AI Takeaway
West Pharmaceutical Services (WST) delivered strong Q2 FY2026 results with revenue up 13.8% YoY to $872.3M and net income up 16.8% to $154.0M, driven by robust Proprietary Products demand (HVP components and delivery devices tied to GLP-1 and Biologics growth), though West Vantage segment profitability was pressured by a May 2026 cybersecurity incident.
Revenue
$872.3M
++13.80% YoY
EPS (Basic)
$2.17
++19.23% YoY
Gross Margin
37.7%
++2.01% YoY
Operating Income
$179.1M
++16.53% YoY
Filed · Source: SEC EDGAR 10-Q filing
West Pharmaceutical Services (WST) reported Q2 FY2026 revenue of $872.3M, up 13.8% year over year. The company posted net income of $154M, up 16.8% from a year earlier, with diluted EPS of $2.15. Gross margin was 37.7%.
Proprietary Products net sales increased 16.6% (15.5% organic) to $722.6M in Q2 FY2026, with HVP components sales up 18.4% (ex-FX) driven by continued strong customer demand for Biologics and GLP-1 products, and HVP delivery devices up 29.2% (ex-FX) driven by demand for self-injection devices, particularly SmartDose 3.5mL ahead of its July 2026 divestiture to AbbVie.
Source: 10-Q Item 2 MD&A
West Vantage net sales grew only 2.0% (0.8% organic) to $149.7M, with revenue growth negatively impacted by approximately $7 million from production downtime associated with the Company's May 2026 cyber incident; segment operating profit fell 27.5% YoY to $12.9M and gross margin contracted 3.3 percentage points to 14.2%.
Source: 10-Q Item 2 MD&A
Consolidated gross profit margin rose 2.0 percentage points to 37.7% in Q2 FY2026, with Proprietary Products gross margin up 2.5 points to 42.6% due to favorable sales mix of HVP components (including GLP-1 products) and price increases, partially offset by inflationary pressures and plant costs.
Source: 10-Q Item 2 MD&A
The Company recorded $6.4M in pre-tax charges in Q2 FY2026 related to M&A activities, including the agreement to sell its SmartDose 3.5mL On-Body Delivery System and associated facilities to AbbVie, alongside $1.5M in restructuring charges and a $3.5M cost-method investment impairment, all excluded from adjusted operating profit of $197.4M (22.6% adjusted margin).
Source: 10-Q Item 2 MD&A
The effective tax rate for Q2 FY2026 was 17.9%, down from 19.2% in the prior-year period, reflecting favorable changes in the Company's geographic mix of earnings, though the six-month effective tax rate rose to 21.3% due to a one-time $12.0M tax cost from an internal legal entity restructuring in Q1 FY2026.
Source: 10-Q Item 2 MD&A
In May 2026, the Company experienced a material cybersecurity attack in which data was exfiltrated and certain systems were encrypted, temporarily disrupting global operations and requiring the Company to proactively take systems offline worldwide for containment. Although the incident has been contained and operations have fully recovered, it contributed to nonrecurring professional fees and negatively impacted West Vantage revenue by approximately $7 million due to production downtime.
Source: 10-Q Item 1A
The filing notes that techniques used to gain unauthorized access to data and systems are constantly evolving, including through the use of artificial intelligence, and the Company may not discover all incidents or be able to respond promptly or sufficiently. Adverse impacts to IT systems or data availability, integrity, or confidentiality could require significant additional costs to modify systems or remediate attacks.
Source: 10-Q Item 1A
Although the Company carries cybersecurity insurance, there is no assurance that policy limits are sufficient to cover all potential losses, damages, or fines from future incidents, or that such insurance will remain available on economically reasonable terms in the future. This leaves residual financial exposure from future cyber incidents.
Source: 10-Q Item 1A
The Company's systems are subject to regulations preserving the privacy of data held on those systems, and failure to comply with regulations or prevent unauthorized access, release, or corruption of confidential or customer information could damage the Company's reputation and result in financial losses.
