Phibro at BofA Securities Summit: Strategic Growth and Integration

On Thursday, 26 February 2026, Phibro Animal Health Corporation (NASDAQ:PAHC) presented at the BofA Securities Animal Health Summit. The company showcased strong financial performance and strategic advancements, highlighting a 21% revenue increase and successful integration of the Zoetis Medicated Feed Additive portfolio. While there were minor setbacks in the legacy MFA business, Phibro remains optimistic about future growth and market expansion.

Key Takeaways

• Phibro reported a 21% increase in revenue and a 60% rise in adjusted net income.
• The integration of Zoetis MFA portfolio contributed $94 million in quarterly revenue.
• The company raised guidance for revenue, EBITDA, and adjusted net income.
• Strategic focus on vaccines, nutritional specialties, and companion animal businesses.
• CEO transition to Dani Bendheim emphasizes continuity in strategy.

Financial Results

• Revenue Growth: Phibro saw a 21% increase in revenue, driven by strong performance across various segments.
• Adjusted Net Income: A significant 60% increase in adjusted net income was reported.
• Zoetis MFA Contribution: The Zoetis portfolio added $94 million to revenue, enhancing Phibro’s market presence.
• Legacy MFA Business: Despite a 5% decline due to timing, normalization shows a 3% growth.
• Vaccine and Nutritional Growth: Vaccines grew by 13%, while nutritional specialties saw a 9% increase.

Operational Updates

• Zoetis MFA Integration: The integration is largely complete, adding a U.S. beef cattle segment and enhancing presence in swine and poultry.
• Geographic Expansion: Presence expanded in Asia, Southeast Asia, South America, and Western Europe.
• Pricing Adjustments: Implemented value-based pricing and simplified rebate programs.
• Manufacturing and Staff Integration: Six manufacturing plants and employees were smoothly integrated into Phibro’s operations.

Future Outlook

• Long-Term Growth: MFA portfolio expected to grow flat to low mid-single digits, with vaccines and nutritional specialties projected to grow mid to high single digits.
• Companion Animal Investment: Plans to invest profits in the companion animal space to become a key business segment.
• Phibro Forward Initiative: Expected to peak in fiscal year 2027, driving operational efficiencies and margin expansion.
• Consumer Demand: Strong demand for animal protein driven by changing consumer attitudes and diet trends.

Q&A Highlights

• Legacy MFA Recovery: Timing issues in the legacy MFA business are expected to recover in the second half of the year.
• Animal Protein Consumption: Demand is bolstered by consumer dietary trends and the influence of GLP-1 weight loss products.
• Competitive Landscape: Main competitors in the MFA market include Elanco and Huvepharma, with Zoetis, Elanco, Merck, BI, and Ceva in vaccines.
• Pricing Power: Addressed mispricing in the Zoetis portfolio, anticipating low single-digit price increases.

For further details, readers are encouraged to refer to the full transcript.

Full transcript - BofA Securities Animal Health Summit:

Operator: Ladies and gentlemen, the program is about to begin. At this time, it is my pleasure to turn the program over to your host, Michael Ryskin. You may begin.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Great. Thanks for joining us, everyone. My name is Mike Riskin. I’m on the BofA Life Science Tools and Diagnostics team, also covering animal health. For our next session, we’re excited to host Phibro Animal Health. We’re joined by a number of members of the team. We’ve got Dani Bendheim with us, Chief Strategy Officer and soon to be CEO as of later this year. We’ve got Glenn David, Chief Financial Officer, and Larry Miller, Chief Operating Officer. Dani, Glenn, Larry, thank you so much for being with us, taking the time.

Glenn David, Chief Financial Officer, Phibro Animal Health: Thank you.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Thank you.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Maybe just to kick things off, we’ll start with sort of a recap and to help set the table for the conversation. You know, we’re a couple of weeks past your fiscal 2Q, calendar 4Q print, the market had another positive reaction to your results. Can you give us a recap of the quarter, what really stood out for you? What kind of drove the results, and, you know, what investor feedback has really been focused on?

