Embecta Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 — Background

Embecta Corp. ("Embecta" or the "Company") is a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes. The Company has a broad portfolio of marketed products, including a variety of pen needles, syringes and safety devices. The Company primarily sells products to wholesalers and distributors that sell to retail and institutional channels who in turn sell to patients or use the products to deliver insulin injections to patients.

Note 2 — Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by GAAP for complete consolidated financial statements are not included herein. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company's opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. All intercompany transactions and accounts within Embecta have been eliminated. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Embecta's Annual Report on Form 10-K for the year ended September 30, 2025, filed with the Securities and Exchange Commission on November 25, 2025 (the “2025 Form 10-K”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses, depreciable and amortizable lives, sales returns and allowances, rebate accruals, inventory reserves and taxes on income as reflected in the Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

The following provides updates to the Company's "Summary of Significant Accounting Policies" as disclosed in the 2025 Form 10-K.

Contingent Consideration Liabilities

For transactions accounted for as a business acquisition, contingent consideration liabilities may exist and these are recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities existing from business acquisitions are recognized in Other operating expense, net in the Consolidated Statements of Income. See Note 3, Acquisition, and Note 18, Financial Instruments and Fair Value Measurements, for further information.

Retirement of Common Stock

When the Company decides to actually or constructively retire the shares of common stock it has repurchased it records the amount paid in excess of par value as a reduction in retained earnings, to the extent such recording does not reduce retained earning to an amount below zero. In those instances in which such recording would reduce retained earnings below zero, it records the difference as a reduction in additional paid-in capital. See Note 14, Stockholders' Equity, for further information.

Recently Adopted Accounting Standards

There were no new material accounting standards adopted in the third quarter of fiscal year 2026.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for the Company beginning with its annual fiscal year 2026 reporting. While this accounting standard will increase disclosures, it will not have a material impact on the Company’s Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), to improve disclosures about an entity's expenses including more detailed information about the components of expenses in commonly presented expense captions. This update is effective for the Company beginning with its fiscal year 2028 reporting and for interim reporting beginning with its fiscal year 2029. While this accounting standard will increase disclosures, it is not expected to have a material impact on the Company’s Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal Use Software. This ASU eliminates accounting consideration of software project development stages and clarifies the threshold applied to begin capitalizing costs. This ASU is effective for the Company beginning with its fiscal 2029 reporting and permits prospective, modified prospective, or retrospective adoption. Early adoption is permitted. The Company is evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies and improves existing interim reporting guidance by consolidating disclosure requirements within Topic 270 and introducing a disclosure principle requiring entities to disclose events and changes occurring after the most recent annual reporting period that are expected to have a material effect on the entity’s financial condition or results of operations. The ASU does not introduce significant changes to recognition or measurement guidance. This ASU is effective for the Company beginning with its fiscal 2029 reporting and permits both prospective and retrospective adoption. The Company is currently evaluating the effect of adopting this pronouncement on its Consolidated Financial Statements and related disclosures.

Note 3 — Acquisition

Owen Mumford Holdings Limited ("Owen Mumford")

On May 15, 2026, the Company acquired Owen Mumford, a UK-based innovator and manufacturer of medical devices and drug-delivery technologies. This transaction is referred to as the OM acquisition.

Consideration Transferred

The OM acquisition was accounted for as a business combination. Per the terms of the sale and purchase agreement, Owen Mumford was acquired for an upfront cash payment of £126.0 million, which included a payment for estimated acquired cash and equivalents. The final purchase price is subject to a working capital adjustment to be finalized in a future period. The Company will also make a payment of up to £50.0 million upon the achievement of certain commercial milestones related to sales of the Aidaptus® next-generation auto-injector platform which was accounted for at fair value on the acquisition date. The U.S. dollar equivalents, as of the acquisition date, for the upfront cash payment and potential future milestone payments were $169.9 million and $67.4 million, respectively.

The fair value of the contingent consideration recognized on the acquisition date was determined using the inputs disclosed in Note 18, Financial Instruments and Fair Value Measurements. The Company reassesses its acquisition-related contingent consideration liabilities each quarter for changes in fair value.

As of the end of the third quarter of 2026, the final allocation of the consideration transferred to the assets acquired and the liabilities assumed remains in process.

