NEOG

Neogen (NEOG) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The upward trend in estimate revisions for this maker of medical testing kits reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Neogen, as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.05 per share for the current quarter represents a change of +25.0% from the number reported a year ago. Over the last 30 days, two estimates have moved higher for Neogen compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 8.33%. The company is expected to earn $0.30 per share for the full year, which represents a change of -6.3% from the prior-year number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Neogen. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 13.43%. The promising estimate revisions have helped Neogen earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Neogen shares have added 18.1% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Neogen Corporation (NEOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:00 a.m. ET President and Chief Executive Officer - Mikhael Nassif Chief Financial Officer - Bryan Riggsbee Chief Commercial Officer - Joe Freels Investor Relations - Scott Gleason Operator: Hello, everyone. Thank you for joining us, and welcome to the Neogen 4Q '26 Earnings Call. I will now hand the conference over to Scott Gleason. Scott, please go ahead. Scott Gleason: Thank you for joining us this morning to discuss our fiscal fourth quarter and full year 2026 results. I will briefly cover our non-GAAP and forward-looking disclosures before turning the call over to our CEO, Mike Nassif; our CFO, Bryan Riggsbee; and our CCO, Joe Freels. Earlier this morning, we issued our fourth quarter and full year results and accompanying presentation, both of which are available on the Investor Relations section of our website. During today's call, we will reference certain non-GAAP financial measures that we believe provide useful insight into our performance. Reconciliations of historical non-GAAP measures are included in our earnings release and presentation. Please also refer to Slide 2 of the presentation, which contains reminders regarding forward-looking statements under the Private Securities Litigation Reform Act. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks are described in our most recent annual report on Form 10-K and in other filings with the SEC. We undertake no obligation to update these forward-looking statements. With that, I'm pleased to turn the call over to Mike. Mikhael Nassif: Thank you, Scott. Good morning, and thank you for joining us. We operate in a highly attractive market, supported by strong growth drivers. Customers increasingly require a true industry leader who can innovate and solve complex challenges. Food safety and security are critical and growing global priorities, and we believe Neogen is uniquely positioned to lead this industry. We closed fiscal year '26 on a strong note. Core growth improved sequentially across both our Food Safety and Animal Safety business units in the fourth quarter. Our fiscal 2027 financial guidance reflects a measured outlook consistent with our historical approach. While my confidence in the trajectory of our business entering the year is high, we believe our macro fundamental backdrop is improving. We have restored our product portfolio and significant progress is underway in enhancing our commercial operations. We exceeded our adjusted EBITDA guidance for the year. At the same time, we are intentionally investing in Neogen's future, and this will remain a key theme through fiscal year 2027. We're funding innovation, technology solutions, enterprise systems and marketing capabilities that are designed to meaningfully enhance the company's long-term growth trajectory. We're prioritizing these investments to position Neogen to win while also driving profitable growth. I would also highlight that Food Safety core growth reached 5.8% in the quarter, the highest level since 2023, going back to the period immediately following the 3M acquisition. In addition, our Animal Safety team successfully resolved the majority of the global supply issues, returned to a year-over-year positive core growth and saw a 7% sequential growth from the third quarter. I'm proud of our teams and want to thank our employees for their dedication to our mission and the effort that made this progress possible. This is a real turnaround from the negative core growth in fiscal year 2025, and we're just getting started. Our ambition is clear: build Neogen into the undisputed global food safety category leader. To accomplish this, we are focused on 3 major strategic initiatives. First, commercial prowess. You'll hear from our Chief Commercial Officer, Joe Freels, on how we're enhancing our capabilities and building a best-in-class global commercial organization in the food safety channel. Our teams are moving decisively from a defensive posture to offense with increased focus on share gain. This includes enhanced targeting and customer segmentation through our new go-to-market strategy, a shift towards selling solutions rather than products and deeper, more strategic engagement with our most important global customers to partner in ways we haven't in the past. Second, high-impact innovation. Our largest area of investment for fiscal year '27 will be in our research and development team led by our Chief Scientific Officer, Jeremy Yarwood. Beyond our previously announced Petrifilm line expansion, we're evaluating technology licensing deals to further solidify our market-leading position and solve customer pain points. Additionally, we have teams working on next-generation platforms in our most critical markets. Our R&D efforts are fully anchored in customer needs, focus on developing solutions that directly address their most pressing challenges while clearly differentiating Neogen from our competition. And finally, operational efficiency. We're simplifying and fortifying our processes. As we look ahead to fiscal '27, our investments in innovation, technology and commercial capabilities will be largely funded through disciplined cost management and enhanced operational efficiency across the organization. We have clear plans in place to aggressively address key areas of value leakage, including inventory write-offs, sample collection margins, purchase price variance, our global supplier network and pricing execution. Ultimately, these initiatives will drive profitable growth as we reinvest in the business. At the same time, our Petrifilm manufacturing