Neogen Reports Q1 Fiscal 2026 Results, Reaffirms Full-Year Outlook

Key Takeaways:

• Neogen Corporation (NASDAQ: NEOG) reported first-quarter revenue of $209.2 million, a 3.6% decline year-over-year.
• Core revenue rose 0.3%, while divestitures and discontinued product lines had a 4.4% negative impact.
• Net income reached $36.3 million, compared to a net loss of $12.6 million in the prior year, driven by a non-cash gain from a divestiture.
• Adjusted EBITDA was $35.5 million, representing a 17.0% margin, down from 20.1% in the prior-year quarter.
• The company reaffirmed its fiscal 2026 outlook, expecting revenue between $820 million and $840 million and Adjusted EBITDA of $165 million to $175 million.

Neogen Corporation First Quarter Financial Overview

Neogen Corporation (NASDAQ: NEOG) reported revenue of $209.2 million for the first quarter ended August 31, 2025, compared with $217.0 million in the same period last year. The company attributed the decline to divestitures, discontinued product lines, and lower volumes in specific product categories.

Core revenue—excluding divestitures, discontinued operations, and foreign currency impacts—rose 0.3%, while foreign exchange contributed a 0.5% positive impact.

Net income totaled $36.3 million, or $0.17 per diluted share, compared to a net loss of $12.6 million (or $(0.06) per share) a year earlier. The increase in net income was largely due to a non-cash gain related to the sale of Neogen’s global Cleaners and Disinfectants business.

Adjusted Net Income was $9.4 million ($0.04 per diluted share), down from $14.4 million ($0.07 per share) in the prior-year period, reflecting lower operating income.

Gross margin for the quarter was 45.4%, compared with 48.4% a year ago. Excluding integration costs, gross margin stood at 49.5%. The margin decline was attributed primarily to costs associated with relocating sample collection production, reduced revenue, and tariffs.

Neogen Segment Results

Food Safety Segment

Revenue for the Food Safety segment was $152.1 million, down 4.6% from the prior year. Core revenue declined 1.7%, while divestitures and product discontinuations had a 3.7% negative impact, partially offset by a 0.8% positive foreign currency effect.

Growth in pathogen detection products supported the Bacterial & General Sanitation category, while food quality, nutritional analysis, and sample collection products showed moderate gains. Sales of Petrifilm declined due to distributor transitions in Asia and adjusted inventory levels in the U.S., though U.S. sales out of distribution channels showed solid growth.

Within Natural Toxins & Allergens, modest gains in allergen testing were offset by lower toxin test kit sales.

Animal Safety Segment

Revenue for the Animal Safety segment was $57.1 million, slightly below the $57.6 million reported in the prior year. Core revenue grew 5.8%, while divestitures and discontinued lines had a 6.4% negative impact.

The Animal Care & Other category saw higher sales of biologics and wound care products, while Life Sciences benefited from increased sales of reagents and substrates. The Biosecurity category experienced growth in insect control products. Lower revenue from needles and syringes weighed on the Veterinary Instruments & Disposables category.

Globally, the company’s Genomics business returned to mid-single-digit core revenue growth, supported by bovine markets but offset by lower companion animal demand.

Liquidity and Capital Position

As of August 31, 2025, Neogen held $138.9 million in cash and cash equivalents, with total outstanding debt of $800 million and $201.5 million in committed borrowing headroom.

During the quarter, the company used proceeds from the divestiture of its Cleaners & Disinfectants unit to repay $100 million in debt, reflecting efforts to strengthen its balance sheet.

Outlook for Fiscal Year 2026

Neogen reaffirmed its full-year fiscal 2026 guidance, projecting:

• Revenue between $820 million and $840 million.
• Adjusted EBITDA between $165 million and $175 million.
• Capital expenditures of approximately $50 million.

Neogen Management Commentary

Chief Executive Officer Mike Nassif noted that while recent results were impacted by operational challenges, the company has initiated cost-reduction measures and a renewed emphasis on commercial execution and innovation.

The company expects these initiatives—including headcount reductions and efficiency improvements—to support margin expansion and reinvestment in key growth areas.

Neogen reiterated its focus on advancing food and animal safety solutions, aiming to enhance operational discipline while pursuing long-term value creation.