What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2026-02-05 · 117 added, 69 removed, 193 unchanged (49% of the section changed)

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Non-traditional entrants, such as technology companies, are also entering into the diabetes care industry and its adjacent markets, some of which may have greater financial and marketing resources than us.

Pricing Pressures.

Pricing and Volume Pressures.

We face significant pricing pressures from competitors in the pen needle and insulin syringe categories who not only can provide competitive products at lower costs, but also provide payors and customers with more choices for formulary partners in these categories.

As a result, select distributors and retailers, especially in the United States, can exercise substantial pricing pressure power in view of the competitive nature of our business which can significantly affect sales volume and market share.

In addition, the increased scrutiny by regulators on healthcare spending, which accelerated in light of the COVID-19 pandemic, along with a shift towards volume-based procurement and group purchasing organizations, which generally values lower cost over product features, benefits and quality, have placed significant pressure on Embecta to lower price in both developed and emerging markets.

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Global Trade.

The current global economic environment has been recently influenced by rapidly changing new tariff policies instituted by the United States government and foreign governments.

The current global economic environment has been recently influenced by rapidly changing tariff policies instituted by the United States government and foreign governments.

As a global company that both imports raw materials and products into the U.S.

and distributes raw materials and products originating from the U.S.

to global manufacturing sites and markets, these new tariffs may have a financial impact on our cost of goods, our profit margins, our business generally and our global distribution strategy.

These new tariffs may cause foreign governments and private purchasers to consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products resulting in the additional possibility that local manufacturers, brands and other competitors may engage in aggressive competitive pricing to take advantage of the uncertain global trade environment and transition customers away from global manufacturers, all of which may impact the Company’s business and operations.

to global manufacturing sites and markets, these tariffs may have a financial impact on our cost of goods, our profit margins, our business generally and our global distribution strategy.

These tariffs may cause foreign governments and private purchasers to consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products resulting in the additional possibility that local manufacturers, brands and other competitors may engage in aggressive

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

competitive pricing to take advantage of the uncertain global trade environment and transition customers away from global manufacturers, all of which may impact the Company’s business and operations.

Changes in Clinical Practice.

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To date we have been able to successfully mitigate this disruption and provide uninterrupted supply to our customers by increasing our inventory levels and taking other measures.

Given our global business, we expect recently announced tariffs will result in additional cost for us and our suppliers, and there is the potential that such tariffs may influence future decisions by foreign governments and private purchasers to source non-U.S., “locally” manufactured products instead of products originating from certain countries (including the U.S.) and that local manufacturers, brands and other competitors may engage in aggressive competitive pricing or other strategies to take advantage of the uncertain global trade environment and transition customers away from global manufacturers.

Given our global business, we expect tariffs announced over the past year will result in additional cost for us and our suppliers, and there is the potential that such tariffs may influence future decisions by foreign governments and private purchasers to source non-U.S., “locally” manufactured products instead of products originating from certain countries (including the U.S.) and that local manufacturers, brands and other competitors may engage in aggressive competitive pricing or other strategies to take advantage of the uncertain global trade environment and transition customers away from global manufacturers.

We will continue to monitor the evolving tariff environment and we will focus on optimizing operations and leveraging existing strategies to reduce the impact from tariffs.

We continue to monitor the conflict in Ukraine and the associated sanctions and other restrictions.

We also are monitoring the conflicts in the Middle East and Houthi attacks on commercial shipping vessels and other naval vessels.

As of February 5, 2026 , there is no material impact to our business operations and financial performance as a result of the aforementioned conflicts.

We continue to monitor global conflicts, including activity in the Middle East and Houthi attacks on commercial shipping vessels and other naval vessels, and the associated sanctions and other restrictions.

As of May 5, 2026 , there is no material impact to our business operations and financial performance as a result of the aforementioned conflicts.

However, the full impact of the conflicts on our business operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflicts and their impact on regional and global economic conditions.

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The nature and extent of the impact of these factors among others varies by region and remains uncertain and unpredictable and may affect our business.