transition remains on track to manufacture sellable product and begin a planned multi-quarter manufacturing transition beginning in November 2026. We're close to completing full validation of our first Petrifilm SKU, which we expect to complete in August, a major milestone for the company. In parallel, we will be making a series of targeted transformation investments aimed at increasing productivity across the organization. These initiatives are expected to deliver strong returns on invested capital. They're critical to achieve our long-term objective of approximately 30% adjusted EBITDA margins. I've been very impressed with how our commercial teams have risen to the challenge and how they are accelerating and scaling our execution. Our Chief Commercial Officer, Joe Freels, is here to share how we are building a world-class commercial engine. Joe Freels: Thanks, Mike. It's truly an honor to lead the commercial organization at Neogen at this pivotal time. We believe we have significant competitive advantages in quality of our products, the breadth of our portfolio and the strength of our technical expertise. We're confident in our right to win in the global food safety market and the actions we're taking will position us to strengthen and expand our leadership across key channels. I'll begin by emphasizing that the 6% core growth we delivered during the fourth quarter in food safety doesn't happen in a vacuum, but is rather the early evidence of a meaningful cultural transformation across our commercial organization. This transformation is reshaping how we approach the market, how we compete, how we define and measure success, how we hold ourselves accountable and ultimately, how we win. Our ambition is clear, building a market-leading position in the food safety industry as the category leader. We believe the path to achieve that is to serve our customers better than anyone else, delivering best-in-class solutions that meet their needs and having a world-class team to communicate our value proposition. Let me walk you through how we're executing against this at a tactical level. First, we are repositioning our commercial organization to align more closely with our new go-to-market strategy, optimizing how we deploy resources across geographies, customer segments and product lines. As part of this effort, we are reallocating investments toward the highest impact markets, product lines and customer segments that will best support our long-term growth objectives. Entering the year, we have identified a focused set of 14 priority countries where we believe we can drive the greatest returns. We're also bringing greater discipline to customer segmentation. Historically, our account base has been highly fragmented with a long tail of thousands of ordering customers globally and limited strategic prioritization. Going forward, we will concentrate our direct commercial efforts on high-value accounts where we can drive meaningful share gains while simultaneously enhancing our ability to serve the broader customer base through technology-enabled solutions. In fiscal '27, we will invest in e-commerce and customer service automation capabilities, which we believe will significantly expand our reach across this long tail. Today, approximately 40% of food safety revenue flows through e-commerce. However, that volume is concentrated among larger accounts due to current platform limitations. We see a clear opportunity to broaden access and increase penetration over time, expanding the reach of our teams. In parallel, we've made the deliberate decision to transition certain markets to distribution partners or exit where we lack sufficient scale. This allows us to deliver a high level of service and focus our resources in regions where we can achieve meaningful competitive advantage. From a customer engagement perspective, we're fundamentally shifting how we approach key accounts. In the past, we've operated at the site or plant level, which has limited our ability to sell enterprise-wide solutions and has created inefficiencies in our commercial model. To address this, we are establishing a dedicated strategic account function designed to engage with senior decision-makers. This will enable us to more effectively position the full breadth of our solutions, including our Neogen analytics platform and support broader enterprise-wide implementation programs. We're already seeing encouraging early results from this approach and look forward to discussing the impact in greater detail at our Investor Day this fall. For the first time in years, we're entering fiscal '27 with a restored product portfolio. Through the efforts of our R&D, manufacturing and supply chain teams, we have resolved prior supply and quality challenges and significantly improved service levels. This progress is reflected in a meaningful improvement in our full and on-time delivery performance over the course of the year. With these operational improvements in place, we believe we are now well positioned to take more aggressive actions focused on share gains. We're also rolling out a global solutions-based sales operating model. This represents a shift away from a product-centric approach toward a more integrated offering of solutions, services and technology. We believe this will drive increased product utilization, deepen customer relationships and create higher barriers to entry from a competitive standpoint while also eliminating siloed selling behaviors. Additionally, we have developed segment-specific strategic frameworks focused on the unique needs of key food production segments such as protein. Each of these segments has distinct operational and regulatory requirements, and this approach will enable our commercial teams to deliver more targeted and relevant solutions to our customers. To drive accountability and measure progress, we're building a culture of operational rigor and discipline. Key metrics we evaluate include funnel building, funnel wins and a focus on share gains. We believe this accountability-based approach is critical to drive long-term success. Last week, I had the privilege of attending our first global sales meeting in years. We were able to unite our reps and leaders from across the globe as we work to roll out the major initiatives I've described. I can say without a doubt, our teams are fired up. We are more unified in our message and purpose than ever before, and we're ready to deliver. So with that, I'll turn it back over to you, Mike. Mikhael Nassif: Thanks, Joe. We'll now turn to our focus on