West Pharmaceutical Services Q2 2026 Earnings Report

West Pharmaceutical Services EPS Results

• Actual EPS: $2.37
• Consensus EPS: $2.08
• Beat/Miss: Beat by +$0.29
• One Year Ago EPS: $1.84

West Pharmaceutical Services Revenue Results

• Actual Revenue: $872.30 million
• Expected Revenue: $839.98 million
• Beat/Miss: Beat by +$32.32 million
• YoY Revenue Growth: +13.80%

West Pharmaceutical Services Announcement Details

• Quarter: Q2 2026
• Date: 7/23/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, July 23, 2026
• Conference Call Time: 8:00AM ET

West Pharmaceutical Services (NYSE:WST) is a global developer and manufacturer of components, systems and services that enable the containment and delivery of injectable drugs. The company focuses on high-quality packaging and delivery solutions for the pharmaceutical and biotech industries, producing primary drug packaging components and specialized drug delivery devices used for vaccines, biologics and other injectable therapies. West is known for its elastomeric closures, seals and polymer components that maintain sterility and compatibility with sensitive drug formulations.

In addition to component manufacturing, West provides engineered delivery systems and support services across the product lifecycle. Its offerings include stoppers and seals, custom-molded polymer parts, prefillable syringe systems and a range of delivery device technologies for self-administration. The company also offers development assistance, analytical testing, regulatory support and contract manufacturing, helping customers take complex parenteral products from design through commercial production while meeting stringent quality and compliance requirements.

West serves a global customer base that includes large pharmaceutical companies, emerging biotech firms and contract development and manufacturing organizations. The company operates manufacturing, research and development, and quality centers across multiple regions to support international supply chains and regulatory markets in North America, Europe, Asia-Pacific and Latin America. With an emphasis on innovation and quality control, West positions itself as a partner for customers seeking reliable containment and delivery solutions for advanced injectable therapies.

West Pharmaceutical Services Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: West delivered Q2 2026 results above expectations, with revenue of $872 million up 13% organically and adjusted EPS of $2.37 up 29% year over year.
• Positive Sentiment: The company raised full-year guidance to 10%-11% organic revenue growth and adjusted EPS of $8.85-$9.05, citing strong momentum in the business.
• Positive Sentiment: High-value product components were the main growth engine, with organic growth of 18% led by biologics, Annex 1-related upgrades, and GLP-1 demand. Management said non-GLP-1 HVP components outperformed expectations and still have a multi-year runway.
• Neutral Sentiment: The cyber incident still affected West Vantage, holding Q2 growth to 1% and shifting some revenue into the second half. Management said the impact should be made up later this year, with Q3 expected to be the trough for the segment.
• Positive Sentiment: Gross margin and operating margin both improved meaningfully in the quarter, helped by stronger sales mix, pricing, and leverage from higher revenue. West also continued share repurchases, buying back $157 million of stock in Q2.

Presentation

[Operator]

Good day, welcome to the West Pharmaceutical Services Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during that session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded.

[Operator]

I would now like to hand the conference over to your speaker, Mr. John Sweeney, Vice President of Investor Relations. Please go ahead, sir.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

Good morning, welcome to West's second quarter 2026 earnings conference call, which is being webcast live today. With me on the call are Eric Green, our CEO, Chair of the Board, and Bob McMahon, CFO. Earlier today, we issued our second quarter financial results. A copy of the press release, along with today's slide presentation containing supplemental information for your reference, has been posted in the Investors section of the company's website at investor.westpharma.com. Later today, a replay of the webcast will also be available in the Investors section of our website. Before we begin, we'd like to remind you that statements made by management during this call and in the accompanying presentation contain forward-looking statements within the meaning of U.S. federal securities law. Please refer to the accompanying Safe Harbor statement currently being displayed on the screen and in today's press release.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

In addition to other disclosures made by the company, such as our 10-K and 10-Q regarding the risks to which the company is subject. During the call, management will also report on certain non-GAAP financial measures, including organic net sales, adjusted operating profit, adjusted operating profit margin, free cash flow, and adjusted diluted earnings per share. The accompanying disclosure statement, as well as reconciliations of these non-GAAP financial measures to the most comparable financial results prepared in conformity with U.S. GAAP, are provided in this morning's press release and today's presentation materials.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

I'll now turn the call over to our CEO, Eric Green. Eric?

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Thank you, John, good morning, everyone. Thanks for joining us today. I am pleased to report strong second-quarter results, which exceeded our expectations on the top and bottom line. Revenues of $872 million were up 13% organically, and adjusted EPS of $2.37 was up 29% as compared to prior year. Our performance was driven by the execution of our strategy and continued operational excellence initiatives. This is a testament to the exceptional efforts of our colleagues, whose collective actions following the cyber incident drove the recovery and these strong financial results. Given the robust outcome in the second quarter and the ongoing momentum in the business, we are raising our guidance for full year 2026. We now anticipate organic revenue growth to be 10%-11% for the full year and adjusted EPS to be in the range of $8.85-$9.05.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Bob will go into more detail shortly. Shifting to our results in the quarter. Our Proprietary Products segment delivered 16% organic growth, led by the biologics market group, which was up 29% organic. The largest contributor continues to be our HVP components business, which increased by 18% on an organic basis. HVP components now account for 49% of total company revenues, up from 46% in the prior year quarter. This was driven by our three growth drivers, which include biologics and biosimilars, HVP upgrades, including Annex 1, and continued strength in GLP-1 elastomers. We continue to believe in the near and long-term growth prospects of HVP components. Non-GLP-1 HVP components were up high teens on an organic basis, exceeding our expectations and were the largest contributors to our outperformance in the quarter. One of the fastest-growing areas of injectable medicines is biologics.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Approximately 75% of new drug approvals in 2025 are large drug molecules, up significantly from prior years. We continue to have strong win rates of over 90% for these new molecules. This is important for West, as these customers tend to use the highest quality components. biologics are generally more complex molecules, often requiring a barrier film, which delivers the requirements needed by our customers bringing new drugs to market. We benefited from strong growth in FluroTec and NovaPure, as these products are well-suited for the most advanced containment options, ensuring safe and effective delivery for biotech customers. The biosimilars market has seen a lot of interest and potential future growth driven by easing regulations and a significant number of biologic drugs going off patent over the next decade. The continued increase of BLAs expands the potential market.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

