PHIBRO ANIMAL HEALTH (PAHC)·Q2 2026 Earnings Summary

Phibro Crushes Q2 as MFA Acquisition Drives 21% Revenue Surge, Stock Jumps 10% After-Hours

February 5, 2026 · by Fintool AI Agent

Phibro Animal Health Corporation (NASDAQ: PAHC) delivered a blowout Q2 FY2026, with revenue surging 21% year-over-year to $373.9 million and adjusted EPS of $0.87—crushing the $0.60 consensus by 45%. The stock jumped 10.3% in after-hours trading to $45.24, reflecting investor enthusiasm for the company's accelerating momentum from its MFA portfolio acquisition.

In a significant governance announcement, the company revealed that Donnie Bendheim will become CEO in July 2026, with Jack Bendheim transitioning to Executive Chairman after five decades of leadership.

Did Phibro Beat Earnings?

Yes—decisively. Phibro beat on every key metric:

This marks Phibro's 8th consecutive quarterly EPS beat, with the magnitude of the surprise accelerating. The beat was driven by faster-than-expected uptake of the MFA (Medicated Feed Additives) portfolio acquired from Elanco in October 2024.

What Drove the Strong Results?

The MFA acquisition is the story. CEO Jack Bendheim highlighted "26% growth in animal health sales and a 41% increase in animal health adjusted EBITDA" as clear evidence the strategy is working.

"Medicated feed additives led with 34% growth, supported by strong gains in nutritional specialties and vaccines. This reflects our continued success integrating the MFA portfolio into our operations." — Jack Bendheim, CEO

Animal Health (+26% YoY to $290M)

The key story is the bifurcation between legacy and acquired MFA products:

This breakdown reveals that the acquired Elanco MFA portfolio (Z-Product) is driving virtually all the growth, while legacy MFA products are declining. This is both a positive (acquisition working) and a risk to monitor (legacy business erosion).

• Vaccines: +13% to $37.6M on strong poultry growth in Latin America and Southeast Asia
• Nutritional Specialties: +9% to $50.2M from increased North American dairy demand

Mineral Nutrition (+9% YoY to $68.9M)

Strong demand for trace minerals and zinc products.

Performance Products (-10% YoY to $15.0M)

Lower demand for personal care product ingredients—the one soft spot, though a small segment.

Industry Pulse: Barcelona & IPPE

Management conveyed strong positive sentiment from two recent events:

• Barcelona Global Leadership Meeting: 150+ global leaders gathered—the largest such meeting in over a decade. Jack Bendheim noted "energy and alignment were outstanding" with a consistent focus on customer partnerships and innovation.

• IPPE (Atlanta): The annual poultry show had an "upbeat" tone. Producers see more stability, demand remains strong, and customers are prioritizing "performance, reliability, and cost efficiency"—all areas where Phibro delivers value.

What Did Management Guide?

Guidance raised across all metrics:

The guidance raise is notable because it comes just one quarter after initial FY2026 guidance was set—management is signaling the MFA integration is ahead of plan.

CEO Bendheim expressed confidence: "With the strategy we have in place and the dedication of our teams, I feel very good about where we're headed."

How Did the Stock React?

The stock closed the regular session at $41.00 before the earnings release, then jumped 10.3% to $45.24 in after-hours trading. This brings PAHC to its highest level since early January, reflecting the market's positive reception of both the beat and raised guidance.

CEO Succession: Donnie Bendheim to Take the Helm

In a pivotal announcement, Phibro revealed a leadership transition effective July 2026:

• Donnie Bendheim (currently Executive VP of Corporate Strategy) becomes CEO
• Jack Bendheim transitions to Executive Chairman after five decades leading the company
• Full management team remains in place, ensuring continuity

"I'm stepping into this role at a dynamic moment for our industry. We are seeing genuine momentum in the protein markets. Producer confidence is rising, and global demand remains resilient." — Donnie Bendheim, CEO Designate

The timing is deliberate—management explicitly framed the transition as occurring "from a position of momentum and operational excellence."

