Executive Summary

Phibro’s Q3 FY2025 delivered strong top-line and profitability: net sales $347.8M (+32% YoY), adjusted EBITDA $54.9M (+85% YoY), and adjusted diluted EPS $0.63 (+$0.32 YoY), driven primarily by the Zoetis MFA portfolio integration and continued execution on “Phibro Forward” initiatives .
Results vs consensus: EPS beat (Adj. EPS $0.63 vs $0.52*), revenue slight miss ($347.8M vs $352.4M*); EBITDA broadly in line vs S&P consensus ($54.9M vs $55.0M*) . Values retrieved from S&P Global.
FY25 guidance raised/narrowed: revenue $1.26–$1.29B (from $1.25–$1.30B), adjusted EBITDA $177–$183M (from $172–$180M), adjusted EPS $1.96–$2.09 (from $1.87–$2.01). Management cites stronger mix, Zoetis MFA margin contribution, and early “Phibro Forward” benefits .
Stock catalysts: sustained EBITDA/EPS momentum into Q4; integration benefits tracking ahead of initial expectations; tariff risk framed as manageable for FY25 with limited FY26 impact (~$5–$10M) and multiple mitigation levers (inventory, supplier shifts, pricing) .

What Went Well and What Went Wrong

What Went Well
- Zoetis MFA integration: MFA & Other +68% YoY with ~$77M from acquired portfolio; Animal Health +42% YoY; management highlighted stronger-than-anticipated margin leverage from the acquired products .
- Profitability surge: adjusted EBITDA +85% YoY to $54.9M and adjusted EPS up $0.32 to $0.63 on higher gross profit and operating leverage (ex. non-GAAP items) .
- Early “Phibro Forward” benefits: SKU rationalization, procurement, and manufacturing improvements contributing, with management citing greater confidence and mix tailwinds, notably in vaccines and acquired MFAs .
What Went Wrong
- Legacy MFA softness and order timing: legacy MFA & Other declined ~3% in the quarter due to timing with large customers and a tough compare; vaccines growth limited by timing/registrations in Asia .
- Gross margin optics: reported gross margin dipped 10 bps to 30.1% due to $3.8M inventory write-offs (closure of an immaterial business) and $1.5M purchase accounting COGS; ex-items, gross margin +140 bps to 31.6% .
- Higher interest expense: net interest $9.4M (+$4.8M YoY) on debt financing of the acquisition, partly offset by favorable FX ($+5.5M vs $(2.4)M YoY) .

Financial Results

Quarterly trend (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$260.4	$309.3	$347.8
GAAP Diluted EPS ($)	$0.17	$0.08	$0.51
Adjusted Diluted EPS ($)	$0.35	$0.54	$0.63
Adjusted EBITDA ($M)	$30.7	$48.2	$54.9
Gross Margin (%)	32.1%	32.9%	30.1%
Operating Margin (%)	6.8%	8.3%	9.6%

Q3 2025 actual vs prior year and estimates

Metric	Q3 2024	Q3 2025 Actual	S&P Consensus	Beat/Miss
Revenue ($M)	$263.2	$347.8	$352.4*	Miss (~$4.6M)
Adjusted EBITDA ($M)	$29.7	$54.9	$55.0*	In line
Adjusted Diluted EPS ($)	$0.31	$0.63	$0.52*	Beat (+$0.11)
Values retrieved from S&P Global.

Segment breakdown – Q3 2025

Segment	Net Sales ($M)	YoY Change
MFAs and Other	$181.6	+68%
Nutritional Specialties	$43.4	+8%
Vaccines	$33.4	+1%
Animal Health (Total)	$258.4	+42%
Mineral Nutrition	$66.8	+4%
Performance Products	$22.7	+28%

KPIs and balance sheet

KPI	Q3 2025
Free Cash Flow (TTM, $M)	$49.1
Total Debt ($M)	$734.2
Cash & Short-term Investments ($M)	$70.4
Gross Leverage (TTM Adjusted EBITDA basis)	3.0x
Net Leverage	2.7x (Net debt $664M / $245M TTM Adj. EBITDA)
Dividend	$0.12/sh declared, payable Jun 25, 2025

Non-GAAP adjustments of note: $3.8M inventory write-offs (Phibro Forward) in COGS; $1.5M insurance settlement gain; acquisition-related COGS $1.5M net increase; SG&A included $4.0M Phibro Forward costs and $0.6M acquisition-related costs .

Guidance Changes

Metric	Period	Previous Guidance (Q2)	Current Guidance (Q3)	Change
Net Sales	FY2025	$1.25B–$1.30B	$1.26B–$1.29B	Narrowed; midpoint slightly raised
GAAP Net Income	FY2025	$39M–$45M	$40M–$45M	Narrowed/up at low end
GAAP Diluted EPS	FY2025	$0.96–$1.11	$0.98–$1.11	Narrowed/up at low end
Adjusted EBITDA	FY2025	$172M–$180M	$177M–$183M	Raised
Adjusted Net Income	FY2025	$76M–$82M	$80M–$85M	Raised
Adjusted Diluted EPS	FY2025	$1.87–$2.01	$1.96–$2.09	Raised
Adjusted Effective Tax Rate	FY2025	~25%	~25%	Maintained
Dividend	Ongoing	$0.12/sh per quarter (history)	$0.12/sh declared May 6	Maintained

Management attributes upgrades to mix (vaccines strength), Zoetis MFA margin contribution, and Phibro Forward execution .