When a biosimilar is introduced, it can result in expansion of therapy use. This generally allows us to maintain or even increase overall volume demand after these drugs are commercialized. Our second growth driver is the mix shift of HVP upgrades, including Annex 1, and our customers' desire to upgrade to more advanced primary containment solutions. This positive mix shift drives both improving revenue and margin performance. We are now seeing an increasing number of customers upgrading HVP components, often adding additional finishing processes such as Envision inspection. We believe we're still in the early stages of this multi-year opportunity. We saw continued growth in Annex 1 related projects in the quarter, and we expect this mix shift to deliver on our target of 200 basis points of revenue growth in 2026. Our third growth driver is GLP-1s.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

HVP GLP-1 components revenues increased in the high teens, slightly better than expected. We believe that the global adoption of GLP-1 therapies is still in its early stages. Market access continues to expand with enablers such as Medicare expansion in the United States. When looking at clinical data, injectables continue to show meaningful efficacy advantages and a substantial reduction in adverse events when compared to oral alternatives. As a result, we anticipate continued growth in both oral and injectable GLP-1 formats as we move forward. Looking ahead, West continues to benefit from generic GLP-1 launches as customers often use the same high-value components, specifically stoppers, plungers, and line seals for primary containment as the most efficient path to commercialization. This is important as we participate in the generic GLP-1 rollout in several countries around the world.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Additionally, we're encouraged by the clinical pipeline of next generation of GLP-1 molecules in development for obesity, diabetes, and metabolic conditions. These novel therapeutics offer enhanced efficacy and improved tolerability and may require more complex primary containment solutions where West's technical expertise excels. We also expect to participate in a range of new GLP-1 product launches targeting indications outside of diabetes and obesity. Shifting to Standard Products, which account for 19% of total company revenues and were up slightly compared to prior year. Standard Products are important as they represent a funnel of upgrade opportunities. Customers convert to HVP components for a variety of reasons. While this conversion provides significant value for our customers, the positive mix shift generates incremental revenues and margins for West, all from the same volume of components.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Moving to HVP delivery devices, which were up 29% organically compared to prior year. We had stronger than anticipated SmartDose 3.5 revenues as the customer ordered additional product in advance of the transaction. On July 1st, we completed the sale and transfer of the manufacturing and supply rights for SmartDose 3.5mL on-body delivery system and associated facilities as planned. The non-SmartDose 3.5 portion of this business represents more than half of HVP delivery device revenues and was up double digits in the quarter, led by SelfDose and Crystal Zenith. Turning to West Vantage segment, which represents 17% of Q2 revenues. West Vantage was up 1% organically in the second quarter, slightly below our expectations due to the impact of the cyber incident.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Finally, I'm very pleased that we recently announced the renewal of our existing agreements with our strategic partner, Daikyo. This allows us to continue our important partnership that has been in place for more than 50 years.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

I will now turn the call over to Bob to discuss the financials in more detail and update our guidance. Bob?

[Bob McMahon, CFO at West Pharmaceutical Services]

Thanks, Eric, and good morning, everyone. This morning I'll provide some additional details on Q2 revenue and take you through the income statement and some other key financial metrics. I'll then cover our updated full year and third quarter guidance. As Eric mentioned, we had a strong second quarter as revenues of $872 million increased 13.8% on a reported basis and grew 12.7% organically, exceeding our expectations overall. Price contributed four percentage points of that growth in the quarter. This strong performance was driven by our proprietary segment, which increased 15.5% on an organic basis, while the West Vantage segment grew 0.8%. Within proprietary, our HVP components business, which now represents almost half our revenues, was the standout, delivering $424 million in revenue and growing 18.4% organically. This was driven by robust growth in GLP-1s, HVP upgrades including Annex 1, and overall continued improving performance in biologic revenues.

[Bob McMahon, CFO at West Pharmaceutical Services]

Our team performed exceptionally well given that we also had to navigate the cyber incident during the quarter. The HVP components business outside GLP-1s accelerated nicely, growing in high teens and driving most of the HVP components outperformance in the quarter. In addition, our GLP-1 HVP components business had another very good quarter with high teens organic growth, and we expect continued double-digit growth throughout the rest of the year. Rounding out the rest of the proprietary segment, HVP delivery devices revenues were $131 million in the quarter and up 29% year-on-year organically, with good performance across the portfolio. In Standard Products, revenues of $167 million were up 0.7% on an organic basis. Moving on to our West Vantage segment. West Vantage delivered $150 million in revenue, growing 0.8% on an organic basis.

[Bob McMahon, CFO at West Pharmaceutical Services]

Segment performance was impacted by the cyber incident, as it was not able to fully recover in the quarter, pushing some revenues into the second half of the year. We estimate this was a mid-single-digit impact to growth in the quarter and is expected to be made up in the remainder of the year. Before turning to the rest of the P&L, I wanted to highlight that we delivered double-digit growth across each of our three geographies, demonstrating the breadth of our business. Asia Pacific led the way with 27% organic growth as we look to capitalize on the significant market expansion and innovation in that region. Let's take a closer look at the rest of the P&L. Total company gross margin was 37.7% in the quarter, up 200 basis points year-over-year.

