What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-11-25 compared with 2024-12-11 · 252 added, 373 removed, 761 unchanged (45% of the section changed)

7 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated December 11, 2024 expressed an adverse opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Measurement of uncertain tax positions

Description of the Matter As described in Notes 3 and 15 to the consolidated financial statements, the Company recorded a consolidated income tax benefit totaling $34.1 million for the year ended September 30, 2024, and a liability for unrecognized tax benefits totaling $13.6 million at September 30, 2024.

In addition, as of September 30, 2024, the Company recorded total of deferred tax assets and liabilities of $140.9 million and $24.7 million, respectively.

The Company conducts business and files tax returns in numerous jurisdictions based on its interpretation of tax laws and regulations and engages in transactions for which the tax consequences may be subject to uncertainty.

The Company uses significant judgment to (1) determine whether, based on the technical merits, its tax position is more likely than not to be sustained upon examination and (2) measure the amount of the tax benefit that qualifies for recognition.

Given the multi-jurisdictional nature of the business, the complexity of the tax laws and legal rulings across the various countries the Company operates in, auditing management’s accounting for uncertain tax positions required a high degree of auditor judgment and increased extent of effort, including the need to involve our tax subject matter professionals.

How We Addressed the Matter in Our Audit With the support of our tax subject matter professionals, our audit procedures included assessing the technical merits of the Company’s tax positions, including assessing correspondence with relevant tax authorities and evaluating third-party advice obtained.

We evaluated changes in tax law that occurred during the year and assessed the Company’s interpretation of those changes under the relevant jurisdictional tax law.

We also evaluated the Company’s significant assumptions, and the completeness and accuracy of the data, used to determine the amount of tax benefits recognized and tested the accuracy of such calculations.

Further, we evaluated the Company’s income tax disclosures included in Note 15 in relation to these matters.

Estimation of variable consideration for revenue recognition

Description of the Matter As discussed in Note 2 and 7 of the consolidated financial statements, the Company’s revenue recognition involves estimates of variable consideration, such as chargebacks, which are treated as a reduction of revenue in the same period the related revenue is recognized.

These estimates are based on contractual terms, historical practices and current trends, and are adjusted as new information becomes available.

Factors considered in the estimate of the chargeback liability include the estimated lag time between the sale of product and the payment of corresponding variable consideration.

Auditing management’s estimate for the chargeback liability attributable to the lag time between the sale of product and the payment of corresponding variable consideration is significant to our audit as the related impact on revenue recognition is material and sensitive to change.

The estimate of the liability attributable to the estimated lag time by management is sensitive to changes in historical practices and current trends, which involves judgment and estimation to determine the impact of these assumptions on the deductions to gross revenues, and therefore requires a higher degree of auditor judgement.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process for estimating variable consideration, including management’s review process of the chargeback liability related to the estimated lag time and the significant assumptions and data utilized in the calculations.

Our audit procedures included, among others, evaluating the methodology and assumptions used by management in developing the estimate for the chargeback liability attributed to the lag time.

This included testing the completeness and accuracy of the historical underlying data, the calculation of the liability, and performing a sensitivity analysis on management’s estimate of the historical claim acceptance rate to evaluate the impact on the chargeback liability.

We tested payments for chargeback claims throughout the year and performed a retrospective analysis of claims paid subsequent to the balance sheet date.

/s/ ERNST & YOUNG LLP

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New York, New York

December 11, 2024

November 25, 2025

Report of Independent Registered Public Accounting Firm

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We have audited Embecta Corp’s internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Embecta Corp.

(the Company) has not maintained effective internal control over financial reporting as of September 30, 2024, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in certain of the Company’s financial reporting processes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended September 30, 2024, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated December 11, 2024, which expressed an unqualified opinion thereon.

In our opinion, Embecta Corp.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended September 30, 2025, and the related notes and our report dated November 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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New York, New York

December 11, 2024

November 25, 2025

Consolidated Statements of Income

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Cost of products sold 403.6 387.9 370.9

387.9 370.9 354.6

Gross Profit $ 676.8 $ 735.2 $ 749.9

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Diluted $ 1.62 $ 1.34 $ 1.22

(1) For the period prior to the Separation, this income statement line includes cost of products sold from related party inventory purchases.

Refer to Note 4 for further detail.

See notes to the Consolidated Financial Statements.

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Net Income $ 95.4 $ 78.3 $ 70.4

Other Comprehensive Income (Loss), net of tax

Benefit plan net loss and prior service credit, net of amortization ( 1.7 ) ( 1.6 ) —

Foreign currency translation adjustments 18.0 17.4 ( 64.2 )

Total Other Comprehensive Income (Loss), net of tax $ 16.3 $ 15.8 $ ( 64.2 )

Other Comprehensive Income, net of tax

Benefit plan net gain (loss) and prior service credit, net of amortization 0.2 ( 1.7 ) ( 1.6 )

Cumulative translation adjustment 5.8 18.0 17.4

Total Other Comprehensive Income, net of tax $ 6.0 $ 16.3 $ 15.8

Comprehensive Income $ 101.4 $ 94.6 $ 86.2

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Embecta Corp.

Shares Par Value Additional Paid-In Capital Accumulated Deficit Net Investment from Becton, Dickinson and Company Accumulated Other Comprehensive (Loss) Income Total

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

Balance at October 1, 2022 57,055,327 $ 0.6 $ 10.0 $ ( 577.1 ) $ ( 324.9 ) $ ( 891.4 )

Net transfers to Becton, Dickinson and Company including Separation adjustments — — — — ( 390.3 ) 9.8 ( 380.5 )

Issuance of common stock in connection with the Separation and reclassification of Net Investment from Becton, Dickinson and Company 57,012,925 0.6 — ( 613.7 ) 613.1 — —

Net consideration paid to Becton, Dickinson, and Company in connection with Separation — — — — ( 1,266.0 ) — ( 1,266.0 )

Net income attributable to Embecta Corp.

— — — 45.2 178.4 — 223.6

Other comprehensive loss, net of taxes — — — — — ( 64.2 ) ( 64.2 )

Net income — — — 70.4 — 70.4

Other comprehensive income, net of taxes — — — — 15.8 15.8

Stock-based compensation plans — — 21.5 — — 21.5

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Stock-based compensation plans — — 26.3 — — 26.3

Dividends declared ($ 0.60 per share)

Dividends and dividend equivalents declared ($ 0.60 per share)

— — 1.3 ( 35.8 ) — ( 34.5 )

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Issuance of shares related to stock-based compensation plans 788,828 — ( 5.7 ) — — ( 5.7 )

Separation-related adjustments — — — ( 5.8 ) 1.2 ( 4.6 )

Balance at September 30, 2025 58,496,113 $ 0.6 $ 80.0 $ ( 445.6 ) $ ( 285.6 ) $ ( 650.6 )

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

See notes to the Consolidated Financial Statements.

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Capital expenditures ( 9.3 ) ( 15.8 ) ( 26.5 )

Acquisition of intangible assets — — ( 0.4 )

Net Cash Used for Investing Activities $ ( 9.3 ) $ ( 15.8 ) $ ( 26.5 )

Financing Activities

Proceeds from the issuance of long-term debt — — 1,450.0

Payments on long-term debt ( 184.6 ) ( 34.6 ) ( 9.5 )

Payment of long-term debt issuance costs — — ( 33.3 )

Payment of revolving credit facility fees — — ( 5.6 )

Payments related to tax withholding for stock-based compensation ( 5.7 ) ( 3.0 ) ( 3.6 )

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Dividend payments ( 35.0 ) ( 34.5 ) ( 34.4 )

Net consideration paid to Becton, Dickinson and Company in connection with the Separation — — ( 1,266.0 )

Net transfers to Becton, Dickinson and Company — — ( 177.9 )

Net Cash Used for Financing Activities $ ( 226.7 ) $ ( 73.4 ) $ ( 48.7 )

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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.

On April 1, 2022 (the "Separation Date"), 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").

The Separation occurred by means of a pro-rata distribution (the "Distribution") of all of Embecta’s issued and outstanding shares of common stock on the basis of one share of Embecta common stock, par value $ 0.01 per share, for every five shares of BD common stock, par value $ 1.00 per share, held as of the close of business on March 22, 2022, the record date for the distribution.

Embecta is now a standalone publicly traded company and, on April 1, 2022, regular-way trading of Embecta common stock commenced on the Nasdaq Global Select Market under the ticker symbol "EMBC".