Earnings Call Themes & Trends

Topic	Q1 2025 (Nov)	Q2 2025 (Feb)	Q3 2025 (May)	Trend
Zoetis MFA integration	Early days; prelim. 8-mo impact ~$200M rev, ~20% EBITDA margin; EPS +$0.25; destocking/blackouts expected	Integration “moving very smoothly”; Q2 Zoetis EBITDA est. ~$12M; Nov blackout then Dec acceleration; confident in ~$200M FY25	Full-quarter contribution ~$77M sales; est. Zoetis EBITDA ~$23.4M; margins better than initial expectations	Positive; accelerating contribution and margin
Phibro Forward	Program to unlock revenue/cost savings; no major headcount cuts	Ongoing; EBITDA margin progression; price/procurement/savings	Early benefits cited (SKU, procurement, manufacturing)	Building impact
Tariffs/Macro	Not highlighted	China tariffs likely “very small” impact; mitigation plans	FY25 de minimis; FY26 impact manageable ($5–$10M); mitigations: inventory, supplier shifts, pricing	Manageable headwind
Segment performance	Vaccines +22%, MFAs +15%, Nutritional +6%	Legacy Animal Health strong; broad demand	Animal Health +42% (acq.-driven); legacy MFA timing -3%; vaccines +1% limited by Asia regs/timing	Solid; timing noise
FX	Limited impact at revenue due to USD pricing	—	Limited impact; some COGS favorability	Neutral-to-minor tailwind
Balance sheet/leverage	Gross leverage 3.9x; refi completed	Gross 3.1x; swaps added	Gross 3.0x; net 2.7x; additional hedges	Improving leverage
Companion Animal	Discontinued atopic dermatitis; pipeline intact	Still a priority; focus messaging on Livestock	Continued focus on Livestock strength	Balanced portfolio focus

Management Commentary

“Our strong performance this past quarter underscores the successful integration of the Zoetis MFA business and the initial positive impact of our Phibro Forward initiatives...” – Jack Bendheim, CEO .
“We are narrowing our full year guidance ranges, and in most case, raising the midpoint... adjusted EBITDA of $177 million to $183 million, and adjusted EPS of $1.96 to $2.09.” – Jack Bendheim .
“We generated $49 million of positive free cash flow (TTM)... gross leverage ratio was 3.0x... net leverage ratio was 2.7x...” – Glenn David, CFO .
“We anticipate some pressure... in the range of $5–$10 million [from tariffs in FY26], but we believe we're well positioned to manage these impacts.” – Jack Bendheim .

Q&A Highlights

Tariffs exposure/mitigation: Majority manufacturing in U.S./Brazil/Israel; mitigation via inventory builds, supplier shifts, negotiated sharing, and price increases; FY25 de minimis; FY26 manageable .
Legacy MFA softness: -3% in Q3 due to timing and tough comp (Q3’24 +16%); year-to-date legacy MFA +7% .
Guidance raise drivers: mix (vaccines), Phibro Forward benefits, and stronger-than-expected Zoetis margins leveraging global infrastructure .
Zoetis contribution: Q3 estimated EBITDA ~$23.4M (directly attributable costs only); integration on-track .
Capital structure/risk management: layered swaps/collar; $0.12 dividend continued .

Estimates Context

Q3 2025 vs S&P Global consensus:
- Revenue: $347.8M actual vs $352.4M consensus* (slight miss) .
- Adjusted EPS: $0.63 actual vs $0.52 consensus* (beat) .
- EBITDA: $54.9M company-adjusted vs $55.0M consensus* (in-line); note S&P actual EBITDA figure may reflect a different definition (reported vs adjusted) .
  Values retrieved from S&P Global.

Where estimates may adjust: upward for FY25 EBITDA/EPS given raised guidance and integration margin evidence; modest caution for legacy MFA near-term timing and vaccines timing/registrations (Asia) .

Key Takeaways for Investors

Integration-led step-up: Acquired Zoetis MFA assets are scaling rapidly with higher-than-initial margin contribution, underpinning the FY25 EBITDA/EPS raise .
Quality of earnings: Operating margin expanded to 9.6% and adjusted EPS to $0.63 despite higher interest, reflecting mix and cost actions; ex-items gross margin improvement was notable .
Guidance credibility: Second consecutive quarterly raise/narrow for FY25; management cites tangible drivers (mix, Phibro Forward, Zoetis margins), not just one-offs .
Risk management: Tariffs framed as manageable with multiple mitigation levers; FX exposure limited via USD pricing strategy; layered interest rate hedging reduces financing volatility .
Watch legacy timing: Some order timing/tough compares in legacy MFAs and vaccines registrations in Asia can create quarterly noise; underlying demand remains healthy .
FCF/leverage trend supportive: TTM FCF $49.1M; gross leverage down to 3.0x, net 2.7x; dividend maintained at $0.12, signaling confidence .
Near-term setup: EPS beat with only slight revenue miss suggests execution and mix are the core drivers; continued delivery on integration and “Phibro Forward” should sustain estimate momentum into FY26 .

Appendix: Additional Detail (source references)

Consolidated results and YoY comparisons .
Segment sales and adjusted EBITDA reconciliation .
Non-GAAP adjustment details .
Dividend declaration .
Prior quarters for trend (Q1/Q2 FY25) .
Guidance frameworks Q2 vs Q3 .

PHIBRO ANIMAL HEALTH CORP (PAHC)·Q3 2025 Earnings Summary