What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 129 added, 117 removed, 469 unchanged (34% of the section changed)

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

21 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

8 unchanged sentences

Embecta Corp.

March 31, 2025 September 30, 2024

June 30, 2025 September 30, 2024

Current Assets

2 unchanged sentences

Restricted cash 3.0 6.7

Trade receivables, net (net of allowance for doubtful accounts of $ 2.6 million and $ 2.8 million as of March 31, 2025 and September 30, 2024, respectively)

Trade receivables, net (net of allowance for doubtful accounts of $ 2.0 million and $ 2.8 million as of June 30, 2025 and September 30, 2024, respectively)

Materials 47.6 40.4

26 unchanged sentences

Authorized - 250,000,000

Issued and outstanding - 58,327,015 as of March 31, 2025 and 57,707,285 as of September 30, 2024

Issued and outstanding - 58,473,127 as of June 30, 2025 and 57,707,285 as of September 30, 2024

Additional paid-in capital 70.2 52.5

8 unchanged sentences

Shares Par Value Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Total

Balance at January 1, 2024 57,573,497 $ 0.6 $ 33.4 $ ( 530.0 ) $ ( 297.5 ) $ ( 793.5 )

Balance at April 1, 2024 57,661,433 $ 0.6 $ 39.7 $ ( 510.0 ) $ ( 299.9 ) $ ( 769.6 )

Net Income — — — 14.7 — 14.7

4 unchanged sentences

Issuance of shares related to stock-based compensation plans 15,034 — ( 0.1 ) — — ( 0.1 )

Balance at March 31, 2024 57,661,433 $ 0.6 $ 39.7 $ ( 510.0 ) $ ( 299.9 ) $ ( 769.6 )

Balance at January 1, 2025 58,131,759 $ 0.6 $ 58.2 $ ( 507.9 ) $ ( 319.7 ) $ ( 768.8 )

Balance at June 30, 2024 57,676,467 $ 0.6 $ 46.2 $ ( 504.2 ) $ ( 306.3 ) $ ( 763.7 )

Balance at April 1, 2025 58,327,015 $ 0.6 $ 65.0 $ ( 493.5 ) $ ( 308.3 ) $ ( 736.2 )

Net Income — — — 45.5 — 45.5

4 unchanged sentences

Issuance of shares related to stock-based compensation plans 146,112 — ( 1.1 ) — — ( 1.1 )

Balance at March 31, 2025 58,327,015 $ 0.6 $ 65.0 $ ( 493.5 ) $ ( 308.3 ) $ ( 736.2 )

Balance at June 30, 2025 58,473,127 $ 0.6 $ 70.2 $ ( 457.1 ) $ ( 283.3 ) $ ( 669.6 )

See notes to the Unaudited Condensed Consolidated Financial Statements.

8 unchanged sentences

Issuance of shares related to stock-based compensation plans 343,114 — ( 2.8 ) — — ( 2.8 )

Balance at March 31, 2024 57,661,433 $ 0.6 $ 39.7 $ ( 510.0 ) $ ( 299.9 ) $ ( 769.6 )

Balance at June 30, 2024 57,676,467 $ 0.6 $ 46.2 $ ( 504.2 ) $ ( 306.3 ) $ ( 763.7 )

Balance at October 1, 2024 57,707,285 $ 0.6 $ 52.5 $ ( 498.6 ) $ ( 292.8 ) $ ( 738.3 )

Net Income — — — 69.0 — 69.0

Other comprehensive (loss), net of taxes — — — — ( 15.5 ) ( 15.5 )

Other comprehensive income, net of taxes — — — — 9.5 9.5

Stock-based compensation plans — — 22.1 — — 22.1

2 unchanged sentences

Issuance of shares related to stock-based compensation plans 765,842 — ( 5.7 ) — — ( 5.7 )

Balance at March 31, 2025 58,327,015 $ 0.6 $ 65.0 $ ( 493.5 ) $ ( 308.3 ) $ ( 736.2 )

Balance at June 30, 2025 58,473,127 $ 0.6 $ 70.2 $ ( 457.1 ) $ ( 283.3 ) $ ( 669.6 )

See notes to the Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

Embecta Corp.

Six Months Ended

Nine Months Ended

Operating Activities

26 unchanged sentences

Effect of exchange rate changes on cash and equivalents and restricted cash

( 1.2 ) ( 1.2 )

Net Change in Cash and equivalents and restricted cash

25 unchanged sentences

The following provides updates to the Company's "Summary of Significant Accounting Policies" as disclosed in the 2024 Form 10-K.

