Phibro Animal Health Reports Strong Second-Quarter Performance and Raises Fiscal 2026 Outlook
Phibro Animal Health Corporation (Nasdaq: PAHC), a global leader in animal health and nutrition solutions, has reported solid financial results for its second quarter ended December 31, 2025, while also raising its financial guidance for the fiscal year ending June 30, 2026. The company delivered double-digit revenue growth, significant profitability gains, and continued momentum across its core Animal Health and Mineral Nutrition segments, reflecting the successful integration of its recently acquired MFA portfolio and strong global demand.
Second Quarter Financial Highlights
For the three months ended December 31, 2025, Phibro posted net sales of $373.9 million, representing an increase of $64.6 million, or 21%, compared with the same period in the prior year. Net income surged to $27.5 million, up from $3.2 million a year earlier, reflecting improved operating leverage and favorable business mix.
Diluted earnings per share reached $0.67, an increase of $0.59 year over year. Adjusted EBITDA rose sharply to $68.1 million, up 41%, while adjusted net income climbed 60% to $35.7 million. Adjusted diluted EPS for the quarter was $0.87, marking a 58% increase from the prior-year period.
Management Commentary
Commenting on the results, Jack Bendheim, President and Chief Executive Officer of Phibro Animal Health Corporation, highlighted the company’s operational execution and growing momentum across markets.
“This was a strong quarter for us, and I’m really proud of how our teams are executing around the world,” Bendheim said. “We are seeing faster-than-expected uptake of our newly integrated MFA portfolio, which is already delivering meaningful benefits to our results. At the same time, our nutritional specialty products and vaccines continue to perform well across key geographies.”
He added that the company’s confidence in its strategy and performance led to the decision to raise full-year guidance, despite ongoing challenges in the global macroeconomic environment.
Revenue Performance by Segment
Animal Health Segment
The Animal Health segment remained the primary growth driver during the quarter. Segment net sales totaled $290.0 million, an increase of $60.6 million, or 26%, compared to the prior year.
Sales of MFAs and other Animal Health products rose 34%, driven largely 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 major customer. Nutritional specialty product sales increased 9%, supported by higher dairy demand in North America. Vaccine sales grew 13%, reflecting continued strength in poultry products in Latin America and rising international demand, particularly in Southeast Asia.
Mineral Nutrition Segment
Mineral Nutrition segment net sales reached $68.9 million, up 9% year over year. The growth was primarily attributable to increased demand for trace minerals and zinc products, reflecting healthy livestock market conditions and customer restocking trends.
Performance Products Segment
The Performance Products segment reported net sales of $15.0 million, a decline of 10% from the prior year. The decrease was mainly due to lower demand for ingredients used in personal care applications.
Profitability and Margin Expansion
Gross profit for the quarter increased 30% to $132.7 million, compared with $101.9 million in the prior-year period. Gross margin expanded by 260 basis points to 35.5%, benefiting from higher sales volumes, favorable product mix, and improved pricing.
Excluding acquisition-related purchase accounting impacts associated with the MFA transaction, gross margin would have been 35.7%, up 220 basis points year over year. The Animal Health segment was the primary contributor to margin expansion, supported by pricing actions and strong product mix, partially offset by higher input and distribution costs as well as foreign exchange impacts.
Operating Expenses and SG&A
Selling, general and administrative (SG&A) expenses totaled $82.3 million, an increase of 8% compared with the prior year. The increase reflected higher employee-related costs, including incremental headcount added through the MFA acquisition, as well as continued investment in Phibro Forward income growth initiatives.
On an adjusted basis, excluding acquisition-related and other non-recurring items, SG&A rose 17%, primarily driven by increased personnel costs across Animal Health and corporate functions.
Interest, Foreign Exchange, and Taxes
Net interest expense increased to $11.8 million, reflecting higher average debt levels associated with financing the MFA acquisition and the expiration of a favorable interest rate swap. Foreign currency losses declined significantly to $2.1 million, compared with $11.7 million in the prior year, due to more stable currency movements in key international markets.
The provision for income taxes was $9.0 million, resulting in an effective tax rate of 24.6%, compared with 34.2% in the prior year. The improvement was driven by a more favorable geographic income mix and reduced foreign exchange volatility.
Adjusted Earnings Performance
Adjusted EBITDA rose 41% to $68.1 million, driven primarily by higher sales and gross profit in the Animal Health segment. Mineral Nutrition also contributed modest EBITDA growth, while Performance Products experienced a slight decline due to lower sales volumes. Adjusted net income increased 60%, reflecting strong operating performance partially offset by higher interest expense.
Balance Sheet and Cash Flow Strength
For the twelve months ended December 31, 2025, Phibro generated $47.3 million in free cash flow. As of quarter-end, the company reported total debt of $737.0 million, a gross leverage ratio of 3.1x, and cash and short-term investments of $74.5 million. Adjusted EBITDA for the trailing twelve months reached $234.8 million, highlighting the company’s strong earnings trajectory.
Updated Fiscal 2026 Financial Guidance
Reflecting its strong first-half performance and positive outlook, Phibro raised its fiscal year 2026 guidance. The company now expects net sales of $1.45 billion to $1.50 billion, representing approximately 14% growth year over year. Adjusted EBITDA is projected to range between $245 million and $255 million, an increase of 36%.
Net income is expected to reach $85 million to $95 million, while adjusted net income is forecast at $120 million to $127 million. Adjusted diluted EPS is projected between $2.93 and $3.10, with an adjusted effective tax rate of approximately 25%. GAAP guidance assumes no additional foreign exchange gains or losses for the remainder of fiscal 2026.
Webcast and Conference Call Information
Phibro will host a webcast and conference call to review its financial results and outlook on Thursday, February 5, 2026, at 9:00 a.m. Eastern Time. The webcast will be available via the company’s investor relations website, with a replay archived following the event.
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