Emergent BioSolutions — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for Q3 2026 were $110.0 million, a 52% decrease from $231.1 million in Q3 2025.
• Net loss for Q3 2026 was $32.7 million, compared to net income of $51.2 million in Q3 2025.
• Net loss per diluted share was $0.64 in Q3 2026, compared to $0.91 in Q3 2025.
• Adjusted net loss for Q3 2026 was $18.7 million, compared to adjusted net income of $65.2 million in Q3 2025.
• Adjusted EBITDA for Q3 2026 was a loss of $4.6 million, compared to $92.6 million in Q3 2025.
• Gross margin was 14% in Q3 2026, down from 54% in Q3 2025.
• Adjusted gross margin was 28% in Q3 2026, down from 62% in Q3 2025.
• Net loss margin was (30)% in Q3 2026, compared to a net income margin of 22% in Q3 2025.
• Year-to-date (YTD) 2026 total revenues were $500.4 million, a 16% decrease from $594.2 million in YTD 2025.
• YTD 2026 net loss was $206.1 million, compared to net income of $107.2 million in YTD 2025.
• YTD 2026 adjusted net income was $24.1 million, compared to $120.5 million in YTD 2025.
• YTD 2026 adjusted EBITDA was $127.5 million, a 38% decrease from $204.8 million in YTD 2025.
• YTD 2026 gross margin was 39%, down from 48% in YTD 2025.
• YTD 2026 adjusted gross margin was 49%, down from 57% in YTD 2025.
• Cost of product and services sales, net was $80.8 million in Q3 2026, down 6% from $85.9 million in Q3 2025.
• Research and development expenses were $9.4 million in Q3 2026, down 30% from $13.5 million in Q3 2025.
• Selling, general and administrative expenses were $46.5 million in Q3 2026, up 20% from $38.9 million in Q3 2025.
• Capital expenditures were $3.3 million in Q3 2026, down 3% from $3.4 million in Q3 2025.
• Cash and cash equivalents were $175.7 million as of September 30, 2026, down from $205.4 million as of December 31, 2025.
• Debt was $507.7 million as of September 30, 2026, down from $572.1 million as of December 31, 2025.
• Deferred revenue was $14.3 million as of September 30, 2026, up from $5.0 million as of December 31, 2025.

Guidance and Future Outlook:

• Updated full-year 2026 total revenue guidance is $600 million to $645 million, revised down from $645 million to $675 million.
• Updated full-year 2026 net loss guidance is $(255) million to $(225) million, revised from $(245) million to $(225) million.
• Updated full-year 2026 adjusted net income (loss) guidance is $(10) million to $20 million, revised from $10 million to $30 million.
• Updated full-year 2026 adjusted EBITDA guidance is $110 million to $140 million, revised down from $130 million to $150 million.
• Updated full-year 2026 adjusted gross margin guidance is 45% to 47%, revised up from 42% to 44%.
• Key assumptions for 2026 include interest expense of approximately $38 million, R&D of approximately 6% of revenue, and SG&A of approximately 28-30% of revenue.
• Key assumptions for 2026 include weighted average fully diluted share count of approximately 52 million, stock-based compensation expense of approximately $19 million, capital expenditures of approximately $16 million, and depreciation & amortization of approximately $81 million.

Business Segments and Product Lines:

• Commercial Products segment revenues were $43.5 million in Q3 2026, a 42% decrease from $74.9 million in Q3 2025.
• Commercial Products gross margin was $11.2 million in Q3 2026, down 51% from $22.9 million in Q3 2025.
• Commercial Products gross margin percentage was 26% in Q3 2026, down from 31% in Q3 2025.
• MCM Products segment revenues were $59.4 million in Q3 2026, a 58% decrease from $142.5 million in Q3 2025.
• MCM Products gross margin was $11.5 million in Q3 2026, down 88% from $97.5 million in Q3 2025.
• MCM Products gross margin percentage was 19% in Q3 2026, down from 68% in Q3 2025.
• Naloxone product sales were $43.5 million in Q3 2026, down 42% from $74.9 million in Q3 2025, driven by lower OTC NARCAN® sales in U.S. public interest channels.
• Anthrax MCM product sales were $25.1 million in Q3 2026, up from $1.4 million in Q3 2025, driven by higher USG sales of CYFENDUS®.
• Smallpox MCM product sales were $26.7 million in Q3 2026, down 68% from $83.6 million in Q3 2025, driven by lower USG sales of ACAM2000® and international sales of CNJ-016®.
• Other Products sales were $7.6 million in Q3 2026, down 87% from $57.5 million in Q3 2025, driven by lower USG BAT® sales.
• Services revenues were $7.1 million in Q3 2026, down 48% from $13.7 million in Q3 2025, driven by less production activity at the Winnipeg facility.
• Contracts and grants revenues were $3.6 million in Q3 2026, down 60% from $9.1 million in Q3 2025, due to lower Ebanga® related development work.
• YTD 2026 Commercial Products revenues were $138.8 million, down 26% from $187.7 million in YTD 2025.
• YTD 2026 MCM Products revenues were $329.2 million, down 8% from $357.5 million in YTD 2025.

Market and Competitive Landscape:

• The company operates in the biodefense/medical countermeasures and naloxone markets.
• Revenue fluctuations in MCM products are driven by the timing of USG annual purchase option exercises, USG purchase timing, availability of governmental funding, and order delivery.
• The company faces competition from generic and branded alternatives for NARCAN® Nasal Spray and KLOXXADO® Nasal Spray.
• The company has been awarded a contract modification valued at approximately $24 million for CYFENDUS®.
• The company was awarded a 'Standing Offer' for NARCAN® Nasal Spray from the Government of Canada.

Risks and Challenges:

• Risks include the availability of USG funding for contracts related to MCM products and development of medical countermeasures.
• Risks include the ability to meet quality and compliance commitments in manufacturing operations.
• Risks include the ability to negotiate additional USG procurement or follow-on contracts for MCM products that have expired or will expire.
• Risks include the commercial availability and impact of generic and branded competition on future sales of NARCAN® and KLOXXADO®.
• Risks include the ability to perform under USG contracts regarding delivery timing and specifications.
• Risks include the ability to maintain compliance with covenants in the term loan facility, revolving credit facility, and Senior Unsecured Notes.
• Risks include the ability to maintain adequate internal control over financial reporting and prepare accurate financial statements.
• Risks include the ability to maintain sufficient cash flow to pay substantial debt.
• Risks include the impact of business developments with customers, including the USG, on financial statements under legal and accounting rules.
• Risks include the results of pending government investigations and their potential impact on the business.
• Risks include the ability to satisfy conditions of litigation settlement agreements and the impact of funds required to resolve related litigation.
• Risks include the impact of tariffs and trade relationships between the USG and foreign governments.
• Risks include the impact of cybersecurity incidents affecting business partners or third parties.

Management Commentary and Tone:

• Joe Papa, President and CEO, stated that Q3 results were inline with guidance and driven by the diverse biodefense/medical countermeasures and naloxone portfolio.
• Management emphasized a focus on turnaround priorities, strengthening the financial position, improving operating performance, and reducing debt.
• Management highlighted a commitment to creating long-term shareholder value and demonstrating high standards of quality and compliance.
• Management noted the importance of disciplined execution as they advance their multi-year transformation.

Other Key Points:

• Rich Lindahl, Executive Vice President and CFO, announced his retirement effective December 31, 2026, and will serve as a part-time advisor through March 31, 2027.
• Frank Vargo, Vice President, Treasurer, will serve as interim Chief Financial Officer beginning January 1, 2027.
• The company completed the repurchase of $75 million aggregate principal amount of Senior Unsecured Notes.
• The company implemented restructuring efforts to improve cost structure, drive efficiencies, and align resourcing, including the creation of a new Growth organization.
• The company announced a commitment to cross-sector collaboration against biological threats in an evolving global security environment.
• The company announced an ongoing commitment to opioid overdose education and preparedness on International Overdose Awareness Day.
• In Q3 2026, the Services operating segment no longer met the quantitative thresholds of a reportable segment and is categorized within "All other revenues."
• The company revised its calculation of non-GAAP measures in Q1 2026 to exclude stock-based compensation expense recorded as cost of sales.
• YTD 2026 included a $191.3 million impairment of long-lived assets.
• Net cash provided by operating activities was $122.4 million for the nine months ended September 30, 2026.
• Net cash used in financing activities was $104.5 million for the nine months ended September 30, 2026.