
Medical Grade Silicones (NuSil)	H2 2025	Mid-teens growth in H1 (observed)	Mid single digit decline H2; modest full-year growth	Lowered H2
Adjusted EBITDA Margin	FY 2025	—	16.5%–17.0%	Lowered vs run-rate
Adjusted EPS	FY 2025	—	$0.94–$0.98	Lowered
Free Cash Flow (before transformation)	FY 2025	—	$550M–$600M	Lowered
Organic Revenue Growth	Q3 2025	—	-4% to -2% (both segments down)	New guide
Adjusted EBITDA Margin	Q3 2025	—	Low ~16%	New guide

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology Initiatives	“Innovation-driven revenue growth” focus (Q4) ; Digital enhancements roadmap (Q1)	Launching Avantor Navigator AI; pricing optimization tool to improve conversion	Increasing focus; commercialization underway
Supply Chain/Operations	Resilient supply chain emphasized (Q4)	Extended maintenance caused backorders; actions to optimize manufacturing/planning	Near-term disruption; recovery plans in flight
Tariffs/Macro	Policy/funding headwinds in Education & Government (Q1)	Tariff COGS fully offset via pricing/sourcing agility	Tariffs mitigated; macro headwinds persist
Product Performance (Bioprocessing)	High-single-digit growth in Q4 ; growth in Q1	Flat YoY; discrete gene therapy/mRNA/MABS customer setbacks and under-absorption	Mixed; headwinds through H2
Regional Trends	—	Europe nearly flat; Americas/Asia pressured	Europe relatively stronger
Regulatory/Legal	—	Gene therapy safety/regulatory setbacks at a key customer	Negative impact near term
Cost Transformation	Program ahead of plan; deleveraging focus (Q4)	On track; >$400M run-rate savings by 2027	Ongoing execution
Medical Silicones (NuSil)	—	Low double-digit YTD; H2 inventory normalization expected	Strong H1; softer H2

Management Commentary

Strategic wins: “We were awarded contract extensions with several top 15 global pharma accounts… more than $100 million in share gains” – Michael Stubblefield .
Bioprocessing headwinds: “Planned maintenance… extended longer than planned and led to an increase in backorders… a leading gene therapy platform encountered regulatory and patient safety setbacks… a key mRNA platform scaled back their outlook” – Michael Stubblefield .
Margin drivers: “Adjusted gross margin… decline of 130 bps driven primarily by price actions in Lab Solutions… unfavorable product mix… higher than expected freight expense and fixed cost under absorption” – Brent Jones .
Cash/FCF: “Free cash flow was $125 million… updated FCF $550–$600 million due to meaningful prepaid rebates tied to contract extensions” – Brent Jones .
Leadership: Emmanuel Ligner named CEO effective Aug 18; extensive bioprocessing background (GE Life Sciences/Cytiva) .

Q&A Highlights

Guide mechanics: Q3 organic -4% to -2% assumes both segments down; silicones timing and bioprocessing recovery drive Q4 ramp potential .
Margin pressure: Predominantly price to defend/grow share; mix and bioprocessing underperformance also dilutive; absorption improves as share gains convert .
Bioprocessing sizing: Maintenance/backorders = 1–2 pts growth impact; discrete customer headwinds = ~2–3 pts; plant back online; recovery feathered through H2 .
Free cash flow reduction: Driven by upfront “prebate” payments on new lab contracts; not channel stuffing; working capital actions to offset .
Lab pricing/volume: Volume modest pressure; the main headwind is price to retain/grow share amid large biopharma competitiveness .

Estimates Context

Q2 2025 results vs S&P Global consensus: Revenue beat by ~$8M ($1.683B actual vs $1.675B estimate*), EPS slightly below/in line ($0.24 vs $0.247*). S&P Global EBITDA consensus exceeded S&P actual; note company-reported adjusted EBITDA of $279.8M differs from S&P “EBITDA” definition* .
FY 2025 consensus EPS ~$0.90* vs company guidance $0.94–$0.98, implying potential upward estimate revisions if H2 execution improves or downward if bioprocessing/regional headwinds persist*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

The quarter was operationally resilient but strategically defensive: revenue stable organically, EPS/EBITDA pressured by deliberate pricing actions to secure share and by bioprocessing execution/mix .
Near-term setup is cautious (Q3 down organically; low-16% margin) with H2 catalysts from silicones normalization and conversion of >$100M contract wins; monitor timing risk .
Bioprocessing is structurally healthy (MABS demand strong) but faces discrete customer/regulatory issues through year-end; execution levers in supply chain, sales intensity and innovation are in motion .
Cash generation remains solid; FCF cut reflects upfront rebates that should support future absorption/margins as volumes ramp .
CEO transition to Ligner is a potential medium-term positive for bioprocessing strategy and operational rigor; expect early priorities at Q3 call .
Estimate revisions likely modest: revenue in line/slight beat and EPS near consensus; watch FY EPS/FCF guidance vs S&P and any lab pricing/margin trajectory updates* .
Tactical: Stock narrative hinges on visibility into bioprocessing headwinds abating, lab margin stabilization, and tangible progress on cost transformation; Q3 print and commentary are the next critical inflection.

Appendices

Non-GAAP adjustments (Q2 2025):

Adjusted EPS reconciles for amortization (0.11), restructuring/severance (0.03), transformation (0.03), legal reserve (0.01), other (0.02), with tax benefit (-0.05) .
Adjusted EBITDA reflects add-backs for interest, taxes, amortization, depreciation, restructuring, transformation, legal, other items; margin 16.6% .

Other relevant press releases:

Avantor announces Emmanuel Ligner as next CEO (effective Aug 18) .
Avantor reiterates shareholder value creation focus and outlines governance/value initiatives in response to Engine Capital .
Engine Capital public letter advocating governance/portfolio actions (context for investor sentiment) .

Avantor, Inc. (AVTR)·Q2 2025 Earnings Summary