Summary of EVO Q2 2026 Earnings Call

1Key Financial Results and Metrics

Group Revenues: Expected to be EUR 300.1 million for the first half of 2026, a decline of 19% year-over-year. Q2 revenues are projected at EUR 143.5 million, down 16%.

Adjusted Group EBITDA: Anticipated at EUR -42.7 million for the first half, with Q2 expected at EUR -20.8 million.

Liquidity: As of June 30, 2026, total liquidity stood at EUR 465.6 million, up from EUR 444.8 million at the end of Q1, primarily due to a $100 million acquisition of Tubulis and a EUR 116 million convertible bond placement.

2Strategic Updates and Business Highlights

Market Conditions: Continued softness in the early drug discovery market, impacting revenue expectations.

Partnerships: Delays in revenue recognition from existing strategic partnerships, with approximately 40% of revenue differences attributed to phasing and milestone-related revenues expected to be recognized in 2027.

Commercial Activity: Positive indicators with a 30% increase in inbound inquiries and a 45% rise in proposals, suggesting strengthening customer engagement.

Horizon Transformation: Ongoing strategic transformation expected to yield EUR 75 million in annual cost savings by the end of 2027, with some savings anticipated to materialize in 2026.

3Forward Guidance and Outlook

Revised Full-Year Guidance: Group revenues are now projected between EUR 570 million and EUR 610 million, with adjusted EBITDA expected to range from EUR -70 million to EUR -105 million.

Future Expectations: While the outlook has been downgraded, there is confidence in the underlying health of the partnership pipeline and commercial indicators, with expectations for improved performance in 2027.

4Bad News, Challenges, or Points of Concern

Revenue Declines: Significant year-over-year declines in both D&PD and JEB segments, with JEB revenues expected to decrease by 29% in the first half.

Delayed Partnerships: New strategic partnerships are taking longer to finalize, leading to lower anticipated contributions in 2026.

Sales Conversion Issues: Approximately 15% of the revenue difference is attributed to slower-than-expected revenue conversion, impacting overall financial performance.

Market Headwinds: Ongoing volatility in the drug discovery market and unfavorable foreign exchange movements contributing to revenue pressures.

5Notable Q&A Insights

Segment Growth: No fixed ratio between JEB and D&PD revenues is planned, but JEB is expected to grow faster in the long term.

Partnership Health: The partnership pipeline remains robust, with 10-20 active opportunities, although only a small number are expected to close this year.

BMS Collaboration: The collaboration with BMS is described as healthy, with expectations for growth to resume in 2027 after a transition year in 2026.

J.TRAIN Technology: Introduced to the market, but no immediate revenue impact is expected; similar timelines for strategic partnerships apply. This summary encapsulates the key points from the earnings call, highlighting both the challenges faced and the strategic initiatives underway at Evotec.