On March 19, 2026, we entered into a definitive agreement to acquire Owen Mumford Holdings Limited (the "Purchase Agreement") for approximately £150 million.

Owen Mumford Holdings Limited (“OM”) is a privately held, UK-based innovator and manufacturer of medical devices and drug-delivery technologies.

Under the terms of the Purchase Agreement, we will acquire OM for an upfront cash payment of £100 million at closing (subject to customary adjustments, including for closing net cash), and will pay up to an additional £50 million upon the achievement of certain commercial milestones related to sales of the Aidaptus® next-generation auto-injector platform through the period ending June 30, 2029.

The transaction is expected to close within the third fiscal quarter of 2026.

In May 2026, the Company announced that the Board approved a three-year $100.0 million stock repurchase authorization (the “Repurchase Program”) of common stock in accordance with applicable securities laws.

The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be suspended or terminated at any time at the Company’s discretion.

In May 2026, the Board of Directors approved a reduction in the quarterly cash dividend from $0.15 to $0.01 per share of common stock.

The dividend is payable on June 15, 2026 to stockholders of record as of May 28, 2026.

In May 2026, we initiated a review of our cost structure and organizational footprint.

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

Results of Operations

Our unaudited Condensed Consolidated Statements of Income are as follows:

Three months ended December 31,

Our unaudited Condensed Consolidated Statements of (Loss) Income are as follows:

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

Revenues $ 221.8 $ 259.0 (14.4) % $ 483.0 $ 520.9 (7.3) %

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Research and development expense 5.4 8.0 (32.5) 10.0 28.3 (64.7)

Other operating (income) expense, net (3.8) 27.0 (114.1)

Other operating expense, net 11.2 13.6 (17.6) 7.4 40.6 (82.0)

Total Operating Expenses 92.8 101.2 (8.3) 171.2 229.6 (25.4)

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Other income (expense), net (2.9) (0.4) 625.0 (3.2) (1.9) 68.4

Income (Loss) Before Income Taxes 58.9 (0.7) *

Income tax provision (benefit) 14.8 (0.7) *

Net Income $ 44.1 $ — *

Net Income per common share:

Income Before Income Taxes 9.5 35.8 (73.5) 68.4 35.1 94.9

Income tax provision 13.6 12.3 10.6 28.4 11.6 144.8

Net (Loss) Income $ (4.1) $ 23.5 (117.4)% $ 40.0 $ 23.5 70.2 %

Net (Loss) Income per common share:

Basic $ (0.07) $ 0.40 (117.5)% $ 0.68 $ 0.40 70.0 %

Diluted $ (0.07) $ 0.40 (117.5)% $ 0.67 $ 0.40 67.5 %

* = not meaningful

Three Months Ended December 31, 2025 Summary (on a comparative basis)

Key financial results for the three months ended December 31, 2025 were as follows:

Three Months Ended March 31, 2026 Summary (on a comparative basis)

Key financial results for the three months ended March 31, 2026 were as follows:

• Revenue decreased by $37.2 million to $221.8 million from $259.0 million;

• Gross profit increased by $4.6 million to $161.7 million from $157.1 million.

• Gross profit decreased by $36.3 million to $127.8 million from $164.1 million.

Gross profit as a percent of revenue was 57.6%, as compared to 63.4% in the prior year comparative period;

• Operating income decreased by $27.9 million to $35.0 million from $62.9 million;

• Net (loss) income decreased by $27.6 million to $(4.1) million from $23.5 million.

Six Months Ended March 31, 2026 Summary (on a comparative basis)

Key financial results for the six months ended March 31, 2026 were as follows:

• Revenue decreased by $37.9 million to $483.0 million from $520.9 million;

• Gross profit decreased by $31.7 million to $289.5 million, from $321.2 million.

Gross profit as a percent of revenue was 59.9%, as compared to 61.7% in the prior year comparative period;

• Operating income increased by $26.7 million to $118.3 million from $91.6 million;

• Net income increased by $16.5 million to $40.0 million from $23.5 million.

