Neogen (NEOG) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue was $224.7 million, with core growth of 2.9% year-over-year, marking a return to positive core growth in both segments despite divestitures and currency impacts.

• Adjusted EBITDA was $48.7 million (21.7% margin), up 470 basis points sequentially, reflecting operational improvements and cost structure optimization.

• Net loss for the quarter was $15.9 million, a significant improvement from a $456.3 million loss in the prior year, which included a large goodwill impairment.

• Strategic transformation initiatives are underway, including new leadership hires and operational enhancements.

• Full-year FY26 guidance was raised for both revenue and Adjusted EBITDA, reflecting strong execution and transformation progress.

Financial highlights

• Q2 revenues: $224.7 million, up 2.9% core growth year-over-year; foreign currency added 0.9%, divestitures/discontinued products were a 6.6% headwind.

• Food Safety segment revenue: $165.6 million, core growth 4.1%; Animal Safety segment: $59.1 million, core revenue flat.

• Gross margin: 47.5%, down from 49.0% year-over-year, but up 210 basis points sequentially; adjusted gross margin was 50.3%.

• Adjusted Net Income: $22.6 million; Adjusted EPS: $0.10, both up from prior quarter but down year-over-year.

• Free cash flow: $7.8 million in Q2, with net cash from operations at $30.3 million for the six months.

Outlook and guidance

• FY26 revenue guidance raised to $845–$855 million; Adjusted EBITDA expected at ~$175 million.

• Q4 revenue expected to be modestly higher than Q3, with seasonality causing a step down from Q2.

• CapEx for FY26 projected at ~$50 million, with $35 million allocated to integration and new manufacturing facilities.

• Guidance remains cautious due to macroeconomic headwinds and new management team integration.