Key Takeaways
- Phibro Animal Health reported Q3 fiscal 2026 net sales of $383.5 million, up 10% year-over-year, with net income of $24.0 million (+15%) and adjusted EBITDA of $60.8 million (+11%).
- Animal Health segment sales grew 13% to $291.2 million, driven by the MFA portfolio acquired in October 2024, stronger legacy MFA demand in North America, and a 16% increase in vaccine sales.
- Adjusted diluted EPS increased 19% to $0.76 and gross margin expanded 270 basis points to 32.8% of net sales.
- After quarter end, Phibro expanded its revolving credit facility by $125 million to $435 million and launched its Sustainable Solutions Platform, including the new VERRATAIN Verified Sustainability Solutions product line.
- The company raised the lower end of its full fiscal year 2026 guidance, now projecting net sales of $1.46 to $1.50 billion and adjusted EBITDA of $247 to $255 million.
Phibro Animal Health Posts 10% Sales Growth and Raises Full-Year Guidance
Phibro Animal Health Corporation (Nasdaq: PAHC) reported third quarter fiscal 2026 results for the three months ended March 31, 2026. Net sales of $383.5 million were up $35.7 million, or 10%, from the prior year period. Net income rose 15% to $24.0 million ($0.59 diluted EPS), and adjusted EBITDA increased 11% to $60.8 million. Adjusted net income grew 19% to $31.2 million, with adjusted diluted EPS of $0.76, up from $0.64 a year ago.
“Phibro delivered a strong third quarter, with net sales increasing 10% to $383.5 million and adjusted EBITDA rising 11% to $60.8 million. Results were driven by continued strength in our Animal Health business, where sales increased 13%, supported by robust demand across MFAs, nutritional specialties, and vaccines. After quarter end, we announced a regulatory development in Brazil affecting certain antimicrobial products. In the past week, we also increased the size of our revolving credit facility by $125 million through an oversubscribed process, further strengthening our liquidity and financial flexibility. And finally yesterday, we announced the launch of our Sustainable Solutions Platform, including the introduction of VERRATAIN Verified Sustainability Solutions. Based on our performance to date and improved visibility into the remainder of the fiscal year, we updated our full year guidance by increasing the lower end of several of our guidance ranges, resulting in higher midpoints across key financial measures,” said Jack Bendheim, Chairman, President and CEO of Phibro Animal Health.
Segment Performance
The Animal Health segment drove the quarter, with net sales of $291.2 million, up $32.8 million or 13%. MFA and other sales increased $24.1 million (13%), reflecting $18.9 million in incremental revenue from the MFA portfolio acquired in October 2024 and stronger demand for legacy products in North America. Nutritional specialty sales rose $3.5 million (8%) on increased North American demand and higher companion animal sales. Vaccine sales grew $5.2 million (16%) on higher international demand in Israel, stronger domestic swine sales, and increased autogenous vaccine volumes. Animal Health adjusted EBITDA increased $8.0 million, driven by higher sales and gross profit partially offset by higher employee-related SG&A.
The Mineral Nutrition segment reported net sales of $73.4 million, up $6.6 million (10%), on stronger demand for zinc and trace minerals. Adjusted EBITDA for the segment decreased $0.6 million as higher unit costs outpaced the sales volume gain.
The Performance Products segment posted net sales of $18.9 million, down $3.8 million (17%), reflecting lower demand for personal care ingredients. Segment adjusted EBITDA declined $1.1 million.
Gross Margin Expansion and Cost Drivers
Gross profit increased $21.1 million, or 20%, to $125.7 million. Gross margin expanded 270 basis points to 32.8% of net sales. Excluding prior-period inventory write-offs, acquisition-related cost of goods sold, and incremental depreciation, adjusted gross margin increased 130 basis points to 33.5%, reflecting higher sales volume, favorable product mix, and pricing gains, partially offset by higher input and distribution costs.
SG&A of $81.0 million increased $10.0 million (14%), primarily on higher employee-related costs in the Animal Health segment. Net interest expense rose $1.1 million following the expiration of a favorable interest rate swap on $300 million of notional debt. Foreign currency resulted in a net loss of $1.9 million in Q3 2026, compared to a $5.5 million net gain in the prior year period.
Balance Sheet and Credit Facility
As of March 31, 2026, Phibro held cash and short-term investments of $77.5 million and total debt of $740.9 million, with a gross leverage ratio of 3.1x. Free cash flow for the trailing twelve months ended March 31, 2026 was $12.8 million. On April 28, 2026, the company amended its credit agreement to expand its revolving credit facility by $125 million to an aggregate commitment of $435 million, providing additional operating flexibility.
Updated Fiscal Year 2026 Guidance For Phibro
Phibro raised the lower end of its full fiscal year 2026 guidance ranges. The company now projects net sales of $1.46 to $1.50 billion (14% growth at midpoint), adjusted EBITDA of $247 to $255 million (37% growth), adjusted net income of $122 to $127 million (47% growth), and adjusted diluted EPS of $2.98 to $3.10 (45% growth). Net income guidance is $92 to $100 million, representing 99% growth at the midpoint. Guidance for GAAP measures assumes no additional foreign exchange gains or losses for the year ending June 30, 2026, and no recovery of tariffs previously imposed under the International Emergency Economic Powers Act.
Read the complete financial results here.