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah. No, thanks, Mike, and thanks for having us. As you mentioned, we had a really strong second quarter. Very positive revenue growth with 21% growth in revenue. We had 60% growth in adjusted net income. We continued to execute really well with the integration of the Zoetis Medicated Feed Additive portfolio. We had $94 million in revenue in the quarter, which was, you know, a very strong performance, very strong profitability as well. You know, when you look at our legacy MFA business, we did decline in the quarter by 5%, but as we mentioned, that was due to the timing of an order from a larger customer that we produce API for. Once you normalize for that, our legacy MFA grew as well. That was around 3%.

We continued to have, you know, sort of outpaced our strong growth in our vaccine portfolio, with growth of 13%, and our nutritional specialty for the quarter grew 9%. Really strong performance, you know, across the business from both the revenue perspective as well as an EBITDA and margin perspective. That strong second quarter, you know, combined with a strong first quarter, you know, and the strong first half, really gave us confidence to raise the guidance, you know, both at a revenue, EBITDA, and adjusted net income perspective. Really pleased with the start to the year and, you know, the performance that we expect for the rest of the year.

you know, based on this positive performance, based on the raise to the guidance, the, you know, the feedback from investors has been very positive.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. In terms of that timing in the legacy MFA business, you know, is it fair to say Are you catching that up in the fiscal third quarter? Is the timing, you know, adjusted for that, no change to underlying conditions? As you said, you’ve got major customers. These types of shifts are not unusual. It was just sort of outsized in fiscal 2Q.

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah, it was just sort of outsized in fiscal 2Q. As you say, with this particular customer, we have good visibility to orders for Q3 and Q4, and we do expect a recovery in the second half of the year. It’s not an underlying demand issue.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay, maybe I’ll start with sort of a big picture question, following up on the Zoetis MFA deal. I mean, I don’t think it’s an overstatement to call that a transformative transaction in terms of what it’s done to Phibro, if you look at over the past 12 months and obviously going forward. First of all, you know, congrats again on pulling that off and completing that. If we look forward from where you are now, you know, it’s certainly, again, a different business than it looked like 18 months ago. How would you characterize new Phibro going forward, in terms of what your expectations are from MFAs going forward?

You know, maybe if you want to touch on nutritional specialties and vaccines as well, on the mix, on the strategy, just sort of on the, on the portfolio as you see it today.

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah. I’ll start with that in terms of the mix and what we see, you know, going forward. You know, obviously, with the acquisition, you know, we will be lapping as we move into fiscal year 2027. We’ll have a full 12 months, and the MFAs will be a larger portion of our overall business. You know, as we move into fiscal year 2027, we are excited about the opportunity to continue to build on the momentum with the Medicated Feed Additive portfolio, particularly the ones that we acquired. You know, we built a field force in the US for US Cattle. You know, we expect them to continue to penetrate the market, as well as some of the field force that we built in Western Europe as well.

When you look at the overall MFA, you know, portfolio, you know, sort of in the long-term cycle, we expect that to grow sort of flat to low mid-single digits. It’s a relatively mature portfolio, but as I said, after fiscal year 27, as we build on that momentum, we expect to do better than that. You know, vaccines, with the investments that we’re making from an R&D perspective as well, you know, we expect that to grow more mid to high single digits over a longer period of time. Similar for nutritional specialty, right? We expect that to be mid to high single digit growth based on new innovation, but also based on geographic, you know, expansions.