Sales and Transfers of Financial Instruments

The Company may discount and sell accounts receivables during the normal course of business.

These receivables which are sold to a third party without recourse, are excluded from the amounts reported in the Condensed Consolidated Balance Sheets.

The Company’s continuing involvement is limited to servicing the receivables.

The cash proceeds received from such sales are included in operating cash flows.

The expenses associated with the sale of receivables are recorded within Other operating expenses in the Condensed Consolidated Statements of Income.

Additional disclosures regarding the Company's accounting for the sales of financial instruments are provided in Note 15.

Restructuring Costs

8 unchanged sentences

Recently Adopted Accounting Standards

There were no new material accounting standards adopted in the second quarter of fiscal year 2025.

There were no new material accounting standards adopted in the third quarter of fiscal year 2025.

Recently Issued Accounting Standards Not Yet Adopted

1 unchanged sentence

Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments.

This update is effective for the Company beginning with its fiscal year 2025 reporting and for interim reporting beginning with its fiscal year 2026.

This update is effective for the Company beginning with

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

its fiscal year 2025 reporting and for interim reporting beginning with its fiscal year 2026.

While this accounting standard will increase disclosures, it will not have a material impact on the Company’s Consolidated Financial Statement results.

3 unchanged sentences

While this accounting standard will increase disclosures, it will not have a material impact on the Company’s Consolidated Financial Statement results.

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

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

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.

7 unchanged sentences

For details on the rights and responsibilities of the parties under these agreements refer to Note 4 to the Consolidated Financial Statements in the 2024 Form 10-K.

The amounts due from BD under the above agreements were $ 17.0 million and $ 7.5 million at March 31, 2025 and are included in Amounts due from Becton, Dickinson and Company and Trade receivables, net , respectively.

The amounts due to BD under these agreements were $ 20.7 million and $ 4.3 million at March 31, 2025 and are included in Amounts due to Becton, Dickinson and Company and Accounts payable , respectively.

The closing of the transfers of certain assets and liabilities related to the Diabetes Care Business in certain jurisdictions, including India, as contemplated by the Separation and Distribution Agreement did not occur at Separation.

The transfer of the relevant local assets and liabilities in India are expected to close at a future date.

As of March 31, 2025, the amounts related to certain assets and liabilities in these jurisdictions are not material to the Company’s Condensed Consolidated Financial Statements.

The amounts due from BD under the above agreements were $ 10.1 million and $ 9.2 million at June 30, 2025 and are included in Amounts due from Becton, Dickinson and Company and Trade receivables, net , respectively.

The amounts due to BD under these agreements were $ 19.5 million and $ 3.5 million at June 30, 2025 and are included in Amounts due to Becton, Dickinson and Company and Accounts payable , respectively.

As of June 30, 2025, the closing of the transfers of certain assets and liabilities related to the Diabetes Care Business in certain jurisdictions which did not occur at Separation, is complete.

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

1 unchanged sentence

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.

As a result, the Company incurred organizational restructuring plan (the "Patch Pump Restructuring Plan") costs during the three and six months ended March 31, 2025.

This Patch Pump Restructuring Plan is substantially complete as of March 31, 2025, with the cumulative pretax costs to be incurred by the Company to implement the Patch Pump Restructuring Plan estimated to be $ 30.0 million to $ 40.0 million.

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.

This Patch Pump Restructuring Plan is substantially complete as of June 30, 2025.

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.

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.

As a result, the Company incurred organizational restructuring plan costs during the three and six months ended March 31, 2025.

The Company expects these restructuring actions to be substantially completed by the end of fiscal year 2025, with the cumulative pretax costs to be incurred by the Company to implement the 2025 Restructuring Plan estimated to be $ 4.0 million to $ 5.0 million.

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.

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

Three months ended March 31, 2025 Six months ended March 31, 2025

Three months ended June 30, 2025 Nine months ended June 30, 2025

Employee Termination Non-Employee Related Total Employee Termination Non-Employee Related Total

5 unchanged sentences

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 which are discussed further in Note 15 and Note 16.

The following table summarizes the charges and spending relating to restructuring program activities for the six months ended March 31, 2025:

Non-employee related costs are associated with termination of contracts and long-lived asset impairments are discussed further in Note 16 and Note 17.