The Company's revenues decreased by $0.7 million, or 0.3%, to $261.2 million for the three months ended December 31, 2025 as compared to revenues of $261.9 million for the three months ended December 31, 2024.

Changes in revenues are driven by the volume of goods that the Company sells, the prices it negotiates with customers, and changes in foreign exchange rates.

The decrease in revenues was driven by $7.8 million of unfavorable changes in price and a $0.7 million decrease in contract manufacturing revenues related to sales of non-diabetes products to BD, partially offset by $4.6 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S.

dollar and $3.2 million of favorable changes in volume.

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

Our revenues decreased by $37.2 million, or 14.4%, to $221.8 million for the three months ended March 31, 2026 as compared to revenues of $259.0 million for the three months ended March 31, 2025.

Changes in revenues are driven by the volume of goods that the Company sells, the prices it negotiates with customers, and changes in foreign exchange rates.

The decrease in revenues was driven by $39.3 million of unfavorable changes in volume, $3.6 million of unfavorable changes in price, and a $2.0 million decrease in contract manufacturing revenues.

This was partially offset by $7.7 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S.

Our revenues decreased by $37.9 million, or 7.3%, to $483.0 million for the six months ended March 31, 2026 as compared to revenues of $520.9 million for the six months ended March 31, 2025.

The decrease in revenues was driven by $40.2 million of unfavorable changes in volume, $7.3 million of unfavorable changes in price, and a $2.7 million decrease in contract manufacturing revenues.

This was partially offset by $12.3 million associated with the positive impact of foreign currency translation primarily due to the weakening of the U.S.

Cost of products sold

Cost of products sold decreased by $5.3 million, or 5.1%, to $99.5 million for the three months ended December 31, 2025 as compared to $104.8 million for the three months ended December 31, 2024.

Cost of products sold as a percentage of revenues was 38.1% for the three months ended December 31, 2025 as compared to 40.0% for the three months ended December 31, 2024.

The decrease in cost of products sold for the three month comparative period was primarily driven by impairment charges recorded in the prior period to write down the carrying value of certain property and equipment with no comparable impairment charges in the current period.

Cost of products sold decreased by $0.9 million, or 0.9%, to $94.0 million for the three months ended March 31, 2026 as compared to $94.9 million for the three months ended March 31, 2025.

Cost of products sold as a percentage of revenues was 42.4% for the three months ended March 31, 2026 as compared to 36.6% for the three months ended March 31, 2025.

The decrease in cost of products sold for the three month comparative period was primarily driven by lower volumes, as well as the impact of net changes from profit in inventory adjustments period over period.

This was partially offset by an increase due to a shift in product mix in the current period as compared to the prior period.

Cost of products sold decreased by $6.2 million, or 3.1%, to $193.5 million for the six months ended March 31, 2026 as compared to $199.7 million for the six months ended March 31, 2025.

Cost of products sold as a percentage of revenues was 40.1% for the six months ended March 31, 2026 as compared to 38.3% in the six months ended March 31, 2025.

The decrease in cost of products sold for the six month comparative period was primarily driven by lower volumes, the impact of net changes from profit in inventory adjustments period over period, and by impairment charges recorded in the prior period to write down the carrying value of certain property and equipment with no comparable impairment charges in the current period.

This was partially offset by an increase due to a shift in product mix in the current period as compared to the prior period.

Selling and administrative expenses

Selling and administrative expenses decreased by $3.5 million, or 4.3%, to $77.6 million for the three months ended December 31, 2025 as compared to $81.1 million for the three months ended December 31, 2024.

The decrease for the three month comparative period was primarily driven by lower compensation expense in the current period.

Selling and administrative expenses decreased by $3.4 million, or 4.3%, to $76.2 million for the three months ended March 31, 2026 as compared to $79.6 million for the three months ended March 31, 2025.

Selling and administrative expenses decreased by $6.9 million, or 4.3%, to $153.8 million for the six months ended March 31, 2026 as compared to $160.7 million for the six months ended March 31, 2025.

The decrease for both the three and six month comparative periods was primarily driven by lower compensation expense in the applicable current periods.

