Q1 FY27
Filed Oct 6, 2026Neogen Reports First-Quarter Financial Results for Fiscal Year 2027
Revenue grew 6.5%, core revenue grew 8.1%, both operating margins improved, adjusted EBITDA rose to $41.6 million, and fiscal year 2027 revenue and Adjusted EBITDA guidance were raised. GAAP net loss was $11.9 million, while the prior-year quarter included a $76.4 million gain on sale of business.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenuesGAAP | $222.8M | – | 6.5% |
| Product revenuesGAAP | $196M | – | – |
| Service revenuesGAAP | $26.8M | – | – |
| Core revenue growthnon-GAAP | 8.1% | – | 8.1% |
| Domestic revenueGAAP | $110.1M | – | – |
| International revenueGAAP | $112.7M | – | – |
| Total Cost of RevenuesGAAP | $117.3M | – | – |
| Cost of product revenuesGAAP | $100.6M | – | – |
| Cost of service revenuesGAAP | $16.7M | – | – |
| Gross ProfitGAAP | $105.5M | – | – |
| Gross MarginGAAP | 47.4% | – | – |
| Adjusted Gross Profitnon-GAAP | $110.9M | – | – |
| Adjusted Gross Marginnon-GAAP | 49.8% | – | – |
| Total Operating ExpensesGAAP | $107.3M | – | – |
| Sales and marketing expenseGAAP | $41.5M | – | – |
| General and administrative expenseGAAP | $59.3M | – | – |
| Research and development expenseGAAP | $6.5M | – | – |
| Adjusted Operating Expensesnon-GAAP | $74.4M | – | – |
| Operating LossGAAP | $(1.8 million) | – | – |
| Operating MarginGAAP | (0.8)% | – | – |
| Adjusted Operating Incomenon-GAAP | $36.5M | – | – |
| Adjusted Operating Marginnon-GAAP | 16.4% | – | – |
| Interest expense, netGAAP | $(13.8 million) | – | – |
| (Loss) Gain on sale of businessGAAP | $(0.4 million) | – | – |
| Other, netGAAP | $1.1M | – | – |
| (Loss) Income Before TaxesGAAP | $(14.9 million) | – | – |
| Income Tax (Benefit) ExpenseGAAP | $(3.0 million) | – | – |
| Net (Loss) IncomeGAAP | $(11.9 million) | – | – |
| Basic Net (Loss) Income Per ShareGAAP | $(0.05) | – | – |
| Diluted Net (Loss) Income Per ShareGAAP | $(0.05) | – | – |
| Weighted Average Shares Outstanding, BasicGAAP | 218.1M | – | – |
| Weighted Average Shares Outstanding, DilutedGAAP | 218.1M | – | – |
| EBITDAnon-GAAP | $28M | – | – |
| EBITDA Marginnon-GAAP | 12.6% | – | – |
| Adjusted EBITDAnon-GAAP | $41.6M | – | – |
| Adjusted EBITDA Marginnon-GAAP | 18.7% | – | – |
| Adjusted Net Incomenon-GAAP | $17.5M | – | – |
| Adjusted Earnings Per Sharenon-GAAP | $0.08 | – | – |
| Net Cash provided by Operating ActivitiesGAAP | $12.9M | – | – |
| Purchases of property, equipment and intangible assetsGAAP | $(8.2 million) | – | – |
| Free cash flownon-GAAP | $4.7M | – | – |
| Net Cash used for Financing ActivitiesGAAP | $(19.0 million) | – | – |
| Repayment of outstanding debtGAAP | $(20.0 million) | – | – |
| Net (Decrease) Increase in Cash and Cash EquivalentsGAAP | $(13.5 million) | – | – |
| Cash and cash equivalentsGAAP | $172M | – | – |
| Non-current debtGAAP | $774.2M | – | – |
| Total AssetsGAAP | $3.30B | – | – |
| Total LiabilitiesGAAP | $1.22B | – | – |
| Total Stockholders’ EquityGAAP | $2.09B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Food SafetyCore revenue growth was 8.1%. The Company saw continued strong growth in Indicator Testing and Culture Media, including Petrifilm, and Bacterial and General Sanitation, including pathogen detection products. | $163.2M | – | 7.4% |
| Animal SafetyCore revenue growth was 8.0%. The Company saw strong growth in Veterinary Instruments & Consumables and in Biosecurity Products, primarily from insect control products. | $59.6M | – | 4.2% |
FY27 outlook
- Revenue$885 – $890
- NoteAdjusted EBITDA: $181 – $183
What drove it
- Core revenue growth included a benefit of approximately 3% related to inventory adjustments at certain distributors in the prior-year quarter and the timing of certain customer orders in the first quarter of fiscal year 2027.
- Gross-margin improvement was driven primarily by a lower level of costs related to the integration of the former 3M Food Safety business.
- Adjusted Gross Margin improvement was driven primarily by higher revenue.
