Neogen (NEOG) investor relations material

Executive summary

• Fiscal Q3 2026 revenue was $211.2 million, down 4.4% year-over-year, primarily due to divestitures and discontinued product lines, but core revenue grew 0.1% excluding currency and divestitures.

• Food Safety segment core revenue grew 4% year-over-year, led by 11% growth in indicator testing and culture media, while Animal Safety core revenue declined 8.7% due to supplier challenges.

• Adjusted EBITDA margin improved to 22.8%, up 110 basis points sequentially, driven by strong cost control and operational efficiency initiatives.

• Transformation efforts focus on commercial prowess, innovation, operational efficiency, and global solutions-based selling, with resource reallocation to high-impact markets.

• Genomics business divestiture announced for $160 million, expected to close in Q2 FY27, with proceeds to reduce leverage below 3x.

Financial highlights

• Q3 FY26 revenue was $211.2 million, down 4.4% year-over-year; Food Safety revenue was $156.7 million (up 2.6% year-over-year), Animal Safety revenue was $54.5 million (down 20.1% year-over-year).

• Adjusted EBITDA was $48.2 million (22.8% margin), up 110 bps sequentially; adjusted net income was $19.4 million (adjusted EPS $0.09).

• Gross margin for Q3 was 46.9%, down from 49.9% last year, with adjusted gross margin at 51.7%.

• Free cash flow for the quarter was $11.1 million; cash and cash equivalents at quarter-end were $159.9 million.

• Net loss for the quarter was $17.0 million (GAAP EPS $(0.08)); basic and diluted EPS were $(0.08).

Outlook and guidance

• FY26 revenue guidance raised to $857–$860 million (from $845–$855 million); adjusted EBITDA guidance maintained at ~$175 million.

• Genomics business sale expected to close by Q2 FY27, with net proceeds to reduce debt and leverage ratio below 3x.

• CapEx expected to decline in FY27 as Petrifilm projects complete, supporting improved free cash flow.

• FX headwinds anticipated as U.S. dollar strengthens, impacting reported growth rates.

• Animal Safety supply challenges expected to persist into Q4, with recovery built into guidance.