In connection with the Separation, BD and Embecta entered into various agreements to provide a framework for the relationship between BD and Embecta after the Separation, including, but not limited to, a separation and distribution agreement, a transition services agreement, a tax matters agreement, an employee matters agreement, a cannula supply agreement, contract manufacturing agreements, an intellectual property matters agreement, a logistics services agreement, distribution agreements, factoring and receivables agreements, local support and service agreements and other transaction documents.

As of October 31, 2024, all of the factoring and trade receivables agreements and the distribution agreements and local support and services agreements have expired and terminated.

Note 2 — Basis of Presentation

On April 1, 2022, the Company became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis.

Prior to the Separation on April 1, 2022, the Company’s historical combined financial statements were prepared on a standalone basis and were derived from BD's consolidated financial statements and accounting records.

The financial statements for all periods presented, including the historical results of the Company prior to April 1, 2022, are now referred to as "Consolidated Financial Statements", and have been prepared pursuant to the rules and regulations for reporting on Form 10-K.

Periods Prior to Separation

Prior to the Separation, the Company was referred to as the Diabetes Care Business.

The assets, liabilities, revenue and expenses of the Diabetes Care Business were reflected in the combined financial statements on a historical cost basis, as included in the consolidated financial statements of BD, using the historical accounting policies applied by BD.

The Consolidated Financial Statements did not purport to reflect what the Company’s results of operations, comprehensive income, financial position, equity or cash flows would have been had the Company operated as a standalone public company during the periods presented.

The Diabetes Care Business had historically functioned together with the other businesses controlled by BD.

Accordingly, the Diabetes Care Business relied on BD’s corporate and other support functions for its business.

Therefore, for the period prior to the Separation, certain corporate and shared costs were allocated to the Diabetes Care Business based on a specific identification basis or, when specific identification was not practicable, a proportional cost allocation method, including:

expenses related to BD support functions, including expenses for facilities, executive oversight, treasury, finance, legal, human resources, shared services, compliance, procurement, information technology and other corporate functions.

certain manufacturing and supply costs incurred by BD, including facility management, distribution, logistics, planning and global quality.

certain costs incurred by BD’s Medication Delivery Solutions organizational unit in relation to selling and marketing activities, and related administrative support functions.

certain costs incurred by BD for activities related to device research and development, as well as medical and regulatory affairs.

stock-based compensation expenses (see Note 10).

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

certain compensation expenses maintained on a centralized basis such as certain employee benefit expenses.

Management believes these cost allocations were a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Diabetes Care Business during the period prior to the Separation, though the allocations may not be indicative of the actual costs that would have been incurred had the Diabetes Care Business operated as a standalone public company.

Actual costs that may have been incurred if the Diabetes Care Business had been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by Diabetes Care Business employees, and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.

BD utilized a centralized approach to cash management and the financing of its operations.

Cash generated by the Diabetes Care Business was routinely transferred into accounts managed by BD’s centralized treasury function and cash disbursements related to operations prior to the Separation were funded as needed by BD.

Balances held by the Diabetes Care Business with BD for cash transfers and loans were reflected as Amounts due to Becton, Dickinson and Company prior to the Separation.

All other cash and equivalents and related transfers between BD and the Diabetes Care Business were generally held centrally through accounts controlled and maintained by BD and were not specifically identifiable to the Diabetes Care Business.

Accordingly, such balances were accounted for through Net Investment from Becton, Dickinson and Company .

BD’s third-party debt and related interest expense were not attributed to the Diabetes Care Business because the business was not the legal obligor of the debt and the borrowings were not specifically identifiable to the business.

For the Diabetes Care Business, transactions with BD affiliates were included in the Consolidated Statements of Income and related balances were reflected as Amounts due to Becton, Dickinson and Company or Amounts due from Becton, Dickinson and Company .

Other balances between the Diabetes Care Business and BD were considered to be effectively settled in the Consolidated Financial Statements at the time the transactions were recorded.

As the separate legal entities that made up the Diabetes Care Business were not historically held by a single legal entity, Net Investment from Becton, Dickinson and Company was shown in lieu of stockholders’ equity in these Consolidated Financial Statements.

Net Investment from Becton, Dickinson and Company represented BD’s interest in the recorded assets of the Diabetes Care Business and the cumulative investment by BD through the date of the Separation, inclusive of operating results.

For periods prior to the Separation, income tax expense and tax balances in the Consolidated Financial Statements were calculated on a separate tax return basis.

The separate tax return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise.

Management believes the assumptions supporting the allocation and presentation of income taxes on a separate return basis are reasonable.

The provision for income taxes for the period prior to the Separation was calculated by applying an estimated effective income tax rate for the full year to ordinary income adjusted by the tax impact of discrete items.

As of the Separation Date

Certain assets and liabilities, including patents and unrecognized tax benefits that were included in the Consolidated Balance Sheet prior to the Separation, have been retained by BD post-Separation and therefore were transferred to BD through Net Investment from Becton, Dickinson and Company in the Company's Consolidated Financial Statements.

In connection with the Separation, additional pension assets, deferred tax assets, other compensation obligations, and certain other assets and liabilities were transferred to the Company through Net Investment from Becton, Dickinson and Company , and the Company recorded these in the Consolidated Balance Sheet.

As part of the Separation, Net Investment from Becton, Dickinson and Company was reclassified as Common Stock and Accumulated Deficit .

Periods Post Separation

Following the Separation, certain functions continue to be provided by BD under the Transition Services Agreements or are being performed using Embecta’s own resources or third-party service providers.

Additionally, under manufacturing and supply agreements, the Company manufactures certain products for BD, or its applicable affiliate and BD manufactures certain products for the Company.

The Company incurred certain costs in its establishment as a standalone public company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company.

All intercompany transactions and accounts within Embecta have been eliminated.

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

Note 2 — Summary of Accounting Policies

Basis of Presentation

These consolidated financial statements have been prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”).

All intercompany transactions and accounts within Embecta have been eliminated.

Revenue Recognition

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Cash and equivalents include all highly liquid investments with a maturity of three months or less at the date of acquisition.

Interest income on Cash and equivalents is recorded as earned.

Interest income on Cash and equivalents is recorded as earned, which is further discussed in Note 16.

Restricted Cash

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The Company grants credit to customers in the normal course of business and the resulting trade receivables are stated at their net realizable value.

The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to trade receivables and is determined based on historical experience, current conditions, reasonable and supportable forecasts and other specific account data.

The allowance for doubtful accounts represents the Company’s estimate of probable credit losses expected to be incurred over the life of its trade receivables and is determined based on historical loss experiences, current conditions, reasonable and supportable forecasts such as country or regional risks that are not captured in the historical loss information, and other specific account data such as customer specific credit risk.

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 Consolidated Financial Statements.

Inventories are stated at the lower of approximate cost or net realizable value determined on the first-in, first-out basis.

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Implementation costs associated with cloud computing arrangements are capitalized when incurred during the application development phase.

Once the implementation of a cloud computing arrangement is complete and ready for its intended use, the Company amortizes the costs over the expected term of the hosting arrangement using the straight-line method to the same income statement line as the associated cloud operating expenses.

Once the implementation of a cloud

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

computing arrangement is complete and ready for its intended use, the Company amortizes the costs over the expected term of the hosting arrangement using the straight-line method to the same income statement line as the associated cloud operating expenses.

Property, Plant and Equipment

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If the asset’s or asset group’s carrying value exceeds such undiscounted cash flows, the assets or asset groups are not recoverable and an impairment loss is recognized based on the amount by which the carrying value of the asset or asset group exceeds its calculated fair value.

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

Capitalized Interest

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For the fiscal years ended September 30, 2025, 2024 and 2023 the Company capitalized $ 2.8 million, $ 3.7 million and $ 4.6 million of interest expense, respectively, into Property, Plant and Equipment, Net .

For the fiscal year ended September 30, 2023 the Company capitalized $ 0.9 million of interest expense into Deferred Income Taxes and Other Assets.

Interest expense capitalized into Deferred Income Taxes and Other Assets during the fiscal year ended September 30, 2024 is not material to the Company’s Consolidated Financial Statements.

For the fiscal years ended September 30, 2024 and 2023 the Company capitalized $ 0.1 million and $ 0.9 million of interest expense into Deferred Income Taxes and Other Assets, respectively .

No interest expense was capitalized into Deferred Income Taxes and Other Assets during the fiscal year ended September 30, 2025.

Advertising Costs

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The Company completed the annual goodwill impairment test as of July 1, 2025 and concluded that no impairment to goodwill was necessary as the fair value of the Company's one reporting unit was significantly in excess of the carrying value.

