Evotec SE (EVO) Q1 2025 Earnings Call Highlights: Navigating Revenue Challenges and Embracing ...

In This Article:

  • Group Revenue: EUR200 million, a 4% decrease versus Q1 2024.

  • Shared R&D Revenue: EUR140.6 million, down from EUR155.2 million in Q1 2024.

  • Just Evotec Biologics Revenue: EUR59.4 million, showing strong growth.

  • Adjusted Group EBITDA: EUR3.1 million.

  • Operating Cash Flow: Improved versus prior year due to favorable changes in working capital.

  • CapEx Spending: EUR18 million in Q1 2025, a reduction from Q1 2024.

  • Liquidity: Decreased by EUR26 million to EUR371 million by end of March 2025.

  • Net Debt: Increased to EUR107 million, with a net debt leverage of 5.97 times adjusted.

  • Full Year 2025 Guidance: Group revenues of EUR840 million to EUR880 million, R&D expenditure of EUR40 million to EUR50 million, and adjusted EBITDA of EUR30 million to EUR50 million.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Evotec SE (NASDAQ:EVO) has made significant progress in its protein degradation collaboration with BMS, showcasing its strategy of technology leadership.

  • The company received a grant from the Korean government to develop novel antibody treatments for lung fibrosis, highlighting its capabilities in drug discovery.

  • Just Evotec Biologics delivered strong growth in Q1 2025, with revenues slightly ahead of expectations.

  • Evotec SE (NASDAQ:EVO) is leveraging cutting-edge technology and AI-driven innovation to accelerate drug discovery and improve success probabilities.

  • The company has implemented significant cost-saving measures, including site closures and headcount reductions, which are expected to positively impact future financials.

Negative Points

  • Evotec SE (NASDAQ:EVO) experienced a 4% decrease in group revenues in Q1 2025 compared to Q1 2024, primarily due to a decline in shared R&D revenue.

  • The market for shared R&D remains soft, resulting in revenue decline and performance slightly below expectations.

  • The company faces temporary lower BMS revenue, which is expected to continue in the midterm.

  • Evotec SE (NASDAQ:EVO) has a temporarily elevated net debt leverage, with a net debt of EUR107 million.

  • The company is operating in a cautious market environment with conservative spending from clients, impacting revenue growth.

Q & A Highlights

Q: Given the deviation in segment performance, with shared R&D underperforming and Just Evotec Biologics (JEB) overperforming, do you expect this trend to persist? Also, how might biotech and pharma layoffs impact your CRO activities? A: (Christian Wojczewski Wojczewski, CEO) The guidance remains unchanged as the overall revenue is balanced by the performance of both segments. The shared R&D market remains soft, but we are confident in our guidance. Layoffs in biotech and pharma could lead to more CRO activities as companies outsource work.