Avantor — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, were $1,698.3 million, a 4.6% increase year-over-year from $1,623.8 million in Q3 2025; organic sales growth was 5.2%.
• Diluted GAAP EPS was $0.30 compared to a loss of $1.04 per share in Q3 2025; adjusted diluted EPS was $0.22, matching the prior-year period.
• Net income increased to $203.4 million from a net loss of $711.8 million in Q3 2025, driven by a $785.0 million non-cash impairment charge recognized in the prior year.
• Adjusted net income was $146.4 million compared to $151.1 million in Q3 2025.
• Adjusted EBITDA was $256.9 million with a margin of 15.1%, down from $267.9 million (16.5% margin) in Q3 2025.
• Operating income was $139.5 million (8.2% margin) compared to a loss of $648.8 million (40.0% margin) in Q3 2025; adjusted operating income was $227.6 million (13.4% margin) versus $237.3 million (14.6% margin) in the prior year.
• Operating cash flow for the quarter was $195.1 million; free cash flow was $156.2 million.
• Total gross debt was $3,699.7 million; cash and cash equivalents were $464.3 million.
• GAAP net leverage was 9.6x; adjusted net leverage was 3.1x as of September 30, 2026.

Guidance and Future Outlook:

• Fiscal 2026 organic revenue growth guidance was raised to +0.75% to +1.25% from the previous range of -0.5% to +0.5%.
• Fiscal 2026 adjusted EPS guidance was raised to $0.81 to $0.83 from $0.80 to $0.83.
• Fiscal 2026 free cash flow guidance was raised to $525 million to $550 million from $500 million to $550 million.
• Fiscal 2026 adjusted EBITDA margin guidance remained unchanged at 14.8% to 15.3%.
• Fiscal 2026 reported revenue growth is expected to be +1.5% to +2.0%, reflecting a +0.75% foreign exchange tailwind.
• Assumptions include a blended EUR/USD exchange rate of 1.15, a fully diluted share count of 679 million, and an adjusted effective tax rate between 22.0% and 22.5%.

Business Segments and Product Lines:

• VWR Distribution & Services reported net sales of $1,233.8 million, a 5.0% reported increase (5.8% organic) from $1,175.0 million in Q3 2025.
• VWR Distribution & Services adjusted operating income was $119.4 million with a 9.7% margin, down from $132.0 million (11.2% margin) in Q3 2025 due to unfavorable product mix and higher SG&A expenses.
• Bioscience & Medtech Products reported net sales of $464.5 million, a 3.5% reported increase (3.6% organic) from $448.8 million in Q3 2025.
• Bioscience & Medtech Products adjusted operating income was $123.4 million with a 26.6% margin, flat versus the prior year due to higher sales volume and commercial excellence offset by higher SG&A expenses.

Market and Competitive Landscape:

• Management cited improving execution and stronger end markets as foundations for sustained revenue growth.
• The company serves over 300,000 customer locations in 180 countries across the life sciences and advanced technology industries.

Risks and Challenges:

• Foreign currency translation negatively impacted reported sales growth by 0.6% in Q3 2026.
• Adjusted operating income margins for VWR Distribution & Services were pressured by unfavorable product mix and higher SG&A expenses.
• Forward-looking statements are subject to risks including foreign currency exchange gains/losses, net income, restructuring charges, and income tax expense, which are difficult to forecast with certainty.

Management Commentary and Tone:

• CEO Emmanuel Ligner stated the company is "delighted to return to year-over-year growth" and that results exceeded expectations for revenue and adjusted EPS.
• Management noted the "Revival journey" is ongoing but highlighted progress in sharpening strategic focus and improving execution.
• Ligner emphasized that robust free cash flow generation allowed the company to further strengthen its balance sheet.

Other Key Points:

• The company hosted a conference call on October 28, 2026, to discuss results.
• A $785.0 million non-cash goodwill impairment charge was recognized in Q3 2025 related to the former Distribution reporting unit, which significantly impacted prior-year comparability.
• The company's cost transformation initiative concluded in 2025; transformation expenses were $0 in Q3 2026 compared to $13.7 million in Q3 2025.
• Pension termination charges related to the U.S. Pension Plan were $0 in Q3 2026 compared to $1.8 million in Q3 2025.
• Restructuring, severance, and related impairment charges were $8.1 million in Q3 2026 compared to $2.2 million in Q3 2025.