No goodwill impairments were identified during the fiscal years ended September 30, 2024, 2023, or 2022, and no accumulated impairment losses are recorded.

No goodwill impairments were identified during the fiscal years ended September 30, 2025, 2024, or 2023.

As of September 30, 2025 there are no accumulated impairment losses related to goodwill.

Amortized intangible assets primarily consist of patents and customer relationships.

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The Company utilizes foreign currency forward contracts to protect against market risks arising in the normal course of business.

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

At the end of the reporting period, foreign-currency-denominated assets and liabilities are remeasured into the functional currencies of the reporting entities at current market rates.

The change in value from this remeasurement is reported as a foreign exchange gain or loss for that period in Other income (expense), net .

The Company recorded transactional foreign exchange losses of $ 4.4 million during the fiscal year ended September 30, 2024.

For the fiscal years ended September 30, 2023 and 2022, transactional foreign exchange impacts were not material to the Company's Consolidated Statements of Income.

The Company recorded transactional foreign exchange gains of $ 1.2 million and losses of $ 4.4 million during the fiscal years ended September 30, 2025 and 2024, respectively.

Transactional foreign exchange impacts were not material to the Company's Consolidated Statements of Income during the fiscal year ended September 30, 2023.

Shipping and Handling Costs

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Additional disclosures regarding the Company’s accounting for contingencies are provided in Note 6.

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

Stock-Based Compensation

Prior to the Separation, certain of the Company’s employees historically participated in BD’s stock-based compensation plans.

Stock-based compensation expense was either allocated to the Company based on a proportionate cost allocation method or recorded based on specific identification.

Effective April 1, 2022, the Company established the 2022 Employee and Director Equity Based Compensation Plan, as amended on February 7, 2024 (the "Plan").

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Benefit Plans

Prior to the Separation, the defined benefit plans in which the Company participated related primarily to plans sponsored by BD and for which other businesses of BD also participate (the "Shared Plans").

The Company accounted for the Shared Plans as multiemployer plans and therefore the related assets and liabilities were not reflected in the Consolidated Balance Sheets.

For such periods prior to the Separation, the Consolidated Statements of Income reflect a proportional allocation of net periodic benefit cost for the Shared Plans associated with the Company.

The Company's participation in the defined pension and postretirement benefit plans sponsored by BD concluded upon the completion of the Separation on April 1, 2022.

At and after Separation, Embecta became the plan sponsor for certain non-United States defined benefit pension plans (see Note 19).

For certain defined benefit plans, the over funded or underfunded status of the Plan was recognized as an asset or liability in the Company's Consolidated Balance Sheets.

Embecta sponsors certain non-U.S.

defined benefit pension plans (See Note 19).

Research and Development

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In evaluating the Company’s tax provision, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be more likely than not of being sustained upon examination based on the technical merits.

The Company’s policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense.

While the Company believes it has identified all reasonable exposures and the reserve it has established is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved.

It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserve.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and introduced an additional United States tax on the earnings of non-United States subsidiaries which are referred to as Global Intangible Low Taxed Income (“GILTI”).

The Company has elected to treat GILTI as a period cost.

Prior to the Separation, the Company's operations were included in the tax returns of BD.

Income taxes as presented in the Consolidated Financial Statements attribute current and deferred income tax assets and liabilities of BD to the Company in a manner that is systematic, rational, and consistent with the asset and liability method prescribed by the accounting guidance for income taxes.

The Company's income tax provision prior to the Separation was prepared using the separate return method.

The separate return method applies the accounting guidance for income taxes to the standalone financial

The Company’s policy is to recognize, when applicable, interest and penalties related to income taxes as part of income tax expense.

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

statements as if the Company were a separate taxpayer and a standalone enterprise.

The Company believes the assumptions supporting the allocation and presentation of income taxes on a separate return basis are reasonable.

different than the amounts reserved.

It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserve.

The Company accounts for the tax effects of global intangible low-taxed income (“GILTI”) in the income tax provision in the period the tax arises.

Additional disclosures regarding the Company's accounting for income taxes are provided in Note 14.

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(2) the manner in which its operations are managed;

and (3) the criteria used by the Company’s President, its CODM, to evaluate performance of the Company’s business and allocate resources and capital.

and (3) the criteria used by the Company’s Chief Executive Officer, its CODM, to evaluate performance of the Company’s business and allocate resources and capital.

Fair Value Measurements

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Finance lease payments are bifurcated into (i) a portion that is recorded as imputed interest expense and (ii) a portion that reduces the finance liability associated with the lease.

For lease arrangements that are recognized on the Company’s Consolidated Balance Sheets, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease.

For lease arrangements that are recognized in the Company’s Consolidated Balance Sheets, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease.

These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement.

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Finance leases are recorded in Property, Plant and Equipment, Net , Current finance lease liabilities , and Non Current Finance Lease Liabilities and operating leases are recorded in Deferred Income Taxes and Other Assets , Accrued expenses , and Deferred Income Taxes and Other Liabilities in the Company's Consolidated Balance Sheets.

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

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 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 Consolidated Statements of Income.

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

Restructuring Costs

The Company records liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred.

In accordance with existing benefit arrangements, future employee termination costs to be incurred in conjunction with involuntary separations are accrued when such separations are probable and estimable.

When accruing these costs, the Company will recognize the amount that is the best estimate.

Costs for one-time termination benefits are recognized at the date the employee is notified, unless the employee is required to render services beyond a minimum retention period, in which case the benefits are expensed ratably over the service period.

Liabilities for other costs associated with a restructuring activity are measured at fair value and are recognized when the liability is incurred.

Other costs primarily consist of contract termination fees and other costs related to restructuring activities and are expensed when incurred.

In connection with exit and disposal activities, the Company also assesses the recoverability of long-lived assets employed in the business.

Additional disclosures regarding the Company’s accounting for restructuring costs are provided in Note 4.

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, including

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

determining the allocation of shared costs and expenses from BD for the period prior to the Separation, depreciable and amortizable lives, sales returns and allowances, rebate accruals, restructuring costs, inventory reserves and taxes on income as reflected in the Consolidated Financial Statements.

These estimates or assumptions affect reported assets, liabilities, revenues and expenses, depreciable and amortizable lives, sales returns and allowances, rebate accruals, restructuring costs, inventory reserves and taxes on income as reflected in the Consolidated Financial Statements.

Actual results could differ from these estimates.

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Cash paid for income taxes, net of refunds, for the fiscal years ended September 30, 2025, 2024 and 2023 was $ 50.1 million, $ 29.1 million and $ 30.4 million, respectively.

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280):

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

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.

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

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

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

The Company adopted this ASU for the fiscal year beginning on October 1, 2024 on a retrospective basis for all periods presented.

The adoption of the ASU did not have an impact on the Company’s consolidated financial condition or results of operations.

See Note 8 for more information.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued 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 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 Financial Accounting Standards Board issued Accounting Standards Update 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 will not have a material impact on the Company’s Consolidated Financial Statements.

Note 4 — Third Party Arrangements and Related Party Disclosures

Pursuant to the Separation, BD ceased to be a related party to Embecta and accordingly, no related party transactions or balances are reported subsequent to April 1, 2022.

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.

This ASU is effective for the Company beginning with its fiscal year 2026 reporting.

While this ASU 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 ASU is effective for the Company beginning with its fiscal year 2028 reporting and for interim reporting beginning with its fiscal year 2029.

While this ASU will increase disclosures, it will not have a material impact on the Company’s Consolidated Financial Statements.

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.

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

Note 3 — Third Party Arrangements

On April 1, 2022 (the "Separation Date"), Embecta and Becton, Dickinson and Company ("BD") entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement").

The Separation and Distribution Agreement 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.

Agreements that Embecta entered into with BD that govern aspects of Embecta's relationship with BD following the Separation include, but are not limited to:

• Transition Services Agreements ("TSA") - Pursuant to the TSA, as amended, Embecta and BD and their respective affiliates provide each other, on an interim, transitional basis, various services, including, but not limited to, information technology, human resources, procurement, quality and regulatory affairs, medical affairs, tax and treasury services.

The agreed-upon charges for such services are generally intended to allow the servicing party to charge a price comprised of out-of-pocket costs and expenses and a predetermined profit in the form of a mark-up of such out-of-pocket costs and expenses.

Such services provided pursuant to the TSA were to terminate no later than April 1, 2024, 24 months following the Separation.