You know, as we look at mineral and performance, that’s somewhat cyclical and dependent more on market dynamics, so it’s hard to give sort of a long-term projection on that. From a margin perspective, you know, we expect to continue to be able to grow income faster than revenue and grow margins obviously better. That’s driven by mix, continuing having the vaccines and nutritional specialty, which are higher margin than the MFAs, continue to make up a bigger portion of the business over time. You know, we think that’ll help overall. You know, from a strategy perspective, Dani, I don’t know if you want to comment.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Yeah, I think our strategy, you know, remains the same. We’re heavily focused on growing our vaccines and our nutritional specialties business, and see a lot of runway there and opportunity. you know, I think as a lower level, our companion animal business as well. those really are the key focuses.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: ... you know, the management team. Okay. Yeah, I mean, that’s been a part of your strategy for a while. I mean, for years now, you sort of emphasized the growth opportunities, in vaccines, in nutritional specialties, and in companions. That’s, that sounds very consistent with what you’ve said in the past. You know, I want, I wanna go back to kind of the way you broke it down, Glenn, in terms of, you know, the sub-segment growth within animal health or the one-item growth. You’ve done meaningfully better than that in the last couple of years. If you look at nutritional specialties, if you look at vaccines over the last 3, 4 years, I mean, nutritional specialties has been effectively at 10% CAGR. vaccines has been in the low teens, low to mid-teens even.

Even, you know, the MFA business and even the legacy MFA, you know, you say flat or low to mid-single. It’s been pretty solidly low to mid-single, if not mid-single.

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Really strong performance across all of animal health for you the last couple of years. Can you dive into that a little bit more? How much of that is the market’s doing a little bit better? I mean, I think we’ve seen livestock markets be pretty robust the last couple of years, and I’m gonna expand on that later in terms of why. How much of it is portfolio, new product introductions, commercial execution? Just sort of, you know, walk us through what’s led to these results.

Glenn David, Chief Financial Officer, Phibro Animal Health: Larry, you wanna talk to the market dynamics a little bit and then our position there?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Yeah. As you mentioned, we’ve had, you know, the industry’s had nice growth and protein, animal-based protein consumption has been doing very well. We can talk more about that, as you said, in a moment about, you know, some of the trends driving that. More specifically, your question and by segment. You know, we really do, you know, the livestock business is our main business today, and we do focus on really working with our customers and having meaningful relationships. When you look by a segment, the Medicated Feed Additives, you know, it’s been some geographic expansion, and, you know, reminding customers of the claims that these products have.

You know, our customers are always facing new disease challenges, new market dynamic challenges, and making sure they understand, you know, not only what those indications are, but what that means practically on their farms. You know, we’ve had nice, I think, continued growth there with the MFAs. In the case of the nutrition specialties, you know, we bring, you know... it’s, you know, a lot of different types of products that are sold in nutrition specialties, and we really bring different approaches to our customers, I think, in this regard. It’s been a mix of some launching some different products, some life cycle management products, but also some geographic expansion. In the area of vaccines, you know, I think really it’s about bringing different things to the market.

You know, you tend to follow, where, you know, surveillance, where maybe new disease or new disease strains are popping up and spreading across the globe. There’s been some geographic expansion in particularly vaccines, that we have strains that are very effective against those emerging pathogens there. Yeah, I think again, bringing different innovation to meet the market needs and growing with the spread of some of these diseases and, you know, is, has been a key part of our growth.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Where you kind of hinted at it yourself there’s also been an end market animal protein consumption driver there as well. Would love to dig into that more. I mean, how much of that is... We think about the livestock markets as being, from a demand perspective, as being cyclical, but sort of on a multi-year basis, cyclical, you know, 2, 3, 5-year cycles, maybe even 5-10-year cycles. Is that what we’re experiencing, or is this just sort of typical seasonality and we’re just going through a really good time? Is this something that’s a little bit different? Just sort of what the underlying drivers of that are, and where are we in that cycle? Are we in, you know, first inning, ninth inning, overtime?

Larry Miller, Chief Operating Officer, Phibro Animal Health: I think, you know, again, the underlying factors here, first of all, it all is about consumer demand, right? Are consumers consuming product, meat-based products, whether that’s beef, whether that’s pork, whether that’s chicken meat, turkey meat, or eggs, or dairy products. Demand for those has been strong. Despite inflation and increased costs, particularly in the case of beef, consumers have continued to gravitate towards those products and put more in their diets. You know, one of the things that’s been interesting in this, and we look at some of the, you know, the demographic trends that are happening in the U.S. and expanding, and I think beyond that is, you know, the whole attitude I think, around animal-based proteins has changed.

