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What factors drove the changes in West Pharmaceutical's revenue and profit?

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What guidance did West Pharmaceutical's management provide for the next earnings period?

What were the key takeaways from West Pharmaceutical's earnings call?

- **Q3 Beat and Guidance Update**: Revenue $805M (+5% organic), EPS $1.96. FY2025 revenue raised to $3.06-$3.07B, EPS $7.06-$7.11.
- **HVP Components Surge**: +13% organic growth, driven by GLP-1s (9% of sales), biologics, and 375 Annex 1 projects.
- **2026 Outlook**: HVP Components to lead double-digit growth, offsetting $40M CGM exit with new high-margin business.
- **Margin Expansion**: Gross margin +120bps YoY, free cash flow +54% YoY. 2026 automation and network optimization to drive further margin gains.

**【CEO Summary Section】**
- **Q3 2025 Performance**: Revenue of $805 million (+5% organic), adjusted EPS of $1.96 (+6% YoY), and operating margin of 21.1%. Guidance updated to $3.06-$3.07 billion in revenue and $7.06-$7.11 in EPS for FY2025.
- **HVP Components Growth**: $390 million (+13% organic), driven by GLP-1s (9% of total sales), biologics, and Annex 1 upgrades (375 ongoing projects). Annex 1 expected to contribute 200bps of growth in 2025.
- **Contract Manufacturing**: $157 million (+4.9% organic), with Dublin facility ramping for drug handling ($20M+ in 2026).
- **Leadership Updates**: New CFO Bob McMahon and CTO Devesh Mathur appointed to accelerate growth and innovation.

**【CFO Financial Commentary】**
- **Financial Highlights**: Gross margin 36.6% (+120bps YoY), free cash flow $294 million (+54% YoY), and capital expenditures $210 million (FY2025 guidance: $275 million).
- **Guidance Update**: FY2025 revenue $3.06-$3.07 billion (+5.8%-6.1% reported), Q4 revenue $790-$800 million (+1%-2.3% organic). FY2025 EPS $7.06-$7.11 (+4.6%-5.3%).
- **2026 Outlook**: HVP Components to lead growth, with CGM contract exit ($40M headwind) offset by new high-margin business in Dublin.

**【Q&A Key Highlights】**
- **Long-Term Growth Drivers**: HVP Components (GLP-1s, Annex 1) expected to sustain double-digit growth. GLP-1s grew >50% in 2025, driven by pipeline expansion and generics.
- **Margin Expansion**: Gross margin to improve via HVP mix, automation (SmartDose 3.6 in 2026), and network optimization. 2026 free cash flow expected to expand with lower CapEx.
- **Annex 1 Momentum**: 375 projects in pipeline, with 40%+ conversion rate to commercial production. Dublin facility to add $20M+ in 2026.
- **Tariff Mitigation**: >50% of 2025 tariff costs mitigated, full mitigation expected in 2026.

West Pharmaceutical Services, Inc. (WST) Q3 2025 Earnings Call Transcript

Proprietary Products

Contract-Manufactured Products

Intersegment Elimination

WST

WST fundamentals

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