[Bob McMahon, CFO at West Pharmaceutical Services]

The year-on-year increase was primarily driven by better-than-expected sales and the associated positive mix shift to HVP components, as well as price contribution. Of note, we did see a dip in gross margin for our West Vantage business, primarily due to the cyber incident, but this was more than made up for by the strong proprietary performance. Adjusted operating margins of 22.6% were up 230 basis points compared to the prior year, driven by the gross margin expansion and leveraging our SG&A and R&D across a higher revenue base. We benefited from improved below-the-line performance in the quarter as our tax rate was a better-than-expected 17.9%, and we had 71.3 million diluted shares outstanding. Adding it all up, Q2 adjusted earnings per share were $2.37, up 29% versus last year, and $0.28 above the midpoint of guidance we gave on the last earnings call.

[Bob McMahon, CFO at West Pharmaceutical Services]

Before moving into our updated guidance, I did want to highlight a few additional financial metrics. In the quarter, we delivered operating cash flow of $124 million. While down year-on-year, the decrease is primarily due to higher accounts receivable due to the timing of our sales as we recovered from the cyber incident in the latter part of the quarter. We expect this to normalize in the remainder of the year. Capital Expenditures were $43 million, down from $75 million in the prior year as we continue to improve capital spending efficiency, focusing on growth and increased financial returns. Our expectations of $250 million-$275 million in the Capital Expenditures remains unchanged for the year. During the quarter, we continued to execute on our $1 billion share repurchase program.

[Bob McMahon, CFO at West Pharmaceutical Services]

In Q2, we repurchased just over 0.5 million shares for $157 million and paid out $16 million in dividends. In the first half of the year, we repurchased 1.8 million shares for $454 million and paid out $32 million in dividends. Our cash flow and strong balance sheet continue to position us well as we deploy our capital for growth and deliver value to shareholders. In summary, we had a strong second quarter that exceeded our expectations and are pleased that our solid business momentum continues. Now let me turn to our updated guidance. While we remain prudent with our forecasting, given that we are only halfway through the year, we are increasing our full-year revenue and EPS guidance based on our good Q2 results and underlying momentum in the market.

[Bob McMahon, CFO at West Pharmaceutical Services]

For the year, we now anticipate revenue to be in the range of $3.345 billion-$3.38 billion, growing 10%-11% organically, which is up from 7%-9% previously. Reported growth is now 8.8%-10%. This is up $40 million at the midpoint, even after absorbing incremental FX headwind as the dollar has strengthened since our last quarterly earnings call. Our updated guidance now assumes a 1 percentage point tailwind from currency, down from our prior guidance assumption of roughly a 2 percentage point tailwind. Of note, we closed the SmartDose 3.5mL transaction as expected on July 1st. SmartDose 3.5 generated $55 million in revenue in the second half of last year, and we have excluded those revenues when calculating organic growth for the year.

[Bob McMahon, CFO at West Pharmaceutical Services]

Our increased guidance is driven by higher growth expectations for the non-GLP-1 portion of our HVP components, as well as an increase in HVP delivery devices. We now anticipate our total HVP components business to grow high teens organically for the year. Both GLP-1 and non-GLP-1 HVP components are now expected to grow high teens for the year. We also expect better performance in our HVP delivery devices, while our expectations for Standard Products and West Vantage are relatively consistent with our previous guidance. From a margin perspective, while we are experiencing some inflationary pressure from higher oil and commodity prices, we are working hard to offset those costs through various means and do not see a change from our previous guidance. The positive revenue mix is helping us to further expand our margins, and our guidance now incorporates over 200 basis points of operating margin expansion as compared to 2025.

[Bob McMahon, CFO at West Pharmaceutical Services]

To help with your models, we are projecting $8 million of net interest income, a tax rate for the full year slightly lower than 19%, and roughly 71.5 million diluted shares outstanding for the full year. This results in adjusted earnings per share to be between $8.85-$9.05 for the year, up 21%-24% year-over-year. Switching gear to the third quarter. We expect revenue to be in the range of $820 million-$835 million. This is a reported increase of 1.9%-3.8%, and an organic increase of 7%-8.9%. The third quarter guidance anticipates a 110 basis point headwind from currency, and our reported growth is impacted by the SmartDose divestiture. Of the $55 million SmartDose sales in the second half of last year, we generated $30 million in Q3 and have adjusted our third quarter organic sales guidance for those revenues.

[Bob McMahon, CFO at West Pharmaceutical Services]

By segment, we expect proprietary to grow low double digits in the third quarter, while West Vantage is expected to decline as Q3 represents the first quarter of the CGM contract exiting. We expect Q3 to be the trough for West Vantage, and we expect improved performance in Q4 as we continue to ramp up our drug handling business. We expect third quarter adjusted diluted earnings per share in the range of $2.14 to $2.24, up 9%-14% year-on-year. In summary, we are very pleased with how our business is performing, driven by our key growth drivers, and are optimistic about our future.

[Bob McMahon, CFO at West Pharmaceutical Services]

Now I'd like to turn the call back over to Eric for some closing comments. Eric?