The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended June 30, 2025:

Employee Termination Non-Employee Related Total

3 unchanged sentences

Non-cash adjustments ( 3.1 ) ( 10.6 ) ( 13.7 )

Balance at March 31, 2025 (a)

Balance at June 30, 2025 (a)

$ 1.2 $ 1.4 $ 2.6

(a) As of March 31, 2025, $ 5.6 million is recorded in Salaries, wages and related items and $ 1.1 million is recorded in Accrued expenses .

(a) As of June 30, 2025, $ 1.2 million is recorded in Salaries, wages and related items and $ 1.4 million is recorded in Accrued expenses.

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

1 unchanged sentence

Other operating expenses are as follows:

Three months ended March 31, Six months ended March 31,

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

8 unchanged sentences

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 six months ended March 31, 2025 and 2024, the Company recognized costs associated with the amortization of cloud computing arrangements which is further discussed in Note 11.

For the three and six months ended March 31, 2025, the Company recognized costs associated with the discontinuation of the patch pump program which is further discussed in Note 4.

For both the three and six months ended March 31, 2025 and 2024, the Company incurred restructuring, business optimization, and severance related costs associated with standing up and optimizing the organization.

For both the three and nine months ended June 30, 2025 and 2024, the Company recognized costs associated with the amortization of cloud computing arrangements which is further discussed in Note 11.

For the three and nine months ended June 30, 2025, the Company recognized costs associated with the discontinuation of the patch pump program which is further discussed in Note 4.

For both the three and nine months ended June 30, 2025 and 2024, the Company incurred restructuring, business optimization, and severance related costs associated with standing up and optimizing the organization.

Note 6 — Contingencies

The Company was not a party to any material legal proceedings at March 31, 2025 or September 30, 2024, nor is it a party to any material legal proceedings as of the date of issuance of these Condensed Consolidated Financial Statements.

The Company was not a party to any material legal proceedings at June 30, 2025 or September 30, 2024, nor is it a party to any material legal proceedings as of the date of issuance of these Condensed Consolidated Financial Statements.

Note 7 — Revenues

16 unchanged sentences

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 rebates.

The Company’s liability attributed to variable consideration at March 31, 2025 and September 30, 2024 was $ 128.4 million and $ 149.6 million, respectively.

Sales deductions recorded as a reduction of gross revenues for the three months ended March 31, 2025 and 2024 were $ 143.2 million and $ 138.5 million, respectively.

Sales deductions recorded as a reduction of gross revenues for the six months ended March 31, 2025 and 2024 were $ 293.3 million and $ 265.2 million, respectively.

The Company’s liability attributed to variable consideration at June 30, 2025 and September 30, 2024 was $ 143.9 million and $ 149.6 million, respectively.

Sales deductions recorded as a reduction of gross revenues for the three months ended June 30, 2025 and 2024 were $ 143.0 million and $ 124.5 million, respectively.

Sales deductions recorded as a reduction of gross revenues for the nine months ended June 30, 2025 and 2024 were $ 436.3 million and $ 389.7 million, respectively.

Disaggregation of Revenues

Disaggregation of revenue by geographic region and product line is provided within Note 8.

Contract Assets and Liabilities

The Company does not have contract liabilities.

Contract assets consist of the Company’s right to consideration that is conditional upon its future performance pursuant to private label agreements and are presented within Prepaid expenses and other in the Condensed Consolidated Balance Sheets.

The Company’s contract asset balance was $ 1.2 million as of both March 31, 2025 and September 30, 2024.

Note 8 — Segment and Geographical Data

3 unchanged sentences

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 large and small key account managers that call on payers, retailers, wholesalers and institutional customers, and field-based territory managers that call on health care providers and pharmacies.

In the United States and Canada, the Company utilizes its key account managers that call on payers, retailers, wholesalers and institutional 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.

3 unchanged sentences

Revenues by geographic region are as follows:

Three months ended March 31, Six months ended March 31,

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

3 unchanged sentences

Total $ 295.5 $ 272.5 $ 816.4 $ 837.0

(1) For the three and six months ended March 31, 2025 and 2024, no individual country outside of the United States generated net revenues that represented more than 10.0% of total revenues.

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

(1) For the three and nine months ended June 30, 2025 and 2024, 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:

Three months ended March 31, Six months ended March 31,

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

6 unchanged sentences

(2) Other includes product sales for swabs and other accessories.