Research and development expenses

Research and development expenses decreased by $15.7 million, or 77.3%, to $4.6 million for the three months ended December 31, 2025 as compared to $20.3 million for the three months ended December 31, 2024.

The decrease for the three month comparative period was primarily driven by expenses incurred in connection with the development of our insulin patch pump program in the prior year before the decision was made to discontinue the program.

There were no comparable expenses associated with the patch pump program in the current year.

Other operating (income) expense, net

Other operating (income) expense, net are as follows:

Research and development expenses decreased by $2.6 million, or 32.5%, to $5.4 million for the three months ended March 31, 2026 as compared to $8.0 million for the three months ended March 31, 2025.

Research and development expenses decreased by $18.3 million, or 64.7%, to $10.0 million for the six months ended March 31, 2026 as compared to $28.3 million for the six months ended March 31, 2025.

The decrease for both the three and six month comparative periods was primarily driven by expenses incurred in connection with the development and subsequent discontinuance of our insulin patch pump program in the prior year.

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

Other operating expense, net

Other operating expense, net are as follows:

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

2026 2025 2026 2025

Costs related to the Separation $ 2.2 $ 6.2 $ 5.3 $ 16.6

Amortization of cloud computing arrangements

2.6 2.7 5.2 5.2

Costs associated with the discontinued patch pump program 0.1 1.0 0.1 15.3

Business optimization and severance related costs — 3.6 — 3.6

Gain on sale of certain intellectual property rights and long-lived assets — — (10.1) —

Acquisition-related costs 5.6 — 5.6 —

Other 0.7 0.1 1.3 (0.1)

Total $ 11.2 $ 13.6 $ 7.4 $ 40.6

Other operating (income) expense, net incurred primarily consist of the following:

Other operating expense, net incurred primarily consist of the following:

• Accounting, auditing, legal services, marketing, supply chain, employee retention, costs associated with the implementation of our new ERP system and other Business Continuity Processes, costs associated with brand transition, and certain other costs to establish certain stand-alone functions to assist with the transition to being a stand-alone entity;

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• A gain on the sale of certain intellectual property rights and long-lived assets associated with the patch pump program.

• Acquisition-related costs associated with the pending acquisition of Owen Mumford.

Interest expense, net

Interest expense, net decreased by $3.8 million to $24.1 million for the three months ended December 31, 2025 as compared to $27.9 million for the three months ended December 31, 2024.

The decrease for the three month comparative period was primarily driven by lower debt levels and lower short-term interest rates in the current period as compared to the prior period.

Interest expense, net decreased by $4.1 million to $22.6 million for the three months ended March 31, 2026 as compared to $26.7 million for the three months ended March 31, 2025.

Interest expense, net decreased by $7.9 million to $46.7 million for the six months ended March 31, 2026 as compared to $54.6 million for the six months ended March 31, 2025.

The decrease for both the three and six month comparative periods was primarily driven by lower debt levels and lower short-term interest rates in the current period as compared to the prior periods.

It remains unclear whether the United States Federal Reserve will increase or decrease the benchmark interest rate during the remainder of fiscal 2026.

An increase in the benchmark interest rate would result in an increase in interest expense on our variable rate debt and a decrease in the benchmark interest rate would result in a decrease in interest expense on our variable rate debt.

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

Other income (expense), net

Other income (expense), net was $(0.3) million and $(1.5) million for the three months ended December 31, 2025 and 2024, respectively.

Other income (expense), net did not materially change in the current period as compared to the prior year period.

Income tax provision (benefit)

The effective tax rates were 25.1% and 100.0% for the three months ended December 31, 2025 and 2024, respectively.

The decrease in the Company's effective tax rate compared to the prior period is primarily due to the level and mix of earnings, lower limitations on the deductibility of interest expense in the U.S.

and lower U.S.

tax on foreign earnings.

Other income (expense), net was $(2.9) million and $(0.4) million for the three months ended March 31, 2026 and 2025, respectively.

Other income (expense), net was $(3.2) million and $(1.9) million for the six months ended March 31, 2026 and 2025, respectively.