I think, you know, that’s diet. I think, you know, it’s things such as the GLP, you know, weight loss products, where people that are on those, they seek out high-quality, simple proteins, and clearly, you know, meat-based proteins are key to that. They tend to eat more and consume more of, you know, meat-based proteins, but also calcium is really important. In addition to the protein, calcium, so, you know, a lot of the dairy products, I think, it’s a favorable trend for them as well. I think we will continue to see strong demand for these proteins.

you know, the first phase of GLP-1s is, you know, strictly about weight loss, but a lot of the sponsors of these drugs are investing in things such as fatty liver and cholesterol and pre-diabetes, et cetera. I think the use of those products will continue, you know, as, you know, probably insurance coverage will change as well as some of these other, you know, broader label claims happen, will continue to drive that. I think, you know, we expect that you’ll probably see more of that, you know, not only just in the U.S., but spreading to other countries as well.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Do you think that maybe, I mean, it might be too early to tell, but do you think maybe that we’re seeing a structural change in livestock markets where they’ll be, you know, 50 basis points, 100 basis points stronger than they’ve been historically, or is it still too early to tell?

Larry Miller, Chief Operating Officer, Phibro Animal Health: I think it’s too early to tell. You know, again, you know, I think the good thing, you know, is that we’re diversified across all basically key livestock production markets. Sometimes you do see some shifts between, you know, countries saying, "You know, we’re going to produce more ourselves and be less reliant on imports." You know, sometimes you have disease outbreaks that, you know, countries will say, "Well, if you have, you know, an outbreak of this, we won’t import from you." You always see a little bit of churn, if you will, a little bit, you know, in the pattern of import and export of meats. I, I guess I would just say that, we see certainly, as we sit here today, a very promising outlook for protein production.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay. Going back to the Zoetis MFA transaction and the assets you brought over, again, I think you pretty much just annualized them in this, in this past quarter. It’s been 12 months, it’s been sort of wholly owned. From now on, you’re not gonna have a, you know, outsized M and A contribution per se. It’s all gonna be organic from this point on. How has the integration of that business gone? How has that slotted in alongside your legacy MFA portfolio? Just sort of can you talk through the integration of the business, both from a product lens and also from a people lens, from a culture lens, from a facility operations perspective?

Glenn David, Chief Financial Officer, Phibro Animal Health: Neil, you want to start with that?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Sure. You know, first of all, we are really pleased with the acquisition and the integration. You know, one of the key things that we have to do is, you know, get the marketing authorizations transferred from the previous owner over to us, and we are nicely on track with that. You know, a vast majority of the markets, it’s been completed, you know, we, you know, that is moving along really nicely. You know, as far as our teams, one of the key things that this integration brought was it brought strength in a couple species areas where we were not as strong or not present even.

If we start, you know, in the U.S., we were not in the U.S. cattle segment, the fed cattle segment at all. We didn’t have really products that had strong presence there or strong application. We got a tremendous group of, you know, a portfolio of products, during the, you know, through this acquisition that really put us in a very nice position to serve the U.S. beef segment. We hired a specialized team of professionals, people that, you know, had a strong franchise with customers, most of them from, you know, production side somewhere, you know, in their history. We really had a wonderful opportunity to hire a great team of beef specialists that are out there.

You know, brought in relationships that they’ve had, existing relationships with customers, and being able to support these products. Also, you know, in the U.S., the swine segment, we certainly have had, you know, products there, MFAs, some nutrition and vaccines, but a really nice portfolio of products in the swine as well, that allow us to bring more customized solutions, more different approaches to our customers there. You know, the same is true in poultry in the U.S., where, you know, we particularly in the area of the medicated feed additives and anticoccidials, to be able to bring more different types of solutions to our customers.