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

Note 9 — Stock-Based Compensation

Stock-Based Compensation Expense

Total stock-based compensation expense for the three and six months ended March 31, 2025 and 2024 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

Three months ended March 31, Six months ended March 31,

Total stock-based compensation expense for the three and nine months ended June 30, 2025 and 2024 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

5 unchanged sentences

Tax benefit associated with stock-based compensation costs recognized $ 0.9 $ 0.6 $ 3.1 $ 1.8

The following table summarizes the Company's total stock-based compensation expense by classification of award for the three and six months ended March 31, 2025 and 2024:

Three months ended March 31, Six Months Ended March 31,

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, 2025 and 2024:

Three months ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

2 unchanged sentences

Total $ 5.9 $ 6.5 $ 22.2 $ 20.4

The following table summarizes the Company's total stock-based compensation expense by award type for the three and six months ended March 31, 2025 and 2024:

Three months ended March 31, Six Months Ended March 31,

The following table summarizes the Company's total stock-based compensation expense by award type for the three and nine months ended June 30, 2025 and 2024:

Three months ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

7 unchanged sentences

Time Vested Restricted Stock Units ("TVUs")

During the six months ended March 31, 2025 , Embecta granted 1,541,980 restricted stock units ("RSUs") in the form of TVUs to employees.

During the nine months ended June 30, 2025 , Embecta granted 1,576,493 restricted stock units ("RSUs") in the form of TVUs to employees.

TVUs vest on a graded basis over a period of three years .

The related stock-based compensation

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

expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility.

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 March 31, 2025 and changes during the six months ended March 31, 2025 are as follows:

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

A summary of TVUs outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:

TVUs (in thousands) Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited, canceled or expired ( 326.0 ) 18.86

Nonvested at March 31 2,372.3 $ 19.60

Expected to vest at March 31 2,256.2 $ 19.66

Nonvested at June 30 2,083.1 $ 18.93

Expected to vest at June 30 1,974.9 $ 18.98

*Includes accumulated nonvested dividend equivalents

**The TVUs distributed include shares withheld for taxes that are not formally issued to the market.

The weighted average grant date fair value of TVUs granted during the six months ended March 31, 2025 is $ 18.55 and the total fair value of TVUs vested during the six months ended March 31, 2025 is $ 18.8 million.

At March 31, 2025, the weighted average remaining vesting term of TVUs is 1.9 years.

The weighted average grant date fair value of TVUs granted during the nine months ended June 30, 2025 is $ 18.53 and the total fair value of TVUs vested during the nine months ended June 30, 2025 is $ 25.1 million.

At June 30, 2025, the weighted average remaining vesting term of TVUs is 1.8 years.

Performance Based Restricted Stock Units ("PSUs")

During the six months ended March 31, 2025 , Embecta awarded 538,031 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.

During the nine months ended June 30, 2025 , Embecta awarded 538,031 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.

The Company has identified certain performance metrics associated with these awards and certain targets will be fully established at a future date.

3 unchanged sentences

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 March 31, 2025 , there were 975,546 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.

A summary of PSUs outstanding as of March 31, 2025 and changes during the six months ended March 31, 2025 are as follows:

As of June 30, 2025 , there were 945,269 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.

A summary of PSUs outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:

Stock Units (in thousands) Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited, canceled or expired ( 6.2 ) 18.96

Nonvested at March 31 229.2 $ 21.39

Expected to vest at March 31 218.1 $ 21.38

Nonvested at June 30 219.0 $ 21.52

Expected to vest at June 30 219.0 $ 21.52

*Includes accumulated nonvested dividend equivalents

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

At March 31, 2025, the weighted average remaining vesting term of PSUs is 0.6 years.

At June 30, 2025, the weighted average remaining vesting term of PSUs is 0.4 years.

Stock Appreciation Rights

A summary of stock appreciation rights ("SARs") outstanding as of March 31, 2025 and changes during the six months ended March 31, 2025 are as follows:

A summary of stock appreciation rights ("SARs") outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:

SARs (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value

2 unchanged sentences

Forfeited, canceled or expired ( 250.0 ) 29.19

Balance at March 31 1,597.4 $ 29.12 6.2 $ —

Vested and expected to vest at March 31 1,563.1 29.08 6.2 $ —

Exercisable at March 31 973.2 $ 28.09 5.8 $ —

Balance at June 30 1,507.0 $ 29.14 6.0 $ —

Vested and expected to vest at June 30 1,497.9 29.14 6.0 $ —

Exercisable at June 30 1,341.6 $ 29.16 5.9 $ —

*The amounts exercised include shares withheld for taxes that are not formally issued to the market.