Q&A Highlights

Gross Margin Drivers (JPMorgan)

CFO Glenn David attributed the strong 35.5% gross margin to:

• Pricing power on the Zoetis (acquired) MFA portfolio exceeding expectations
• Favorable mix from higher-margin vaccines and nutritional specialties
• ~100 bps one-time benefit from Tier 3 to Tier 1 market transition (returns at full cost)

Legacy MFA Timing (Bank of America)

The 5% decline in legacy MFA was driven by one large customer's inventory timing (~$10M impact). Management expects this to reverse in H2 FY2026.

End Market Sustainability (Bank of America)

COO Larry Miller emphasized:

• Demand for high-quality proteins remains "very strong" across beef, poultry, pork, turkey, dairy, and eggs
• Favorable feed costs supporting producer margins
• Geographic diversification enhanced by MFA acquisition

Share Gains (Bank of America)

Phibro is gaining share in poultry anticoccidial programs due to the more complete portfolio, and seeing growth in swine enteritis products.

Companion Animal Update (BNP Paribas)

Restoris (oral health product) launched late 2025, exhibited at VMX in Orlando with "a lot of foot traffic and interest." Material revenue contribution expected starting FY2027.

Phibro Forward Initiative (Morgan Stanley)

Management confirmed the cost/efficiency program is "halfway through" with maximum benefits expected in FY2027:

• Structural changes driving higher gross margins
• R&D and technology investments laying groundwork for future growth
• Full annualization of benefits expected in FY2027

What Changed From Last Quarter?

Several notable shifts:

1. MFA Integration Accelerating: The $57.5M in incremental MFA revenue exceeded expectations, suggesting the acquisition synergies are materializing faster than planned

2. Margin Expansion: Gross margin improved 260 basis points to 35.5% from 32.9% YoY, driven by favorable product mix, higher ASPs, and operating leverage

3. Leverage Improving: While gross leverage stands at 3.1x ($737M debt / $234.8M LTM Adj. EBITDA), the rapid EBITDA growth is quickly de-leveraging the balance sheet

4. Foreign Currency Tailwind: FX losses dropped to $2.1M from $11.7M YoY as Argentine Peso and Israeli Shekel headwinds eased

Financial Summary

Balance Sheet & Cash Flow

Tariff Inventory Build-Up

Management noted that free cash flow has been "negatively impacted by a buildup of inventory in advance of tariffs and to meet increasing customer demand." Inventory is expected to stabilize in coming quarters.

Interest Rate Hedging

Phibro has prudently hedged a significant portion of its floating-rate debt:

• $150M fixed at 3.18% + margin through September 2029
• $275M fixed at 3.64% + margin through February 2030
• $250M Forward Starting Interest Rate Collar (July 2025) with 4.75% cap / 1.99% floor through June 2026

This hedging strategy provides protection against rising rates while limiting costs if rates decline further.

What's Next?

Key Catalysts to Watch:

1. CEO Transition (July 2026) — Donnie Bendheim takes the helm; watch for any strategic shifts
2. Legacy MFA Timing Recovery (H2 FY2026) — $10M customer timing impact expected to reverse
3. Phibro Forward Full Annualization (FY2027) — Maximum margin benefits expected next fiscal year
4. Restoris Ramp (FY2027+) — Companion animal oral health product material contribution
5. Inventory Normalization — Tariff-related build-up should stabilize in coming quarters

Key Takeaways

1. MFA acquisition is a home run — Acquired MFAs up 156% YoY, driving the beat
2. CEO succession announced — Donnie Bendheim takes over in July; Jack becomes Executive Chairman
3. Legacy MFA timing, not erosion — 5% decline driven by one customer's $10M timing shift, expected to reverse H2
4. Broad-based strength — Vaccines (+13%) and nutritional specialties (+9%) also growing solidly
5. Guidance raised meaningfully — Revenue to $1.45-1.50B, EBITDA to $245-255M (36% growth)
6. Stock reacting appropriately — 10% after-hours pop reflects the quality of the beat
7. Phibro Forward on track — Halfway through initiative, max benefits in FY2027

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Phibro Animal Health reports on a June fiscal year end. Q2 FY2026 covers the quarter ended December 31, 2025.