Source: 10-Q Item 1A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $872.3M | $766.5M | +13.80% |
Cost of Revenue | $543.1M | $492.6M | +10.25% |
Gross Profit | $329.2M | $273.9M | +20.19% |
Operating Income | $179.1M | $153.7M | +16.53% |
Net Income | $154M | $131.8M | +16.84% |
EPS (Basic) | $2.17 | $1.82 | +19.23% |
EPS (Diluted) | $2.15 | $1.82 | +18.13% |
R&D Expense | $19.7M | $19.1M | +3.14% |
SG&A Expense | $117.6M | $95.9M | +22.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $4.08B | $3.95B | +3.13% |
Current Assets | $1.81B | $1.68B | +7.53% |
Total Liabilities | $1.09B | $1.02B | +6.11% |
Current Liabilities | $640.5M | $604.6M | +5.94% |
Stockholders' Equity | $2.99B | $2.93B | +2.09% |
Cash & Equivalents | $435.8M | $509.7M | -14.50% |
Long-Term Debt | $202.9M | $202.6M | +0.15% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $213.9M | $306.5M | -30.21% |
Investing Cash FlowYTD | $-85.9M | $-146.5M | +41.37% |
Financing Cash FlowYTD | $-473.5M | $-161.9M | -192.46% |
Share BuybacksYTD | $454.3M | $134M | +239.03% |
D&A | $46.2M | $41.4M | +11.59% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 37.7% | 35.7% | +2.01% |
Operating Margin | 20.5% | 20.1% | +0.48% |
Net Margin | 17.7% | — | — |
ROE | 5.2% | — | — |
ROA | 3.8% | — | — |
Current Ratio | $2.822 | — | — |
Debt to Equity | $0.363 | — | — |
Expected release date, analyst estimates & what to watch
WST delivered a strong Q1 FY2026 with revenue surging 21.0% YoY to $844.9M and operating income jumping 65.5% to $177.1M, driven by significant margin expansion, though operating cash flow declined 30.5% amid aggressive share buybacks.
WST delivered solid FY2025 results with revenue growing 6.3% to $3.07B and gross margin expanding 140 bps to 35.9%, though net income was nearly flat at $493.7M (+0.2%) as SG&A costs surged 16.3%.
Other companies in Health Care Supplies
The filing does not disclose analyst consensus estimates, so a direct beat/miss comparison cannot be confirmed from this 10-Q. However, WST reported strong YoY growth with revenue up 13.8% to $872.3M and diluted EPS up 18.1% to $2.15, alongside adjusted (non-GAAP) diluted EPS of $2.37.
Key takeaways include 13.8% YoY revenue growth to $872.3M, driven by strong Proprietary Products demand for GLP-1 and Biologics-related HVP components (up 18.4% ex-FX) and delivery devices (up 29.2% ex-FX). Gross margin expanded 2.0 percentage points to 37.7%, while West Vantage segment profitability was pressured by a May 2026 cybersecurity incident that reduced revenue by roughly $7M.
The primary risk highlighted was a material cybersecurity attack in May 2026 in which data was exfiltrated and systems were encrypted, temporarily disrupting global operations, though the Company states the incident has been contained and operations have fully recovered. The filing also notes ongoing risk from evolving, increasingly sophisticated cyber threats including AI-enabled attacks and potential insufficiency of cybersecurity insurance coverage.
Consolidated net sales grew 13.8% YoY (12.7% organic) to $872.3M, led by the Proprietary Products segment which grew 16.6% (15.5% organic) to $722.6M on strong HVP components and delivery device demand tied to GLP-1 and Biologics products. West Vantage grew only 2.0% (0.8% organic) to $149.7M, partly held back by ~$7M of lost revenue from the May 2026 cyber incident.
WST shows solid financial health with a current ratio of 2.82 indicating strong liquidity, a conservative debt-to-equity ratio of 0.36, and $435.8M in cash and equivalents. Net income grew 16.8% YoY to $154.0M with a 17.7% net margin, though six-month cumulative operating cash flow declined 30.2% YoY to $213.9M and the Company returned significant capital via $454.3M in share buybacks year-to-date.