Sign in

You're signed outSign in or to get full access.

CI

Catalent, Inc. (CTLT)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 FY2024 net revenue was $1.07B (+4% YoY; +3% constant currency), with double‑digit non‑COVID growth; adjusted EBITDA rose 55% YoY to $163M and margin expanded to 15.1% .
  • Versus external consensus, CTLT missed on revenue ($1.07B vs ~$1.11B) and adjusted EPS (-$0.06 vs ~$0.24); S&P Global consensus was unavailable due to a data mapping constraint .
  • Management highlighted sequential improvement in consolidated revenue and adjusted EBITDA margin for the second consecutive quarter and record non‑COVID customer wins in Q3, reinforcing momentum in Biologics and Pharma & Consumer Health .
  • No earnings call and guidance withdrawn amid the pending all‑cash acquisition by Novo Holdings (expected to close towards end of calendar 2024), leaving the stock narrative tied to deal progress and operational traction; liquidity was ~$1.3B, net debt $4.82B, net leverage 9.3x (improving from 10.3x) .

What Went Well and What Went Wrong

What Went Well

  • Double‑digit non‑COVID revenue growth and record non‑COVID customer wins; momentum cited across both segments: “Catalent returned to growth… double‑digit non‑COVID year‑on‑year revenue growth… record third quarter non‑COVID customer wins” — Alessandro Maselli, CEO .
  • Adjusted EBITDA increased 55% YoY to $163M; consolidated adjusted EBITDA margin expanded to 15.1% from 10.1% YoY and improved sequentially for the second quarter running .
  • Pharma & Consumer Health segment net revenue grew 8% YoY to $613M; segment EBITDA rose 21% YoY to $153M; margin expanded to 24.9% (from 22.3%) .

What Went Wrong

  • External consensus misses: revenue $1.07B vs ~$1.11B and adjusted EPS -$0.06 vs ~$0.24; S&P Global consensus unavailable (tool mapping constraint) .
  • Biologics segment net revenue declined 3% YoY to $461M, reflecting ongoing normalization from COVID and site transformation impacts, despite a sharp EBITDA rebound (margin 10.6% vs 1.1%) .
  • Leverage remains elevated: net debt $4.82B; net leverage 9.3x (down from 10.3x in Q2), constraining financial flexibility despite ~$1.3B liquidity .

Financial Results

Consolidated quarterly trajectory (Q1→Q3 FY2024)

MetricQ1 2024Q2 2024Q3 2024
Revenue ($USD Billions)$0.982 $1.032 $1.074
GAAP EPS ($USD)-$3.94 -$1.12 -$0.56
Adjusted EPS ($USD)-$0.10 -$0.24 -$0.06
Adjusted EBITDA ($USD Millions)$115 $124 $163
Adjusted EBITDA Margin %11.7% 12.0% 15.1%

Q3 FY2024: YoY and vs external consensus

MetricQ3 2023Q3 2024 ActualConsensus (external)Result
Revenue ($USD Billions)$1.037 $1.074 ~$1.11 Miss
Adjusted EPS ($USD)-$0.09 -$0.06 ~$0.24 Miss
Adjusted EBITDA ($USD Millions)$105 $163 N/A—
Adjusted EBITDA Margin %10.1% 15.1% N/A—

Segment breakdown (Q3 FY2024 vs Q3 FY2023)

Segment MetricQ3 2023Q3 2024
Biologics Net revenue ($USD Millions)$475 $461
Biologics Segment EBITDA ($USD Millions)$6 $49
Biologics EBITDA margin %1.1% 10.6%
Pharma & Consumer Health Net revenue ($USD Millions)$563 $613
Pharma & Consumer Health Segment EBITDA ($USD Millions)$125 $153
Pharma & Consumer Health EBITDA margin %22.3% 24.9%

KPIs and balance sheet

KPIQ1 2024Q2 2024Q3 2024
Total Debt ($USD Billions)$4.95 $5.01 $4.98
Net Debt ($USD Billions)~$4.74 ~$4.78 ~$4.82
Cash & Equivalents ($USD Millions)$209 $229 $162
LTM Adjusted EBITDA ($USD Millions)$642 $462 $520
Net Debt / LTM Adjusted EBITDA (x)7.4x 10.3x 9.3x
First Lien Debt / Adj. EBITDA (x)3.4x 4.8x 4.4x
Available Liquidity ($USD Billions)N/A~$1.3 ~$1.3
Cash from Operations YTD ($USD Millions)N/AN/A$54 (nine months)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueFY 2024$4.3B–$4.5B No guidance due to pending merger Withdrawn
Adjusted EBITDAFY 2024$680M–$760M No guidance due to pending merger Withdrawn
Adjusted Net IncomeFY 2024$113M–$175M No guidance due to pending merger Withdrawn
Weighted Avg Diluted SharesFY 2024181M–183M Not updated; no guidance Withdrawn