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Thank you, Bob. To summarize the quarter, the strength of our financial results continues to reaffirm that our growth strategy is working. We have a durable business with a strong competitive moat, which delivers unique value to our customers. We are well-positioned to capitalize on long-term macro trends, and we remain focused on our three key growth drivers of biologics, GLP-1s, and Annex 1 and other HVP conversions while leveraging our global scale. As I pass the torch of leadership and welcome Michel Lagarde on August 31st, I want to express what an honor and privilege has been to lead this exceptional organization. I am incredibly proud of what we have built together and remain inspired by the dedication and unwavering commitment of our team members across the globe.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Finally, I want to extend my gratitude to the Board of Directors for their partnership. In closing, I want to sincerely thank the OneWestTeam, our customers, and our shareholders. I look forward to watching West's continued progress in the years ahead.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Operator, we are ready to take questions. Thank you.

[Operator]

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. Due to time restraints, we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Michael Ryskin with Bank of America. Your line is open.

[Michael Ryskin, Managing Director at Bank of America]

Great. Thanks for taking the question, congrats on a really strong print. Maybe let's drill in a little bit into the non-GLP-1 HVP components. As you called out, that was a really pleasant surprise in the quarter. Continues to do really well, continues to exceed expectations. Any additional color you could provide on sort of what's driving that? You talked about win rates, strong growth in specific products, just want to get a better sense of how sustainable you think that is, sort of if we can really get into the underlying drivers of that strength.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Michael, good morning, thank you for the question. You're absolutely correct. We're really pleased with the performance of the non-GLP-1 HVP components part of our business. It really comes down to really three areas. The first one is specifically in our biologics and biosimilar space. As you've indicated, we continue to see greater than 90% participation rate of all new molecules. You know, that's where we win in that space is in the pipeline. We continue to see a very strong pipeline that gives us the confidence as we think about the growth going forward. If you look at the growth that we've commented on in biologics, it's really a couple areas. One is obviously new launches. Second area are uptake of existing molecules in-market that are expanding, whether it's geographically or patient population. Else we're seeing expansion in biosimilars. Those are the key drivers.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

The second exciting area also is really around that Annex 1 and other HVP-related upgrades. What we're seeing there, and as you know, that's around the sterility and contamination control strategy. The catalyst was a couple years ago in Europe with the new Annex 1 regulations. The exciting part is that we have a significant number of units that we sell existing customers with their commercialized drugs in market that require upgrades to our HVP portfolio. Just to give you context there, we have just shy of 800 total projects in hand, that's up 50% from the same time period last year. What you've seen is the result of higher ASP and higher mix shift from the margin perspective with no incremental volume.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Because they're staying with the incumbent formulation that's on the drug molecule, we are able to add pharma washing and Envision to enable our customers to quickly transition to meet the requirements of their contamination control strategy. One last point around that, we're seeing interest now outside of just out of Europe, in the U.S. and other geographies where we're working on projects with the similar growth driver opportunities. I would say those are the two largest. The third one is really around operational excellence, that really came true when you saw our response and recovery of the cyber incident that happened early May. That's how I would summarize it, Michael, I think these are long-term macro trends in all these categories that we're very well-positioned geographically, technology, portfolio, and just our incumbent position with our current customers.

[Bob McMahon, CFO at West Pharmaceutical Services]

Hey, Mike, this is Bob. Let me just add a little additional color to what Eric was saying to give you a sense for how the runway is, particularly on the Annex 1. As we talked about, he mentioned the number of programs continues to increase on a quarterly basis and is significantly above where we were last year, both in terms of ongoing projects as well as projects that are now currently being in the commercial numbers. The other thing that I would say is, if we look at the opportunity, we've talked about 6 billion units. We're still in the early innings of conversion there for the E.U.. As Eric said, we're actually starting to see what I would call spillover effect or opportunities within the U.S. to actually potentially expand that pool beyond that 6 billion.

[Bob McMahon, CFO at West Pharmaceutical Services]

We think that this is a multi-year opportunity, as he said in the prepared remarks, given that we're the incumbent, we think we're differentiated to be able to win, in particular, in this way relative to our competition going forward.

[Michael Ryskin, Managing Director at Bank of America]

Okay. That's super helpful. If I can squeeze in a quick follow-up, just given everything you just said about how sustainable the strength is and how durable you feel this is, just talking about the second half guide, after you beat 1Q, you raised the guide, you still kept the rest of the year out very conservative. You just put up another really strong 2Q. You raised the guide again, still feels like this going to happen is a little bit conservative. You talked about some of the revenues moving around from the West Vantage cyberattack. We previously known about the, obviously, the 3.5mL SmartDose.

[Michael Ryskin, Managing Director at Bank of America]

Any other moving pieces in the second half we should be wary of, just sort of a gauge degree of conservatism or if there's anything else to think about when we look at what optically looks like a little bit of a step down in the second half? Thanks.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. I think we feel very good about the ongoing momentum. As I mentioned in our prepared remarks, we're taking one quarter at a time and a prudent approach. Don't read too much into it. We feel very good about the underlying momentum, particularly in the HVP components business that really drives not only the top line, but our profits. We feel like we're well-placed to continue to drive a very strong, not only second half of the year, but the full year.

[Michael Ryskin, Managing Director at Bank of America]

Awesome. Thank you.

[Bob McMahon, CFO at West Pharmaceutical Services]

Thank you.

[Operator]

One moment for our next question. That will come from the line of Paul Knight with KeyBanc. Your line is open.

[Paul Knight, Managing Director at KeyBanc]

Hi, Eric. I met you at Sigma-Aldrich, I believe, and you were a winner there and a big winner at West, congratulations on all you've done.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Hey, thank you, Paul.

