Phibro Animal Health Reports Strong Second Quarter Results and Raises FY2026 Guidance
Phibro Animal Health Corporation (Nasdaq: PAHC) reported solid financial results for the second quarter ended December 31, 2025, alongside an upward revision to its financial guidance for the fiscal year ending June 30, 2026. The Company delivered strong top-line growth, significant profitability improvements, and expanding margins, driven largely by the successful integration of its recently acquired MFA portfolio and continued strength across its core Animal Health offerings.
Second Quarter Financial Highlights
For the three months ended December 31, 2025, Phibro reported net sales of $373.9 million, representing an increase of $64.6 million, or 21%, compared with the same period last year. Net income rose sharply to $27.5 million, up $24.3 million year over year. Diluted earnings per share increased to $0.67, reflecting a $0.59 improvement from the prior-year quarter.
Profitability metrics also showed strong gains. Adjusted EBITDA increased 41% to $68.1 million, while adjusted net income reached $35.7 million, up 60% year over year. Adjusted diluted earnings per share rose 58% to $0.87, highlighting improved operational leverage and favorable product mix.
Updated Fiscal Year 2026 Outlook
Based on the Company’s strong second-quarter performance and continued momentum across its business segments, Phibro raised its fiscal year 2026 financial guidance. The Company now expects net sales to range between $1.45 billion and $1.50 billion, with adjusted EBITDA projected between $245 million and $255 million.
Management cited strong customer demand, rapid uptake of newly integrated products, and sustained growth across nutritional specialty and vaccine portfolios as key drivers behind the improved outlook.
Management Commentary
Jack Bendheim, President and Chief Executive Officer of Phibro, expressed confidence in the Company’s trajectory, noting that execution across global operations continues to exceed expectations.
He highlighted the faster-than-anticipated integration of the MFA portfolio, which is already contributing meaningfully to financial performance. Bendheim also emphasized the ongoing strength of Phibro’s nutritional specialty and vaccine businesses across multiple regions, particularly in international markets. Despite ongoing global economic challenges, management remains confident in the Company’s strategy, operational discipline, and long-term growth prospects.
Net Sales Performance by Segment
Animal Health
The Animal Health segment delivered another strong quarter, with net sales rising 26% to $290.0 million. Growth was primarily driven by increased sales of MFAs and other products, which rose 34%, supported by $57.5 million in incremental revenue from the MFA portfolio acquired in October 2024. This growth was partially offset by the timing of purchases by a large customer.
Nutritional specialty product sales increased 9%, reflecting stronger North American dairy demand. Vaccine sales grew 13%, driven by continued poultry market expansion in Latin America and rising international demand, particularly in Southeast Asia.
Mineral Nutrition
Mineral Nutrition net sales increased 9% to $68.9 million, supported by higher demand for trace minerals and zinc products. The segment benefited from improved customer demand across several end markets.
Performance Products
Performance Products net sales declined 10% to $15.0 million, primarily due to lower demand for ingredients used in personal care applications.
Gross Profit and Margin Expansion
Gross profit for the quarter increased 30% to $132.7 million, reflecting higher sales volumes and improved product mix. Gross margin expanded 260 basis points to 35.5%, compared with 32.9% in the prior-year period.
Excluding acquisition-related purchase accounting impacts, gross margin improved to 35.7%, supported by favorable pricing, higher sales, and operational efficiencies. These gains were partially offset by higher input and distribution costs, as well as unfavorable foreign currency movements.
Animal Health gross profit showed the most significant improvement, driven by strong sales growth and pricing benefits. Mineral Nutrition gross profit increased modestly due to higher volumes, while Performance Products gross profit declined due to softer demand.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses increased 8% to $82.3 million. The increase was primarily attributed to higher employee-related costs, including incremental headcount added following the MFA acquisition, and continued investments in Phibro Forward income growth initiatives.
Excluding acquisition-related and other non-recurring items, SG&A expenses increased 17%, reflecting strategic investments to support future growth.
Interest Expense and Foreign Currency Impact
Net interest expense rose to $11.8 million, an increase of $2.8 million year over year, driven by higher average debt levels related to the financing of the MFA acquisition and the expiration of a favorable interest rate swap.
Foreign currency losses improved significantly, declining to $2.1 million compared with $11.7 million in the prior year. Currency movements in the Argentine Peso and Israeli New Shekel impacted current results, while prior-year losses were largely driven by fluctuations in the Brazilian Real.
Income Taxes and Net Income Growth
The provision for income taxes increased to $9.0 million, resulting in an effective tax rate of 24.6%, compared with 34.2% in the prior year. The change reflects differences in geographic income mix, global tax considerations, and lower foreign exchange losses.
Net income rose sharply to $27.5 million, supported by higher operating income, improved margins, and reduced foreign currency losses, partially offset by higher interest expense and SG&A costs.
Outlook
With strong execution, improving margins, and growing contributions from its expanded product portfolio, Phibro Animal Health enters the second half of fiscal 2026 with confidence. The Company remains focused on disciplined growth, operational excellence, and delivering value to customers and shareholders alike.
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