Neogen Corporation Reports Mixed Third-Quarter 2025 Results

Neogen Corporation announced a third-quarter revenue of $221.0 million, a slight decrease of 3.4% compared to the previous year. The company’s net loss for the quarter was $11.0 million, translating to a loss of $(0.05) per diluted share. Despite these challenges, the company reported an Adjusted Net Income of $20.9 million, or $0.10 per diluted share, and an Adjusted EBITDA of $48.5 million. The Food Safety segment showed core revenue growth of 7%, driven by biosecurity and pathogen detection products.

The company faced a decline in sample collection revenue but achieved improvements in production throughput by the end of the quarter. The Animal Safety segment saw a 4.0% decrease in revenue, impacted by declines in the vet instruments category, although there was growth in small-animal supplements and rodent control products. The Genomics business experienced a mid-single-digit core revenue decline, aligning with restructuring activities.

Overall, Neogen’s gross margin for the quarter was 49.9%, down from 51.1% in the previous year. This decline was attributed to lower revenue and higher integration costs. Excluding these costs, the gross margin was 51.5%. The company’s operating income decreased to $5.4 million from $12.0 million in the prior year, primarily due to lower operating income levels.

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Neogen Reports Mixed Results for Q3

Neogen’s third-quarter performance fell short of market expectations, with revenue reported at $221.0 million compared to the anticipated $232.36 million. The company also reported a net loss per share of $(0.05), whereas analysts had expected an EPS of $-0.007. The shortfall was attributed to challenges in sample collection revenue and broader economic uncertainties, including global trade policies and potential recession fears.

Despite these setbacks, Neogen’s Food Safety segment demonstrated resilience, with core revenue growth of 7%. This growth was primarily driven by strong performances in biosecurity and pathogen detection products. However, the Animal Safety segment faced a core revenue decline of 2.6%, impacted by unfavorable foreign currency effects and discontinued product lines.

The company’s Adjusted EBITDA margin declined to 22.0% from 23.0% in the previous year, reflecting the impact of lower revenue. Adjusted Net Income also decreased to $20.9 million from $26.4 million in the prior year, primarily due to reduced operating income. Neogen remains focused on controlling factors within its reach and believes its strategic changes will position it for long-term growth.

Neogen Updates Full-Year Guidance

In light of the third-quarter results and ongoing economic uncertainties, Neogen has updated its full-year guidance. The company now expects full-year revenue to be approximately $895 million, with Adjusted EBITDA projected at around $195 million. Capital expenditures are anticipated to be about $100 million, reflecting the lower Adjusted EBITDA and some integration capital expenses being pulled forward into fiscal 2025.

Neogen’s management remains optimistic about the company’s future trajectory, focusing on improved execution and strategic initiatives. The establishment of its own production line for Petrifilm is progressing well, with initial test production expected to begin in the fall. The company is also taking decisive actions to manage through the current uncertainty and position itself for long-term growth opportunities.

Despite the challenges, Neogen’s commitment to advancing global food security and animal well-being remains steadfast. The company continues to leverage science and technology to deliver optimized products and solutions across its key markets. Neogen’s presence in over 140 countries and its dedicated network of experts underscore its capability to navigate the evolving market landscape effectively.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.