Analysis AMRX
Amneal raised its adjusted earnings target. Why did its cash forecast fall?
The latest quarter generated cash after a first-half outflow. Inventory and other operating balances still explain a gap between earnings growth and cash generation.
Amneal expects stronger adjusted earnings this year, but less operating cash. The drugmaker lowered its cash forecast as working capital, including inventory for growing product lines, absorbs funds.
That leaves two different promises for 2026. The adjusted EBITDA range rose to $800 million–$815 million from $750 million–$780 million. Expected operating cash flow fell by $25 million at each end of the range.
| Measure | July | November |
|---|---|---|
| Adjusted EBITDA | $750–$780 | $800–$815 |
| Operating cash flow | $350–$400 | $325–$375 |
Adjusted EBITDA removes interest, taxes, depreciation, amortization and selected other items. Operating cash flow includes working-capital movements. Amneal kept its capital-spending forecast at about $150 million, including deposits for future property and equipment purchases.
Growth requires money before it produces cash
The latest cash statement shows $158.3 million used by inventory changes in the first nine months, compared with $66.8 million a year earlier. Receivables and prepaid expenses also absorbed cash. These uses helped leave operating cash flow at $50.3 million, versus $209.7 million a year earlier.
The earnings improvement is real. Third-quarter revenue rose 10% to $862.7 million, and adjusted EBITDA increased 30% to $207 million. GAAP operating income also rose, to $95.4 million from $70.3 million. Growth in Affordable Medicines and Specialty outweighed a decline at distributor AvKARE, which faced a strong prior-year product launch comparison.
The quarter was better than the year-to-date cash total suggests
Research by Ticker Byline shows that Amneal generated $98.3 million of operating cash in the third quarter after a $48 million outflow in the first half. Most of the nine-month cash shortfall against 2025 was already visible in July.
Quarterly cash generation still fell short of the year-earlier $118.5 million.
Amneal also completed its Kashiv BioSciences acquisition on August 10. The nine-month cash statement records $421 million paid for the purchase, net of acquired cash. That investing payment is separate from operating cash flow. The transaction used cash, new shares and additional borrowing.
The Amneal company profile tracks the acquisition terms, minority-interest adjustments and debt behind those forecasts.