From a geographic standpoint, there were a few other geographic areas where we weren’t as strong in, one of those was Asia, particularly in China, but even some Southeast Asian countries. Some of the northwestern South American countries, as well as Western Europe. This acquisition gave us a much, you know, stronger foundation from which to build organizations and ultimately to put, you know, resources in the market and focus on demand creation. Not just pushing product through, but being able to have people out there in touch with the end-use customers, you know, on farm with them, working on farm with them, bringing solutions. From a plant standpoint, so there were six locations that came with it, four in the U.S., one in China, and one in Italy.

You know, those were pretty much dedicated to these products, and so the transition of those was pretty direct and clean, straightforward. You know, we’ve, you know, integrated those, I would say, very rapidly as part of our business. It’s mostly the same type of, you know, products, same type of distribution and that kind of thing.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. on those integration activities and what you were talking about earlier in terms of maybe hiring some specialists, balancing out the commercial organization, is that pretty much done? I know it’s sort of, you know, you’re never done. You’re always continuing to evolve and continue to integrate, but have the major steps been completed, and is it pretty integrated, pretty seamless in terms of the legacy business and the Zoetis business?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Yeah.

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah, I.

Larry Miller, Chief Operating Officer, Phibro Animal Health: Go ahead. Randy, you go.

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah, I’d say we’re pretty much done at this point, right? There are some regulatory things that still remain, but in terms of integrating the colleagues, building the field force in the U.S. and Western Europe...

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: ... you know, we’re definitely in the later stages of that. It’s just more stuff from a regulatory perspective. Systems are all integrated at this point as well. To Larry’s point, right, we, you know, we basically, we mostly acquired the plants and the colleagues in the plants. From a cultural perspective, I think it’s gone extremely well, right? I think they’re very excited to be part of Phibro. These products are a priority for us, in probably a different way than they experienced in the past, and, you know, so they’re very excited to be part of the team.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. What about from a customer perspective? I mean, I imagine you probably had relatively high overlap on customers between the two businesses, but still is gonna be bringing some new ones. What’s been the reception? You know, has it helped you strengthen any relationships, build new relationships, sort of, for those parts of the portfolio? I mean, same thing, it must have been pretty transformative difference. Can you talk about the reception you’ve seen in the market?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Yeah, I would say it’s been really positive. You know, I’ve had a chance to get out a lot in the field, particularly the last few weeks, with some of the big trade shows that happened, where we’re, you know, meeting, you know, the end users, right? Getting the chance to talk to them. I think they’re really pleased that we have these products as part of our portfolio because this is a high priority for us. They appreciate, you know, the support that we’re gonna give these products in terms of product supply, in terms of, you know, support, field support, and in many cases, reminding and, you know, promoting the products and reminding our customers how these products are indicated.

you know, really, how they can practically be used on farm to, you know, to address some of the unique challenges that, you know, health challenges, those types of things. I think our customers have been really positive on this. As you said, in the primary markets, you know, the overlap of customers has been, you know, pretty large. In most of the, you know, industries are fairly integrated. With the exception, as I mentioned earlier, beef is a new segment for us. And in some of the secondary markets, where perhaps either Phibro and or, you know, the Zoetis had distributors here, you know, we’re able to really look at demand creation here and dedicate resources to open new relationships with some of the livestock producers.

we’re also seeing, you know, not only within the combined MFA portfolios, but also good complementary between the combined MFAs, but also with our nutrition specialties and our vaccines. Our vision is to bring comprehensive health solutions to our customers, you know, that really makes sense on their farm, and in many cases, that involves a vaccine for preventions, it involves nutrition specialty products for gut health or, you know, general health, as well as medicated products for prevention, control, and treatment of diseases.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. That kind of brings me to the next topic I wanted to touch on, which would be sort of competitive landscape and the position of the portfolio relative to some of your peers. You know, when you think about, animal health market, you know, a lot of people think about Elanco and Zoetis. You guys don’t necessarily compete with them as much or overlap with them as much, especially now that you know, you acquired Zoetis, some of their business. Some of your competitors are more, you know, along the lines of Huvepharma, some of these specialty, livestock feed producers.