On March 28, 2024, BD granted a limited extension until November 1, 2024 of certain services under the TSA and the Logistics Services Agreement (“LSA”) in a limited set of markets (the "Extension") to support the Interim Business Continuity Processes.

• Transition Services Agreements ("TSA") and Logistics Services Agreement ("LSA") - Pursuant to the TSA, as amended, and the related LSA, as amended, Embecta and BD and their respective affiliates provide each other, on an interim, transitional basis, various 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 (collectively, the “Interim Business Continuity Processes”).

The agreed-upon charges for such services were generally intended to allow the servicing party to charge a price comprised of out-of-pocket costs and expenses and a predetermined profit in the form of a mark-up of such out-of-pocket costs and expenses.

Specifically for the LSA, Embecta paid BD (i) reimbursable costs, including all shipping costs, selling costs, general administration costs, costs of goods, research and development services costs, and other income and expenses related solely to the diabetes care business, that were incurred by BD directly, as allocated costs or as costs payable to a third party and (ii) a monthly administrative fee of 1.0 % of net revenue (which increased to 1.25 % of net revenue after January 1, 2024).

Such services provided pursuant to the TSA and the LSA have terminated and expired.

• Trade Receivables Factoring Agreements - Embecta and BD entered into trade receivables factoring agreements (the "Factoring Agreements"), under which Embecta transferred certain net trade receivable assets to BD, and paid a service fee calculated as 0.1 % of annual revenues related to countries subject to the Factoring Agreements in exchange for the services provided by BD.

Per the terms of the Factoring Agreements, the Company and its relevant subsidiaries sold receivables to the corresponding BD subsidiary in the same jurisdiction and such BD

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

subsidiary collected the receivables from Company's customers.

Per the terms of the Factoring Agreements, the Company and its relevant subsidiaries sold receivables to the corresponding BD subsidiary in the same jurisdiction and such BD subsidiary collected the receivables from Company's customers.

The BD subsidiary assumed the credit risk in respect of the receivables, and accordingly deducted a factoring fee from the purchase price of such receivables.

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The transfers are presented in the Consolidated Statements of Cash Flows as operating activities and the related service fee is presented as a component of Other income (expense), net in the Consolidated Statements of Income.

The Trade Receivables Factoring Agreements terminated and expired as of March 31, 2024.

The Trade Receivables Factoring Agreements have terminated and expired as a result of the Company's implementation and onboarding of 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 planning (“ERP”) systems (“Business Continuity Processes”).

• Distribution Agreements - Embecta and BD entered into distribution agreements for certain territories, principally in the Asia Pacific Region and Latin America, whereby a subsidiary of BD was appointed as a distributor of Embecta or its relevant subsidiaries to support certain commercial operations of the diabetes care business on a transitional basis in these regions for a maximum of two years .

The distribution agreements each continued until either (1) certain governmental approvals needed to distribute products in the defined territory are obtained and order-to-cash processes and other services of the Company for such territory are migrated to an alternative commercial arrangement between the parties or (2) the applicable services are transitioned to a third-party distributor or independently performed by Embecta, but in any event no longer than the maximum term of two years , except certain such agreements may be extended in connection with the Extension.

All distribution agreements in the Asia Pacific Region and Latin America terminated and expired in October 2024.

Embecta paid BD a return of 1.5 % to 2.0 % of net revenue for each territory.

As it pertains to the Distribution Agreements noted above, Embecta determined it was the principal under these arrangements and was entitled to all the benefits, and was liable for all the risks, related to the inventory and receivables.

Additionally, Embecta had latitude in pricing, had the ability to direct BD regarding decisions over inventory, and was responsible for all credit and collections

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

risks and losses associated with the related receivables when there was no factoring agreement in place.

As such, Embecta recognized these sales on a gross basis.

All distribution agreements have terminated and expired.

• Cannula Supply Agreement - Embecta and BD entered into a cannula supply agreement whereby BD sells to Embecta cannulas for incorporation into Embecta's existing syringes and pen needles, safety syringes and safety pen needles, and products currently under development.

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Embecta is barred from taking any action, or failing to take any action, where such action or failure to act adversely affects or could reasonably be expected to adversely affect the tax-free status of the distribution and certain related transactions or result in certain other taxes to BD, for all relevant time periods.

• Logistics Services Agreement - Embecta and BD entered into the LSA, as amended, whereby BD provides Embecta with certain order-to-cash and logistics services to support certain commercial operations for a maximum term of two years , which BD agreed to extend pursuant to the Extension.

Embecta pays BD (i) reimbursable costs, including all shipping costs, selling costs, general administration costs, costs of goods, research and development services costs, and other income and expenses related solely to the diabetes care business, that are incurred by BD directly, as allocated costs or as costs payable to a third party and (ii) a monthly administrative fee of 1.0 % of net revenue (which increased to 1.25 % of net revenue after January 1, 2024).

• Other agreements that Embecta entered into with BD include, but are not limited to, the employee matters agreement ("EMA"), 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.

See Note 18 for more information on the lease agreement for Holdrege.

Additionally, Embecta had latitude in pricing, had the ability to direct BD regarding decisions over inventory, and was responsible for all credit and collections risks and losses associated with the related receivables when there was no factoring agreement in place.

As such, Embecta recognized these sales on a gross basis.

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

On March 28, 2024, the Company entered into (i) a second amendment (the “TSA Amendment”) to the TSA, dated as of March 31, 2022 and previously amended as of July 1, 2022 by and between Embecta and BD, and (ii) a second amendment (the “LSA Amendment”) to the LSA, dated January 1, 2022 and previously amended as of November 20, 2023, by and between Embecta and BD.

Under the TSA Amendment and the LSA Amendment, BD granted Embecta, among other things, the Extension.

As of March 31, 2024, all Factoring Agreements between Embecta and BD had expired and terminated as a result of the Company's implementation and onboarding of 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 planning (“ERP”) systems (“Business Continuity Processes”) in North America, and certain jurisdictions in Europe and Asia.

The amounts due from BD under the above agreements were $ 3.3 million and $ 12.2 million at September 30, 2025 and are reflected in Amounts due from Becton, Dickinson and Company and Trade receivables, net , respectively.

The amount due to BD under these agreements was $ 42.5 million at September 30, 2024 and is included in Amounts due to Becton, Dickinson and Company .

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

The transfers of the relevant local assets and liabilities in Mexico, Brazil, and Colombia closed in October 2024.

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

As of September 30, 2024, the Company estimates that amounts due from BD related to certain assets and liabilities in these jurisdictions are $ 7.0 million and are reflected in Prepaid expenses and other .

As of September 30, 2024, the Company estimates that amounts due to BD related to certain assets and liabilities in these jurisdictions is $ 6.3 million and are reflected in Accrued expenses .

Prior to the Separation, the Company did not operate as a standalone business and the Consolidated Financial Statements were derived from the consolidated financial statements and accounting records of BD.

The following disclosures summarize activity between the Company and BD up to the Separation, including the affiliates of BD that were not part of the Separation.

Corporate and Medical Segment Allocations from BD

Prior to the Separation, BD provided significant corporate, finance, human resources, information technology, facilities, and legal services, among others (collectively, “General Corporate Expenses”) to the Company.

Some of these services continue to be provided by BD to the Company on a temporary basis under the TSA.

For purposes of these Consolidated Financial Statements for the periods prior to the Separation, the General Corporate Expenses have been allocated to the Company.

The allocations of General Corporate Expenses are reflected in the Consolidated Statements of Income as follows:

Year ended September 30,

The amount due to BD under these agreements was $ 16.3 million and $ 4.1 million at September 30, 2025 and are included in Amounts due to Becton, Dickinson and Company and Accounts payable , respectively.

As of September 30, 2025, the closing of the transfers of certain assets and liabilities in certain jurisdictions which did not occur at Separation, is complete.

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

Note 4 — 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.

As a result, the Company incurred organizational restructuring plan (the "Patch Pump Restructuring Plan") costs of $ 34.5 million during the twelve months ended September 30, 2025.

This Patch Pump Restructuring Plan is substantially complete as of September 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 of $ 3.5 million during the twelve months ended September 30, 2025.

The 2025 Restructuring Plan is substantially complete as of September 30, 2025.

The following table summarizes the charges related to the restructuring programs by type of cost for the period ended September 30, 2025:

Employee Termination Non-Employee Related Total

Cost of products sold $ 0.5 $ 6.3 $ 6.8

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Research and development expense 6.8 4.7 11.5

Other (income) expense, net ( 0.6 )

Total General Corporate Expenses $ 53.1

These expenses were allocated to the Company on a pro rata basis of global and regional revenues, headcount, research and development spend and other drivers.

