Embecta Corp.
For the period ended Dec 31, 2025. Filed Feb 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 5, 2026
EMBC$6.19-2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001872789-25-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001872789-26-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 115 current paragraphs.
83 unchanged; 21 reworded; 11 added; 22 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
= not meaningful
Current report
•Revenue decreased by $0.7 million to $261.2 million from $261.9 million;
Current report
•Operating income increased by $54.6 million to $83.3 million from $28.7 million; and
Current report
•Net income increased by $44.1 million to $44.1 million from $0.0 million.
Current report
Other operating (income) expense, net
Current report
Other operating (income) expense, net are as follows:
Current report
•A gain on the sale of certain intellectual property rights and long-lived assets associated with the patch pump program.
Current report
Other income (expense), net was $(0.3) million and $(1.5) million for the three months ended December 31, 2025 and 2024, respectively. Other income (expense), net did not materially change in the current period as compared to the prior year period.
Current report
Receivables Sale Agreement
Current report
The change in inventories is primarily attributed to timing of purchases, production, and sales of our inventories.
Current report
Certain amounts previously presented within Amounts due from Becton, Dickinson and Company and Amounts due to Becton, Dickinson and Company are presented within Trade receivables, net and Accounts Payable, respectively, beginning October 1, 2025 within the Condensed Consolidated Balance Sheets. Changes in working capital associated with the agreements referenced in Note 3 to the Condensed Consolidated Financial Statements are reflected within the change in trade receivables and accounts payable and accrued expenses, respectively.
Removed paragraphs (22)
Previous report
On November 22, 2024, the Company's Board of Directors approved a plan to discontinue internal and external investment in the research and development of our patch pump program. As a result, the Company incurred organizational restructuring plan (the "Patch Pump Restructuring Plan") costs of $34.3 million during the nine months ended June 30, 2025. Restructuring actions associated with the Patch Pump Restructuring Plan to discontinue the patch pump program are substantially complete as of June 30, 2025. In addition, we discontinued our commercial operation plans for the insulin delivery system, including the previous intended limited launch. The Company plans to refocus its investment on its core business while looking to optimize free cash flow and strengthen its balance sheet by paying down debt.
Previous report
During the second quarter of fiscal 2025, the Company initiated restructuring actions in connection with the 2025 Restructuring Plan to streamline the organization and optimize resources. As a result, the Company incurred organizational restructuring plan costs of $3.5 million during the nine months ended June 30, 2025. The 2025 Restructuring Plan is substantially complete as of June 30, 2025.
Previous report
On July 4, 2025, the One Big Beautiful Bill ("OBBB") Act, which includes a broad range of tax reform provisions, was signed into law in the United States and we continue to assess its impact. We currently do not expect the OBBB Act to have a material impact on the Company's results of operations in fiscal year 2025.
Previous report
•Revenue increased by $23.0 million to $295.5 million from $272.5 million;
Previous report
•Operating income increased by $38.1 million to $94.0 million from $55.9 million; and
Previous report
•Net income increased by $30.8 million to $45.5 million from $14.7 million.
Previous report
•Revenue decreased by $20.6 million to $816.4 million from $837.0 million;
Previous report
•Gross profit decreased by $43.1 million to $518.3 million, from $561.4 million. Gross profit as a percent of revenue was 63.5%, as compared to 67.1% in the prior year comparative period;
Previous report
•Operating income increased by $45.0 million to $185.6 million from $140.6 million; and
Previous report
•Net income increased by $5.3 million to $69.0 million from $63.7 million.
Previous report
Cost of products sold increased by $22.5 million, or 8.2%, to $298.1 million for the nine months ended June 30, 2025 as compared to $275.6 million for the nine months ended June 30, 2024. Cost of products sold as a percentage of revenues was 36.5% for the nine months ended June 30, 2025 as compared to 32.9% in the nine months ended June 30, 2024. The increase in cost of products sold for the nine month comparative period was primarily driven by the impact of net changes from profit in inventory adjustments period over period and non-cash asset impairment charges recorded to write down the carrying value of certain property and equipment as a result of the Company's Patch Pump Restructuring Plan. This was partially offset by lower volumes in the current period compared to the prior year period.