Could you walk us through how you’re positioned relative to your, you know, actual competitors in the livestock markets, how that’s changed as post-deal, and just sort of what, you know, how it’s enhanced your competitive positioning and go to market?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Larry?

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Yeah, sure. Yeah, so Michael, as you pointed out, in our different segments, there’s different competitors. You allude to the MFA market, so there, you know, the global competition is chiefly Elanco and Huvepharma, as you said. Some markets, like the U.S., are fairly highly regulated with fairly high barriers to entry, so there’s fewer local or generic players. Other markets have, you know, lots of generic, lots of local players. Though I will note that, you know, most of our legacy products and even some of our purchased products, the Zoetis portfolio, do not have generic competition, despite being around for decades. You know, we are the pioneer drug owner, and in certain cases, we remain the only person providing those drugs.

I, you know, I think on, you know, specifically on MFA place, spot, we probably are number two globally. And we do see, you know, a strengthening dynamic as far as our ability to kind of complete a rotation for our customer and have them with products that they never have to leave, you know, with a situation when they never have to leave our products, despite the fact that they want to rotate. Within vaccines, a lot more competition out there, Ryskin. You know, Zoetis, Elanco, Merck, BI, Ceva is a company that’s not public, but it’s a large player in the vaccine business.

There as you know, I think as Larry had talked about, margins are higher. It really comes down to the strain sometimes. You know, we have a couple of products for strains out there that are really emerging diseases that we’ve seen a lot of our growth in South America over the last few years. You know, while we expect, you know, more competition in those strains going forward, we also see those diseases heading towards more geographies and expanding the use case. You know, I think we’re also feel pretty confident about our ability to continue with our double-digit growth in the vaccines. Finally, nutritional specialties.

Here you see a little bit of Elanco. You don’t really see Zoetis. You see other companies, though, other public companies like Novonesis, which is the old Novozymes and Chr. Hansen. Church & Dwight has an animal nutrition group that we compete with, a company called Balchem, which is a public company. These are all kind of nutritional specialty business, you know, companies. A little bit different there. It is more about, you know, it’s fragmented, it’s rational. Your success there is driven less by price, but more by formulation, quality, efficacy, and technical support. I think we, you know, we offer a lot in those areas, as you’ve seen by our historical growth.

It’s also one of those areas that you will see, as our innovation pipeline, as we put products out there, because there’s no label claims, a lot of it is just based on history and on your ability to grow and to get, you know, market data as far as, you know, use cases. There’s a constant build on successful products there. You know, we’re pretty excited about our portfolio and our growth, ability to grow there, going forward as well.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Do you think you’re able to take share, or you have been taking share from some of your competitors over the past year, or is that a little bit tougher in these markets?

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: It, Larry, you want to take it?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Yeah. having precise market data is a challenge here because as you know, many, some of the companies don’t report, and particularly in, when cases where you have local competitors that don’t report. It’s hard to judge that. I would say when you look at our sales growth, obviously, if we’re growing faster than the market growth, then certainly we’re expanding share. A lot of what we do is to expand the market. Dani used an example about a vaccination, right?

The vaccine market may be worth X amount today, but it all of a sudden, if you have an emerging disease come and, you know, it’s a problem, then you have a new use, if you will. A lot of the things that we’ve brought, you know, I think the innovations we’ve brought in vaccines and nutrition specialties, et cetera, you know, really do create market expansion opportunities, which is, you know, really exciting. As we grow our sales, I guess, you know, our share of the animal health market grows.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay. Sort of along the same lines, I think you’ve been talking a little bit more about pricing power in recent quarters, I think you called out being able to take some price last quarter. That’s not typically something that you see a lot of in animal health. Could you just speak about, you know, what’s giving you confidence there, how durable that is, and your thoughts on price as part of the long-term algorithm?

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah, Larry, you want to start?