The decrease for both the three and six month comparative periods was primarily attributed to unfavorable impacts from foreign exchange.

Income tax provision

The effective tax rates were 143.2% and 34.4% for the three months ended March 31, 2026 and 2025, respectively.

The increase in the Company's effective tax rate compared to the prior period is primarily due to the tax impacts from changes in level and mix of earnings and higher non-deductible costs.

The effective tax rates were 41.5% and 33.0% for the six months ended March 31, 2026 and 2025, respectively.

The increase in the Company's effective tax rate compared to the prior period is primarily due to the change in mix of earnings and higher non-deductible costs.

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

LIQUIDITY AND CAPITAL RESOURCES

We believe that our cash and our cash equivalents and cash from operations, together with our borrowing capacity under our Revolving Credit Facility, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares and additional growth opportunities for the foreseeable future.

We have also initiated a review of our cost structure and organizational footprint.

However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund growth opportunities and satisfy upcoming debt maturities.

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

The following is a summary of Embecta's total debt outstanding as of March 31, 2026:

Term Loan $ 641.8

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

Certain measures relating to our total debt outstanding as of December 31, 2025 were as follows:

Certain measures relating to our total debt outstanding as of March 31, 2026 were as follows:

Total debt $ 1,326.4

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In addition, the credit agreement contains covenants that limit, among other things, our ability to prepay, redeem or repurchase our 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 December 31, 2025, we were in compliance with all of such covenants.

As of March 31, 2026, we were in compliance with all of such covenants.

The credit agreement and the senior secured notes are secured by substantially all assets of Embecta and each subsidiary guarantor, subject to certain exceptions.

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

During the three months ended December 31, 2025, the Company paid an aggregate principal amount of approximately $37.5 million on the Term Loan, of which $35.1 million was discretionary.

During the six months ended March 31, 2026, the Company paid an aggregate principal amount of approximately $75.0 million on the Term Loan, of which $70.3 million was discretionary.

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

During the three months ended December 31, 2025 , the Company made interest payments of $13.2 million on debt outstanding.

During the six months ended March 31, 2026 , the Company made interest payments of $44.1 million on debt outstanding.

We may, from time to time, seek to retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchase, or privately negotiated transactions, or otherwise may redeem some or all of our debt pursuant to its terms.

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For additional information related to the Company's debt related activities, refer to Note 13 within the Notes to Condensed Consolidated Financial Statements within this Form 10-Q.

Maturities of our finance lease and operating lease liabilities as of December 31, 2025 by fiscal year are as follows:

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

In May 2026, the Company announced that the Board approved a three-year $100.0 million stock repurchase authorization of common stock in accordance with applicable securities laws.

The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be suspended or terminated at any time at the Company’s discretion.

In May 2026, the Board of Directors approved a reduction in the quarterly cash dividend from $0.15 to $0.01 per share of common stock.

The dividend is payable on June 15, 2026 to stockholders of record as of May 28, 2026.

Maturities of our finance lease and operating lease liabilities as of March 31, 2026 by fiscal year are as follows:

Finance Lease Operating Leases Total

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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, $56.0 million of trade receivables were sold during the three months ended December 31, 2025, resulting in derecognition of the receivables from the Company's Condensed Consolidated Balance Sheets.

In connection with the Company's receivables sale agreement, $120.3 million of trade receivables were sold during the six months ended March 31, 2025, resulting in derecognition of the receivables from the Company's Condensed Consolidated Balance Sheets.

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

The cash received on the sale of trade receivables during the three months ended December 31, 2025 is presented in changes in trade receivables, net within operating activities in the Condensed Consolidated Statement of Cash Flows.

The cash received on the sale of trade receivables during the six months ended March 31, 2025 is presented in changes in trade receivables, net within operating activities in the Condensed Consolidated Statement of Cash Flows.

As of March 31, 2026, the Company had collected $5.4 million, on behalf of the financial institution, which is reflected as Restricted cash and the related obligation to remit the cash within Accrued expenses .