Previous report
Other operating expenses
Previous report
Other operating expenses are as follows:
Previous report
•Restructuring related costs associated with the optimization of certain business functions as we transition to being a stand-alone entity;
Previous report
Other income (expense), net, was $4.8 million and $(1.1) million for the three months ended June 30, 2025 and 2024, respectively. Other income (expense), net was $2.9 million and $(6.1) million for the nine months ended June 30, 2025 and 2024, respectively. The income generated for the three and nine month periods ended June 30, 2025 was primarily attributed to favorable impacts from foreign exchange. The costs incurred for the three and nine month periods ended June 30, 2024, was primarily attributed to amounts due to BD for income taxes payable incurred in deferred jurisdictions where BD is considered the primary obligor and the unfavorable impacts from foreign exchange. We do not expect to incur any additional amounts where BD is considered the primary obligor in the current fiscal year.
Previous report
The effective tax rates were 35.7% and (24.4)% for the nine months ended June 30, 2025 and 2024, respectively. The increase in the Company's effective tax rate compared to the prior period is primarily due to the absence of non-recurring tax benefits recognized in the prior period related to withholding taxes on undistributed foreign earnings, Swiss tax law changes and lower tax reserves. This was partially offset by favorable tax impacts primarily resulting from overall higher earnings reflected in the current period.
Previous report
Factoring Agreements
Previous report
In conjunction with the Separation, we entered into the Factoring Agreements with BD. Embecta owed BD a service fee calculated as 0.1% of annual revenues related to countries subject to the Factoring Agreements, in exchange for the services provided by BD pursuant to the Factoring Agreements.
Previous report
As of March 31, 2024, all Factoring Agreements between Embecta and BD had expired and terminated as a result of our implementation and onboarding of certain Business Continuity Processes in North America, and certain jurisdictions in Europe and Asia.
Previous report
The change in inventories is primarily attributed to actions taken to build inventory to support the execution of our brand transition program.
Previous report
The change in amounts due from/due to Becton, Dickinson and Company is attributed to the timing of payments associated with certain agreements effectuated at Separation.
Previous report
•The risks associated with the material weakness identified in our internal control over financial reporting and our ability to remediate such material weakness.
Reworded paragraphs (21)
Previous wording
We are a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. In the 100-year history of our business, we believe that our products have become some of the most widely recognized and respected brands in diabetes management in the world. We estimate that our products are used by approximately 30 million people in over 100 countries for insulin administration and to aid with the daily management of diabetes. Our business traces its origins to 1924, when BD developed the first dedicated insulin syringe. Since then, we have built a world-class organization with an unique manufacturing, supply chain and commercial footprint.
Current wording
We are a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. In the over 100-year history of our business, we believe that our products have become some of the most widely recognized and respected brands in diabetes management in the world. We estimate that our products are used by approximately 30 million people in over 100 countries for insulin administration and to aid with the daily management of diabetes. Our business traces its origins to 1924, when BD developed the first dedicated insulin syringe. Since then, we have built a world-class organization with a unique manufacturing, supply chain and commercial footprint.
Previous wording
Global Trade. The current global economic environment has been recently influenced by rapidly changing new tariff policies instituted by the United States ("U.S.") government and foreign governments. As a global company that both imports raw materials and products into the U.S. and distributes products and raw materials originating from the U.S. to global manufacturing sites and markets, these new tariffs may have a financial impact on our cost of goods, our profit margins, our business generally and our global distribution strategy. These new tariffsmay cause foreign governments and private purchasers to consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products resulting in the additional possibility that local manufacturers, brands and other competitors may engage in aggressive competitive pricing to take advantage of the uncertain global trade environment and transition customers away from global manufacturers, all of which may impact the company’s business and operations.
Current wording
Global Trade. The current global economic environment has been recently influenced by rapidly changing new tariff policies instituted by the United States government and foreign governments. As a global company that both imports raw materials and products into the U.S. and distributes raw materials and products originating from the U.S. to global manufacturing sites and markets, these new tariffs may have a financial impact on our cost of goods, our profit margins, our business generally and our global distribution strategy. These new tariffs may cause foreign governments and private purchasers to consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products resulting in the additional possibility that local manufacturers, brands and other competitors may engage in aggressive competitive pricing to take advantage of the uncertain global trade environment and transition customers away from global manufacturers, all of which may impact the Company’s business and operations.