Larry Miller, Chief Operating Officer, Phibro Animal Health: Yeah. So, you know, I guess, you know, we saw opportunities, you know, in some of the larger markets here. We saw opportunities to look at, you know, the price, particularly of the acquired products, and see, you know, maybe they were undervalued a little bit. We do try and, you know, practice value-based pricing in our products, so we saw an opportunity there to adjust that. In many cases, there were, you know, use of rebates and particularly end-use rebates. As we looked at that, we basically, I guess, we saw opportunities where maybe those programs were not as effective. We’ve really simplified our approach in pricing and eliminated many of those end-use rebates with large users.

You know, by doing that, obviously, you know, you affect the net price and can, you know, really help with integration or with the gross margin of the products. Some of the other markets, you know, secondary markets, in some cases, you know, we did benchmarking, you know, versus the other markets, you know, where, how these products sold, and, you know, versus some of the local competitors. We saw opportunities where some of the products, you know, really had lower or even, you know, negative margins. We were able to take more significant price reset, I would say, to get these products where, you know, they should be, or we felt they should be, versus the value they provide.

You know, we really have not seen volume drops to this point anyway, at least that would be significant on a global basis as a result of that.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay, it sounds like, you know, best way to characterize some of these price gains were sort of fixing areas where you were mispricing previously, just sort of, you know, more of like a one-time adjustment, true-up correction across the portfolio versus something you’ll be doing, you know, regularly going forward.

Glenn David, Chief Financial Officer, Phibro Animal Health: I think that’s a good summary, Mike, right? The outsized price opportunities was sort of part of the integration, sort of resetting with the new Zoetis portfolio. You know, on an ongoing basis, like we said, particularly in the MFAs, these are more mature products. You know, we’d expect low single-digit price increase opportunities on these moving forward.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay, okay. I wanna, we’ve got about five minutes left, still a bunch of topics I want to talk about. Maybe let’s pivot to Companion. It’s something that’s been, a major focus area, in the past, but obviously over the last year, you know, we’ve had to dedicate a lot of time to Zoetis and MFA as we did today. Can you give us an update on how that portfolio is doing? I mean, I think we’ve certainly seen a lot more ads and a much bigger presence, for some of the companion animal assets like Restoris. I know you guys were at VMX earlier this year in January, which I don’t believe you’ve ever been there before, or at least I haven’t seen you there before.

Can you talk about Companion, you know, what you’re seeing over the last couple of years, and just how to think about that business go forward?

Glenn David, Chief Financial Officer, Phibro Animal Health: Go ahead, Ben.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Sure. I guess we missed you in Orlando, but yes, we were there. We’re also in Las Vegas last week, if you were at the Westin Metro. Yeah, we’ve launched Restoris, which is our second product. Our first product was Regensa. Continue to do nicely with Regensa. We’re, we’re really pleased with the reception, though, to Restoris. We see a really nice, strong growth trajectory in front of us. Though, you know, I’ll note, you know, obviously in fiscal 26, it’s, it’s a small contributor.

It should be larger in the years to come. You know, I think our philosophy is to take the profits from the revenue and or from a margin there, and to reinvest it into the companion animal space. At the same time, not to get ahead of it, and not to spend, you know, too much ahead of it. I think we’re rather fiscally conservative when it comes to the pet side. We are kind of slowly building to where we reach scale, where we can do something larger, perhaps, at that stage, but we’re definitely not there yet.

You know, I think what we’ve been consistent in talking about our overall strategy in the long term, and I stress the long term, is to turn this into kind of a fourth leg to our stool. Where, you know, along with our MFAs, nutritional specialties, and our vaccines, we’ll be able to talk, you know, in meaningful revenue about our companion animals.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay. Looking forward to that for sure. Go ahead. I wanna touch on margins briefly. You know, when you were talking about the LRP earlier and sort of how you see how you see margins, going forward. You talked about, you know, opportunity for margin expansion. Can you talk about what’s driving that? How much of that is mix, versus execution, versus, you know, maybe some components of Phibro Forward, and just any way to quantify the opportunity there?