[Paul Knight, Managing Director at KeyBanc]

The question I have is around facilities, specifically Eschweiler, Grand Rapids, and Dublin. Dublin, the biggest, of course. Where are you at with capacity utilization at Dublin? Any color around where you are with, I think, some expansions of Grand Rapids and Eschweiler as well.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Yeah. No, thanks, Paul. These are important sites for us for different reasons. I'll start with Eschweiler. Eschweiler is our largest HVP components plant across the globe, and we have been operating at a high level of capacity utilization. However, in later part of 2025, we mentioned that we put a very specific initiative in place on operational excellence, and I'm pleased to report that in the first half of this year, we've seen a significant improvement in productivity and throughput. I'll just characterize as double-digit type category, which is quite impressive for that size of site. Frankly, that was the key catalyst to allow us to recover from the cyber event that happened in early May. Without that improvement that was in place, we would have had some probably more challenges versus the success that we've been able to see.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

More to come in that area. The team's now been expanded to drive the same methodology and capabilities across all our HVP sites to leverage existing assets. Be assured that we will continue to fuel that with capital investments when necessary, within the 6%-8% of sales framework that we have articulated. In the West Vantage business, specifically Grand Rapids, that has done a great job of ramping up. We're close to the levels that we expect in 2026 of throughput. I would say, Paul, we're close to the level that we anticipate with the installed capacity we put into Grand Rapids.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Then Dublin, we're still in the ramping phase at this point in time. Bob commented that in the drug handling, the revenues that we anticipated for 2026 are still on track, but it's more back-ended, really around the, call it, the Q4 time period, and we'll be ramping nicely into 2027 with that business. There's more capacity available in Dublin, and we'll continue to leverage that over the next, call it, 6-12 months.

[Paul Knight, Managing Director at KeyBanc]

Thank you.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Thanks, Paul.

[Operator]

One moment for our next question. That will come from the line of Patrick Donnelly with Citibank. Your line is open.

[Patrick Donnelly, Managing Director at Citibank]

Hey, guys. Thank you for taking the questions. Bob, maybe one for you. You mentioned the profitability, I think in one of the answers to the earlier questions. Wanted to dive in a little bit there. Similar question in the back half, it seems like, I think your word is prudence, in terms of layering in some of that around the margin build in 2H. I think between the pricing side, the mix shift, obviously, which is quite attractive to you guys. Can you just talk about that bridge in the second half? Again, even that opportunity as we move forward into next year, it feels like a lot moving your way in terms of the mix shift in particular. I know there's a footprint opportunity as well, so it would be great to talk through the margins.

[Bob McMahon, CFO at West Pharmaceutical Services]

Thanks, Patrick. We feel good about the trajectory of where we've been here for the first six months and expect that to continue going into the second half of the year. As you mentioned, maybe I'll talk about it in a couple of different buckets. Certainly price, we have actually seen an acceleration of price Q1 to Q2. It was 4 points of the growth in Q2, and that's above our 2%-3% corridor. As we talked about, this is a multi-year kind of journey for us to be able to really to ensure that we're capturing some of the value that we're delivering and helping participate with our customers. We feel good about the ongoing momentum there in the second half of the year.

[Bob McMahon, CFO at West Pharmaceutical Services]

As you said, when we have HVP components really driving the outperformance, the incremental margins there are just quite nice. If you look at where we are in Q2, we had very nice incrementals. What I would say is as we think about Q3, we do have some of the step downs, but we're actually seeing, if you look at Q3 versus Q2, actually roughly flat in terms of margin expansion or margin performance. We're saying over 200 basis points for the full year and feel like there's some opportunities for upside beyond that. You referenced footprint and other activities that we have. We think we have a multi-year opportunity across not only gross margin, but really leveraging our spend and being more productive in operation or OpEx spend as well.

[Bob McMahon, CFO at West Pharmaceutical Services]

As you noticed, or as we commented, we're also focused on below-the-line performance as well. We've got a number of, I would say, arrows in the quiver to be able to continue to use going forward. We feel good about where we are in the second half of the year, and I would say there's probably opportunities for upside.

[Patrick Donnelly, Managing Director at Citibank]

That's helpful. Thank you. Maybe a quick one just on the GLP business, what you guys saw kind of sequentially. I know that's been a focus. It seems like it came in a little better than expected. Would love to talk through just the trends there and the expectations as we work our way through the year, what you're hearing from the larger customers. Thank you, guys.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Patrick, it's playing out as we anticipated earlier this year. We're on the GLP-1s with the largest players, and we continue to be able to support them with the multiple modalities of the different GLPs that are in the marketplace. We're also seeing an expansion with the generics, particularly coming out of Asia, and that's actually when Bob referenced the strong growth in the quarter of 27%. One of the key drivers of that growth out of China and India, a little bit of Korea, was really the biosimilars around GLP-1s. In the generic space, we believe that that is an additional growth opportunity, and they expand geographically and also patient population. We're very well positioned, Bill, to benefit from that also.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

The third is on the GLP-1s, the number of new indications that are being developed in late stage, and we're really proud about our position to be able to participate. When those are finally approved and in market, we'll be able to support our customers. We're pretty comfortable that how we articulated GLP-1s going forward, we're very well positioned. We do believe orals, we have been seeing this, orals are expanding the market versus cannibalizing the injectable space. We're feeling good about our position with GLP-1s for long term.

[Patrick Donnelly, Managing Director at Citibank]

Great. Thank you, guys.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Thank you.

[Operator]

Thank you. Our next question will come from the line of Matt Larew with William Blair. Your line is open.