Dollar amounts are in millions except per share amounts or as otherwise specified.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date:

The acquired carrying values of cash and cash equivalents, accounts receivable, raw materials inventory, prepaid expenses and other, and accounts payable, accrued expenses, and other liabilities represented their fair values at the date of acquisition.

The fair value of finished goods inventories was determined based on its net realizable value based on the estimated selling price adjusted for cost of the selling effort and reasonable profit allowance for the selling effort.

The fair value of the identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of the expected future cash flows (including net revenue, cost of sales, operating expenses) and the appropriate discount rate. The Company is still in process of allocating fair value to the identifiable intangible asset components. The Company expects to complete this process no later than twelve months after the closing of this transaction. Preliminary useful lives for definite lived intangibles range from 12 to 13 years.

The fair value measurement of contingent consideration arising from the transaction was determined via a probability-weighted cash flow using a Monte Carlo simulation model which was then discounted to present value. Refer to Note 18, Financial Instruments and Fair Value Measurements, for further information.

The excess of the consideration paid over the fair value of the net assets acquired was recorded as goodwill. The goodwill recognized upon acquisition is not deductible for income tax purposes.

Revenues associated with Owen Mumford during the period from May 15, 2026 through June 30, 2026 were $13.8 million. Operating results during the period from May 15, 2026 through June 30, 2026 were not material.

Pro Forma Financial Information

The following table presents the unaudited pro forma condensed combined results of the Company and Owen Mumford for the three and nine months ended June 30, 2026 as if the OM acquisition had occurred on October 1, 2024.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of the Company and Owen Mumford. In order to reflect the occurrence of the acquisition on October 1, 2024 as required, the unaudited pro forma financial information includes adjustments to reflect amortization expense of the identifiable intangible assets acquired, accretion expense related to contingent consideration, additional interest expense associated with the issuance of debt to finance the acquisition and the tax impact of each of the aforementioned adjustments. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the OM acquisition been completed on October 1, 2024. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Note 4 — Third Party Arrangements

On April 1, 2022, Embecta and Becton, Dickinson and Company ("BD") entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, BD agreed to spin off its diabetes care business (the "Diabetes Care Business") into Embecta, a new, publicly traded company (the "Separation").

In connection with the Separation, the Company entered into the Separation and Distribution Agreement, which contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of Embecta and BD (including certain deferred assets and liabilities) as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of Embecta's business with Embecta and financial responsibility for the obligations and liabilities of BD’s remaining businesses with BD, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation among Embecta and BD of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Separation, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures governing Embecta’s and BD’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of BD’s business and Embecta’s business. In addition, the Company entered into a series of agreements with BD that govern aspects of Embecta's relationship with BD following the Separation which include, but are not limited to the Transition Services Agreements ("TSA"), Trade Receivables Factoring Agreements ("Factoring Agreements"), Distribution Agreements, Cannula Supply Agreement, Tax Matters Agreement, Logistics Services Agreement ("LSA"), employee matters agreement, an intellectual property matters agreement, local support services agreements, certain other manufacturing arrangements and a process services agreement and lease agreement for a manufacturing facility located in Holdrege, Nebraska. Certain of these agreements have expired or terminated as disclosed in the 2025 Form 10-K.

For details on the rights and responsibilities of the parties under these agreements refer to Note 3 to the Consolidated Financial Statements in the 2025 Form 10-K.

Amounts associated with the above agreements are included in the Condensed Consolidated Balance Sheets. 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. As of June 30, 2026, $8.8 million was in Trade receivables, net and $20.1 million was in Accounts payable.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Note 5 — Business Restructuring Charges

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 the Company's patch pump program (the "Patch Pump Restructuring Plan"). The actions under the Patch Pump Restructuring Plan were substantially complete as of September 30, 2025.

During the second quarter of fiscal year 2025, the Company initiated a restructuring plan (the "2025 Restructuring Plan") to streamline the organization and optimize resources. The actions under the 2025 Restructuring Plan were substantially complete as of September 30, 2025.

Charges incurred related to the restructuring programs for the three and nine month periods ended June 30, 2026 werenot material to the Company’s Condensed Consolidated Financial Statements.

The following table summarizes the charges related to the restructuring programs by type of cost for the periods ended:

Employee termination costs are associated with actual headcount reductions, including involuntary headcount reductions which were probable and could be reasonably estimated.

Non-employee related costs are associated with termination of contracts and long-lived asset impairments are discussed further in Note 18.

