This article first appeared on GuruFocus .
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew 8% year-over-year, driven by a 9% increase in the biopharmaceutical and diagnostic solutions segment.
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High-value solutions revenue increased 16%, representing 45% of total revenue, with biologics revenue up 30%.
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Adjusted EBITDA margin expanded 280 basis points to 26%, reflecting improved operational efficiency.
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The divestiture of the California-based subsidiary is expected to be accretive to full-year margins.
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Regulatory approval for the Alina pen platform in Europe marks a significant commercial milestone for proprietary drug delivery systems.
Negative Points
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Engineering segment revenue declined 2% due to lower sales in pharma visual inspection and glass converting.
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Gross profit margin in the BDS segment decreased 10 basis points due to expected depreciation, higher utility costs, and currency headwinds.
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One-time expenses of $12.2 million related to the divestiture negatively impacted operating profit.
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Higher effective tax rate in Q2 2026, due to the absence of prior-year tax incentives and no tax benefit on the divestiture, reduced net profit.
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Negative cash flow of $32 million in Q2 2026, driven by significant capital expenditures for growth projects.
Q & A Highlights
Q: Can you walk us through what drove the change in the BDS growth outlook from double-digit to high single-digit, and whether it reflects only the divestiture or other changes in the underlying business? A: Marco Delago (CFO) explained that the updated guidance on a reported basis is high single-digit, but organic growth remains double-digit. The change is driven by a reduction of approximately $15 million related to the divestiture of Balda, partially offset by an $8 million favorable currency translation adjustment. The company also increased organic growth expectations by a couple of million dollars in its core business.
Q: As your GLP-1 exposure continues to increase, are you seeing growth broaden across non-GLP-1 biologics, or is GLP-1 still the primary growth driver for high-value solutions? A: Franco Stevanato (Chairman and CEO) stated that while GLP-1s are a phenomenal class expected to remain a strong long-term driver, the company is laser-focused on biologics. With more than 9,000 injectable assets in the global pipeline and over 60% being biologics, the company is heavily investing in plants in Europe and the US to expand proprietary devices. In 2026, biologics delivered 6% growth, with most revenue coming from early-stage clients (Phase 2 and 3), but the strategic goal is to be ready for the molecules that will provide tailwinds in the coming years.
Q: Could you talk about which products in your portfolio you consider to be premium within high-value solutions, and how many countries and what is the size of the opportunity with the recent Alina approval for liraglutide? A: Franco Stevanato (Chairman and CEO) expressed excitement about the Alina approval, noting it took 8 years to develop. The approval in several European countries for both diabetes and weight management validates the company's IP product, positioning it in the "Champions League." The company is delivering Alina pens and cartridges to system integrators for biosimilar clients in Europe and the US. The approval is opening and boosting traction for other validations worldwide, with production in Germany. The company also introduced Aura, an evolution of Alina for treatments requiring stricter dose adherence. Alina is expected to generate double-digit revenue growth in the coming years.
Q: What capacity utilization will Fishers and Latina operate at this year? A: Franco Stevanato (Chairman and CEO) noted that demand in Fishers and Latina is quite strong for 2026, particularly for syringes, Nexa, Alba cartridges, and bulk cartridges. The company plans investments with dedicated capacity and programs with customers, maintaining some free capacity for flexibility and validation of future programs. Marco Delago (CFO) added that the company plans to fully ramp up Fishers by the end of 2028, with continued improvement in production and financial performance over the next quarters.
Q: Can you give us an update on creating centers of excellence within engineering? A: Franco Stevanato (Chairman and CEO) explained that the engineering segment has two centers: one in Italy specializing in visual inspection machines and customized lines, and one in Denmark specializing in sophisticated high-speed assembly lines. The optimization plan initiatives are delivering positive results, reflected in better revenue and margins. The team is making good progress in winning new orders with historical clients and building a pipeline for new clients, particularly in the visual inspection spectrum. The goal is to achieve quarter-by-quarter improvements in revenue and margins to return to original numbers by 2027.
Q: Can you give us an idea of GLP versus non-GLP growth in high-value products or biologics? A: Franco Stevanato (Chairman and CEO) stated that biologics represent approximately 42% of BDS segment revenue, up from less than 20% in 2022. GLP-1s are a visible revenue contribution within biologics as they are already commercial, serving two big originators. The company is actively maximizing validation through biosimilars using syringes, Nexa cartridges, and drug delivery systems. While GLP-1 is a well-established tailwind, the broader biologic market, spread across many clients and therapeutic areas, will be much bigger in the coming years.
Q: It sounds like the Alina approval culminates several years of work, but you're not building in a lot of revenue this year. Does this validation open the door for several other approvals, and do you have other customers in the queue? A: Franco Stevanato (Chairman and CEO) confirmed that investments and revenue around Alina are already captured in the 2026 guidance. The company is heavily investing in industrial and commercial capacity in Germany over the next 12-36 months, expecting double-digit revenue growth for Alina. The first registration in Europe will be followed by additional validations in North America in the second half of the year. This registration is boosting traction from other clients, particularly in the biosimilar space for weight loss management, opening a big opportunity for the company's IP product.
Q: Could you unpack the engineering performance in Q2 and how customer decision timelines evolved throughout the quarter, and what the backlog looks like heading into the second half? A: Franco Stevanato (Chairman and CEO) noted a healthy pipeline that is gradually translating into orders. The company has made strong progress in winning new orders, particularly for visual inspection machines in Europe and Asia, and assembly technology for drug delivery systems in Europe and the US. The order intake is progressing quarter after quarter, with the trend becoming better. The company remains cautious due to elongated sales cycles and project phasing.
Q: Could you touch on the gross and operating margin assumptions for the full year, and how they change with the divestiture? A: Marco Delago (CFO) stated that at the center point of guidance, the company plans to expand reported gross profit by approximately 50 basis points, excluding one-time items. Adjusted operating profit is expected to increase by 110 basis points compared with last year. Adjusted EBITDA at the center point is expected to be 26.8%, expanding 170 basis points, driven by slightly improved margins in the BDS segment, improved gross profit margin in engineering, and disciplined cost management in SG&A and R&D expenses.
Q: Could you walk us through the strategic rationale for divesting the Balda business, its growth profile, and quantify the margin uplift? A: Franco Stevanato (Chairman and CEO) explained
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