Management believes the assumptions underlying the Consolidated Financial Statements, including the assumptions regarding allocating General Corporate Expenses from BD, are reasonable.

Nevertheless, the Consolidated Financial Statements for periods prior to the Separation may not include all of the actual expenses that would have been incurred and may not reflect the Company’s Consolidated results of operations, financial position and cash flows had it been a standalone public company during the periods presented.

Actual costs that would have been incurred if the Company had been a standalone public company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

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

Related party transactions

The following transactions represent activity in the ordinary course of business between the Company and BD prior to the Separation for certain materials for use in production of certain medical products that were not at arm’s length.

The following table summarizes such former related party purchases as follows:

Year ended September 30,

Purchases from BD $ 28.0

All significant intercompany transactions between the Company and BD prior to the Separation have been included in the Consolidated Financial Statements and are considered to be effectively settled for cash at the time the transaction is recorded.

For the period prior to the Separation, the total net effect of the settlement of these intercompany transactions is reflected in the Consolidated Statements of Cash Flows as a financing activity and in the Consolidated Balance Sheets as Net Investment from Becton, Dickinson and Company.

Prior to the Separation, net transfers to BD were included within Net Investment from Becton, Dickinson and Company .

in the Consolidated Statements of Equity and represent the net effect of transactions between the Company and BD.

The following table summarizes the components of the net transfers to BD as follows:

Year ended September 30,

Cash pooling and general financing activities (1)

Corporate and segment allocations, excluding non-cash stock-based compensation ( 50.4 )

Taxes deemed settled with BD ( 16.2 )

Other Separation related adjustments, net ( 11.4 )

Net transfers to BD as reflected in the Consolidated Statements of Cash Flows 177.9

Share-based compensation expense ( 8.5 )

Pension expense ( 3.6 )

Net consideration paid to BD in connection with the Separation

Related party senior secured notes 197.0

Other transfers to (from) BD, net 84.1

Net transfers to BD $ 1,712.9

(1) The nature of activities includes financing activities for capital transfers, cash sweeps and other treasury services.

As part of this activity, cash balances were swept to BD on a daily basis under the BD Treasury function and the Company receives capital from BD for its cash needs.

Related Party Senior Secured Notes

On March 31, 2022, Embecta issued $ 200.0 million of senior secured notes to BD (the "Related Party Notes").

The Related Party Notes issued to BD were not issued for cash and instead were subject to a debt-for-debt exchange which occurred on April 1, 2022.

As of April 1, 2022 t he Related Party Notes were reclassified to Long-Term Debt in the Consolidated Balance Sheets as the Related Party Notes are third party debt for periods post Separation.

Refer to Note 13 for further information.

Note 5 — Collaboration Agreement

In March 2023, the Company entered into a collaboration agreement with a third-party to develop and commercialize an interoperable automated glycemic controller ("iAGC") to complement the Company's insulin patch pump currently in development.

The Company believes that both parties are active participants in the operating activities of the collaboration and exposed to certain risks and rewards depending on commercial success.

The transaction included an upfront payment

Other operating expenses 14.1 5.0 19.1

$ 22.0 $ 16.0 $ 38.0

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 16 and Note 17.

The following table summarizes the charges and spending relating to restructuring program activities for the period ended September 30, 2025:

Employee Termination Non-Employee Related Total

Balance at September 30, 2024 $ — $ — $ —

Charged to expense 22.0 16.0 38.0

Cash payments ( 18.4 ) ( 4.0 ) ( 22.4 )

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

Balance at September 30, 2025 (a)

$ 0.5 $ 1.4 $ 1.9

(a) As of September 30, 2025, $ 0.5 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.

of $ 2.5 million for project costs, which was expensed to Research and development expense during the fiscal year ended September 30, 2023.

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 Company will refocus its research and development strategy on its core business.

For additional information related to this matter, refer to Note 21.

Note 5 — Other Operating Expenses

In connection with the Separation, the Company incurred separation and stand-up costs of approximately $ 110.8 million , $ 92.7 million, and $ 44.7 million during the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

The costs incurred primarily consist of costs associated with accounting, auditing, legal services, marketing, supply chain, employee retention, the implementation of the Company's new ERP system, and certain other costs to establish certain Business Continuity Processes and stand-alone functions to assist with the transition to being a stand-alone entity.

During the fiscal year ended September 30, 2024, the Company recognized $ 6.3 million of costs associated with the amortization of cloud computing arrangements.

For the fiscal years ended September 30, 2023 and 2022, there were no amortization of implementation costs associated with cloud computing arrangements due to the timing of when these projects were placed into service.

The Company recorded approximately $ 7.4 million and $ 5.6 million of severance costs related to the optimization of certain business functions during the fiscal years ended September 30, 2024, and 2023, respectively.

These costs were primarily recorded in the U.S.

and liabilities for costs associated with these activities were not material to any period presented.

For the fiscal year ended September 30, 2022 severance costs were not material to the Company's Consolidated Statements of Income.

Other operating expenses are as follows:

Twelve months ended September 30,

2025 2024 2023

Costs related to the Separation $ 31.3 $ 110.8 $ 92.7

Amortization of cloud computing arrangements

Costs associated with the discontinued patch pump program 15.7 — —

Business optimization and severance related costs 7.3 7.4 5.6

Other 0.7 — 1.1

Total $ 65.4 $ 124.5 $ 99.4

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 fiscal years ended September 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 fiscal year ended September 30, 2023, there was no amortization of implementation costs associated with cloud computing arrangements due to the timing of when these projects were placed into service.

For the fiscal year ended September 30, 2025, the Company recognized costs associated with the discontinuation of the patch pump program which is further discussed in Note 4.

No such costs were recognized for the fiscal years ended September 30, 2024 and 2023.

For the fiscal years ended September 30, 2025, 2024 and 2023, the Company incurred restructuring, business optimization, and severance related costs associated with standing up and optimizing the Company.

Note 6 — Contingencies

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

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

Note 7 — Revenues

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Because 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 does not generally adjust its revenues for the effects of a financing component.

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,

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

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 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.

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Disaggregation of revenue by geographic region 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 Consolidated Balance Sheets.

The Company’s contract asset balance was $ 1.2 million as of each of September 30, 2024 and 2023.

Note 8 — Segment, Geographic, and Product Information

Operating segments are identified as components of an enterprise in which discrete financial information is available for evaluation by the CODM in making decisions regarding assessing business performance and allocating resources and capital.

Management has concluded that the Company operates in one segment based upon the information used by the CODM in evaluating the performance of the Company’s business and allocating resources and capital.

The Company's operations include four product lines which constitute one operating segment engaged in providing solutions to improve the health and well-being of people living with diabetes.

The Company's CODM is the Chief Executive Officer.

The CODM assesses performance and decides how to allocate resources for the Company's one operating segment based on consolidated net income that is reported on the Consolidated Statements of Income.

The Company has also evaluated the significant segment expenses incurred by our single segment regularly provided to the CODM.

The significant expenses provided to the CODM are consistent with those reported on the Consolidated Statements of Income and include cost of products sold, selling and administrative expense, research and development, other operating expenses, 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, decision about key personnel, and approving annual operating and capital budgets.

Our 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 Consolidated Balance Sheets.

Disaggregation of Revenues

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In Latin America, the Company maintains distribution agreements and direct sales representatives.

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

Revenues by geographic region are as follows:

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(1) For the fiscal years ended September 30, 2025, 2024, and 2023 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.

Revenues by product family are as follows:

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Total $ 1,080.4 $ 1,123.1 $ 1,120.8

(1) In 2024, Other includes product sales for swabs and other accessories.

In 2024, Other also includes the recognition of incremental Italian payback accruals resulting from two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015 which totaled $ 4.1 million.

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

Other also reflects the recognition of changes in estimates for the Italian payback measure relating to certain prior fiscal years between 2015 and 2023.

Note 9 — Stock-Based Compensation

Periods Prior to Separation

Prior to the Separation, certain of the Company's employees participated in stock-based compensation plans sponsored by BD.

Under these plans BD granted time-vested restricted stock units ("TVUs"), stock appreciation rights ("SARs"), and performance share units ("PSUs") to certain management level employees.

Prior to the Separation on April 1, 2022, share-based compensation expense in the Consolidated Statements of Income is representative of those employees who were dedicated to the Diabetes Care Business.

Additionally, share-based compensation expense was allocated to the Diabetes Care Business for BD Corporate and Medical Segment employees who were not dedicated solely to the Diabetes Care Business.

