Evotec (EVT) Q3 2025 earnings summary

Executive summary

• Group revenues for the first nine months of 2025 were €535.1 million, down 7% year-over-year, mainly due to a 12% decline in D&PD, while JEB grew 11% and outperformed expectations.

• A landmark transaction with Sandoz was signed, including the sale of the Toulouse site and a technology license, with upfront and milestone payments totaling over $650 million and future royalties on up to 10 biosimilars.

• Strategic partnerships advanced, with up to four molecules expected to enter phase II clinical studies in 2026 and over 100 assets in the pipeline.

• The company is transitioning to a higher-margin, asset-light business model, focusing on technology leadership and IP licensing.

• Net loss for the period improved to €(118.1)m from €(155.2)m in the prior year, driven by lower reorganization expenses and cost base.

Financial highlights

• Group revenues: €535.1m (down 7% year-over-year); D&PD revenues: €391.9m (down 12%); JEB revenues: €143.2m (up 11%).

• Gross margin declined to 6.7% from 11.9% year-over-year, mainly due to D&PD underperformance and JEB ramp-up costs.

• Adjusted Group EBITDA was negative €16.9m, with D&PD at €(18.8)m and JEB at €1.9m.

• Free cash flow for 9M 2025 was €-139.9m, but is expected to turn positive by year-end due to milestone payments and asset sales.

• Cash and cash equivalents: €174.0m as of 30 September 2025, down from €306.4m at year-end 2024.

Outlook and guidance

• 2025 revenue guidance confirmed at €760–800m, with adjusted EBITDA expected between €30–50m.

• 2028 outlook targets 8–12% revenue CAGR and adjusted EBITDA margin above 20%.

• Cost reduction initiatives are ahead of plan, with over €60m targeted for 2025 and further productivity measures planned.

• Stable development expected, driven by JEB, with D&PD navigating a challenging market.