Inotiv (NOTV) Q1 2026 earnings summary

Executive summary

• Q1 FY 2026 revenue rose 0.8% year-over-year to $120.9 million, driven by 12% growth in Discovery & Safety Assessment (DSA) revenue, partially offset by a 5.4% decline in Research Models & Services (RMS) revenue.

• DSA net awards grew 44% for discovery and 22% for safety assessment, with a trailing 12-month DSA awards increase of 34%.

• DSA backlog increased to $145.4 million from $130.4 million a year earlier, with a book-to-bill ratio of 1.16x for the quarter.

• Consolidated net loss was $28.4 million (23.5% of revenue), compared to $27.6 million (23.0%) in the prior year.

• Site optimization led to the exit of two RMS lease facilities, with further cost reductions and efficiency improvements expected.

Financial highlights

• DSA segment revenue reached $48.0 million (up from $42.8 million), while RMS revenue fell to $72.9 million (down $4.1 million).

• Operating loss increased to $16.3 million from $15.5 million, with higher RMS losses offset by DSA income growth.

• Adjusted EBITDA for Q1 FY 2026 was $1.8 million (1.5% margin), down from $2.6 million (2.2%) in Q1 FY 2025.

• Cash and cash equivalents at quarter-end were $12.7 million, down from $21.7 million at the prior quarter-end.

• Total debt (net of issuance costs) was $405.8 million, including $118.2 million convertible notes and $24.7 million second lien notes.

Outlook and guidance

• No formal financial guidance for FY 2026 due to market and client demand uncertainty and evolving tariff policies.

• Management forecasts noncompliance with financial covenants for the remainder of fiscal 2026, raising substantial doubt about the ability to continue as a going concern.

• Management expects DSA margins to improve in the back half of the year as pricing actions and cost increases are realized.

• NHP full-year revenue expected to remain flat year-over-year despite Q1 volume decline.

• The company is exploring debt refinancing alternatives and continues discussions with lenders.