This stock-based compensation expense was allocated using a proportional cost allocation method and is included as a component of corporate allocations for periods prior to the Separation.

The amounts presented for the periods prior to the Separation are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company would have incurred as an independent company.

As of Separation Date and Periods Post Separation

In connection with the Separation, and in accordance with the EMA, Embecta's employees with outstanding former BD share-based awards received replacement share-based awards under the Plan.

The ratio used to convert the BD share-based awards was designed to preserve the aggregate intrinsic value of the award immediately after the Separation when compared to the aggregate intrinsic value of the award immediately prior to Separation.

As a result of the award modification, Embecta will incur $ 6.1 million of incremental stock-based compensation expense.

Of this amount, $ 1.2 million, $ 1.8 million and $ 2.3 million was recognized during the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

$ 0.8 million will be recognized at a future date over the awards' remaining vesting period.

Effective April 1, 2022, Embecta established the Plan, as amended on February 7, 2024.

The Company grants stock appreciation rights ("SARs"), time-vested restricted stock units ("TVUs"), performance based restricted stock units ("PSUs") and cash awards pursuant to the 2022 Employee and Director Equity Based Compensation Plan ("the Plan").

A total of 10,189,000 shares of common stock are authorized under the Plan.

The Plan provides for the grant of various types of awards including RSU awards, SARs, stock options, performance-based awards, and other stock-based awards.

Under the Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date.

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The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in earnings in the period of the change.

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

Stock-Based Compensation Expense

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Research and development expense 0.4 2.2 1.6

Other operating expense 2.8 — —

Total Stock-Based Compensation Expense $ 31.8 $ 26.6 $ 21.9

Tax benefit associated with stock-based compensation costs recognized $ 4.2 $ 3.2 $ 2.7

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 classification of award:

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Total $ 31.8 $ 26.6 $ 21.9

The following table summarizes the Company's total stock-based compensation expense by award type for the fiscal years ended September 30, 2024, 2023 and 2022, subsequent to the Separation:

The following table summarizes the Company's total stock-based compensation expense by award type for the fiscal years ended September 30, 2025, 2024 and 2023:

2025 2024 2023

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*The amounts 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 fiscal years 2024, 2023 and 2022 are as follows:

The weighted average grant date fair value of TVUs were as follows:

2025 2024 2023

Weighted average grant date fair value of units granted $ 18.53 $ 17.39 $ 31.00

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

The total fair value of TVUs vested during the fiscal years 2024, 2023 and 2022 was as follows:

The total fair value of TVUs vested were as follows:

2025 2024 2023

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Performance Based Restricted Stock Units

During the fiscal year ended September 30, 2024 , Embecta awarded 553,235 RSUs in the form of PSUs to certain executive officers and employees which 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 and targets that will be fully established at a future date.

During the fiscal year ended September 30, 2025 , Embecta awarded 530,014 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.

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 for each separately-vesting tranche over the requisite service period based on the fair value at each reporting date.

PSUs cliff vest on the third anniversary after grant date.

The related stock-based compensation expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility.

The fair value of all PSUs is based on the market value of the Company’s stock on the date of grant.

As the service inception

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

date precedes the accounting grant date, the Company recognizes stock-based compensation expense for each separately-vesting tranche 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 September 30, 2025, there were 901,360 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.

In October 2025, the Compensation Committee certified the Company achieved certain performance targets set for the PSUs awarded in November 2022 (the “2023 PSUs”).

Therefore, applicable employees are entitled to vesting of the 2023 PSUs at 125 % of the target shares awarded under the Plan.

A summary of PSUs outstanding as of September 30, 2025 and changes during the fiscal year then ended is as follows:

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Nonvested at October 1 56.7 $ 30.24

Granted (a) 269.9 18.17

Distributed* ( 47.6 ) 18.76

Forfeited, canceled or expired ( 6.2 ) 18.96

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Expected to vest at September 30 271.8 $ 22.64

The weighted average grant date fair value of PSUs granted during the fiscal year 2023 is as follows:

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

(a) Includes a payout adjustment of 53.8 thousand units due to the actual performance level achieved for PSUs granted in fiscal 2023 that will vest during fiscal 2026.

The weighted average grant date fair value of PSUs were as follows:

2025 2024 2023

Weighted average grant date fair value of units granted $ 18.17 $ — $ 30.24

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The BSM assumptions include expected dividend yield, risk-free interest rate, volatility, and term of the SARs.

In connection with the SARs granted during 2022, the Company used the BSM to determine the fair value of the SARs as of the grant date.

In applying this model, the Company uses both historical data and current market data to estimate the fair value of its SARs.

The expected dividend yield is based on forecasted patterns of dividend payments.

The risk-free interest rate is based on the rate at grant date of zero-coupon United States Treasury Notes with a term equal to the expected term of the SAR.

Expected volatility is estimated using historical volatility.

Due to the lack of trading history of Embecta's stock at the time of valuation efforts, the historical component of expected volatility is based on historical monthly price changes of the peer group within the industry.

BD's historical data for Embecta employees was used to estimate equity award exercise and employee termination behavior within the valuation model.

The expected term represents the amount of time that SARs granted are expected to be outstanding based on historical and forecasted exercise behavior.

The weighted average fair value of SARs was determined using the following assumptions:

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

Risk-free interest rate 2.5 %

Expected volatility 37.8 %

Expected dividend yield 2.9 %

Expected life 6.5

Fair value per SAR $ 9.38

A summary of SARs outstanding as of September 30, 2025 and changes during the fiscal year then ended is as follows:

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Balance at October 1 1,760.4 $ 29.11

Exercised* ( 7.9 ) 13.72

Forfeited, canceled or expired ( 309.2 ) $ 28.95

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Exercisable at September 30 1,278.0 $ 29.27 5.7 $ —

A summary of SARs exercised during the fiscal years 2023 and 2022 is as follows:

A summary of SARs exercised were as follows:

2025 2024 2023

Total intrinsic value of SARs exercised $ — $ — $ 0.3

Total fair value of SARs exercised $ 0.1 $ — $ 0.6

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

Unrecognized Compensation Expense and Other Stock Plans

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Intangible asset amortization expense was $ 1.1 million for the fiscal year ended September 30, 2025, $ 1.1 million for the fiscal year ended September 30, 2024 and $ 1.2 million for the fiscal year ended September 30, 2023, respectively.

The estimated intangible asset amortization expense for each of the fiscal years ended September 30, 2025 through 2029 is expected to approximate $ 1.1 million per year and $ 2.8 million for fiscal years subsequent thereafter.

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

The estimated intangible asset amortization expense for the next five fiscal years and thereafter is as follows:

Thereafter 2.3

Note 11 — Cloud Computing Arrangements

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$ 54.9 $ 64.5

Costs amortized during the fiscal year ended September 30, 2024 were $ 6.3 million, and are included in Other operating expenses .

For the fiscal years ended September 30, 2023 and 2022 there were no costs recognized related to the implementation of these cloud computing arrangements due to the timing of when these projects were placed into service.

As of September 30, 2024, cloud computing arrangement assets in-service have remaining useful lives which range from approximately two to eight years .

Costs amortized during the fiscal year ended September 30, 2025 and 2024 were $ 10.4 million and $ 6.3 million, respectively, and are included in Other operating expenses .

For the fiscal year ended September 30, 2023 there were no costs recognized related to the implementation of these cloud computing arrangements due to the timing of when these projects were placed into service.

As of September 30, 2025, cloud computing arrangement assets in-service have remaining useful lives of up to seven years .

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

Note 12 — Long-Term Debt

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The Related Party Notes issued to BD were not issued for cash and instead were subject to a debt-for-debt exchange which occurred on April 1, 2022.

As such, the issuance of the Related Party Notes is a non-cash financing activity and is not presented in the Consolidated Statements of Cash Flows for the fiscal year ended September 30, 2022.

On April 1, 2022, BD transferred the Related Party Notes with a notional value of $ 200.0 million issued by Embecta to Morgan Stanley in exchange for certain notes of BD that were purchased by Morgan Stanley pursuant to a tender offer.

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

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.

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.

The Credit Agreement and the indentures for Embecta's outstanding 5.00 % Notes and 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 September 30, 2025, 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 September 30, 2025:

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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 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.

In September 2024, the Company made a discretionary prepayment of $ 25.0 million on the Term Loan.

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

Amounts amortized during the years ended September 30,

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

2025, 2024 and 2023 were $ 9.1 million, $ 6.9 million and $ 6.4 million, respectively.

