Prepared remarks
Greetings, and welcome to the Kamada Ltd. Second Quarter 2026 Earnings Conference Call. Please note this conference is being recorded. I would now like to turn the conference over to Brian Ritchie, Managing Director of LifeSci Advisors. Please go ahead, sir.
Thank you, operator. This is Brian Ritchie with LifeSci Advisors. Thank you all for participating in today's call. Joining me from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer. Earlier today, Kamada announced its financial results for the three and six months ended June 30, 2026. If you have not received this news release, please go to the Investors page of the company's website at www.kamada.com. Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's Forms 20-F and 6-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, Wednesday, August 12, 2026. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that said, it's my pleasure to turn the call over to Amir London, CEO. Amir?
Thank you, Brian, and thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. I'm pleased to report that we continue to execute on our strategic multi-year growth plan, delivering record high operational and financial performance during the first half of 2026, with strong double-digit growth in revenues and adjusted EBITDA for both the six-month and second quarter reporting periods. Before proceeding to the specifics, I'd like to point out that when examining and analyzing the company performance during recent months and without future binary events, it's clear that the company's growth strategy model based on our well-defined four growth pillars is working effectively. We are seeing growth and improvement across all financial metrics, including expanded sales and revenues, operational synergies and disciplined management of expenses, enhanced profitability and EBITDA, and a strengthened ability to generate cash from operations. It's important to note that the significant growth we are currently experiencing is driven solely by our existing commercial product portfolio — organic growth. And that once we execute the acquisitions and M&A transactions that are also part of our strategic plan, this growth will accelerate even further, resulting in enhanced financial metrics. With that said, let's move on now to our first six months performance. Total revenues were a record high of $100.2 million for the first half, an increase of approximately 13% year-over-year. Adjusted EBITDA was a record high of $25.7 million, up 14% year-over-year and representing a notable 26% margin of revenues. For the second quarter of the year, total revenues were $54.9 million, the strongest in our history, representing a 23% year-over-year increase. Adjusted EBITDA was $14.1 million, up 29% year-over-year and representing a 26% margin of revenues. Net income for the first half was $13.4 million and 18% up year-over-year, and second quarter net income was $9.3 million, up 26% year-over-year. Our revenues and adjusted EBITDA for the first six months of the year represent approximately 50% of our 2026 annual guidance. Based on our first half performance, we are reiterating our 2026 annual guidance of $200 million to $205 million in revenues and $50 million to $53 million of adjusted EBITDA, respectively, representing 12% and 23% growth when comparing 2026 guidance midpoints to 2025 results. As described on previous calls, we continue to be focused on our four growth drivers on a path for delivering continuous double-digit profitable annual growth. We are focused on continuing sales growth of our entire commercial portfolio, including our six FDA-approved specialty plasma-derived products. In our Distribution segment, growth is supported by the launch of additional biosimilar products in the Israeli market, as well as the expansion of the Distribution business to the MENA region, which is ongoing with new distribution agreements being signed. We continue to ramp up plasma collection at our Texas-based facilities in support of our new three-year $50 million supply agreement and expect to commence plasma sales by year-end. Lastly, securing new business development and M&A opportunities remains a core focus. And as already said, we are committed to expanding our current commercial portfolio and accelerating our current double-digit organic growth. The underlying demand for our products, including for KEDRAB in the U.S. market, as well as VARIZIG and HEPAGAM, continues to increase. Our lead product continues to be our anti-rabies immunoglobulin, KEDRAB, which is being distributed in the U.S. through our collaboration with Kedrion. End user utilization of the product in the U.S. is continuing to increase significantly, and our product supply to Kedrion is increasing year-over-year and beyond Kedrion's contractual minimum commitment. In addition to our significant market share in the U.S., we continue to grow sales of KAMRAB in leading international markets such as Canada, Latin America and Israel. GLASSIA represents our second leading franchise, with revenue contribution driven by our growing product sales in ex-U.S. markets such as Argentina, Russia, Israel, Switzerland, as well as additional markets, mainly in Latin America, and royalty income generated from sales of the product by Takeda in the U.S. and Canada. We continue to support the comprehensive post-marketing research program for CYTOGAM, which we launched last year, which we believe will help demonstrate the advantages of the product in the prevention and management of CMV disease. This program was developed in collaboration with leading key opinion leaders to explore advancement of novel CMV disease management. The benefits of this program were recently highlighted by the presentation of data by Dr. Daniel Calabrese, Assistant Professor of Medicine at the UCSF Lung Transplant Program at the 2026 International Society for Heart and Lung Transplant Annual Meeting. Findings presented by Dr. Calabrese based on analysis of CMV high-risk lung transplant recipients suggest CYTOGAM use is associated with improved clinical