3,400 SARs w ere exercised during the six months ended March 31, 2025.

The intrinsic val ue and grant date fair value of SARs exercised was immaterial.

3,400 SARs w ere exercised during the nine months ended June 30, 2025.

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 March 31, 2025, is approximately $ 39.6 million which is expected to be recognized over a weighted-average remaining life of approximately 2.1 years.

At March 31, 2025, 3.1 million shares were authorized for future grants under the Company's 2022 Employee and Director Equity Based Compensation Plan, as amended.

The amount of unrecognized compensation expense for all non-vested stock-based awards granted as of June 30, 2025, is approximately $ 30.9 million which is expected to be recognized over a weighted-average remaining life of approximately 1.9 years.

At June 30, 2025, 3.3 million shares were authorized for future grants under the Company's 2022 Employee and Director Equity Based Compensation Plan, as amended.

Note 10 — Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets consisted of:

March 31, 2025 September 30, 2024

June 30, 2025 September 30, 2024

Amortized intangible assets

13 unchanged sentences

Capitalized costs to implement cloud computing arrangements at cost and accumulated amortization were as follows:

March 31, 2025 September 30, 2024

June 30, 2025 September 30, 2024

Short-term portion

6 unchanged sentences

$ 57.4 $ 64.5

Costs amortized during the three and six months ended March 31, 2025 and 2024 are included in Other operating expenses and were as follows:

Three months ended March 31, Six months ended March 31,

Costs amortized during the three and nine months ended June 30, 2025 and 2024 are included in Other operating expenses and were as follows:

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

1 unchanged sentence

$ 2.6 $ 2.2 $ 7.8 $ 3.8

As of March 31, 2025, cloud computing arrangement assets in-service have remaining useful lives which range from approximately two to eight years .

As of June 30, 2025, cloud computing arrangement assets in-service have remaining useful lives which range from approximately one to seven years .

Note 12 — Long-Term Debt

6 unchanged sentences

Such quarterly principal payments are calculated as 0.25 % of the initial principal amount, with the remaining balance payable upon maturity;

• a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $ 500.0 million, with a five -year term that matures in 2027.

• a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $ 500.0 million, with a five -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 March 31, 2025, no amount has been drawn on the Revolving Credit Facility.

As of June 30, 2025, no amount has been drawn on the Revolving Credit Facility.

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 March 31, 2025, we were in compliance with all of such covenants.

As of June 30, 2025, we were 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.

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

The following is a summary of Embecta's total debt outstanding as of March 31, 2025:

The following is a summary of Embecta's total debt outstanding as of June 30, 2025:

Term Loan due March 2029 $ 789.1

6 unchanged sentences

The debt issuance costs on the Term Loan, 5.00 % Notes, 6.75 % Notes and 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 the six months ended March 31, 2025, the Company recorded approximately $ 4.1 million of amortization on deferred debt issuance costs and discounts.

During the six months ended March 31, 2025 , the Company made interest payments of $ 52.5 million on debt outstanding.

The weighted-average interest rate on total borrowings as of March 31, 2025 is 6.5 %.

During the six months ended March 31, 2025, the Company paid an aggregate principal amount of approximately $ 59.8 million on the Term Loan, of which $ 55.0 million was discretionary.

Debt extinguishment charges as a result of this discretionary prepayment were not material to the Company's Condensed Consolidated Statements of Income.

During the nine months ended June 30, 2025, the Company recorded approximately $ 6.5 million of amortization on deferred debt issuance costs and discounts.

During the nine months ended June 30, 2025 , the Company made interest payments of $ 68.5 million on debt outstanding.

The weighted-average interest rate on total borrowings as of June 30, 2025 is 6.5 %.

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.

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

Thereafter 700.0

The estimated fair value of long-term debt (including current portion) at March 31, 2025 was $ 1,477.4 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $ 1,518.6 million.

The estimated fair value of long-term debt (including current portion) at June 30, 2025 was $ 1,430.8 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $ 1,468.3 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.

Note 13 — Earnings per Share

The calculation of earnings per basic and diluted common share for the three and six months ended March 31, 2025 and 2024 was as follows:

The calculation of earnings per basic and diluted common share for the three and nine months ended June 30, 2025 and 2024 was as follows:

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

($ in millions and shares in thousands, except per share amounts) 2025 2024 2025 2024

13 unchanged sentences

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 34.4 % and ( 191.9 )% for the three months ended March 31, 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 and tax reserves, partially offset by favorable tax impacts primarily resulting from overall higher earnings reflected in the current period.