The net cash flows related to these collections are reported as financing activities in the Condensed Consolidated Statement of Cash Flows.

Pending Acquisition

On March 19, 2026, the Company entered into a definitive agreement to acquire OM (the "Purchase Agreement") for approximately £150 million.

OM is a privately held, UK-based innovator and manufacturer of medical devices and drug-delivery technologies.

Under the terms of the Purchase Agreement, the Company will acquire OM for an upfront cash payment of £100 million at closing (subject to customary adjustments, including for closing net cash), and will pay up to an additional £50 million upon the achievement of certain commercial milestones related to sales of the Aidaptus® next-generation auto-injector platform through the period ending June 30, 2029.

All closing conditions and regulatory approvals have been satisfied and the transaction is expected to close within the third fiscal quarter of 2026.

Access to Capital and Credit Ratings

In May 2025 and January 2026, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates and reaffirmed our preexisting credit ratings.

In March 2026 and January 2026, Moody’s Investor Services and Standard & Poor’s Ratings Services published updates and reaffirmed our preexisting credit ratings.

Our Moody's Investors Services credit rating is B1 and our Standard & Poor's Rating Services credit rating is B+.

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

Cash and equivalents and restricted cash were $204.4 million as of December 31, 2025 as compared to $228.6 million as of September 30, 2025.

Cash and equivalents and restricted cash were $193.4 million as of March 31, 2026 as compared to $228.6 million as of September 30, 2025.

The primary uses of cash that contributed to the $35.2 million decrease were:

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Effect of exchange rate changes on cash and equivalents and restricted cash 0.6

December 31, 2025 Cash and equivalents and restricted cash balance $ 204.4

March 31, 2026 Cash and equivalents and restricted cash balance $ 193.4

Net cash provided by operating activities was primarily attributable to:

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Change in inventories

Change in amounts due from/due to Becton, Dickinson and Company

Change in prepaid expenses and other

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All other movements related to working capital were due to timing of payments and receipts of cash in the ordinary course of business.

Net cash provided by investing activities for the three months ended December 31, 2025 was comprised of proceeds from the sale of certain intellectual property rights and long-lived assets of $10.1 million offset by capital expenditures of $0.6 million to support our business and operations.

Net cash provided by investing activities for the six months ended March 31, 2026 was comprised of proceeds from the sale of certain intellectual property rights and long-lived assets of $10.1 million offset by capital expenditures of $1.1 million to support our business and operations.

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

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Dividend payments $ (17.8)

Change in unremitted cash collections from servicing factored receivables 5.4

Payments on long-term debt (75.0)

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Contractual Obligations

Our contractual obligations as of December 31, 2025, which require material cash requirements in the future, consist of purchase obligations and lease obligations.

Our contractual obligations as of March 31, 2026, which require material cash requirements in the future, consist of purchase obligations and lease obligations.

Purchase obligations are enforceable and legally binding obligations for purchases of goods and services which include inventory purchase commitments.

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Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2025 Form 10-K for further details.

As of December 31, 2025, there have been no material changes to our contractual obligations outside the ordinary course of business.

As of March 31, 2026, there have been no material changes to our contractual obligations outside the ordinary course of business other than the Purchase Agreement entered into to acquire OM for an upfront cash payment of £100 million at closing (subject to customary adjustments, including for closing net cash), and up to an additional £50 million upon the achievement of certain commercial milestones related to sales of the Aidaptus® next-generation auto-injector platform through the period ending June 30, 2029.

Critical Accounting Policies

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A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates are disclosed in the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Form 10-K.

There have been no changes to our critical accounting policies as of December 31, 2025.

There have been no changes to our critical accounting policies as of March 31, 2026.

Cautionary Statements Regarding Forward-Looking Statements

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• Any failure by BD to perform its obligations under the various separation agreements entered into in connection with the Separation and distribution, including the cannula supply agreement.

• Any events that adversely affect the sale or profitability of one of Embecta’s key products or the revenue delivered from sales to its key customers.

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

• Increases in operating costs, including costs incurred from the new tariffs instituted by the U.S.