Earnings Call Themes & Trends

Note: The company did not host an earnings call for Q2 and Q3 FY2024 due to the pending Novo Holdings acquisition; themes below reflect press release commentary .

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 FY2024)Trend
Non‑COVID growthStrong non‑COVID sequential revenue growth in Biologics and PCH (Q2) ; reaffirmed FY24 guidance and operational improvement focus (Q1) Returned to growth; double‑digit non‑COVID YoY revenue growth; record Q3 non‑COVID customer wins Improving
Segment momentumBiologics challenges but sequential progress; PCH stable/growing (Q2) Biologics EBITDA/margin rebounded; PCH net revenue +8% YoY and margin +260 bps Positive mix
Operational improvementsInvesting in site transformation and high‑growth areas (Q2) ; focus on pre‑filled syringes capacity (Q1) Continued momentum; sequential consolidated margin improvement for second consecutive quarter Executing
Leverage & liquidityLiquidity ~$1.3B after term loan; net leverage 10.3x (Q2) Liquidity ~$1.3B; net leverage improved to 9.3x Improving
Guidance policyReaffirmed FY24 guidance (Q1) ; no guidance starting Q2 due to merger No guidance; no call due to pending merger Limited disclosures
Strategic transactionAnnounced Novo Holdings acquisition (Q2) Transaction expected to close towards end of calendar 2024 Ongoing

Management Commentary

  • “Catalent returned to growth, including double‑digit non‑COVID year‑on‑year revenue growth… consolidated sequential revenue and adjusted EBITDA margin [increased] for the second consecutive quarter… record third quarter non‑COVID customer wins” — Alessandro Maselli, President & CEO .
  • “Catalent will remain a leading global service provider… following the completion of the transaction with Novo Holdings… Under private ownership, we will benefit from access to additional capital and resources” — Alessandro Maselli .
  • Merger details: all‑cash acquisition by Novo Holdings valuing CTLT at $16.5B EV; expected close towards end of calendar 2024; no earnings call and no forward guidance during pendency .

Q&A Highlights

  • No Q&A session was held; the company did not host an earnings conference call in light of the pending Novo Holdings transaction .

Estimates Context

  • S&P Global consensus data was unavailable due to a company mapping constraint in our estimates tool.
  • External sources indicate: revenue consensus ~$1.11B vs actual $1.07B (miss), adjusted EPS consensus ~$0.24 vs actual -$0.06 (miss) .
  • Given the absence of guidance and the reported misses vs external consensus, near‑term estimate frameworks will likely key off sequential margin progress and non‑COVID demand trends as disclosed in the release .

Key Takeaways for Investors

  • Double‑digit non‑COVID revenue growth, record non‑COVID customer wins, and two consecutive quarters of sequential adjusted EBITDA margin improvement signal operational traction across Biologics and PCH .
  • Despite Biologics revenue -3% YoY, segment EBITDA and margin rebounded materially (10.6% vs 1.1% YoY), aiding consolidated margin expansion .
  • Liquidity remains solid (~$1.3B), and net leverage improved to 9.3x from 10.3x, though absolute leverage is still high; cash ended at $162M with net debt ~$4.82B .
  • No call and withdrawn guidance during the Novo Holdings acquisition period concentrates catalysts on deal approvals/close timing and continued sequential margin improvements .
  • External consensus misses on revenue and adjusted EPS underscore lingering normalization from COVID programs and Biologics variability; watch segment mix where PCH contributed 57% of total revenue in Q3 .
  • Working capital and cash generation remain focus areas (nine‑month CFO $54M) as capex and site transformation continue; balance between margin recovery and deleveraging will inform medium‑term thesis .
  • Strategic backdrop: all‑cash take‑private by Novo Holdings expected by end‑2024; investment case tilts toward deal completion and post‑close execution under private ownership .