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DATE

Thursday, February 26, 2026 at 5 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Joseph Papa
  • Executive Vice President and Chief Financial Officer — Richard Lindahl

TAKEAWAYS

  • Adjusted EBITDA -- $205 million, an increase of $22 million or 12% year over year, with margin expansion of 1,000 basis points.
  • Gross Margin -- Improved by 900 basis points for the full year and 300 basis points in the fourth quarter, reaching 43% in the quarter due to product mix and operational efficiency.
  • Operating Expenses -- Decreased by $140 million, representing a 37% reduction versus 2024.
  • Adjusted Net Income Per Share -- Increased to $1.53 in 2025 from a loss of $0.23 in 2024.
  • Total Revenues -- Reported at $743 million for the year, excluding $115 million of settlement and divested revenue from the prior year.
  • Cash and Liquidity -- Ended the year with $205 million in cash and $305 million in total liquidity, including $100 million of undrawn revolver capacity.
  • Net Leverage -- Improved to 1.9x from 3.3x at the end of 2024, reflecting debt repayments and higher cash flow.
  • International MCM Sales -- Accounted for 34% of full year medical countermeasure revenue, supported by a newly announced CAD 140 million Canadian government contract.
  • Naloxone Segment Developments -- Secured FDA approval for two multi-use NARCAN Nasal Spray configurations (6-count and 24-count multipacks) targeting high-volume partners.
  • Share Buyback -- Repurchased 3.1 million shares, with an additional $50 million authorization approved through March 31, 2027.
  • 2026 Revenue Guidance -- Projected at $720 million to $760 million; adjusted EBITDA expected between $135 million and $155 million, and adjusted gross margin between 45% and 47%.
  • First Quarter 2026 Outlook -- Revenues guided to $135 million to $155 million, with approximately 40% of annual revenue expected in the first half.
  • Capital Structure Actions -- Made a $100 million voluntary prepayment on the term loan and repurchased $10 million of unsecured bonds, reducing gross debt to $590 million and net debt to $384 million (total reductions of 32% and 49% from year-end 2023, respectively).
  • Commercial Segment Q4 Revenue -- Lower than anticipated due to softer demand from public interest customers amid a U.S. government shutdown, described as a temporary impact.
  • MCM Outlook -- U.S. government orders have moderated, setting a new baseline, while international demand remains a growth catalyst; 2025 included a $60 million international order not expected to recur in 2026.

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RISKS

  • Richard Lindahl said, "net income was below the range due to the loss on debt extinguishment," indicating a realized negative impact on bottom-line results.
  • Guidance notes that adjusted EBITDA will decrease from 2025 primarily due to the $50 million EBITDA contribution from a onetime 2025 international order that will not repeat in 2026.
  • Quarterly revenue shortfall in the Commercial segment was attributed to the U.S. government shutdown, introducing uncertainty for public interest customers.
  • Naloxone full year performance was affected by pricing dynamics and the impact of the California market, as well as temporary disruptions amplifying seasonality.

SUMMARY

Emergent BioSolutions Inc. (EBS +3.62%) executed significant deleveraging by reducing both gross and net debt, accompanied by disciplined capital returns via share repurchases. Management directed resources to international medical countermeasure expansion, exemplified by a CAD 140 million Canadian contract, while advancing new NARCAN Nasal Spray configurations following FDA approval. Forward guidance was shaped by management's caution about the non-recurrence of a $60 million international order that materially elevated prior period results. The company identified substantial public funding streams for future growth, including increased U.S. federal commitments and over $50 billion in opioid settlement dollars available industrywide for the next decade.

  • Management stressed international demand as a key revenue catalyst, separating its outlook from the moderating baseline of U.S. government orders.
  • Joseph Papa said, "recent legislation signed by the New York Governor now requires certain private employers to stock an opioid antagonist," highlighting expanding institutional demand for naloxone products.
  • Emergent is channeling organic cash generation into both internal R&D and selective bolt-on acquisitions to sustain long-term profitability.
  • Richard Lindahl stated, "we achieved substantial financial improvements," specifically referencing resilient cash generation and a leaner operating model as drivers of flexibility for growth investments.

INDUSTRY GLOSSARY

  • MCM: Medical countermeasures—products developed and deployed to address chemical, biological, radiological, or nuclear threats as well as emerging public health emergencies.
  • BIODEFENSE: The segment of drug development and sales directed at preventing or responding to deliberate biological threats, often in partnership with governments.
  • BARDA: Biomedical Advanced Research and Development Authority—a U.S. government agency funding biodefense and pandemic preparedness solutions.
  • Strategic National Stockpile: A U.S. national repository of medical supplies and countermeasures for large-scale public health emergencies.
  • Project BioShield: U.S. federal program that funds the development and acquisition of new medical countermeasures against bioterrorism agents.
  • NARCAN: Emergent’s proprietary naloxone nasal spray product used for opioid overdose reversal.