The restructuring reserve balances as of June 30, 2026 and September 30, 2025 werenot material to the Company’s Condensed Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Note 6 — Other Operating Expense, Net

The following table presents the income and expenses recorded for the three and nine months ended June 30, 2026 and 2025:

In connection with the Separation, the Company incurred separation and stand-up costs. The costs incurred primarily consist of costs associated with accounting, auditing, legal services, marketing, supply chain, employee retention, brand transition, and certain other costs to establish certain systems and services, including but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report, which, for clarity, includes enterprise resource plan ("ERP") system (“Business Continuity Processes”) and stand-alone functions to assist with the transition to being a stand-alone entity.

For both the three and nine months ended June 30, 2026 and 2025, the Company recognized costs associated with the amortization of cloud computing arrangements which is further discussed in Note 12.

For the nine months ended June 30, 2026 and three and nine months ended 2025, the Company recognized costs associated with the discontinuation of the patch pump program which is further discussed in Note 5.

During the nine months ended June 30, 2026, the Company executed an agreement with a third party to sell certain intellectual property rights and long-lived assets associated with the patch pump program and recorded a gain on sale of $10.1 million.

For the three and nine months ended June 30, 2026, the Company recognized acquisition-related costs associated with the acquisition of Owen Mumford.

Note 7 — Contingencies

On June 17, 2026, a putative securities class action, Apitz-Grossman v. Embecta Corp., et al., No. 2:26-cv-07217, was filed in the United States District Court for the District of New Jersey against the Company and certain of its officers. The complaint purports to be brought on behalf of purchasers of the Company’s common stock between November 25, 2025 and May 4, 2026, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The complaint alleges that the defendants made materially false and misleading statements and omissions concerning its fiscal year 2026 revenue guidance. The Company believes the claims are without merit and intends to defend the action vigorously. Given the preliminary stage of the matter, the Company cannot predict the outcome or reasonably estimate a range of potential loss, if any.

Note 8 — Revenues

The Company’s policies for recognizing revenue have not changed from those described in the 2025 Form 10-K. The Company sells syringes, pen needles and other products used in the management of diabetes which are primarily sold to wholesalers and distributors that sell to retail and institutional channels who in turn sell to patients or use the products to deliver insulin injections to patients. End-users of the Company’s products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Measurement of Revenues

Payment terms extended to the Company’s customers are based upon commercially reasonable terms for the markets in which the Company’s products are sold and the Company generally expects to receive payment within one year or less from when control of a product is transferred to the customer. The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured in the historical loss information. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. The allowance for doubtful accounts for trade receivables is not material to the Company’s Condensed Consolidated Financial Statements.

The Company’s gross revenues are subject to a variety of gross-to-net deductions which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts, and sales returns. Because these deductions represent estimates of the related obligations, judgment is required when determining the impact of these revenue deductions on gross revenues for a reporting period. Rebates provided by the Company are based upon prices determined under the Company’s agreements primarily with its end-user customers. Additional factors considered in the estimate of the Company’s variable consideration include the quantification of inventory that is either in stock at or in transit to the Company’s distributors, as well as the estimated lag time between the sale of product and the payment of corresponding variable consideration.

The Company’s liability attributed to variable consideration at June 30, 2026 and September 30, 2025 was $159.4 million and $113.7 million, respectively. Sales deductions recorded as a reduction of gross revenues for the three months ended June 30, 2026 and 2025 were $157.2 million and $143.0 million, respectively. Sales deductions recorded as a reduction of gross revenues for the nine months ended June 30, 2026 and 2025 were $473.9 million and $436.3 million, respectively.

Disaggregation of Revenues

Disaggregation of revenue by geographic region and product line is provided within Note 9.

Note 9 — Segment and Geographical Data

The Company's operations include four product lines which constituteone operating segment engaged in providing solutions to improve the health and well-being of people living with diabetes. The Company's chief operation decision maker ("CODM") is the Chief Executive Officer. The CODM assesses performance and decides how to allocate resources for the Company'sone operating segment based on consolidated net income that is reported on the Condensed Consolidated Statements of Income. The Company has also evaluated the significant segment expenses incurred by our single segment that are regularly provided to the CODM. The significant expenses provided to the CODM are consistent with those reported on the Condensed Consolidated Statements of Income and include cost of products sold, selling and administrative expense, research and development, other operating income and expense, interest expense, other income and expense, and income taxes. The CODM uses these metrics to make key operating decisions which include approving the design of key commercialization strategies, decisions about key personnel, and approving annual operating and capital budgets. The CODM considers budget-to-actual variances and year over year performance when making decisions supporting resource allocation. The Company manages assets on a consolidated basis as reported on the Condensed Consolidated Balance Sheets.

