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 margin improved 470 basis points sequentially to 21.7%, driven by cost structure improvements and operational efficiency.

• 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.

• Leadership team strengthened with new CEO, CFO, CCO, and other key executives to drive transformation and execution.

• FY26 financial guidance raised for both revenue and Adjusted EBITDA, reflecting performance ahead of expectations.

Financial highlights

• Q2 FY26 revenue: $224.7 million, up from $209.2 million in Q1 FY26; core growth 2.9% year-over-year; foreign currency added 0.9%, divestitures/discontinued products were a 6.6% headwind.

• Adjusted EBITDA: $48.7 million (21.7% margin), up 470 basis points from Q1.

• Adjusted Net Income: $22.6 million; Adjusted EPS: $0.10–$0.11, both more than double the prior quarter.

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

• Free cash flow: $7.8 million in Q2, up $20.9 million from Q1; net cash from operations for six months was $30.3 million.

Outlook and guidance

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

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

• Q4 revenue expected to be modestly higher than Q3, with seasonality impacting trends.

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

• Effective tax rate projected at 21%.