• Any events that adversely affect the sale or profitability of Embecta’s products or the revenue delivered from sales to its customers, including if these customers reduce the amount of product that they purchase from Embecta, reduce the amount that they are willing to pay for such products, or increase charges to distribute such products.

• Increases in operating costs, including costs incurred from the tariffs instituted by the U.S.

government and certain foreign governments on raw materials and products, fluctuations in the cost and availability of oil-based resins, other raw materials, and energy as well as certain components, used in its products, the ability to maintain favorable supplier arrangements and relationships, and the potential adverse effects of any disruption in the availability of such items.

• The risk that as a result of the current global trade environment from the newly instituted tariffs, certain foreign governments, private purchasers and other customers in certain countries may consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products and local manufacturers and competitors may attempt to capitalize on these sentiments and participate in aggressive competitive pricing or other strategies to transition, or divert, current and potential customers away Embecta.

• The risk that as a result of the global trade environment from tariffs, certain foreign governments, private purchasers and other customers in certain countries may consider transitioning away from products originating from certain countries (including the U.S.) in favor of buying “local” products and local manufacturers and competitors may attempt to capitalize on these sentiments and participate in aggressive competitive pricing or other strategies to transition, or divert, current and potential customers away Embecta.

• Embecta’s ability to obtain clearance from the U.S.

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In particular, tariffs or other trade barriers imposed by the United States or other countries could adversely impact its supply chain costs or otherwise adversely impact its results of operations.

• Any future impact of pandemics or geopolitical instability on Embecta’s business, including disruptions in its operations and supply chains.

• Any future impact of pandemics or geopolitical instability, including conflicts in the Middle East, on Embecta’s business, including disruptions in its operations and supply chains.

• New or changing laws and regulations affecting Embecta’s domestic and foreign operations, or changes in enforcement practices, including laws relating to healthcare, environmental protection, trade, monetary and fiscal policies, taxation (including tax reforms that could adversely impact multinational corporations) and licensing and regulatory requirements for products.

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• Risks associated with indebtedness and our use of indebtedness available to us.

• The risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the Separation will exceed Embecta's estimates.

• The risk that ongoing dis-synergy costs, costs of restructuring and other costs incurred in connection with the Separation will exceed Embecta's estimates.

• The impact of the Separation on Embecta's businesses and the risk that the Separation, including brand transition timelines and efforts, may be more difficult, time-consuming or costly than expected, the impact on its resources, systems, including ERP, procedures and controls, diversion of management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties.

• Embecta’s ability to timely and successfully complete the brand transition, including any resulting regulatory delays of transferring or obtaining registrations and licenses in the “Embecta” name, interruptions in, or customer confusion from, the replacement and transfer of the rebranded product into the current commercialization, supply and distribution networks, or other issues arising out of system, supply chain logistics, administrative and adjudicative operations transitions in the end-to-end product flow and end-user access.

• The expectations related to the costs, profitability, timing and the estimated financial impact of, and charges associated with, the Patch Pump Program Restructuring Plan and the 2025 Restructuring Plan.

• The risk that we may not complete strategic collaborative partnerships and acquisition opportunities that enable us to accelerate our growth or strategic collaborative opportunities that give us access to innovative technologies, complementary product lines, and new markets.

• Potential actions resulting from our review of our cost structure and organizational footprint.

• Embecta's ability to continue to return capital to our stockholders through the payment of cash dividends and/or the repurchase of our common stock.

• The risk that we may not complete strategic collaborative partnerships and acquisition opportunities, including the acquisition of OM, in the expected time frames and in a way that enable us to accelerate our growth or strategic collaborative opportunities that give us access to innovative technologies, complementary product lines, and new markets.

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

There can be no assurance that the transactions or uncertainties described above will in fact be consummated or occur in the manner described or at all.

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The above list of factors is not exhaustive or necessarily in order of importance.

For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussions under “Risk Factors,” included within the 2025 Form 10-K.

Any forward-looking statement speaks only as of the date on which it is made, and Embecta expressly disclaims and assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis