Phibro Animal Health (NASDAQ:PAHC) executives highlighted strong fiscal second-quarter performance, ongoing integration progress for the acquired Zoetis medicated feed additive (MFA) portfolio, and continued strategic emphasis on vaccines, nutritional specialties, and a developing companion animal franchise during a discussion hosted by Bank of America’s Michael Ryskin.
Fiscal second-quarter performance and guidance raise
Chief Strategy Officer Dani Bendheim said the company delivered “a really strong second quarter,” citing 21% revenue growth and 60% growth in adjusted net income. She said the company generated $94 million in revenue in the quarter and described profitability as “very strong.”
She also cited continued growth in other segments, including 13% growth in vaccines and 9% growth in nutritional specialties for the quarter. Bendheim said the strong first half gave the company confidence to raise guidance for revenue, EBITDA, and adjusted net income, and she described investor feedback as “very positive.”
Portfolio outlook and growth expectations
CFO Glenn David discussed how the business mix is expected to evolve as the company laps the Zoetis MFA acquisition, with MFAs representing a larger portion of overall results after a full-year comparison period. Looking over a longer cycle, David said the overall MFA portfolio is relatively mature and that the company expects it to grow “flat to low mid-single digits,” while also indicating the company aims to outperform that baseline as it builds momentum after fiscal 2027.
David said management expects vaccines and nutritional specialties to deliver “mid to high single digits” growth over longer periods, driven by R&D investment, innovation, and geographic expansion. He added that mineral and performance is more cyclical and dependent on market dynamics, making it harder to forecast over the long term.
From a profitability perspective, David said the company expects to grow income faster than revenue and expand margins over time, driven by mix benefits as higher-margin vaccines and nutritional specialties represent a larger portion of the business.
Bendheim said the company’s strategy remains consistent, with a focus on growing vaccines and nutritional specialties and, at a lower level, the companion animal business.
Drivers of recent growth: end-market demand and execution
COO Larry Miller attributed recent performance to a combination of strong end-market demand for animal-based protein and execution across segments. He said the company’s livestock business remains its main business today and emphasized customer relationships and on-farm support.
Miller described several growth contributors across the portfolio:
- Medicated Feed Additives: Geographic expansion and commercial efforts focused on reinforcing product claims and practical farm use cases.
- Nutritional specialties: A mix of new product launches, lifecycle management, and geographic expansion.
- Vaccines: Product positioning tied to surveillance and emerging disease strains, along with geographic expansion where certain strains are effective.
Discussing market dynamics, Miller said consumer demand for meat, eggs, and dairy has remained strong despite inflation and higher costs, particularly in beef. He also pointed to demographic and dietary trends, including the impact of GLP-1 weight loss drugs, suggesting users may seek “high-quality, simple proteins,” which he said is supportive for meat-based protein consumption, and that calcium needs could be favorable for dairy consumption. When asked whether the trend could represent a structural step-up for livestock markets, Miller said it was too early to tell, while adding that the company’s diversification across livestock production markets provides resilience amid shifting trade patterns and disease-related disruptions.
Zoetis MFA integration, customer reception, and pricing actions
Management said the integration of the acquired Zoetis MFA portfolio is progressing well. Miller said transfer of marketing authorizations is “nicely on track,” with completion in a “vast majority” of markets. He also said the acquisition strengthened Phibro’s presence in certain species and geographies, including entry into the U.S. fed cattle segment, and expanded the portfolio in U.S. swine and poultry.
On operations, Miller said the deal included six locations—four in the U.S., one in China, and one in Italy—and described the transition as “direct and clean.” Executives added that systems are integrated and that the company is in the later stages of integration, with remaining work largely tied to regulatory items. Management also said cultural integration has gone well, noting employees are excited because the acquired products are now a priority.
On the commercial side, Miller said customer reception has been positive, citing increased support for product supply and field engagement. He also said the company is seeing complementarity between MFAs and its vaccines and nutritional specialty products as it seeks to provide more comprehensive on-farm health solutions.
Regarding competitive positioning, executives identified Elanco and Huvepharma as key global competitors in MFAs, noting higher regulatory barriers in markets like the U.S. David said the company is “probably” number two globally in MFAs and discussed the value of a broader portfolio that supports customer rotation needs. He said vaccines are more competitive, naming Zoetis, Elanco, Merck, Boehringer Ingelheim, and Ceva as participants.
On pricing, management said it identified opportunities during integration to adjust pricing on certain acquired products that it viewed as undervalued, including simplifying pricing by eliminating many end-use rebates. Miller said the company also reset pricing in some secondary markets where benchmarking suggested products carried low or negative margins, adding that the company has not seen significant volume drops globally as a result. David characterized the integration-related pricing benefits as outsized and said ongoing MFA price increases are expected to be low single digits.
Companion animal update and CEO transition
Executives provided a brief update on the companion animal business. David said the company has launched Restoris as its second product, following Regensa, and said management is pleased with Restoris’s reception and expects a strong growth trajectory. He noted the business is a small contributor in fiscal 2026 but could become more meaningful over time. He also said the company intends to reinvest profits back into the companion animal space while remaining “fiscally conservative” and not spending too far ahead of the revenue base.
On leadership, Bendheim said she will become CEO later this year and described the transition as “one of continuity, not really of change.” She said current strategy, the operating model, and the strategic framework remain in place, and that the broader management team is staying put. Bendheim added that Executive Chairman Jack Bendheim will remain involved and cited the Phibro Forward initiative—an operating effort aimed at translating strategy into bottom-up plans and execution discipline—as an example of continued focus going forward.
About Phibro Animal Health (NASDAQ:PAHC)
Phibro Animal Health Corporation (NASDAQ: PAHC) is a diversified global animal health and mineral nutrition company headquartered in Teaneck, New Jersey. The company develops, manufactures and markets a broad range of pharmaceutical, mineral nutrition and performance products designed to support the health and productivity of livestock, companion animals and aquaculture species. Phibro’s portfolio includes vaccines, anti-infective therapies, coccidiostats, disinfectants, premix minerals and specialty feed additives aimed at enhancing growth, immunity and overall animal well-being.
The company operates through three principal business segments: Animal Health, Mineral Nutrition and Performance Products.