During the year ended September 30, 2025, the Company paid an aggregate principal amount of approximately $ 184.6 million on the Term Loan, of which $ 175.1 million was discretionary.

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

The Company made interest payments of $ 103.8 million related to its debt outstanding during the fiscal year ended September 30, 2025.

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

Thereafter 700.0

Certain measures relating to our total debt outstanding as of September 30, 2025 were as follows:

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The calculation of earnings per basic and diluted common share for the fiscal years ended September 30, 2025, 2024 and 2023 were as follows:

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

($ in millions and shares in thousands, except per share amounts) 2025 2024 2023

Net Income attributable to Embecta $ 78.3 $ 70.4 $ 223.6

Net Income $ 95.4 $ 78.3 $ 70.4

Basic weighted average number of shares outstanding 58,309 57,681 57,248

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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.

As of September 30, 2024, 2.8 million of dilutive share equivalents issuable under stock-based compensation plans were excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

As of both September 30, 2023 and September 30, 2022, 1.8 million of dilutive share equivalents issuable under stock-based compensation plans were excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

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.

As of September 30, 2025, 2024, and 2023, 2.3 million, 2.8 million, and 1.8 million dilutive share equivalents issuable under stock-based compensation plans were excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

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

Note 14 — Income Taxes

Income (Loss) Before Income Taxe s

Income Before Income Taxe s

The components of Income Before Income Taxes for the fiscal years ended September 30 consisted of:

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Income tax provision (benefit) $ 40.9 $ ( 34.1 ) $ 35.3

The Company's income tax provision for the first half of fiscal 2022 was prepared using a separate return method.

The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise.

The Company believes the assumptions supporting the allocation and presentation of income taxes on a separate return basis are reasonable.

For a portion of fiscal year 2022, the Company’s domestic and foreign operations were included in BD’s domestic consolidated and foreign tax returns, and payments to all tax authorities were made by BD on the Company’s behalf.

The Company filed its own foreign tax return and made its own foreign tax payments in Ireland.

The Company’s current tax liabilities computed under the separate return method were considered to be effectively settled in the consolidated financial statements at the time the transaction was recorded, with the offset recorded against Net parent investment.

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

Tax Rate Reconciliation

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Nondeductible expenses 3.4 16.5 2.5

Tax basis adjustments ( 17.4 ) — — —

Other, net ( 5.8 ) 1.8 0.1

Effective income tax rate 30.0 % ( 77.1 ) % 33.4 %

The increase in the Company's effective income tax rate for fiscal year 2025 as compared to fiscal year 2024 was primarily due to the absence of 2024 tax benefits from the recognition of deferred tax assets related to tax reform in Switzerland, the absence of 2024 tax benefits from the reduction of withholding tax accruals on unremitted foreign earnings resulting from the expiration of certain stock ownership holding period requirements, fewer nontaxable items of income and the correlative tax impacts of these changes on higher overall earnings in 2025;

partially offset by approximately $ 5.1 million of tax benefits from various tax return true ups for filings made during 2025 which are reflected above in the Other, net category.

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

The decrease in the Company's effective income tax rate for fiscal year 2024 as compared to fiscal year 2023 was primarily due to a reduction in withholding taxes on unremitted earnings of foreign subsidiaries related to the expiration of a two-year stock holding period requirement in Switzerland, the recognition of deferred tax assets from Switzerland tax reform, changes in the geographical mix of earnings and overall lower pre-tax earnings;

partially offset by an increase in uncertain tax positions and non-deductible expenses.

The increase in the Company's effective income tax rate for fiscal year 2023 as compared to fiscal year 2022 was primarily due to the establishment of a valuation allowance against interest expense carryforwards in the U.S., an increase in U.S.

tax on foreign earnings primarily because of limitations on the utilization of foreign tax credits and higher withholding taxes on unremitted foreign earnings;

partially offset by increased tax benefits from non-taxable items and change in geographical mix of earnings.

For fiscal year 2023, the Other, net included a tax benefit for the establishment of net deferred tax assets incurred in connection with the ongoing separation of the Diabetes Care Business from BD, partially offset by a return to provision adjustment from the prior fiscal year.

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

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 our provision for income taxes for the fiscal year ended September 30, 2025.

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 fiscal year ended September 30, 2025 and others becoming effective through the fiscal year ended September 30, 2027.

OBBBA did not have a material impact to our provision for income taxes for the fiscal year ended September 30, 2025.

Deferred Income Taxes

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As of September 30, 2025 and September 30, 2024, the Company has recorded deferred taxes on undistributed earnings of its foreign subsidiaries.

During fiscal year 2024, the Company recorded a tax benefit of approximately $ 16.8 million related to a reversal of taxes on unremitted foreign earnings due to the expiration of certain holding period requirements for stock ownership in its foreign affiliate.

During fiscal year 2025, the Company recorded a deferred tax asset of approximately $ 23.8 million related to tax losses incurred in connection with an internal restructuring which is fully offset by a valuation allowance.

As of September 30, 2025, the Company has recorded valuation allowances of approximately $ 90.7 million due to uncertainty that exists regarding the future realizability of certain deferred tax assets, primarily for interest expense carryforwards in the U.S.

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

related to limitations on the annual deductibility of such interest, tax loss carryforwards, annual limitations on utilization of amortization deductions and tax credits in Switzerland and deferred tax assets related to certain foreign manufacturing operations.

In addition, the Company recorded a tax benefit of approximately $ 28.7 million (before valuation allowance) related to the recognition of deferred tax assets for future amortization deductions and tax credits resulting from tax law changes in Switzerland.

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related to limitations on the annual deductibility of such interest, annual limitations on utilization of amortization deductions and tax credits in Switzerland, state tax credits and deferred tax assets related to certain foreign manufacturing operations.

As of September 30, 2023, the Company has recorded valuation allowances of $ 31.6 million due to the uncertainty that exists regarding future realizability of certain deferred tax assets primarily for interest expense carryforwards in the U.S.

related to limitations on the annual deductibility of such interest, state net operating losses, state tax credits and deferred tax assets related to certain foreign manufacturing operations.

The approximate tax benefit related to a tax holiday in Switzerland is $ 0.7 million and $ 0.01 impact on diluted earnings per share in fiscal year 2024.

The Company will no longer receive tax benefits from the tax holiday beginning in 2025.

Beginning in fiscal year 2025, the Company no longer receives tax benefits related to tax holidays.

For fiscal year 2024, the approximate tax benefit related to a tax holiday in Switzerland was $ 0.7 million and $ 0.01 impact on diluted earnings per share.

As of September 30, 2025, the Company had tax loss and credit carryforwards of approximately $ 2.9 million of state income tax credit carryforwards, $ 4.2 million of Switzerland cantonal tax credit carryforwards and $ 27.9 million in net operating loss carryforwards in various jurisdictions.

Approximately $ 0.4 million of net operating loss carryforwards will not expire and the remaining carryforwards expire in varying amounts from 2026 through 2045.

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

Unrecognized Tax Benefits

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Unrecognized tax benefits including interest and penalties that would affect the effective tax rate if recognized $ 17.7 $ 13.6 $ 7.2

For a portion of fiscal year 2022, the Company’s domestic and foreign operations were included in BD’s domestic consolidated and foreign tax returns, with the exception of Ireland.

The Company conducts business and files tax returns in numerous countries and currently has no tax audits in progress for the period after the Separation.

The Company conducts business and files tax returns in numerous countries and currently has no tax audits in progress as of September 30, 2025.

The following were included for the fiscal years ended September 30 as a component of Income tax provision (benefit) in the Consolidated Statements of Income and the Consolidated Balance Sheets.

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Interest and penalties associated with unrecognized tax benefits on the Consolidated Balance Sheets 1.1 0.1 0.2

Note 15 — Receivables Sale Agreement

During the third quarter of fiscal year 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, $ 63.2 million of trade receivables were sold during fiscal year 2025, resulting in derecognition of the receivables from the Company's Consolidated Balance Sheets.

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

recognized on the sale of trade receivables were not material to the Company's Consolidated Statements of Income.

The cash received on the sale of trade receivables during fiscal year 2025 is presented in changes in trade receivables, net within operating activities in the Consolidated Statement of Cash Flows.

Note 16 — Financial Instruments and Fair Value Measurements

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All cash and equivalents are Level 1 in the fair value hierarchy.

Interest income on Cash and equivalents was $ 12.0 million and $ 9.4 million for the fiscal years ended September 30, 2024 and 2023, respectively, and is included as a component of Interest expense, net .