Disaggregation of Revenues

The Company has distribution agreements with regional or national distributors (including wholesalers and medical suppliers) to ensure broad availability of its products as well as a direct sales force in certain countries and regions around the world. In the United States and Canada, the Company utilizes its key account managers that call on payers, retailers, wholesalers and institutional customers, business-to-business ("B2B") customers and field-based territory managers that call on health care providers and pharmacies. In certain markets within Europe, the Company has dedicated sales representatives and in certain regions of the Middle East and Africa, the Company has distribution agreements. In Asia, the Company has distribution agreements, and in China the Company relies on its own commercial team to support sales execution. In Latin America, the Company maintains distribution agreements and direct sales representatives.

The Company disaggregates its revenue by geography and product line as management believes these categories best depict how the nature, amount, and timing of revenues and cash flows are affected by economic factors.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Revenues by geographic region are as follows:

(1)For the three and nine months ended June 30, 2026 and 2025, no individual country outside of the United States generated net revenues that represented more than 10.0% of total revenues.

Revenues by product line are as follows:

(2)Other includes product sales for Owen Mumford products, swabs and other accessories.

Note 10 — Stock-Based Compensation

Stock-Based Compensation Expense

Total stock-based compensation expense for the three and nine months ended June 30, 2026 and 2025 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

The following table summarizes the Company's total stock-based compensation expense by classification of award for the three and nine months ended June 30, 2026 and 2025:

Dollar amounts are in millions except per share amounts or as otherwise specified.

The following table summarizes the Company's total stock-based compensation expense by award type for the three and nine months ended June 30, 2026 and 2025:

Time Vested Restricted Stock Units ("TVUs")

During the nine months ended June 30, 2026, Embecta granted 3,430,747 restricted stock units ("RSUs") in the form of TVUs to employees. TVUs vest on a graded basis over a period ofthree years. The related stock-based compensation expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant.

A summary of TVUs outstanding as of June 30, 2026 and changes during the nine months ended June 30, 2026 are as follows:

The weighted average grant date fair value of TVUs granted during the nine months ended June 30, 2026 is $8.61 and the total fair value of TVUs vested during the nine months ended June 30, 2026 is $19.0 million.

At June 30, 2026, the weighted average remaining vesting term of TVUs is 1.8 years.

Performance Based Restricted Stock Units ("PSUs")

During thenine months ended June 30, 2026, Embecta granted 1,297,854 RSUs in the form of PSUs to certain executive officers and employees which cliff vest after three years, subject to continued employment of the recipients and the achievement of certain performance metric targets.

For PSUs awarded in the prior fiscal year, certain performance metrics and targets will be fully established at a future date. The Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, the Company recognizes stock-based compensation expense over the requisite service period based on the fair value at each reporting date. The requisite service period is equal to the vesting period or is based on retirement eligibility. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant. As of June 30, 2026, there were 428,377 RSUs in the form of PSUs that have been awarded, inclusive of accumulated dividend equivalents, for which a grant date has not yet been established.

Dollar amounts are in millions except per share amounts or as otherwise specified.

A summary of PSUs outstanding as of June 30, 2026 and changes during the nine months ended June 30, 2026 are as follows:

At June 30, 2026, the weighted average remaining vesting term of PSUs is 1.6 years.

Stock Appreciation Rights

A summary of stock appreciation rights ("SARs") outstanding as of June 30, 2026 and changes during the nine months ended June 30, 2026 are as follows:

No SARswere exercised during the nine months ended June 30, 2026.

Unrecognized Stock-Based Compensation Expense and Other Stock Plans

The amount of unrecognized compensation expense for all non-vested stock-based awards granted as of June 30, 2026, is approximately $33.3 million which is expected to be recognized over a weighted-average remaining life of approximately 1.7 years. At June 30, 2026,3.6 million shares were authorized for future grants under the Company's 2022 Employee and Director Equity Based Compensation Plan, as amended.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Note 11 — Goodwill and Intangible Assets

Goodwill and Intangible Assets consisted of:

During the three months ended June 30, 2026, the Company recognized $24.4 million of goodwill in connection with the OM acquisition. See Note 3, Acquisition for further information.