[Matt Larew, Equity Research Analyst at William Blair]

Hi, good morning. Eric, congratulations on a great tenure. I wanted to ask about the delivery devices, kind of turning the page from SmartDose 3.5mL, got a bit of a benefit in the quarter there, but that remains an area of interest and excitement for you. You called out a couple pieces of portfolio, including SelfDose today. Just curious, as you're looking into the pipeline, there's been a lot of focus on the component side, on the GLP side, but what's most interesting to you on the delivery device side? Maybe not thinking about the next three months, but perhaps the next couple of years.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Yeah, I know, Matt. Thank you for that. You're right. When we look ex SmartDose 3.5 that we completed the transaction on July 1st, we're very pleased with the portfolio, realizing that we need to continue to develop new additional products to support what we call self-injection. One of the key growth drivers of that area is SelfDose, and that's on with multiple customers and multiple drug molecules, and we're seeing pretty healthy expansion in that particular area. The second area within that portfolio is our Crystal Zenith technology. That has been around for a while, but that is really heavily targeted towards the highest end of biologics. You think about cell and gene therapy in addition to that. That is a clear opportunity that we'll continue to leverage.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

The third area is our administration systems. This area, while the self-injection and Crystal Zenith is really a double-digit type growth portfolio, the administration system's mid-single to high single digit type growth. Again, that leverages our competency around injection molding, design, and scale. This area probably will evolve in the future, but we're excited about the position that we're operating from at this point in time, especially when you take the SmartDose 3.5 out, the margin profile is attractive for us going forward. I'm pleased on the work the team has done, and I'm excited about that operating it and where they're going to take that business.

[Matt Larew, Equity Research Analyst at William Blair]

Thank you.

[Operator]

Thank you. Our next question will come from the line of David Windley with Jefferies. Your line is open.

[David Windley, Managing Director at Jefferies]

Hi. Good morning. Thanks for taking my question. Eric, I'd add my compliments on your career. Enjoy your retirement. Thanks for the help. My question is around the High-Value Product components portfolio, kind of trying to assimilate the different call-outs. Your GLP-1, you had in prior calls, talked about NovaChoice as the component of choice there. You're calling out NovaPure and FluroTec, sorry, in the deck. Then mentions of Annex 1 upgrades that sound like kind of Envision or Westar RS, Westar RU type upgrades. It sounds like all the portfolio is being hit. I was hoping you could kind of give us a relative stack, rank order of which parts are the strongest drivers of your mix shift, given that they all seem to be contributing. Thank you.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

David, thank you for the comments. The strongest growth driver within our HVP components is biologics. That tends to use the highest end of our portfolio, and that would be the NovaPure, the FluroTec, where the ASPs and margins are obviously highest on that spectrum. As you think about the portfolio and how the new approvals coming through, that is only going to get, I believe, more pronounced because there's more units, more volumes, more molecules in the marketplace going forward. You're right. That's an area that we're focused on, and we'll continue to drive that forward. As new biosimilars come to market, we're finding that a lot of our customers are leveraging the incumbent's primary packaging configuration with the biosimilars, which has equivalent economics as you would expect out of the biologics.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

The second area you comment on, you're right around the Annex 1. What's unique about that business proposition is that the formulations are what we call core or Standard Products. As long as we can leverage the existing formulation that's been on that drug molecule, they don't have to open up and do stability tests on the Drug Master File. That's to our benefit when we can add the capabilities of pharmaceutical washing and Envision. That tends to be on the lower end of the spectrum, but it's still very attractive ASPs and it's margin accretive. More importantly, it's leveraging the existing assets that we have in place today. This is more the HVP finishing processing that we have in our five manufacturing plants around the world.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

More volume will be going through due to Annex 1 over time, but the economics and the growth, you're going to see really a high end of the biologics. Bob?

[Bob McMahon, CFO at West Pharmaceutical Services]

Hey, David, just to add on to what Eric is saying, if we think about kind of the long-term opportunity for Annex 1, we're actually seeing some of the lower-end HVP products also being upgraded. While the big piece is actually moving from standard to HVP or core to HVP, we're also seeing additional steps being asked for by our customers to take an existing HVP product and even adding more value to it. There's a kind of a multiple step process here that we're seeing across the globe. We think, again, the staying power of Annex 1 is there and here to stay for multiple years.

[David Windley, Managing Director at Jefferies]

That prompts a follow-up real quickly. I think on Annex 1, maybe the earliest quantification that you guys had given was around 150 basis points. That might have been last year. This year 200 basis points. You're talking about continuing growing projects. Sounds like it's expanding beyond Europe, potentially, stepping up from low value to high value within HVP. Is this an accelerating trajectory of Annex 1 over multiple years, or should we think about it as more steady at the 200 basis point level? Thanks.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. There's a possibility and an opportunity to accelerate. I think right now 200 basis points is well-placed and there's an opportunity potentially to be more. Stay tuned on that.

[David Windley, Managing Director at Jefferies]

Thank you. Great. Thanks.

[Operator]

One moment for our next question. That will come from the line of Kallum Titchmarsh with Morgan Stanley. Your line is open.