- Adjusted EBITDA Margin benefited primarily from higher revenue driving operating leverage with operating expenses.
- The Company reported growth in all regions globally, including double-digit growth in Asia Pacific.
- The Company completed full validation of its first Petrifilm SKU in August 2026.
Concerns
- GAAP net loss was $(11.9 million), or $(0.05) per diluted share.
- Operating Loss was $(1.8 million) and Operating Margin was (0.8)%.
- The core revenue increase included approximately 3% benefit from prior-year distributor inventory adjustments and the timing of certain customer orders.
- Petrifilm duplicate manufacturing costs were $4.7 million in the Adjusted EBITDA reconciliation and $5.6 million in the Adjusted Net Income reconciliation.
- The sale of the global Genomics business to Zoetis Inc. remains subject to customary closing conditions and pending regulatory reviews.
What to watch
- Manufacture of saleable Petrifilm product and the planned multi-quarter manufacturing transition beginning in November 2026.
- Completion of the global Genomics business sale to Zoetis Inc.; regulatory reviews are currently expected to conclude by the end of December 2026.
- Execution against FY27 revenue guidance of $885 – $890 and Adjusted EBITDA guidance of $181 – $183.
- Whether revenue-driven operating leverage and lower integration costs continue to support gross margin and Adjusted EBITDA Margin.
Balance sheet and cash flow
- Cash and cash equivalents were $172.0 million as of August 31, 2026, compared to $185.5 million as of May 31, 2026.
- Non-current debt was $774.2 million as of August 31, 2026, compared to $793.7 million as of May 31, 2026.
- Net Cash provided by Operating Activities was $12.9 million, compared to $10.8 million in the prior-year quarter.
- Free cash flow was $4.7 million.
- Purchases of property, equipment and intangible assets were $(8.2 million), compared to $(24.0 million) in the prior-year quarter.
- Repayment of outstanding debt was $(20.0 million), compared to $(100.0 million) in the prior-year quarter.
Analysis
Neogen opened fiscal year 2027 with revenue of $222.8 million, up 6.5% from $209.2 million. Core revenue growth was 8.1%, although the company said this included a benefit of approximately 3% from prior-year distributor inventory adjustments and the timing of certain customer orders. Food Safety revenue was $163.2 million, up 7.4%, led by Indicator Testing and Culture Media and Bacterial and General Sanitation. Animal Safety revenue was $59.6 million, up 4.2%, with growth in Veterinary Instruments & Consumables and Biosecurity Products.
Profitability improved on both reported and adjusted operating measures. Gross Margin rose to 47.4% from 45.4%, driven primarily by lower costs related to integrating the former 3M Food Safety business. Adjusted Gross Margin was 49.8%, compared with 49.5%. Operating Loss narrowed to $(1.8 million) from $(16.1 million), while Adjusted Operating Income increased to $36.5 million from $29.6 million. Adjusted EBITDA increased to $41.6 million from $35.5 million and Adjusted EBITDA Margin rose to 18.7% from 17.0%, with the company citing higher revenue and operating leverage with operating expenses.
GAAP net results were affected by the comparison with a prior-year gain on sale of business. Net loss was $(11.9 million), or $(0.05) per diluted share, versus net income of $36.3 million, or $0.17 per diluted share, in the prior-year quarter. The company said the prior-year net income was driven primarily by the non-cash gain on the divestiture of the Cleaners & Disinfectants business. On an adjusted basis, Adjusted Net Income rose to $17.5 million from $9.5 million and Adjusted Earnings Per Share rose to $0.08 from $0.04.
Cash flow from operations was $12.9 million and free cash flow was $4.7 million. Cash and cash equivalents were $172.0 million at August 31, 2026, while non-current debt was $774.2 million. The company repaid $20.0 million of outstanding debt during the quarter. It is on track to manufacture saleable Petrifilm product and begin the planned multi-quarter manufacturing transition in November 2026 after fully validating its first SKU in August 2026.
Management raised fiscal year 2027 guidance to revenue of $885 – $890 and Adjusted EBITDA of $181 – $183. The company also continues to work toward the sale of its global Genomics business to Zoetis Inc., with pending regulatory reviews currently expected to conclude by the end of December 2026. The raised guide, improving adjusted margins, and progress on Petrifilm transition execution are the principal reported indicators for the remainder of fiscal year 2027.
Management, verbatim
As we entered fiscal year 2027, our focus shifted from strengthening fundamentals to scaling them to drive more consistent execution, improved customer outcomes and profitable growth.
Mike Nassif, President and Chief Executive Officer
Our first-quarter results reflect encouraging progress as the changes underway across the organization continue to take hold.
Mike Nassif, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is included.
- No GAAP net income, GAAP EPS, gross margin, operating expense, tax-rate, operating cash flow, capital expenditure, or free-cash-flow guidance was provided.
- No share repurchases or dividend declarations were reported.
- No prior-quarter income-statement comparisons were reported.
- No prior-year balance-sheet comparisons were reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.