Note 12 — Cloud Computing Arrangements

The Company capitalizes costs associated with the development of cloud computing arrangements in a manner consistent with internally developed software. Capitalized costs are included in Prepaid expenses and other and Deferred Income Taxes and Other Assets. Capitalized costs to implement cloud computing arrangements at cost and accumulated amortization were as follows:

Costs amortized during thethree and nine months ended June 30, 2026 and 2025 are included in Other operating expense, net and were as follows:

As of June 30, 2026, cloud computing arrangement assets in-service have remaining useful lives of up tosix years.

Note 13 — Long-Term Debt

Credit Agreement

On March 31, 2022, Embecta entered into a credit agreement (the “Credit Agreement”), providing for:

•a Term Loan B Facility (the "Term Loan") in the amount of $950.0 million, with aseven-year term that matures in March 2029. The interest rate is 300 basis points over the secured overnight financing rate (“SOFR”), with a 0.50% SOFR floor. The Term Loan was issued at a discount of 0.50%. Principal and interest payments on the Term Loan commenced on June 30, 2022. Such quarterly principal payments are calculated as 0.25% of the initial principal amount, with the remaining balance payable upon maturity; and

Dollar amounts are in millions except per share amounts or as otherwise specified.

•a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $500.0 million, with afive-year term that matures in March 2027. Borrowings under the Revolving Credit Facility bear interest, at Embecta’s option, at an annual rate equal to (a) in the case of loans denominated in United States dollars (i) the SOFR or (ii) the alternate base rate or (b) in the case of loans denominated in Euros, the EURIBOR rate, in each case plus an applicable margin specified in the Credit Agreement. A commitment fee applies to the unused portion of the Revolving Credit Facility, equal to 0.25% per annum. As of June 30, 2026, $129.9 million has been drawn on the Revolving Credit Facility.

•See Note 21 for a description of amendments to the Credit Agreement effective August 6, 2026.

The Credit Agreement and the indentures for Embecta's outstanding 5.00% senior secured notes due February 2030 (the "5.00% Notes") and 6.75% senior secured notes due February 2030 (the "6.75% Notes") contain customary financial covenants, including a total net leverage ratio covenant, which measures the ratio of (i) consolidated total net debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, must meet certain defined limits which are tested on a quarterly basis in accordance with the terms of the Credit Agreement and the 5.00% Notes and 6.75% Notes. In addition, the Credit Agreement contains covenants that will limit, among other things, Embecta’s ability to prepay, redeem or repurchase its subordinated and junior lien debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, redeem or repurchase equity interests, and create or become subject to liens. As of June 30, 2026, the Company was in compliance with all of such covenants. The Credit Agreement and the senior secured notes are secured by substantially all assets of Embecta and each subsidiary guarantor, subject to certain exceptions.

The following is a summary of Embecta's total debt outstanding as of June 30, 2026:

The debt issuance costs on the Term Loan,5.00% Notes,6.75% Notesand the discount on the Term Loan are reported in the Condensed Consolidated Balance Sheets as a reduction of debt and are amortized as a component of Interest expense, net over the term of the related debt using the effective interest method. During thenine months ended June 30, 2026, the Company recorded approximately $5.2 million of amortization on deferred debt issuance costs and discounts.

During the nine months ended June 30, 2026, the Company made interest payments of $56.3 million on debt outstanding.

The weighted-average interest rate on total borrowings as of June 30, 2026 is 6.1%.

During thenine months ended June 30, 2026, the Company paid an aggregate principal amount of approximately$77.4 million on the Term Loan, of which$70.3 million was discretionary.

During thenine months ended June 30, 2026, the Company drew down $180.0 million on its Revolving Credit Facility and repaid an aggregate principal amount of approximately$50.1 million.

The schedule of principal payments required on debt for the next five fiscal years and thereafter is as follows:

The estimated fair value of debt at June 30, 2026 was $1,186.2 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $1,455.1 million. Fair value was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability and would be considered Level 2 in the fair value hierarchy.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Note 14 — Stockholders' Equity

Stock Repurchase Program and Common Stock Retirement

In May 2026, the Company announced that the Board of Directors approved athree-year $100.0 million stock repurchase authorization (the “Repurchase Program”) of common stock in accordance with applicable securities laws. The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be suspended or terminated at any time at the Company’s discretion.