[Kallum Titchmarsh, VP and Equity Analyst at Morgan Stanley]

Hey, guys. Thanks for taking the question. Eric, wishing you all the best for the next adventure. Just a couple of quick ones from me. Firstly, just on APAC, again, pretty strong growth there. Maybe some specifics on the regions and the drug categories that have been driving that growth. You had a strong Q1 there too. Bob, maybe just on West Vantage, I know the drug handling mix is increasing there. Maybe just talk us through when we could expect that margin impact to start stepping up given the shift over from the more traditional med device work. Thanks a lot.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Yeah, let me start. Bob, if we take a look at the Asia Pacific, I think that's a great call-out, Kallum. When you think about the 27% growth in the quarter, what we're seeing is that the largest growth from a geographic point of view is China, followed by India, after that, South Korea. What we're finding is it's broad-based, but the largest growth engine right now as we speak is the GLP-1s, the generic versions or the biosimilars. We obviously have a very good participation. We saw that come very true when there was a number of new approvals coming out of India, our participation on those biosimilars, we're able to support our customers and those products going. We'll ramp up with them as we go forward.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

What's also exciting is that we're seeing more CDMO work being done, particularly out of South Korea, as an example, we're very well-positioned to support our customers, the multinationals, leveraging their partners in South Korea to be able to support them in their primary packaging configuration. More to come specifically in South Korea, but we're very well-positioned for future growth in Asia-Pac.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah, I would just say to add to that, if you think about the amount of innovation that's coming through there, it's amazing how fast it has changed, it's really on innovative drugs and biologics. Again, that's where our strength is. Think about that opportunity going forward. To your second point around drug handling, Kallum, is we feel very good about the momentum there. We talked about first commercial batches coming off earlier this year. We're still on track for the $20 million of revenue. Mostly, that was back half loaded. We're expecting some in Q3, but a real step up in Q4. You'll actually see, if you think about kind of what Q3 is probably the trough from a revenue perspective.

[Bob McMahon, CFO at West Pharmaceutical Services]

We do expect margins to improve quarter-on-quarter, Q2 to Q3 because of some of that we were just talking about, and will continue, and then into 2027 as well. That's the way to kind of think about that.

[Kallum Titchmarsh, VP and Equity Analyst at Morgan Stanley]

Thanks a lot.

[Operator]

One moment for our next question. That will come from the line of Daniel Markowitz with Evercore ISI. Your line is open.

[Daniel Markowitz, Director at Evercore ISI]

Hey, guys. Congrats on another good print. I wanted to ask on the GLP-1s, assumed in the guide, it seems to imply a steep drop-off in the second half versus the first half. I do think I know the answer here, but just to be super clear, does this reflect anything you're actually seeing or is it just prudence? Then you also mentioned OUS markets going generic. Is that a really significant impact this year, or would you characterize it as more of a 2027, 2028 driver? Thanks.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. To your first question, Daniel, is more prudence than anything else. We're not seeing anything in the marketplace, and as you think about kind of the news continues to be very constructive coming out of the GLP-1 market, not only with, as Eric mentioned in the prepared remarks, the expansion here in the U.S. in the second half of the year. There was just some positive news earlier this morning about some next generation products that are coming out. Our expectation is that we'll continue to expand the market and the adoption will continue.

[Bob McMahon, CFO at West Pharmaceutical Services]

On the second piece of your question around the growth opportunities outside the U.S. certainly is helping us this year, but that's really a forward-looking opportunity. We would expect 2027 and the future years to be even bigger components of our contributors of growth in GLP-1s outside the U.S., in Europe going forward.

[Daniel Markowitz, Director at Evercore ISI]

Great. Thank you. The second thing I wanted to touch on was the margins. Super impressive on the proprietary product side. We don't see it by sub-segment level, but I do believe High-Value Component's the main driver. If you do look at other pieces of the business, SmartDose, I believe, still is very dilutive to the margins. As we look into the back half, can you give some color on what the margins were in that business and help us understand the impact that divestiture should have? Thanks.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. We talked about this at the beginning. You're right. HVP components is our most accretive business from a margin perspective. SmartDose 3.5 has been dilutive in the first half of the year. We've talked about that going away in the second half of the year and contributing 50 basis points of incremental margin for the full year, so that's 100 basis points in the second half of the year. We're still on track for that. If you look at our margin progression, I would expect it to continue to improve going forward and then moving into 2027 and beyond.

[Daniel Markowitz, Director at Evercore ISI]

Great. Congrats.

[Operator]

Thank you. One moment for our next question. As a reminder, please limit yourself to one question. Our next question will come from the line of Luke Sergott with Barclays. Your line is open.

[Salem Salem, Analyst at Barclays]

This is Salem on for Luke. Thanks for taking our question. I just had one on the Medicare launch. I know it's pretty early in the process there. I don't know if you've had any conversations with your customers on how they think that will ramp and what the ordering patterns will be there and what's kind of contemplated in the guide from a GLP-1 perspective.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

I'll start on this. The regulations or the changes should expand the market for us and increase volume. That's a net benefit for West. Our customers are addressing the opportunity for them, but we'll be able to support them. That's all being factored into our ongoing forecasting efforts that we have with our customers, so we are able to provide products in a timely manner. We do believe this will expand volume for West.

[Bob McMahon, CFO at West Pharmaceutical Services]

It'll ramp over time, Salem.

[Salem Salem, Analyst at Barclays]

Got it. Thank you. Just quickly on delivery devices, you guys talked about the guide improving again. You started the year guiding mid-singles on that business. Even excluding the SmartDose ordering kind of ahead of what you thought, half that growth still seems to be coming from the core business. Should we kind of expect that kind of cadence for the rest of the year? Any direction on that would be great. Thank you.

[Bob McMahon, CFO at West Pharmaceutical Services]

You're spot on there. We've enjoyed some really nice growth in the rest of the portfolio there, which speaks to the underlying dynamics that Eric mentioned earlier in the call. Our expectation is that will continue into Q3 and Q4.

[Salem Salem, Analyst at Barclays]

Awesome. Thank you.

[Operator]

One moment for our next question. That will come from the line of Justin Bowers with Deutsche Bank. Your line is open.

