Neogen Corp (NASDAQ:NEOG) stock fell 3.29% (As on April 10, 11:23:29 AM UTC-4, Source: Google Finance) after the company reported third-quarter results that exceeded analyst expectations. The company’s Food Safety segment drove performance with 4.0% core revenue growth, continuing the strong trend from the second quarter, with regional growth led by Latin America and Europe. However, Animal Safety core revenue declined 8.7%, impacted by third-party supplier challenges. Adjusted EBITDA reached $48.2 million with a margin of 22.8%, representing a 110 basis point sequential improvement from the second quarter despite lower revenue. The margin expansion reflected strong cost control, with adjusted operating expenses down 9% sequentially, positively impacted by the full effect of a workforce reduction initiated in the first quarter. The company reported adjusted net income of $19.4 million for the quarter. The company’s Petrifilm manufacturing transition remains on track for November 2027, with initial product validations showing promising results. Divestiture of Genomics business unit announced and anticipated to close in 2Q27; Net cash proceeds support net debt-to-adjusted EBITDA of less than three times by end of CY2026.
Meanwhile, in the third quarter the Animal Safety business suffered several third-party, supply based, setbacks leading to lower-than-anticipated growth, and the company is actively engaged in improving these production-related challenges through our supplier qualification and sales and operations planning process. In addition, Neogen is currently completing a review of its global go-to-market strategy. As part of this review, the company plans to realign resources to higher-return markets, establish unified solutions-based selling standards for all global markets, and enhancing performance rigor through metric-based analysis under new commercial leadership.
NEOG in the first quarter of FY 26 has reported the adjusted earnings per share of $0.09, beating the analysts’ estimates for the adjusted earnings per share of $0.06. The company had reported the adjusted revenue decline of 4.4 percent to $211.2 million in the first quarter of FY 26, beating the analysts’ estimates for revenue of $204.49 million.
Neogen raised its full-year fiscal 2026 revenue guidance to $857 million to $860 million, with the midpoint of $858.5 million above the consensus estimate of $850.9 million. The company previously guided for revenue of $845 million to $855 million. Neogen maintained its adjusted EBITDA guidance of approximately $175 million for the full year and expects to be free cash flow positive in fiscal 2026.