Pursuant to the Repurchase Program, the Company repurchased 2.7 million shares of its common stock for $8.7 million during the three and nine months ended June 30, 2026. The Company constructively retired the shares of common stock it had repurchased by recording amounts paid in excess of the $0.01 par value of each share as a reduction in additional paid-in capital.

Note 15 — Earnings Per Share

The calculation of Earnings per basic and diluted common share for thethree and nine months ended June 30, 2026 and 2025 was as follows:

Earnings per diluted share is computed by giving effect to all potentially dilutive stock awards that are outstanding. The computation of Earnings per diluted share excludes the effect of the potential exercise of stock-based awards, when the effect of the potential exercise would be anti-dilutive. PSUs vest based upon achievement of performance targets and are excluded from the diluted shares outstanding unless the performance targets have been met as of the end of the applicable reporting period regardless of whether such performance targets are probable of achievement.

Note 16 — Income Taxes

The Company is subject to income tax in the various jurisdictions in which it operates. A significant portion of the Company's earnings are taxed in jurisdictions with tax rates that are lower than the statutory tax rate of the United States. The effective tax rate can change from quarter to quarter because of variability in global pretax income or geographical mix of the Company's earnings, changes in tax laws and matters related to tax audits.

The effective tax rates were 23.6% and 37.0% for the three months ended June 30, 2026 and 2025, respectively. The decrease in the Company's effective tax rate compared to the prior period is primarily due to the tax impacts from changes in the level and mix of earnings and higher non-deductible costs.

The effective tax rates were 36.4% and 35.7% for the nine months ended June 30, 2026 and 2025, respectively. The increase in the Company's effective tax rate compared to the prior period is primarily due to the change in mix of earnings and higher non-deductible costs.

The Organization for Economic Cooperation and Development ("OECD") has developed major reform of the international tax system with respect to a global minimum 15% tax rate. European Union member states agreed to adopt the OECD’s minimum tax rules, which went into effect for tax years beginning on January 1, 2024 or later. Certain countries have enacted the law changes and other countries are considering changes to their tax laws. The impact of the changes went into effect for the Company beginning in fiscal year 2025. The global minimum tax rules did not have a material impact to the Company's provision for income taxes for the three and nine month periods ended June 30, 2026 and 2025.

Dollar amounts are in millions except per share amounts or as otherwise specified.

On January 5, 2026, the OECD released the Pillar 2 Side-by-Side Package, which addresses how subsidiaries of U.S. listed companies are taxed under Pillar 2, including the addition of some safe harbors. As countries adopt these rules, the Company will continue to evaluate the future impact of these changes.

On July 4, 2025, the U.S. One Big Beautiful Bill Act ("OBBBA") was enacted which includes permanent extensions of certain expiring provisions of the Tax Cuts and Jobs Act and makes significant modifications to the U.S. international tax framework. The legislation has multiple effective dates, with certain provisions effective beginning in the fiscal year ended September 30, 2025 and others becoming effective through the fiscal year ending September 30, 2027. OBBBA did not have a material impact to the Company's provision for income taxes for the three and nine month periods ended June 30, 2026 and 2025.

Note 17 — Receivables Sale Agreement

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.

In connection with the Company's receivables sale agreement, $167.2 million of trade receivables were sold during the nine months ended June 30, 2026, 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, 2026 is presented in changes in trade receivables, net within operating activities in the Condensed Consolidated Statement of Cash Flows.

Note 18 — Financial Instruments and Fair Value Measurements

The following reconciles Cash and equivalentsand Restricted cash reported within the Condensed Consolidated Balance Sheets as of June 30, 2026 and September 30, 2025, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

Cash and equivalents as of June 30, 2026 includes cash held in money market funds and other cash equivalents. All cash and equivalents are Level 1 in the fair value hierarchy.

Interest income on Cash and equivalents during thethree and nine months ended June 30, 2026 and 2025 is included in Interest expense, net and was as follows:

Restricted cash consists of cash not readily available for use in the Company's operating activities. The Company's restricted cash balance consists of amounts pledged as collateral for bank guarantees related to certain customer performance guarantees, international property leases, and amounts collected on behalf of the financial institution, which have yet to be remitted associated with the Company's trade receivables sale agreement.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Foreign Currency Risks and Related Strategies

The Company has foreign currency exposures throughout Europe, Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated, in part, through the use of forward contracts.

