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Investing.com -- Evotec SE ADR (NASDAQ:EVO) shares fell 12.7% after the German drug discovery company cut its revenue forecast for fiscal year 2025, citing weaker-than-expected performance in its Shared R&D base business.
The company now expects revenues in the range of €760-800 million, down from its previous guidance of €840-880 million. The revised outlook represents a potential decline from 2024’s revenue of €797 million. Despite the revenue reduction, Evotec maintained its adjusted EBITDA guidance of €30-50 million and R&D expenditure forecast of €40-50 million.
Evotec reported that its Shared R&D base business generated revenues below expectations in the first half of 2025 and anticipates continued challenging market conditions in the second half of the year. The company’s long-term outlook for 2028 remains unchanged, with targeted group revenue CAGR of 8-12% from 2024 to 2028 and an expected adjusted EBITDA margin above 20% by 2028.
In April, Evotec announced a new strategy focused on sustainable and profitable growth, including a pivot to a less capital-intensive business model. The company now expects this strategy to yield results sooner than initially anticipated, driven by stronger-than-planned revenue contributions from high-margin technology license deals.
CEO Dr. Christian Wojczewski stated that the company’s Priority Reset transformation program is now expected to exceed the cost-saving targets announced during its first quarter results call in May. The changing revenue mix is anticipated to positively influence the margin profile of the Evotec Group despite the lower revenue guidance.
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