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West reported Q2 revenue of $872.3 million, above the $836.8 million consensus and up 13.8% from $766.5 million a year earlier. Adjusted earnings per share of $2.37 also exceeded the $2.08 consensus; reported diluted earnings per share rose to $2.15 from $1.82.
CFO Bob McMahon said organic growth in Proprietary Products was driven by high-value components, including components for GLP-1 medicines, customer upgrades and biologics. West Vantage grew more slowly, with the cyber incident shifting some revenue into the second half of the year, he said.
West’s gross margin rose to 37.7% from 35.7%; McMahon attributed the increase primarily to sales mix and pricing. The company’s operating margin was 20.5%, compared with 20.1% a year earlier. Free cash flow fell to $80.8 million from $101.9 million; McMahon said operating cash flow was lower partly because the timing of sales during the cyber recovery increased accounts receivable.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $872.3 million | $766.5 million | 13.8% |
| Diluted EPS | $2.15 | $1.82 | 18.1% |
| Gross margin | 37.7% | 35.7% | 2.0 percentage points |
| Operating margin | 20.5% | 20.1% | 0.5 percentage points |
| Free cash flow | $80.8 million | $101.9 million | −20.7% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.37 | $2.08 | Beat by 13.9% |
| Revenue | $872.3 million | $836.8 million | Beat by 4.24% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On the Q2 call, CEO Eric Green said demand for high-value components came from biologics and biosimilars, customer upgrades and GLP-1 elastomers. He said non-GLP-1 components grew in the high teens organically and were the main contributors to outperformance. CFO Bob McMahon said pricing contributed four percentage points of the quarter’s growth.
Asked about the non-GLP-1 business, Green pointed to new biologic launches, wider use of existing medicines and biosimilars. He also discussed customers upgrading components under contamination-control strategies, saying West had “just shy of 800 total projects in hand”. McMahon said some existing high-value products were also receiving additional processing steps at customers’ request.
McMahon attributed the increase in company gross margin to sales mix, including a greater share of high-value components, and pricing. He said West Vantage’s margin declined primarily because of the cyber incident. On the call, he said higher oil and commodity prices were creating inflationary pressure, and West was working to offset those costs.
An analyst asked about capacity at West’s facilities. Green said productivity and throughput had improved at Eschweiler, helping the company recover from the cyber incident. He said Grand Rapids was close to its expected throughput level, while Dublin was still ramping up and had capacity available. McMahon said West’s full-year capital spending expectation remained $250 million to $275 million at the time of the call.
On GLP-1s, Green said West was seeing expansion in generics, particularly from Asia, and believed oral medicines were expanding the market rather than replacing injectables. Looking ahead from the Q2 call, McMahon expected West Vantage revenue to decline in Q3 after the exit of a continuous glucose monitoring contract, followed by improved performance in Q4 as drug handling ramped up.
Guidance
In its October update, West raised its full-year net sales forecast, which rounds to $3.4 billion, from the range issued in July. It increased expected organic growth to 11.3%–11.6% from 10.0%–11.0%, and adjusted diluted EPS to $9.38–$9.48 from $8.85–$9.05.
West also raised its reported diluted EPS outlook to $9.31–$9.41 and reduced its capital spending forecast to $215.0 million–$220.0 million from its previous range.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, GAAP | FY2026 | $9.31–$9.41 | $9.01–$9.26 | Raised |
| Capex | FY2026 | $215.0 million–$220.0 million | $250.0 million–$275.0 million | Cut |
| EPS, non-GAAP | FY2026 | $9.38–$9.48 | $8.85–$9.05 | Raised |
| Revenue, Smartdose 3 5ml | Q4 FY2026 | West expects no additional SmartDose 3.5mL product sales in Q4 FY2026. | — | — |
| Revenue growth, Organic Growth | FY2026 | 11.3%–11.6% | 10.0%–11.0% | Raised |
| Revenue | FY2026 | $3.4 billion–$3.4 billion | $3.3 billion–$3.4 billion | Raised |
| EPS, non-GAAP | Q3 FY2026 | $2.14–$2.24 | — | New |
| Revenue growth, Organic Growth | Q3 FY2026 | 7.00%–8.90% | — | New |
| Revenue growth, Reported Growth | Q3 FY2026 | 1.90%–3.80% | — | New |
| Revenue, Reported | Q3 FY2026 | $820.0 million–$835.0 million | — | New |
| Revenue growth, Reported Growth | FY2026 | 8.80%–10.0% | — | New |
| Revenue, Reported | FY2026 | $3.3 billion–$3.4 billion | — | New |
| Revenue growth, Annex 1 Mix Shift | FY2026 | 2.00% | — | New |
| Operating margin, Smartdos 3 5 Divestiture | FY2026 | 0.50% | — | New |
| EPS, Adjusted Diluted | Q3 FY2026 | $2.14–$2.24 | — | New |
| Revenue growth, Organic | Q3 FY2026 | 7.00%–8.90% | — | New |
| Revenue | Q3 FY2026 | $820.0 million–$835.0 million | — | New |
| Operating margin | FY2026 | 2.00% | — | New |
| EPS, Adjusted Diluted | FY2026 | $8.85–$9.05 | — | New |
| Revenue growth, Organic | FY2026 | 10.0%–11.0% | — | New |