Previous wording
Changes in Clinical Practice. Introduction of new drugs and increased penetration of oral and once-weekly anti-diabetic drugs (e.g., SGLT-2s), GLP-1s and GLP-1 combination products have delayed initiation of insulin therapy and contributed to less demand for our products. New drug therapies, including weekly insulin, are targeted to challenge the current diabetes treatment paradigm, including the frequency insulin is dosed (weekly vs. daily injections) and amount of insulin used. Additionally, insulin therapy in developed markets continues to transition to infusion pumps.
Current wording
Changes in Clinical Practice. Introduction of new drugs and increased penetration of oral and once-weekly anti-diabetic drugs (e.g., SGLT-2s, once-weekly insulin, GLP-1s and GLP-1 combination products) have delayed initiation of insulin therapy and contributed to less demand for our products. New drug therapies, including weekly insulin, are targeted to challenge the current diabetes treatment paradigm, including the frequency insulin is dosed (weekly vs. daily injections) and amount of insulin used. Additionally, insulin therapy in developed markets continues to transition to infusion pumps.
Previous wording
•Gross profit increased by $7.0 million to $197.1 million from $190.1 million. Gross profit as a percent of revenue was 66.7%, as compared to 69.8% in the prior year comparative period;
Current wording
•Gross profit increased by $4.6 million to $161.7 million from $157.1 million. Gross profit as a percent of revenue was 61.9%, as compared to 60.0% in the prior year comparative period;
Previous wording
Our revenues increased by $23.0 million, or 8.4%, to $295.5 million for the three months ended June 30, 2025 as compared to revenues of $272.5 million for the three months ended June 30, 2024. Changes in revenues are driven by the volume of goods that the Company sells, the prices it negotiates with customers, and changes in foreign exchange rates. The increase in revenues was driven by $13.5 million of favorable changes in volume, $6.8 million of favorable changes in price, a $1.7 million increase in contract manufacturing revenues related to sales of non-diabetes products to Becton, Dickinson and Company ("BD"), and $1.0 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar.
Current wording
The Company's revenues decreased by $0.7 million, or 0.3%, to $261.2 million for the three months ended December 31, 2025 as compared to revenues of $261.9 million for the three months ended December 31, 2024. Changes in revenues are driven by the volume of goods that the Company sells, the prices it negotiates with customers, and changes in foreign exchange rates. The decrease in revenues was driven by $7.8 million of unfavorable changes in price and a $0.7 million decrease in contract manufacturing revenues related to sales of non-diabetes products to BD, partially offset by $4.6 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S. dollar and $3.2 million of favorable changes in volume.
Previous wording
Cost of products sold increased by $16.0 million, or 19.4%, to $98.4 million for the three months ended June 30, 2025 as compared to $82.4 million for the three months ended June 30, 2024. Cost of products sold as a percentage of revenues was 33.3% for the three months ended June 30, 2025 as compared to 30.2% for the three months ended June 30, 2024. The increase in cost of products sold for the three month comparative period was primarily driven by higher volumes and the impact of net changes in profit in inventory adjustments period over period.
Current wording
Cost of products sold decreased by $5.3 million, or 5.1%, to $99.5 million for the three months ended December 31, 2025 as compared to $104.8 million for the three months ended December 31, 2024. Cost of products sold as a percentage of revenues was 38.1% for the three months ended December 31, 2025 as compared to 40.0% for the three months ended December 31, 2024. The decrease in cost of products sold for the three month comparative period was primarily driven by impairment charges recorded in the prior period to write down the carrying value of certain property and equipment with no comparable impairment charges in the current period.
Previous wording
Selling and administrative expenses decreased by $1.3 million, or 1.5%, to $84.4 million for the three months ended June 30, 2025 as compared to $85.7 million for the three months ended June 30, 2024. Selling and administrative expenses decreased by $23.2 million, or 8.6%, to $245.1 million for the nine months ended June 30, 2025 as compared to $268.3 million for the nine months ended June 30, 2024. The decrease for both the three and nine month comparative periods was primarily driven by lower TSA and LSA costs with BD in addition to lower compensation expense recognized in the current periods.
Current wording
Selling and administrative expenses decreased by $3.5 million, or 4.3%, to $77.6 million for the three months ended December 31, 2025 as compared to $81.1 million for the three months ended December 31, 2024. The decrease for the three month comparative period was primarily driven by lower compensation expense in the current period.
Previous wording
Research and development expenses decreased by $16.0 million, or 78.4%, to $4.4 million for the three months ended June 30, 2025 as compared to $20.4 million for the three months ended June 30, 2024. Research and development expenses decreased by $26.3 million, or 44.6%, to $32.7 million for the nine months ended June 30, 2025 as compared to $59.0 million for the nine months ended June 30, 2024. The decrease for both the three and nine month comparative periods was primarily driven by a reduction in payments made in connection with the development of our insulin patch pump program in the current periods as compared to the prior periods, given the discontinuation of the patch pump program. We expect our research and development expenses to decrease sequentially in fiscal year 2025 compared to fiscal year 2024.
Current wording
Research and development expenses decreased by $15.7 million, or 77.3%, to $4.6 million for the three months ended December 31, 2025 as compared to $20.3 million for the three months ended December 31, 2024. The decrease for the three month comparative period was primarily driven by expenses incurred in connection with the development of our insulin patch pump program in the prior year before the decision was made to discontinue the program. There were no comparable expenses associated with the patch pump program in the current year.
Previous wording
Other operating expenses incurred primarily consist of the following:
Current wording
Other operating (income) expense, net incurred primarily consist of the following:
Previous wording
•Severance and contract termination costs associated with the discontinued patch pump program; and
Current wording
•Severance and contract termination costs associated with the discontinued patch pump program;
Previous wording
•Costs recognized associated with the amortization of cloud computing arrangements.
Current wording
•Costs recognized associated with the amortization of cloud computing arrangements; and
Previous wording
Interest expense, net decreased by $1.2 million to $26.6 million for the three months ended June 30, 2025 as compared to $27.8 million for the three months ended June 30, 2024. Interest expense, net decreased by $2.1 million to $81.2 million for the nine months ended June 30, 2025 as compared to $83.3 million for the nine months ended June 30, 2024. The decrease for both the three and nine month comparative periods was primarily driven by lower debt levels and lower short-term interest rates in the current periods as compared to the prior periods. It remains unclear whether the United States Federal Reserve will increase or decrease the benchmark interest rate during the remainder of fiscal 2025. An increase in the benchmark interest rate would result in an increase in interest expense on our variable rate debt and a decrease in the benchmark interest rate would result in a decrease in interest expense on our variable rate debt.
Current wording
Interest expense, net decreased by $3.8 million to $24.1 million for the three months ended December 31, 2025 as compared to $27.9 million for the three months ended December 31, 2024. The decrease for the three month comparative period was primarily driven by lower debt levels and lower short-term interest rates in the current period as compared to the prior period. It remains unclear whether the United States Federal Reserve will increase or decrease the benchmark interest rate during the remainder of fiscal 2026. An increase in the benchmark interest rate would result in an increase in interest expense on our variable rate debt and a decrease in the benchmark interest rate would result in a decrease in interest expense on our variable rate debt.
Previous wording
The effective tax rates were 37.0% and 45.6% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the Company's effective tax rate compared to the prior period is primarily due to favorable tax impacts resulting from overall higher earnings reflected in the current period. This was partially offset by higher taxes on undistributed foreign earnings and reduced tax benefits from non-taxable income.
Current wording
The effective tax rates were 25.1% and 100.0% for the three months ended December 31, 2025 and 2024, respectively. The decrease in the Company's effective tax rate compared to the prior period is primarily due to the level and mix of earnings, lower limitations on the deductibility of interest expense in the U.S. and lower U.S. tax on foreign earnings.
Previous wording
During the nine months ended June 30, 2025, the Company paid an aggregate principal amount of approximately$112.2 million on the Term Loan, of which$105.0 million was discretionary. Debt extinguishment charges as a result of these discretionary prepayments were not material to the Company's Condensed Consolidated Statements of Income.
Current wording
During thethree months ended December 31, 2025, the Company paid an aggregate principal amount of approximately$37.5 million on the Term Loan, of which$35.1 million was discretionary. Debt extinguishment charges as a result of these discretionary prepayments were not material to the Company's Condensed Consolidated Statements of Income.
Previous wording
During the nine months ended June 30, 2025, the Company made interest payments of $68.5 million on debt outstanding.
Current wording
During the three months ended December 31, 2025, the Company made interest payments of $13.2 million on debt outstanding.
Previous wording
During the third quarter of 2025, the Company entered into a trade receivables sale agreement with a third-party financial institution to sell certain trade receivables of the Company at a discount on an uncommitted basis. These trade receivable sales are accounted for as a sale of assets, as the Company's continuing involvement is limited to servicing the accounts receivables. The Company receives the sales price, equal to the trade receivable less the applicable discount, at the time of sale.
Current wording
The Company has established a trade receivables sale agreement with a third-party financial institution to sell certain trade receivables of the Company at a discount on an uncommitted basis. These trade receivable sales are accounted for as a sale of assets, as the Company's continuing involvement is limited to servicing the accounts receivables. The Company receives the sales price, equal to the trade receivable less the applicable discount, at the time of sale.
Previous wording
In connection with the Company's receivables sale agreement, $26.2 million of trade receivables were sold during the nine months ended June 30, 2025, resulting in derecognition of the receivables from the Company's Condensed Consolidated Balance Sheets. Discounts recognized on the sale of trade receivables were not material to the Company's Condensed Consolidated Statements of Income. The cash received on the sale of trade receivables during the nine months ended June 30, 2025 is presented in changes in trade receivables, net within operating activities in the Condensed Consolidated Statement of Cash Flows.
Current wording
In connection with the Company's receivables sale agreement, $56.0 million of trade receivables were sold during the three months ended December 31, 2025, resulting in derecognition of the receivables from the Company's Condensed Consolidated Balance Sheets. Discounts recognized on the sale of trade receivables were not material to the Company's Condensed Consolidated Statements of Income. The cash received on the sale of trade receivables during the three months ended December 31, 2025 is presented in changes in trade receivables, net within operating activities in the Condensed Consolidated Statement of Cash Flows.
Previous wording
In May 2025 and June 2025, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates to our credit ratings. Our Moody's Investors Services credit rating is B1 and our Standard & Poor's Rating Services credit rating is B+.
Current wording
In May 2025 and January 2026, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates and reaffirmed our preexisting credit ratings. Our Moody's Investors Services credit rating is B1 and our Standard & Poor's Rating Services credit rating is B+.
Previous wording
Cash and equivalents and restricted cash were $233.6 million as of June 30, 2025 as compared to $274.2 million as of September 30, 2024.
Current wording
Cash and equivalents and restricted cash were $204.4 million as of December 31, 2025 as compared to $228.6 million as of September 30, 2025.
Previous wording
The primary uses of cash that contributed to the $40.6 million decrease were:
Current wording
The primary uses of cash that contributed to the $24.2 million decrease were:
Previous wording
Net cash used for investing activities was comprised of capital expenditures of $2.0 million for the nine months ended June 30, 2025 to support our business and operations.
Current wording
Net cash provided by investing activities for the three months ended December 31, 2025 was comprised of proceeds from the sale of certain intellectual property rights and long-lived assets of $10.1 million offset by capital expenditures of $0.6 million to support our business and operations.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Nine Months Ended June 30, 2025 Summary (on a comparative basis)
Previous report — wording carried elsewhere
Key financial results for the nine months ended June 30, 2025 were as follows:
Previous report — wording carried elsewhere
Our revenues decreased by $20.6 million, or 2.5%, to $816.4 million for the nine months ended June 30, 2025 as compared to revenues of $837.0 million for the nine months ended June 30, 2024. The decrease in revenues was driven by $31.0 million of unfavorable changes in volume and $7.0 million associated with the negative impact of foreign currency translation primarily due to the strengthening of the U.S. dollar. This was partially offset by $10.9 million of favorable changes in price and $6.5 million increase in contract manufacturing revenues related to sales of non-diabetes products to BD.
Previous report — wording carried elsewhere
Dollar amounts are in millions except per share amounts or as otherwise specified.