For the fiscal year ended September 30, 2022, interest income was not material to the Company's Consolidated Statements of Income.

Interest income on Cash and equivalents was $ 6.0 million, $ 12.0 million, and $ 9.4 million for the fiscal years ended September 30, 2025, 2024, and 2023 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.

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The notional amounts of the Company’s foreign currency-related derivative instruments were as follows:

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

Hedge Designation September 30, 2025 September 30, 2024

Foreign exchange contracts (a) Undesignated $ 9.7 $ 4.5

Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables.

Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany and third-party transactions.

Gains and losses on these instruments are recognized immediately in Other income (expense), net .

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

In the fiscal year ended September 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 .

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.

During the fiscal year ended September 30, 2023, the Company recorded impairment charges of $ 2.5 million related to the abandonment of certain manufacturing equipment in China that is no longer in use that was inherited as part of the Separation from BD.

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The impairment charges are recognized within Impairment expense in the Consolidated Statements of Income.

During the fiscal year ended September 30, 2022, the Company recorded impairment charges of $ 58.9 million related to the abandonment of certain manufacturing production lines in the United States that are no longer expected to be completed.

These assets were previously included as a component of Construction in progress within Property, Plant and Equipment .

The impairment charges are recognized within Impairment expense in the Consolidated Statements of Income.

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

Concentration of Credit Risk

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Total Property, Plant and Equipment, Net $ 257.2 $ 290.4

These assets were previously included as a component of Machinery, equipment and fixtures within Property, Plant and Equipment .

These assets were previously included as a component of Construction in progress within Property, Plant and Equipment .

The impairment charges are recognized within Impairment expense in the Consolidated Statements of Income.

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

During the fiscal year ended September 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 .

Note 18 — Leases

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The Company has options to extend the lease for additional period of six years and to extend for a subsequent additional period of four years , after the expiration of the first extension period.

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

Aggregate Lease Information

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Weighted-average discount rate 6.6 % 6.5 %

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

Lease costs incurred are as follows:

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Total lease cost $ 11.1 $ 12.4 $ 9.3

For the fiscal year ended September 30, 2022, operating lease costs and finance lease costs were not material to the Company's Consolidated Statements of Income.

Supplemental cash flow information related to leases was as follows as of September 30, 2025, 2024 and 2023:

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Finance Lease

$ — $ — $ 36.7

Operating Leases 2.2 3.0 19.0

September 30, 2024 September 30, 2023

September 30, 2025 September 30, 2024 September 30, 2023

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from Operating Leases

$ 5.8 $ 6.4 $ 2.9

Financing cash flows from Finance Lease

Operating cash flows from Finance Lease

For the fiscal year ended September 30, 2022, cash paid for amounts included in the measurement of lease liabilities was not material.

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 September 30, 2025 by fiscal year are as follows:

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Present value of lease liabilities $ 32.1 $ 17.1 $ 49.2

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

Note 19 — Benefit Plans

Defined Benefit Plans

Prior to the Separation on April 1, 2022, Embecta participated in BD's non-United States plans.

BD has defined benefit pension plans covering eligible employees in certain of its international subsidiaries.

The Company participated in BD's benefit plans as though it was a participant in a multi-employer plan with the other businesses of BD.

The retirement benefits accounting guidance provides that liabilities beyond any contributions currently due and unpaid are not required to be reported.

For the period prior to the Separation, the Consolidated Statements of Income include expense allocations for these benefits, which were determined using a proportional allocation method.

Total benefit plan expense allocated to the Company for the fiscal year ended September 30, 2022 was $ 3.6 million.

Except for deferred closing countries, the Company's participation in the defined pension and postretirement benefit plans sponsored by BD concluded upon the completion of the Separation on April 1, 2022.

As of April 1, 2022, Embecta became the plan sponsor for certain global defined benefit pension plans.

The Company's retiree benefit plans include defined benefit plans for employees in its affiliates in Switzerland (the "Swiss Plan") as well as other insignificant defined benefit plans in other countries where the Company maintains an operating presence.

These Consolidated Financial Statements reflect the periodic benefit costs and funded status of such plans.

The Company uses September 30 as the year-end measurement date.

Of the plans, the defined benefit pension plan covering employees in Switzerland (the "Swiss Plan") is the only defined benefit pension plan material to the Company's Consolidated Financial Statements.

The Company's Swiss Plan is a government-mandated retirement account balance plan.

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Most employers provide higher benefits than those required by law, which is the case for Embecta.

The minimum level of retirement benefit is expressed by a cash balance formula with age-related contribution rates (or "retirement credits") based on an insured salary defined by law, and a minimum required interest crediting rate which is set by the government (1.25% in 2024, and 1.00% in 2023 and 2022).

The minimum level of retirement benefit is expressed by an account balance formula with age-related contribution rates based on an insured salary defined by law, and a minimum required interest crediting rate which is set by the government (1.25% in 2025 and 2024 and 1.00% in 2023).

The sum of the Company's contributions should be at least equal to the sum of employee contributions.

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Total employer contributions by the Company to the plans were $ 14.3 million, $ 15.1 million and $ 14.1 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

Between April 1, 2022 and September 30, 2022, BD remained the defined benefit pension plan sponsor for certain Embecta employees in Ireland.

The Company accounts for this plan as though it was a participant in a multi-employer plan with other businesses of BD.

The amount of contributions to BD for this plan are included in the amounts noted above.

At the Separation Date, Embecta effectuated an Embecta sponsored defined contribution pension plan for certain other employees in Ireland.

On October 1, 2022, any Embecta employees who remained participating in the BD defined benefit pension plan ceased participating and these employees began participating in an Embecta sponsored defined contribution pension plan that was effectuated at the Separation Date.

Deferred Compensation Plan

On the date of the Separation, the Company established a Deferred Compensation Plan in which certain directors and employees of the Company may defer the payment and taxation of up to 75 % of their base salary and up to 100 % of bonus amounts and other eligible cash compensation.

The Company has a Deferred Compensation Plan in which certain directors and employees of the Company may defer the payment and taxation of up to 75 % of their base salary and up to 100 % of bonus amounts and other eligible cash compensation.

A participant's deferrals are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator.

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Additions charged to costs and expenses ( 0.2 ) ( 18.7 ) ( 18.9 )

Deductions and other 2.1 (b) 21.1 23.2

Deductions and other 0.5 (a) 18.8 19.3

Balance at September 30, 2023 $ ( 1.0 ) $ — $ ( 1.0 )

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(a) Accounts written off

(b) Amounts factored to BD

Long-Lived Assets

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Note 21 — Subsequent Events

Discontinuation of the patch pump program

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 Company will refocus its investment on its core business while looking to optimize free cash flow and strengthen its balance sheet by paying down debt.

As a result of this decision, the Company will undergo an organizational restructuring (the "Restructuring Plan").

In addition, the Company intends to discontinue its plans to manufacture and commercialize the insulin delivery system, including the previous intended limited launch.

The Company estimates that it will incur approximately $ 25 million - $ 30 million in pre-tax cash-based charges primarily associated with employee severance payments and benefits related to the workforce reduction.

The Company expects that the majority of the restructuring charges related to the workforce reduction will be incurred in the first quarter of fiscal 2025 and that the implementation of the workforce reduction, including cash payments, will be substantially complete by the end of the second quarter of fiscal 2025.

The Company estimates that it will incur approximately $ 10 million - $ 15 million of additional pre-tax non-cash charges related to asset impairments and asset write-offs.

These preliminary estimates may be revised following the completion of the ongoing analysis of the expected additional pre-tax non-cash charges associated with the implementation of the Restructuring Plan.

The estimates of the pre-tax cash charges and additional charges that the Company expects to incur in connection with the Restructuring Plan, and the timing thereof, are subject to a number of assumptions and actual amounts may differ

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

materially from estimates.

In addition, the Company may incur other pre-tax cash charges or additional charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Restructuring Plan.

Performance-Based and Time-Vested Restricted Stock Units

In November 2024 and pursuant to the Plan, the Company granted approximately 1.4 million TVUs in connection with the Company's annual grant which vest on a graded basis over a period of three years , subject to continuous service to the Company by the employee.

The Company also awarded approximately 0.5 million PSUs to certain executive officers and employees in connection with the Company's annual grant which 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 and targets that will be fully established at a future date.

Sale of Assets

In November 2025, 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 for $ 10.0 million.

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

1 unchanged sentence

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What changed 10-K

Item 8. Financial Statements and Supplementary Data