Full Conference Call Transcript

Joe Papa, President and Chief Executive Officer, who will provide an update on the company's 2025 business performance and multiyear transformation plan highlights; and Rich Lindahl, EVP and Chief Financial Officer, who will provide details on the fourth quarter and full year 2025 financial results, as well as provide an update on full year 2026 guidance. Joe Papa will conclude by discussing the company's key catalysts for growth followed by Q&A. Finally, for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on February 26, 2026. Since then, Emergent may have made announcements related to topics discussed during today's call.

And with that, I would now like to turn the call over to Joe Papa. Joe?

Joseph Papa: Thank you, Frank, and good afternoon, everyone. This is Joe Papa, CEO of Emergent. I am joined by our CFO, Richard Lindahl. I'll start with our multiyear transformation plan progress and top line business results. Rich will walk through the fourth quarter and full year 2025 financials and provide our 2026 guidance before I return to our business outlook and growth drivers, and we'll end with a Q&A. Turning to Slide 5. Over the past 2 years, our Emergent team has made substantial progress executing on our multiyear transformation plan, strengthening our financial position through great operating results, strategic divestitures, margin improvements and deleveraging through debt repayments.

In 2025, we also returned capital to shareholders through share repurchases and resolved a legacy historical matter with the New York Attorney General's office. I'm proud of the excellent work by our Emergent team for staying focused on our mission to protect and save lives. In 2026, our priorities are clear: invest in revenue growth drivers across both the MCM and the naloxone segments by advancing our internal pipeline and pursuing targeted bolt-on acquisitions and external opportunities that leverage our infrastructure and scale. Turning to Slide 7.

In 2025, we delivered strong results, adjusted EBITDA of $205 million, primarily driven by our lean, efficient customer-focused business model, year-end cash of $205 million and net leverage was reduced to 1.9x from 3.3x in December of 2024. We secured biodefense contracts in the U.S. and ex U.S. with international sales representing 34% of our full year medical countermeasures revenue. In quarter 4, we maintained market leadership across our naloxone business while dealing with the U.S. government shutdown, which created uncertainty for some of our public interest customers. Let's look at our MCM business on Slide 8.

Our work in biodefense preparedness remains strong with numerous contract awards and product orders with the U.S. government and international deliveries made to over 20 countries. And just announced today, we have executed a series of new multiyear agreements with the government of Canada valued at CAD 140 million to deliver critical medical countermeasures. And now on to our naloxone business on Slide 9. CTC data continues to show a meaningful decline in U.S. opioid overdose death from 2022 to '23 peak. We believe access to naloxone, especially our NARCAN Nasal Spray 4 milligram as a standard of care remains essential to sustaining this progress.

As the market leader in nasal naloxone across the public interest channel, we continue to invest in access, awareness and innovation across our NARCAN Nasal Spray product line, to include convenient carrying case designed to be compact, discrete and easy to carry. Our consumer survey of more than 500 adults reinforced the critical need for this solution. The survey found 74% of consumers prefer a carrying case over standard packaging. And among college students, the population identified as one of the highest risk groups for opioid misuse. This preference rises to 81%.

Additionally, we received FDA approval for 2 multi-use configurations of NARCAN Nasal Spray offering both a 6-count and a 24-count multipack option designed to meet the needs of partners distributing higher volumes of naloxone. As opioid overdose death rates are declining nationally, we believe in the critical role OTC NARCAN plays in saving lives. Many from the field want to know what is the real-world impact of naloxone and opioid overdose reversal and saving lives. New York State offers compelling evidence of its effectiveness. A peer-reviewed analysis from 2023 to March 2025 found that naloxone administration saved more than 6,500 lives and over 200,000 years of life in the New York State alone.

It's worth noting that recent legislation signed by the New York Governor now requires certain private employers to stock an opioid antagonist. Our efforts are aligned as we work hard to ensure businesses are equipped and prepared to respond to an opioid overdose emergency. We are also very proud of our ongoing work to support Canada and their efforts to help save lives. There have been recent shifts across British Columbia and other provinces to prioritize nasal naloxone access, and we look forward to continued engagement across Canada.

We cannot afford to lose thousands of innocent lives to opioid crisis, and we believe our work in collaboration with all stakeholders is essential to reducing the number of lives lost to 0. Now I'd like to turn the call over to Rich to walk through the quarter 4 financial results.