outcomes, supporting increased CYTOGAM utilization. In addition, patients continue to be enrolled in the investigator-initiated trial titled the SHIELD study, which is a prospective randomized controlled multicenter study in CMV high-risk kidney transplant recipients. The trial is investigating the benefit of CYTOGAM administered at the conclusion of antiviral prophylaxis to reduce the risk of clinically significant late CMV in kidney transplant recipients who are CMV seronegative and have a CMV seropositive donor. We believe that the data generated by this study will support increased product utilization for CYTOGAM in the large population of kidney transplant recipients. With respect to VARIZIG, our anti-Varicella Zoster Immune Globulin, and HEPAGAM, our hepatitis B Immune Globulin, we are experiencing strong market demand for these products resulting, among other things, from our product awareness activities in the U.S. market. As for our distribution operation, as part of activities to advance organic growth, we already have two biosimilar products launched in the Israeli market, and we are on track to launch two other products during this quarter. We have other biosimilar products in the pipeline to be launched in the coming years and additional in-licensing agreements are in process. We believe that this portfolio will become an increasingly important portion of our distribution business, with biosimilar annual sales of between $15 million to $20 million within the next few years. We are also continuing to advance expansion of our distribution activity to the MENA region. We have recently entered into several distribution agreements and initiated activities to register the underlying products with local authorities. We continue to engage in discussion with additional international companies, offering them full service from registration all the way to commercialization. In July, we were very pleased to announce our three-year $50 million sales agreement, first of its kind, to supply normal source plasma to a leading biopharmaceutical company focused on plasma-derived therapies. This agreement validates our plasma collection strategy and the investments we made in our U.S.-based state-of-the-art plasma collection centers, as well as our vertical integration strategy and multi-year revenue growth objectives. We expect that initial commercial sales under this agreement will be recorded in the fourth quarter of this year and have included these projected revenues in our current annual guidance. Moving to business development and M&A: we continue to evaluate opportunities to enrich our portfolio of marketed products and complement our existing commercial operation. This remains a core focus, and we are committed to expanding our current commercial portfolio, accelerating our long-term profitable growth. With that, I'll turn the call over to Chaime for a detailed discussion of our financial results. Chaime, please go ahead.
Thank you, Amir. As Amir stated at the top of the call, we are recording record high financial results for the first six months and second quarter of 2026. Total revenues for the first six months of 2026 were $100.2 million, a 13% increase from the $88.8 million generated in the first six months of 2025. The increase in revenues is primarily attributable to increased sales of KEDRAB in the U.S. market, as well as VARIZIG and HEPAGAM. Total revenues for the first six months of 2026 are at approximately 50% of the midpoint of our 2026 annual guidance. As an anecdote, approximately five years ago, we reported $103 million in total revenues for the full year ended December 31, 2021. And now we are reporting a similar revenue figure for the first six months. This is a strong indication of the company's significant growth track. Total revenues for the second quarter of 2026 were $54.9 million, up 23% compared to the second quarter of 2025. Second quarter revenues represent the highest revenue for a given quarter in Kamada's history. Net income for the first six months of 2026 was $13.4 million, or $0.23 per diluted share, up 18% compared to $11.3 million, or $0.19 per diluted share in the first six months of 2025. For the second quarter of 2026, net income was $9.3 million, up 26% compared to the second quarter of 2025. Adjusted EBITDA was $25.7 million in the first six months of 2026, a 14% increase as compared to the $22.5 million in the first six months of 2025. Adjusted EBITDA for the first six months of 2026 represents a 26% margin of revenues and is at 50% of the midpoint of our 2026 annual guidance. Cash provided by operating activities during the first six months of 2026 was approximately $17.8 million compared to $7.5 million during the first six months of 2025. As of June 30, 2026, we had cash and cash equivalents and short-term investments totaling $70.1 million compared to $73.1 million at the end of March. The company's ability to maintain its cash position while making a $14.4 million dividend payment during the second quarter is indicative of its continued ability to convert operating profits into cash flow. With that, I will transfer the call back to Amir.
Thank you, Chaime. Before we open the call to questions, I want to take a moment to acknowledge the other news we issued earlier this morning. As we announced, Chaime will be leaving Kamada at the end of the year to pursue other opportunities. On behalf of everyone at Kamada as well as our Board of Directors, I'd like to thank Chaime for his leadership and significant contribution to Kamada during his nine years of service. Chaime has been instrumental in our continued growth while maintaining a strong operating and financial position that underlies the growth track we reported on today. We've initiated a search for a new CFO, and Chaime is committed to providing transitional support. Please join me in wishing him all the best in his future endeavors. Operator, that concludes our prepared remarks. We are ready to open the call to questions.
Questions and answers
The first question comes from Annabel Samimy with Stifel.