[Justin Bowers, Analyst at Deutsche Bank]

Hi. Good morning, everyone. Eric, one heck of a run, so congratulations on the retirement. Just one high-level question and one around the GLPs. Really, really strong performance projected this year coming out of destocking and post-pandemic. In terms of the LRP at the 7%-9% organic growth, is that something on the go forward we should think of as a through cycle number, or is that an annual target? That's number one. Number two on the GLPs, what are you assuming for HVP penetration this year and growth in that segment or growth in products ex the GLP-1s? Thanks.

[Eric Green, CEO and Chair of the Board at West Pharmaceutical Services]

Yeah. Justin, I'm going to start because I want to thank you for the comment. It's been a pleasure to be able to be part of West for these years. Thank you for that. LRP, I'm going to let Bob answer that since I don't want to put him in an uncomfortable position.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. Justin, to that point, we certainly are benefiting from some very nice momentum here, and there's nothing to suggest that momentum won't change going forward. Obviously, we'll have an opportunity to work with Michel when he comes on board. If you look at the underlying market, the market is very constructive going forward. Given our position in that marketplace, we think we'll be able to continue to participate disproportionately relative to the market growth. Feel good about where we are going forward.

[Bob McMahon, CFO at West Pharmaceutical Services]

Then can you ask the second part of your question? I just want to make sure we answer it correctly.

[Justin Bowers, Analyst at Deutsche Bank]

Sure thing. I'm just thinking about [crosstalk] Proprietary Products specifically this year. How are you thinking about GLP penetration on the year and/or growth for that business? Proprietary Products organic growth ex GLP. What's embedded in the guide?

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. If we think about GLPs, we're saying high teens for that business for the full year. I would expect that to be consistent for the second half of the year. For Proprietary overall, it's low double digit. I would say most importantly, the non-GLP-1 HVPs at high teens as well. That kind of gives you the core growth drivers of that business. Obviously, Standard Products flattish consistent with what we talked about at the beginning of the year. It's actually performed slightly better than that. As we were asking about delivery devices, that business continues to perform very well.

[Justin Bowers, Analyst at Deutsche Bank]

Excellent. Thank you so much.

[Operator]

One moment for our next question. That will come from the line of Michael Polark with Wolfe Research. Your line is open.

[Michael Polark, Analyst at Wolfe Research]

Hi, good morning. Thank you for taking the question. Just want to fully understand the GLP-1 elastomer growth in the quarter. I heard HVP GLP-1 growth rate high teens quoted, but if I just use the percent of revenue disclosures, 10% this quarter, 8% in the year-ago quarter, and do those dollars. That growth is more like 40% year-on-year. I just want to make sure I bridge that. Why isn't it 40% and what am I missing in the math on the high teens? Thank you.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah, it is high teens. We can follow up with your modeling questions going forward. It was roughly 10% in Q1 as well. You may be referencing kind of the West Vantage piece of it as well.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

I think there's rounding in there too.

[Bob McMahon, CFO at West Pharmaceutical Services]

In this round. Yep.

[Michael Polark, Analyst at Wolfe Research]

Yes. Thank you.

[Bob McMahon, CFO at West Pharmaceutical Services]

The bottom line, what I would say, is we feel very good about the continued performance of our GLP-1 portfolio.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

Yes.

[Michael Polark, Analyst at Wolfe Research]

Okay. Thank you.

[Operator]

Thank you. One moment for our next question. That will come from the line of Mac Etoch with Stephens Inc. Your line is open.

[Mac Etoch, Analyst at Stephens Inc]

Hey, good morning, thank you for taking my question. Eric, I'll add my congrats on a wonderful tenure and a great way to round that out. My one question kind of centers around, Bob, your comments around pricing. Obviously, you're making an effort to better capture the value provided by the platform. I think that's shown up in the last couple of quarters, with price kind of ticking up on average. Just kind of generally speaking about the shift in energy prices and surcharges that you're seeing elsewhere, how are you thinking about price today versus maybe at the start of the year and how that's reflected within guidance? Thanks.

[Bob McMahon, CFO at West Pharmaceutical Services]

Yeah. Mac, I'll take that. Yeah, obviously, that's one of the areas that we've been evaluating as we've started to see some increased costs associated with not only oil, but just commodity prices in general, is having some of that be passed on to our customers. We've been able to do that in the past, to do that. I would expect in the second half of the year, that probably being a bigger piece of price going forward, just given kind of the dynamics in the marketplace.

[Operator]

Thank you. That is all the time we have today for Q&A. I would now like to turn the call back over to Mr. John Sweeney for any closing remarks.

[John Sweeney, VP of Investor Relations at West Pharmaceutical Services]

Thank you very much for joining us today. We look forward to meeting some of you at our conferences and other events as we move through the quarter. Thank you very much. Have a good day.

[Operator]

This concludes today's program. Thank you all for participating. You may now disconnect.

Participants

Executives

• John Sweeney, VP of Investor Relations
• Eric Green, CEO and Chair of the Board
• Bob McMahon, CFO

Analysts

• Michael Ryskin, Managing Director at Bank of America
• Paul Knight, Managing Director at KeyBanc
• Patrick Donnelly, Managing Director at Citibank
• Matt Larew, Equity Research Analyst at William Blair
• David Windley, Managing Director at Jefferies
• Kallum Titchmarsh, VP and Equity Analyst at Morgan Stanley
• Daniel Markowitz, Director at Evercore ISI
• Salem Salem, Analyst at Barclays
• Justin Bowers, Analyst at Deutsche Bank
• Michael Polark, Analyst at Wolfe Research
• Mac Etoch, Analyst at Stephens Inc