Richard Lindahl: Thanks, Joe. Good afternoon, everyone, and thank you for joining us today. We're excited to share the strong progress we made in 2025 and the continued momentum we're carrying into 2026. 2025 was a year of meaningful advancement for Emergent, one where our transition from stabilization to turnaround gained real traction. Our resilient and strategically positioned portfolio designed to protect against global public health threats delivered sustainable revenue, expanded profitability and powerful cash generation. These foundational strengths are positioning us for long-term value creation and giving us financial flexibility to pursue attractive growth opportunities. Throughout the year, we achieved substantial financial improvements. Adjusted EBITDA rose to $205 million, a $22 million or 12% year-over-year increase.

Gross margin expanded by an impressive 900 basis points, and we reduced operating expenses by $140 million versus 2024. These results are further highlighted by the improvement of adjusted net income per share from a loss of $0.23 in 2024 to earnings of $1.53 in 2025. These outcomes reflect the strong potential and enhanced competitiveness of our business. We also significantly strengthened cash generation, reducing both net debt and net leverage while returning capital to shareholders. Our lean disciplined operating model continues to support solid profitability and robust cash flow, creating meaningful optionality as we invest in the business and drive shareholder value. Turning to Slide 11.

Our fourth quarter performance was generally as expected, although the impacts on public interest customers that Joe described led to lower-than-anticipated Commercial segment revenues. Total revenues were $149 million, with MCM tracking squarely to guidance. NARCAN performance was temporarily impacted by softer demand amid the prolonged government shutdown and near-term market uncertainty. Factors we view as transient and not reflective of the long-term growth potential in this category. Adjusted EBITDA of $11 million or an 8% margin landed at the high end of our guidance. Adjusted gross margin improved 300 basis points to 43%, driven by product mix and continued operational efficiency. Operating expenses decreased 10% year-over-year, underscoring our ongoing commitment to disciplined cost management.

Slide 12 reflects a year of strong execution. Total revenues were $743 million, remembering that 2024 included $115 million of settlement and divested revenue. And despite the revenue decline versus 2024, adjusted EBITDA landed at the high end of guidance, again, up $22 million or 12% year-over-year and expanding by 1,000 basis points. Gross margin improved 900 basis points, and operating expenses decreased $140 million or 37%. Even in a lower revenue environment, we delivered meaningful improvements in profitability, reinforcing the solid foundation and operating discipline we've established during the first phase of our multiyear transformation. Slide 13 highlights the durability of our revenue base.

Total revenue of $743 million reflects steady performance across MCM, complemented by increasing international momentum, where global MCM sales represented 34% of total revenue and continue to be a growth catalyst. As expected, U.S. government orders moderated and established a new baseline of demand going forward. Naloxone's full year performance reflected pricing dynamics and the California market impact, along with temporary disruptions that amplify seasonality impacts during the year. Importantly, we continue to invest in NARCAN's brand strength, product extensions, commercial capabilities and customer support, reinforcing the long-term health of this franchise. Other revenue of $60 million aligned to expectations, reflecting the absence of prior onetime items and divested facility revenue.

Slide 14 showcases the significant improvement across our financial metrics. We ended 2025 with total liquidity of $305 million, including $205 million in cash and $100 million of undrawn revolver capacity, and this is after making a substantial $100 million voluntary prepayment on our term loan. Operating cash flow grew 190% to $171 million. Net leverage improved to 1.9x from 3.3x in the prior year, and adjusted net income per share rose to $1.53, reversing a loss in 2024. These results reflect not only strong operating execution, but also increasing financial flexibility that enhances our ability to drive shareholder value. On Slide 15, we highlight the significant steps taken to optimize our capital structure.

During 2025, we paid down $110 million of gross debt, a combination of the $100 million voluntary prepayment against our term loan and the repurchase of $10 million principal amount of our unsecured bonds. These efforts reduced our total debt to $590 million and net debt to $384 million, a 32% and 49% reduction from year-end 2023, respectively. As a result of these efforts, 2025 ending net leverage of 1.9x improved substantially from 5.7x in the first quarter of 2024. This progress illustrates how our enhanced cash-generating profile supports both accelerated deleveraging and continued investment in growth initiatives, all while maintaining healthy liquidity. Slide 16 outlines our consistent capital allocation priorities, growth, debt reduction and shareholder returns.

