Embecta (Nasdaq:EMBC) shares ticked up today on third-quarter results that came in ahead of the consensus forecast on Wall Street.
Shares of EMBC 17% to $12.12 apiece in early-morning trading today.
The Parsippany, New Jersey-based diabetes technology company — which spun off from BD three years ago — reported profits of $45.5 million. That equals 78¢ per share on sales of $295.5 million for the three months ended June 30, 2025.
Embecta — one of the largest diabetes tech companies in the world — more than tripled its profits year-over-year on a sales increase of 8.4%.
Adjusted to exclude one-time items, earnings per share came in at $1.12. That landed 35¢ ahead of expectations on Wall Street. Sales also topped estimates as experts forecast $278.2 million in revenue.
Embecta said strategic highlights for the quarter included the completion of its global transition to its ERP system, shared service capabilities and distribution infrastructure in India. That was the only remaining market operating on BD systems post-spinoff.
The company also signed multiple contracts and received purchase orders to co-package its pen needles with potential generic GLP-1s. It continues making progress on expanding the availability of appropriately sized GLP-1 retail packaging for use with weekly injection therapies.
Embecta also substantially completed its restructuring plan to streamline the organization and optimize resources and paid down significant debt. The company said in May that it kicked off a phased plan to create value and shift priorities toward broader medical applications. While intending to remain as an insulin injection leader, Embecta aims to shift toward becoming a broad-based medical supplies company.
Read more about Embecta and the rest of the diabetes tech industry in our free Diabetes Technology Special Report.
“Q3 was a strong quarter for embecta, reflecting solid commercial execution, aided in part by the timing of customer orders. Despite an increasingly complex and dynamic geopolitical environment, given the year-to-date performance and our outlook for the remainder of the year, we are tightening and raising our fiscal 2025 outlook for key financial metrics,” said Devdatt (Dev) Kurdikar, president and CEO of Embecta. “This quarter, we implemented our ERP system and operationalized our own distribution centers and shared services in India, marking the successful conclusion of a multi-year, complex separation program.
“We remain focused on executing on the value creation drivers we highlighted at our recent Analyst and Investor Day, including our long-term goal of transforming embecta into a diversified medical supplies company.”
Embcta narrowed its full-year sales guidance from between $1.073 billion and $1.09 billion to between $1.078 billion and $1.085 billion. It increased its adjusted EPS guidance from $2.70-$2.90 to $2.90 to $2.95.
The analysts’ take
BTIG analysts Marie Thibault, Sam Eiber and Alexandra Pang maintain a “Buy” rating for Embecta. They called the earnings performance “another big quarter,” with the company tracking ahead of its goals on ERP, debt and free cash flow (FCF) generation.
“EMBC continued to check off its to-do list, completing the full multi-year ERP system transition during the quarter, continuing its brand transition in the U.S. and Canada, reaching its annual goal of $110M debt paydown a quarter early, and pushing forward with the GLP-1 partnership opportunities,” the analysts wrote. “In particular, FCF was an impressive $81M this quarter, helped by the restart of a trade receivable factoring program. In light of these achievements and the continual quarterly beats, we think that EMBC is undervalued.”