Glenn David, Chief Financial Officer, Phibro Animal Health: Yeah. I think there are a number of things driving it, Mike, like you said. Mix certainly is a factor. You know, particularly in the first half of this year and in the second quarter, we had positive mix dynamics. Within the MFA portfolio, there are certain products that have higher margins, and that benefits as well. In the first half of the year, we saw a good mix within the MFA portfolio. Also, though, vaccines growing rapidly, nutritional specialty, those are also higher margin products. That helps us from a margin perspective. You know, another big contributor, though, has been the Phibro Forward growth initiative. You know, as we mentioned, we’re looking across the portfolio for where we can drive growth at both the revenue and an income level.

One of the big areas has been also, you know, as we talked about within procurement, trying to drive, you know, efficiencies in terms of how we work with our suppliers, leverage the broader scale that we also have right now from a Zoetis perspective, adding those MFAs to our portfolio. There are a number of initiatives across Phibro Forward, which are helping us drive margin expansion as well. It’s a combination of the mix, it’s a combination of new portfolio, but it’s also these initiatives that we have, which cut across every area of the business, every market, every species, that we’re looking to be more efficient in, that are helping to drive greater EBITDA margin for the company.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Any way you want to take a stab at quantifying how to think about that relative to revenue growth going forward, or just too early?

Glenn David, Chief Financial Officer, Phibro Animal Health: We haven’t quantified the specific dollar amount from Phibro Forward. Obviously, we have targets internally that we track on a, you know, weekly, daily basis, sort of. You know, what we shared externally is we do expect that, you know, Phibro Forward will hit its peak in fiscal year, you know, 2027, but it’s something that we’re going to embed in the company to, you know, continue to drive growth. We do believe that it’s going to help us really deliver on our value proposition of driving income growth faster than revenue, and that’s really going to be our focus moving forward.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Income growth faster than revenue. All right. We’ve got only a couple of minutes left, so I guess I’ll just jump to my last one. Dani, again, congrats on stepping in as the incoming CEO later this year. Obviously, send my best regards and congratulations to Jack. I mean, I hope to speak with him. And I know he’ll be sticking around beyond that. Just at a high level, you know, your thoughts as you’re going to be walking into the role, and how you see the strategy going forward, if there’s any changes you’re going to make or any things that you’re not going to change, just if you could give us some high-level thoughts.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Yeah. you know, thank you, first, for the congratulations. As you know, my father’s not going away. He’s staying as Executive Chairman.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Yep

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: keeping the office with the bathroom. You know, so I would overall, I’d characterize the transition as one of continuity, not really of change, right? The strategy we’re executing today, it’s going to be the same strategy I’ll be responsible for as CEO. I’ve been deeply involved in shaping it and the key capital allocation to date and the operating decisions, you know, well ahead of July first, frankly, you know, for the last few years. You know, Larry, Glenn, all, you know, our management team is staying put. You know, from a decision-making standpoint, there’s no reset. You know, the operating model, strategic framework, they all remain firmly in place. You know, as Glenn just talked about, you know, a good example is Phibro Forward, which I’ve actually been leading.

You know, it’s translating strategy into bottom-up plans, clear ownership, discipline, and just, you know, execution throughout the organization. I see more of the same on that, maybe more paying attention to, you know, to Claude Code or something of that nature. Overall, you know, I think it is really just more of the same and looking to continue kind of on the streak that we’re on.

Mike Riskin, Analyst, BofA Life Science Tools and Diagnostics: Okay. Okay. Yeah, I mean, it’s hard to have a transition with more continuity than what you guys are doing. I don’t doubt that it’ll be smooth and seamless. All right. With that, we’re out of time. Thanks so much for joining us, everyone. Glenn, Dani, Larry, thanks so much for taking the time and for being with us, and we’ll be staying in touch.

Glenn David, Chief Financial Officer, Phibro Animal Health: Thanks, Mike.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Thank you.

Glenn David, Chief Financial Officer, Phibro Animal Health: Thank you.

Dani Bendheim, Chief Strategy Officer, soon to be CEO, Phibro Animal Health: Appreciate it.

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