The effective tax rates were 33.0 % and ( 102.5 )% for the six months ended March 31, 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 tax reserves, partially offset by favorable tax impacts primarily resulting from overall higher earnings reflected in the current period.

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.

The effective tax rates were 35.7 % and ( 24.4 )% for the nine months ended June 30, 2025 and 2024, respectively.

This was partially offset by favorable tax impacts primarily resulting from overall higher earnings reflected in the current period.

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.

Note 15 — Receivables Sale Agreement

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.

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.

Note 16 — Financial Instruments and Fair Value Measurements

The following reconciles Cash and equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets as of March 31, 2025 and September 30, 2024, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

March 31, 2025 September 30, 2024

The following reconciles Cash and equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets as of June 30, 2025 and September 30, 2024, to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:

June 30, 2025 September 30, 2024

Cash and equivalents

3 unchanged sentences

$ 233.6 $ 274.2

Cash and equivalents as of March 31, 2025 includes cash held in money market funds and other cash equivalents.

Cash and equivalents as of June 30, 2025 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 was $ 1.3 million and $ 2.9 million for the three months ended March 31, 2025 and 2024, respectively, and $ 3.1 million and $ 6.3 million for the six months ended March 31, 2025 and 2024, respectively, and is included as a component of Interest expense, net .

Interest income on Cash and equivalents was $ 1.5 million and $ 3.1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 4.6 million and $ 9.4 million for the nine months ended June 30, 2025 and 2024, respectively, and is included as a component of Interest expense, net .

Restricted cash consists of cash not readily available for use in the Company's operating activities.

3 unchanged sentences

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 primarily through the use of forward contracts.

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of March 31, 2025 and September 30, 2024:

Hedge Designation March 31, 2025 September 30, 2024

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

The notional amounts of the Company’s foreign currency-related derivative instruments were as follows as of June 30, 2025 and September 30, 2024:

Hedge Designation June 30, 2025 September 30, 2024

Foreign exchange contracts (a)

7 unchanged sentences

These measurements of fair value are generally based upon Level 3 inputs, including values estimated using the income approach.

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

In the first half of fiscal year 2025, the Company recorded a non-cash asset impairment charge of $ 10.4 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.

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 .

1 unchanged sentence

Concentration of Credit Risk

Three of the Company’s customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 40.8 % for the three months ended March 31, 2025, and three of the Company's customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 41.4 % of total revenues for the six months ended March 31, 2025.

Two of the Company's customers represented at least 10.0% of total gross trade receivables individually and, in the aggregate, represented approximately 32.3 % as of March 31, 2025.

Three of the Company’s customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 40.7 % for the three months ended June 30, 2025, and three of the Company's customers represented at least 10.0% of total gross revenues individually and, in the aggregate, represented approximately 41.2 % of total revenues for the nine months ended June 30, 2025.

Two of the Company's customers represented at least 10.0% of total gross trade receivables individually and, in the aggregate, represented approximately 29.1 % as of June 30, 2025.

Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry.

2 unchanged sentences

Property, Plant and Equipment, Net consisted of:

March 31, 2025 September 30, 2024

June 30, 2025 September 30, 2024

Land $ 3.1 $ 3.1

6 unchanged sentences

Total Property, Plant and Equipment, Net $ 262.7 $ 290.4

During the nine months ended June 30, 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 .

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

Note 18 — Leases

4 unchanged sentences

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:

March 31, 2025 September 30, 2024

June 30, 2025 September 30, 2024

Finance Leases

14 unchanged sentences

Weighted-average discount rate 6.8 % 6.5 %

Supplemental cash flow information related to leases for the six months ended March 31, 2025 and 2024 were as follows:

March 31, 2025 March 31, 2024

Supplemental cash flow information related to leases for the nine months ended June 30, 2025 and 2024 were as follows:

June 30, 2025 June 30, 2024

Right of use assets obtained in exchange for lease liabilities

Operating Leases $ 2.2 $ 1.5

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

Cash used for amounts included in the measurement of lease liabilities

2 unchanged sentences

Operating cash flows from Finance Lease

Maturities of the Company's finance and operating lease liabilities as of March 31, 2025 by fiscal year are as follows:

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

Maturities of the Company's finance and operating lease liabilities as of June 30, 2025 by fiscal year are as follows:

Finance Leases Operating Leases Total

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements