Phibro Animal Health 2025 Q3 Earnings Beats Expectations with Net Income Surging 148%

Phibro Animal Health (PAHC) reported its fiscal 2025 Q3 earnings on May 7th, 2025. The company exceeded expectations with quarterly earnings of $0.63 per share, surpassing the Zacks Consensus Estimate of $0.52 per share, which represents an earnings surprise of 21.15%. Phibro also raised its fiscal year guidance, projecting net sales between $1.26 billion and $1.29 billion and adjusted EBITDA of $177 million to $183 million. The company’s positive outlook reflects confidence in managing potential tariff impacts and maintaining growth prospects for FY 2026.

Revenue

The total revenue of Phibro Animal Health rose by 32.1% to reach $347.82 million in 2025 Q3, compared to $263.22 million in 2024 Q3. Within the Animal Health segment, revenue climbed to $258.38 million, supported by the Zoetis MFA business acquisition. The MFAs and other segment recorded $181.65 million, while Nutritional specialties contributed $43.35 million. Vaccines generated $33.38 million, Mineral Nutrition achieved $66.77 million, and Performance Products added $22.67 million.

Earnings/Net Income

Phibro Animal Health's EPS increased by 147.6% to $0.52 in 2025 Q3 from $0.21 in 2024 Q3, indicating strong earnings growth. The company’s net income also improved significantly, reaching $20.88 million, up 148.4% from $8.40 million in the previous year. The rise in EPS demonstrates robust financial health.

Post-Earnings Price Action Review

The strategy of purchasing Phibro Animal Health shares following a quarter-over-quarter revenue rise and holding them for 30 days has historically yielded a 13.27% return over the past five years. However, this performance fell short of the benchmark, underperforming by 70.81%. The strategy's Sharpe ratio of 0.36, coupled with a maximum drawdown of -10.16% and a volatility of 7.10%, indicates a challenging risk-return profile. Although the strategy's return was positive, the high volatility and drawdown suggest that investors faced considerable risk in realizing these returns. The historical underperformance against the benchmark underscores the importance of evaluating risk factors and market conditions before adopting this investment strategy.

CEO Commentary

"Our strong performance this past quarter underscores the successful integration of the Zoetis MFA business and the initial positive impact of our Phibro Forward initiatives," stated Jack Bendheim, President and Chief Executive Officer. "Despite temporary order timing that moderated growth in our legacy business, we achieved significant gains, with total sales increasing by 32%, and adjusted EBITDA and diluted EPS surging 85% and over 100%, respectively. Our overall Animal Health segment was a key driver, growing 42%, while our legacy Animal Health business saw flat growth. We remain confident in our growth prospects for FY 2026, though we remain vigilant given the evolving global trade landscape."

Guidance

Phibro Animal Health updated its fiscal year 2025 guidance, projecting net sales between $1.26 billion and $1.29 billion, and adjusted EBITDA of $177 million to $183 million. Mr. Bendheim indicated that potential effects from tariffs have been identified, but the overall impact is expected to be manageable, reinforcing confidence in growth prospects for the upcoming fiscal year.

Additional News

Phibro Animal Health Corporation announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share on its Class A and Class B common stock, payable on June 25, 2025, to stockholders of record at the close of business on June 4, 2025. Additionally, Phibro completed the acquisition of Zoetis’ medicated feed additive product portfolio and certain water-soluble products, expanding its Animal Health segment and global reach. The acquisition was financed by a new $310 million revolving credit facility, which increased the company's financial leverage and interest expenses. Furthermore, Phibro Animal Health appointed Joyce J. Lee, MBA, to its Board of Directors as a Class II director, enhancing its leadership team and strategic direction.