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of June 30, 2026 and September 30, 2025:

(a)Represents hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and third-party transactions. Gains and losses on these instruments are recognized immediately in Other income (expense), net. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Gains and losses recognized to date on these instruments were not material to the Company's Condensed Consolidated Financial Statements.

Nonrecurring Fair Value Measurements

Non-financial assets, including property, plant and equipment as well as intangible assets, are measured at fair value when there are indicators of impairment and these assets are recorded at fair value only when an impairment is recognized. These measurements of fair value are generally based upon Level 3 inputs, including values estimated using the income approach.

In the first nine months of fiscal year 2025, the Company recorded non-cash asset impairment charges of $10.6 million to write down the carrying value of certain property and equipment as a result of the Company's plan to discontinue the patch pump program. $6.3 million was recorded to Cost of products sold and $4.3 million was recorded to Research and development expense. The amount recognized was recorded to adjust the carrying amount of assets to the assets' fair values, which were estimated, based upon a market participant's perspective, using Level 3 measurements, including values estimated using the income approach.

Concentration of Credit Risk

Two of the Company’s customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 26.0% for the three months ended June 30, 2026, and two of the Company's customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 27.1% of total revenues for the nine months ended June 30, 2026.

One of the Company's customers represented at least 10.0% of total gross trade receivables individually and represented approximately 18.1% as of June 30, 2026.

Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry. The Company does not normally require collateral from its customers.

Contingent Consideration

The fair value measurement of contingent consideration arising from business combinations is determined via probability-weighted cash flows using a Monte Carlo simulation model, which are then discounted to present value. These inputs may include: (i) the estimated amount and timing of projected cash flows, (ii) the probability of the achievement of the factor(s) on which the contingency is based and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly higher or lower fair value measurement. At June 30, 2026, the fair value measurements of acquisition-related contingent consideration were determined using a discount rate of 16.0%.

Dollar amounts are in millions except per share amounts or as otherwise specified.

The following table presents a reconciliation of contingent consideration measured on a recurring basis using significant unobservable inputs (Level 3):

1 As of June 30, 2026, $10.0 million and $28.9 million were recorded in Accrued expenses and Deferred Income Taxes and Other Liabilities, respectively.

Note 19 — Property, Plant and Equipment

Property, Plant and Equipment, Net consisted of:

Note 20 — Leases

Finance Leases

The Company's finance lease assets and liabilities are attributed to its manufacturing site in Holdrege, Nebraska, which has an initial term often years and an option for the Company to extend the lease term for an additional period of up tofive years. This lease is classified as a finance lease because the present value of the sum of the lease payments associated with the lease exceeds substantially all of the fair value of the manufacturing site.

Operating Leases

The Company's operating leases primarily relate to its real estate leases that are not classified as finance leases.

Dollar amounts are in millions except per share amounts or as otherwise specified.

Aggregate Lease Information

The Company's leases are included in its Condensed Consolidated Balance Sheets as follows:

Dollar amounts are in millions except per share amounts or as otherwise specified.

Lease costs incurred are as follows:

Supplemental cash flow information related to leases for the nine months ended June 30, 2026 and 2025 were as follows:

For both the three and nine months ended June 30, 2026 and 2025, right of use assets obtained in exchange for lease liabilities were not material.

Maturities of the Company's finance and operating lease liabilities as of June 30, 2026 by fiscal year are as follows:

Note 21 — Subsequent Events

On August 6, 2026, the Company entered into the First Amendment to First Lien Credit Agreement (the “First Amendment”), which amends the Credit Agreement. The First Amendment, among other things, reduced the aggregate revolving credit commitments from $500 million to $310 million and extended the maturity of $210 million of the revolving credit commitments from March 31, 2027 to December 30, 2028, with the remaining $100 million of revolving credit commitments continuing to mature on March 31, 2027. The amended Credit Agreement contains revised financial covenants and certain additional restrictions on the Company and its subsidiaries that are more restrictive than those contained in the existing Credit Agreement.

Dollar amounts are in millions except per share amounts or as otherwise specified.