In 2025, we strengthened our portfolio through the additions of KLOXXADO and Rocketvax and continued investing in our internal R&D pipeline and international MCM capabilities. Debt repayment remains a key focus. In addition to our $100 million term loan prepayment, we used $8.7 million of cash to repurchase and retire $10.3 million principal amount of our unsecured bonds. And we advanced shareholder returns by repurchasing 3.1 million shares under our stock buyback program. As announced today, our Board has approved a new $50 million authorization through March 31, 2027. We will remain opportunistic with additional share repurchases based on market conditions. Please turn to Slide 17.

Throughout 2025, we consistently raised guidance and full year results for adjusted net income, adjusted gross margin and adjusted EBITDA exceeded the midpoint of our October outlook, while net income was below the range due to the loss on debt extinguishment. Overall, these outcomes demonstrate our strong execution and proactive cost management even in a lower revenue environment. Slide 19 presents our initial 2026 outlook with total revenues expected in the range of $720 million to $760 million. MCM revenue is expected to be flat to slightly down with continued strength in international demand. Of note, 2025 benefited from an exceptionally strong $60 million international customer order, which we do not currently forecast to repeat in 2026.

Commercial revenues are expected to be flat to slightly up with volume offsetting anticipated price adjustments. And we expect NARCAN to maintain its leading market share. Adjusted gross margin is expected to land between 45% and 47%, reflecting product mix and expected pricing dynamics. Adjusted EBITDA is anticipated to be between $135 million to $155 million. To put this guidance in context, note that the onetime international order I just referenced contributed $50 million of adjusted EBITDA in 2025. Net income is expected to be between a loss of $30 million and a loss of $10 million with adjusted net income between $25 million and $45 million.

We anticipate a healthy start to the year with first quarter revenue of $135 million to $155 million. Of note, we also expect that revenues in the first half of the year will represent about 40% of the full year total. In closing, please turn to Slide 20. 2025 year was a year of consistent execution, expanding profitability and material progress towards our transformation goals. Our lean and focused operating model delivered higher gross margins, stronger profitability and robust cash flow, fueling debt reduction and shareholder returns. With net leverage below 2x, strong liquidity and meaningful operating momentum entering 2026, we are well positioned to build on this progress and drive compelling long-term value for our shareholders.

With that, I'll now turn the call back to Joe.

Joseph Papa: Thank you, Rich. Turning to Slide 22. As part of our mission to protect and save lives, we develop and deliver highly complex products that address some of the world's most present public health threats like smallpox, anthrax, Botulism and Ebola. As a market leader in nasal naloxone, we are deeply steeped in the evolving nature of the opioid crisis. We believe every medicine cabinet, first aid kit and person should have NARCAN on hand. On to our medical countermeasure biodefense [ work for ] today in the future, the risk of bioterror and public health threats is rising. Our proprietary survey insights show how policy leaders view bioterror as easier to carry out than nuclear attacks.

Fortunately, we have a strong bipartisan support for U.S. leadership in biodefense. On Slide 23, you'll see a summary of the government funding in several international commitments which demonstrate stability and provides Emergent with an opportunity to engage meaningfully with our customers and partners. Of note, U.S. government spend is rising in 2026 across all major federal programs, including BARDA, Project BioShield, Strategic National Stockpile, and State Opioid Response Grants, reinforcing a strong and sustained commitment to U.S. preparedness. International investment is also rising with the EU's HERA program and NATO allies boosting their readiness budgets.

It's also worth noting that more than $50 billion in U.S. class action opioid settlement dollars, which is an additional funding stream, will be available to address the opioid crisis over the next 8 to 10 years. Moving to Slide 24. In 2026, we outlined our outlook on future growth and cash deployment. Our plan remains on track to selectively invest the cash we are generating from our profitable business segments into 2 key initiatives: organic internal growth and inorganic initiatives through business development and external partnerships. We'll continue to invest in international MCM expansion efforts geographically and pursue naloxone innovation opportunities.

Slide 25 takes a closer look at our life cycle initiatives with TEMBEXA, Ebanga and raxibacumab, as well as the pipeline focus areas. In summary, on Slide 26, we achieved many key milestones in the fourth quarter and throughout 2025, including operating performance, cash generation and debt reduction. We are confident in our ability to execute on our core business and long-term growth initiatives while ensuring continued improvement in operational profitability. As we advance our transformation, we remain committed to the highest standards of quality, ethics and compliance, and we look forward to the years ahead. Operator, let's please open up the line for questions.

Operator: [Operator Instructions] I am showing no questions at this time. I would now like to turn the call back to Joe Papa, CEO, for closing remarks.

Joseph Papa: Thank you, everyone, for joining us today. I think that the presentation was clear, straightforward and answered questions that people had anticipated. So we very much appreciate everyone's attendance today. Thank you very much. Look forward to speaking with many of you in the near future. Thank you. Have a great day, everyone.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.