Phibro Animal Health Corp. (NASDAQ:PAHC) closed out fiscal 2026 with results that management says validate its acquisition strategy, as full-year adjusted diluted earnings per share jumped 48% to $3.22 and adjusted EBITDA climbed 39% to $255 million on net sales exceeding $1.5 billion.

Market Context

The company completed its first full fiscal year since folding in a large medicated feed additive portfolio—a deal that reshaped Phibro's revenue mix heading into fiscal 2026. The results, covering the quarter and year ended June 30, come as livestock values sit at all-time highs, giving customers more incentive to invest in animal health products.

Analysis

The acquired feed additive business grew 70% for the full year and added $354.3 million in sales, but perhaps more telling is how the rest of Phibro performed without it. The Animal Health segment overall rose 21% to $1.162 billion, Mineral Nutrition climbed 11% to $282.3 million on stronger demand for zinc, copper and trace minerals, and vaccine sales rose 14% to $156.4 million behind poultry demand in Latin America and Israel. Nutritional Specialties also grew, helped by North American dairy customers.

Leadership pointed to newer growth levers during the August 27 earnings call. Companion animal joint health product Rejensa saw a 'nice uptick' as distribution widened beyond a single partner, according to COO Larry Miller. The company also highlighted that historically high livestock values are pushing customers to spend more on animal health inputs—a tailwind that could persist if protein prices remain elevated.

On the cost side, the three-year Phibro Forward efficiency program formally concluded in June but is expected to deliver roughly $50 million in cumulative EBITDA benefit in fiscal 2027. The planned closure of the Chicago Heights plant should save $15 million to $20 million annually starting in fiscal 2028.

The cash flow picture remains a concern despite EBITDA strength. Free cash flow for fiscal 2026 came in at just $9.9 million, dragged down by an $86.3 million inventory buildup tied mostly to the newly acquired portfolio. The balance sheet carries $737.9 million in total debt with a gross leverage ratio of 2.9 times EBITDA—a figure worth monitoring if growth decelerates.

Key Numbers

- Fiscal 2026 net sales: >$1.5 billion (first time surpassing this threshold)

- Adjusted diluted EPS: $3.22, up 48% year-over-year

- Adjusted EBITDA: $255 million, up 39% year-over-year

- Acquired feed additive portfolio contribution: $354.3 million in sales, up 70% for full year

- Animal Health segment revenue: $1.162 billion, up 21%

- Mineral Nutrition revenue: $282.3 million, up 11%

- Vaccine sales: $156.4 million, up 14%

- Free cash flow: $9.9 million (inventory buildup of $86.3 million weighed heavily)

- Total debt: $737.9 million; gross leverage at 2.9x EBITDA

What to Watch

Growth is expected to slow meaningfully in fiscal 2027. Guidance calls for net sales of $1.55 billion to $1.6 billion and adjusted EBITDA of $258 million to $268 million—roughly 4% and 3% growth at the midpoint, a sharp step down from this year's pace. Part of that reflects tough comparisons: acquired portfolio sales fell 11% in the fourth quarter against a strong prior-year period.

Management also expects negative EBIT growth in the fiscal first quarter due to a higher SG&A base built up over the year. Investors will want to monitor whether Rejensa distribution gains continue and how livestock value trends evolve as input costs normalize for customers.