Emergent BioSolutions (NYSE:EBS) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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The full earnings call is available at https://edge.media-server.com/mmc/p/qw3ajghx/
Summary
Emergent BioSolutions reported Q1 2026 revenue of $156 million, exceeding guidance, with an adjusted EBITDA of $36 million.
The company has reduced its net debt by approximately 22% in 2025 and aims for further improvement.
Strategic initiatives include expanding the MCM business internationally and pursuing accretive external opportunities.
Emergent BioSolutions has secured a $140 million multi-product agreement with the Government of Canada and a $54 million contract with ASPR.
The company announced a strategic manufacturing partnership with SAB Biotherapeutics to advance a type 1 diabetes autoimmune candidate.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the Q1 2026 Emergent BioSolutions earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. You’ll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Frank Vargo, Vice President Treasurer. Please go ahead
Frank Vargo (Vice President Treasurer)
Good afternoon everyone and thank you for joining us at Emergent discusses its operational and financial results for the first quarter of 2026. As is customary, today’s call is open to all participants. It’s being recorded and is copyrighted by Emergent BioSolutions. In addition to today’s press release, a slide presentation accompanying this webcast is available to all webcast participants. Turning to Slide 2 during today’s call, Emergent may make projections and other forward-looking statements related to its business, future events, prospects or future performance. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. Any forward-looking statements speak only as of the date of this conference call and except as required by law, Emergent BioSolutions does not undertake to update any forward looking statement to reflect new information, events or circumstances. Investors should consider this cautionary statement as well as the risk factors identified in Emergent’s periodic reports filed with the SEC when evaluating these forward looking statements. During today’s call, Emergent may also discuss certain non GAAP financial measures that include adjustments to GAAP figures to provide additional transparency regarding the company’s operating performance. Please refer to the tables included in today’s press release. Turning to slide 3, the agenda for today’s call includes remarks from Joe Bapa, President and Chief Executive Officer, who will provide an update on the Company’s leadership in public health, preparedness, business performance and key highlights. Rich Lindahl, EVP and chief financial officer, will then review the first quarter 2026 financial results and provide an update on the full year 2026 guidance. Joe will conclude with a discussion of the Company’s key catalysts for growth, followed by a question and answer session. Finally, for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on April 30, 2026. Since that time, Emergent may have made announcements related to topics discussed during today’s call. With that, I would now like to turn the call over to Joe Poppin
Joe Poppin
Thank you, Frank and good afternoon everyone. Welcome to our first quarter 2026 earnings call. This is Joe Papa. I’m joined today by Rich Lindell, our Chief Financial Officer. Let’s turn to Slide five. Our aspiration at Emergent is to be the leader in solving public health threats around the world. Over the last 25 years we have built what we believe is the most diverse biodefense product portfolio in the world. Our medical countermeasures address anthrax, smallpox, mpox, Ebola, botulism and complications from smallpox vaccination alongside the leading branded Naloxone franchise with our Narcan nasal spray which has a decade of trusted brand leadership. We believe in our unique position within the industry demonstrate just how public private partnerships are critical for national security. Turning to Slide 6 Since implementing our multi year transformation plan in 2024, we have stabilized and rightsized the company in order to provide Emergent with a strong foundation for future growth. 2026 marks a pivotal year of our transformation as we invest in high growth opportunities. I’m pleased to note that this process is now well underway. We are focusing on segment revenue growth and improved operating performance. We are generating strong cash flow for continued investment in internal R and D and quality capabilities. We have identified product acquisition opportunities that address unmet medical needs and have the potential for sustainable long term revenue growth. Debt reduction will remain a priority for us. In 2025, we reduced our net debt levels by approximately 22% and we have planned for further improvement on our balance sheet and credit ratings. Collectively, these activities are about putting in place the foundations for creating sustainable long term value creation. To move to Slide 8, we’ll take a look at our first quarter highlights. Thanks to the great efforts of our emerging team, our first quarter results are evident in both our top and bottom line performance. We reported first quarter revenue of $156 million which exceeded the high end of our guidance range and was ahead of internal expectations. Adjusted EBITDA came at $36 million, also above our internal expectations representing a 23% margin is driven by continued efforts to deliver a lean and operationally efficient customer centric business model. For example, net working capital improved by over $100 million since Q1 2025. We improved our cash balance by $11 million versus the prior year to $160 million and our total liquidity increased to $260 million. Our strong cash position enabled the repayment of $110 million in debt last year on the capital allocation side, we continue to create value In April we announced the refinancing of our prior term loan which enabled us to secure a more favorable interest rate. We also amended our revolver to $50 million and established a new delayed draw term loan facility for 75 million. We also continued our share repurchase program, buying back $9 million in shares in the first quarter. Since the start of the share repurchase program in 2025, Emergent has repurchased approximately $34 million of shares. Turning to our business performance overall, MCM performed very well reflecting increased global demand and strategic diversification in our international market which now represent 37% of our total MCM revenue. We received four contracted product orders in the quarter. With respect to the NALAXO business, we continue maintaining the shared leadership. We command a competitive pricing strategy and recently launched our newest product offering the Narcia Naval Spray Carrying Case and a multi pack configuration, both of which are already performing very well in the first month of launch. We believe on slide 9 the world is an increasingly dangerous place and public health preparedness in the face of potential threats is critical. We are proud of our long standing partnership with the Government of Canada and in Q1 we announced a $140 million multi product agreement. We also executed $54 million big award with ASPR and approximately 21.5 million delivery order to supply Biothrax to the Department of War. Our MCM business represents an important driver of our future growth and with the added flexibility from our recent financing we see multiple opportunities to acquire high growth and complementary products to our MCM portfolio. Our mission on Slide 10 to protect the stabilize is answered every day with the work we do to …
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