Congratulations on a good quarter. So, I'm going to have to ask the obvious. Given the solid quarter and the balanced growth across all your franchises, are there any specific reasons why you don't feel comfortable raising guidance at this time? And just as well with the gross profit, your EBITDA margins were great and they're expanding. I was just curious about the gross profit as you're becoming more vertically integrated — I was curious why it was going down instead of up. Is there anything unusual in the quarter? That's the first question, and I'll follow up with another question.
Yes. Thanks, Annabel. So, first half performance is approximately 50% of an annual midpoint guidance. In our guidance, we have already forecasted significant growth this year — 12% in revenue and 23% in EBITDA compared to last year — and we are executing to the plan. So that's basically the rationale based on our performance and annual guidance. We expect another strong year next year of double-digit growth. As we said, we believe that our growth model works. We guided between $200 million to $205 million, and the first half is approximately 50% of that. We felt comfortable with the expectations for the second part of the year, and we will be guiding 2027 in due time, which will be another strong year of significant growth for the company. As for the gross margin decline, gross margin can shift between quarters based on product mix and market mix. It's important to mention that we have maintained our EBITDA rate of 26% of revenue, which we believe is a significant achievement. And we were able to significantly grow our net income by over 18% year-over-year. With those financial metrics, we believe that we are on a very strong track moving forward, generating significant profitability and significant cash from operations, and being able to convert that profitability into real cash.
The next question comes from Jim Sidoti with Sidoti & Company.
Can you just give a little color — why was it important for you to get that rabies antibody neutralizing test approved and be able to do that yourself?
The lab approval was important for us in order to be even further vertically integrated. Until now, we were sending samples of the anti-rabies product to an external lab. Having the lab in-house allows us quicker response and the ability to get the product in process and final results, which allows us to release product faster to the market. With a significantly growing demand for KEDRAB, it's an important factor in our ability to continuously support growing market demand. Regarding your question about selling and marketing expense being particularly low in the quarter, we have been very effective in the way we are utilizing our resources. We are pleased to present our investors year-after-year profitable growth. So it's not just that we are growing our top line, but we are also growing revenues, EBITDA and net profit. That's all about synergies, economies of scale and responsible management of our resources. On the plasma collection centers: since we launched the Houston and San Antonio centers, we estimated that each of those two centers will contribute between $8 million to $10 million in revenue per year. If you add the two centers together, you get between $16 million to $20 million per year. If you take the $50 million contract divided by three years, it's approximately $17 million per year, which aligns with the capacity of those centers and this contract. This capacity has been essentially sold based on the contract we signed. We are growing our specialty plasma collection in those centers, and that specialty plasma also goes into our own production. So, we're not just selling plasma as a way to grow revenue and profitability; we're also using specialty plasma for our own products in a way that, over time, will allow us to keep growing and improving our gross margins and overall profitability. The third center is a specialty center that collects only specialty plasma, which is used by our operation — this was the original center we acquired in Beaumont, and it's specialty-focused.
I would like to turn the call to Brian Ritchie for web questions at this time.
Just a couple, Amir, and they're related. So, I'll ask them together. First, can you talk about whether or not the organic growth is sustainable? And then maybe just discuss the consistency that we've seen in the business over the last several years and how sustainable that is long term?
Yes. Great question. Our organic growth is highly sustainable. We've been able to grow our business year-over-year at double-digit rates, and we are projecting continued growth moving forward. We haven't completed our 2027 budget plan yet, but I can assure you that we will continue growing organically. This is based on a strong business model and a strategic model that is working very well for us: six FDA-approved products in over 30 different countries, an in-licensing and Distribution segment which is growing including expansion to the MENA region, the newly signed plasma sales deal we discussed, and ongoing M&A and business development activities that we will execute over time. When examining and analyzing the company's recent performance and excluding future binary events, Kamada is growing year after year and quarter after quarter. It's clear the company's growth strategy model is working effectively. We are seeing growth and improvement across all financial metrics — expanded sales, expanded revenues, operational synergies, disciplined management of expenses, enhanced profitability and EBITDA, and a very strong ability to generate cash from operations. We have the formula to continue growing profitably and bring value to our shareholders, especially when looking at our current share price and valuation.
Thanks, Amir. Maybe we'll just turn it back to you for the closing comments, please.
Okay. Thank you very much. As communicated at the beginning of the call and as I answered Brian, we continue to execute on our strategic multi-year growth plan, delivering record high operational and financial performance during the first half of 2026. We continue to reach new heights and deliver on our commitment to deliver double-digit profitable growth. We are investing in our four-pillar growth strategy, making continued progress in organic growth of our existing commercial portfolio, expanding our distribution and in-licensing business, growing our plasma collection operation and advancing business development and M&A transactions to support and expedite our growth. We look forward to continuing to support clinicians and patients with important life-saving products that we develop, manufacture and commercialize. We thank you all for your support. We remain committed to creating long-term shareholder value. We hope you all stay healthy and safe. Thank you for joining our call today.
Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.