Evotec SE (EVO), a German drug discovery and development company, on Wednesday reported significantly higher adjusted Group EBITDA in the fourth quarter with increased revenues, mainly on contribution from the license payment under the Sandoz agreement. Further, the firm issued cautious outlook for fiscal 2026, and updated medium-term framework 2026-2030.
In the overnight trading in U.S., the shares were gaining around 6.6 percent, at $2.75, after closing Tuesday's regular trading 1.5% lower.
In the fourth quarter, adjusted Group EBITDA was 58.0 million euros, an increase of 103 percent from last year's 28.5 million euros.
The growth in results reflected a 65 million euros incremental contribution from the license payment recorded in the JEB segment under the Sandoz agreement closed in December 2025.
Group revenues grew 14 percent to 253.3 million euros from 221.2 million euros in the same period in 2024.
Drug Discovery and Preclinical Development or D&PD revenues declined 17 percent to 137.1 million euros from last year's 164.4 million euros.
Just - Evotec Biologics or JEB segment revenues surged to 116.2 million euros from 56.8 million euros in the prior-year period, mainly driven by the incremental contribution from the license payment under the Sandoz agreement.
Looking ahead for fiscal 2026, the company projects adjusted Group EBITDA of around 0-40 million euros on reported basis and 10 million euros to 50 million euros at constant exchange rates or CER.
Group revenues for the year are projected to be approximately 700 million euros to 780 million euros on a reported basis and 730 million euros or 810 million euros at CER.
In fiscal 2025, adjusted Group EBITDA was 41.1 million euros on a reported basis and 52.3 million euros at CER. Group revenues were 788.4 million euros, or 810.4 million euros at CER.
Evotec stated that 2026 represents a transition year as Horizon is implemented, with operational improvements expected to become increasingly visible in the second half of the year.
Further, Evotec updated its medium-term framework 2026-2030, considering the timing and impact of Horizon while maintaining the company's growth ambition. The framework reflects a phased transition to growth.
Adjusted EBITDA margin is expected to reach 20 percent by 2028 and exceed that level by 2030. Group revenues are expected to grow to more than 1 billion wueos, at 8-12 percent CAGR.
The company said the framework is supported by structural cost improvements, a shift toward higher-margin, technology-driven revenues and increased operating leverage.
Paul Hitchin, Chief Financial Officer of Evotec said, "Evotec's 2025 financials reflect the benefits of the cost discipline transformation we began two years ago, which yielded annualized structural savings of EUR60 million, significantly exceeding our initial target. With the implementation of Horizon now beginning, 2026 will be a transition year marked by further steps that will put the business on structurally sounder footing, with improved profitability and cash generation from 2027 onward."
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