innovation. We're stepping up our commitment to innovation as we enter fiscal year '27. We plan to increase R&D investment by about 50% next year and intend to continue scaling R&D at an accelerated pace with a long-term objective of approaching 5% of revenue. We believe these investments will deliver attractive returns on invested capital. They are focused on differentiated industry-leading technologies that support our ambition to increase market leadership across our food safety channel. We're also evaluating technology licensing opportunities. This is an important evolution in how we innovate. We're looking to bring differentiated technologies to solve real-world customer challenges. Given the pace of innovation in adjacent markets such as human health care, we believe licensing offers a highly efficient and cost-effective way to accelerate technology adoption within food safety. We're making real progress to expand our product platforms. At our Oakdale, Minnesota facility, we're standing up our new Petrifilm innovation line. All capital equipment is ordered, and we expect the line to be fully operational later this fiscal year. At that point, we will begin validating a pipeline of new SKUs targeting meaningful market opportunities. In parallel, we're evaluating partnership and co-development opportunities to further accelerate investment and broaden the scope of innovation within this platform. We believe we will soon have the capability to deliver on 2 new Petrifilm SKUs per year. Beyond product innovation, we're investing in our digital ecosystem. We're enhancing our Neogen analytics platform to improve connectivity, deliver more actionable insights to customers and build a scalable data architecture. Over time, we believe this data strategy can create meaningful network effects that strengthen our value proposition and deepen customer engagement. We now have teams assessing next-generation platforms for core markets like pathogen detection and general sanitation. Ultimately, our goal is to have differentiated market-leading solutions that match customer needs across all product lines. Now our organic development cycles run 18 to 24 months from concept to commercialization. So we expect these investments to meaningfully contribute to revenue growth starting in fiscal year '29 and beyond. We believe as we ramp up our R&D spending, we will be able to support 2 new Petrifilm SKU launches and up to 5 innovation projects simultaneously. We look forward to providing additional details on our innovation strategy at our Investor Day this fall. Now I want to highlight our ongoing efforts to drive operational efficiency, including the progress we are making on the Petrifilm manufacturing transition. We're on track to manufacture sellable product and begin our planned multi-quarter manufacturing transition beginning in November of 2026. We also anticipate having our first fully validated SKU in August, a major milestone demonstrating the capability our teams have built. To date, we haven't encountered any major problems in the validation process. This is a reflection of the rigor and quality of the planning and execution led by our operations and engineering teams. We're making real progress in inventory management as we build our more integrated enterprise-wide supply chain. Since launching our first sales and operations planning process known as S&OP earlier this year, we're already seeing results. This includes a reduction in actual inventory of more than $36 million year-over-year. Despite our reduction in inventory levels, on-time and full rate, which measures the percentage of time we fulfill an order completely and on time has improved 40% since we initiated our S&OP process. This metric is critical as we rebuild customer trust and look to drive share gain. This progress is very encouraging, and we're still focused on further opportunities to enhance efficiency by strengthening vendor qualification processes, rationalizing our global logistics and supply footprint, executing on PPV savings initiatives and reducing inventory waste. Looking ahead to fiscal '27, our teams are actively driving initiatives to improve profitability and reduce cost. Key areas of focus include reducing inventory write-downs, improving purchase price variance through more disciplined supply chain management, optimizing pricing and contracting strategies and enhancing margins with our sample collection business. Together, we expect these initiatives to generate meaningful savings that help fund our ongoing investments in innovation and commercial growth. We're also advancing technology and enterprise capability upgrades to improve efficiency and scalability. Last quarter, we completed a comprehensive technology and systems assessment to identify key gaps. Examples of this work include our AI-enabled John Gul demand planning software and our automation initiatives for key finance processes. Based on this work, we plan to invest in transformation initiatives in fiscal year '27. We expect these investments to deliver highly attractive returns and significantly improve our long-term cost structure, exceeding the returns of our internal capital deployment opportunities. These upgrades strengthen core capabilities across our commercial organization, supply chain and logistics and corporate functions. Over time, we believe they will enable us to scale the business efficiently with limited incremental headcount, driving improvements in revenue per FTE and overall margin profile. Finally, experience tells us that the key enabler to success of any transformation is the commitment of the team and the strength of the culture, and we are seeing meaningful progress. As part of our efforts, we're hosting regular company-wide listening sessions and tracking our progress through frequent engagement surveys. Encouragingly, the percentage of employees who believe our transformation is working increased meaningfully with double-digit improvements in metrics on communication, transparency and leadership responsiveness. We are committed to building on this momentum. I am exceptionally proud of the progress our team has made and the foundation we're building. As we move into fiscal year '27, we're entering the next phase of our transformation, one where we expect to operate and execute at a meaningfully higher level. And now I'll turn the call over to Bryan. R. Riggsbee: Thank you, Mike, and thanks to all of you participating in this call today. I'm pleased to provide an overview of our financial results and outlook for fiscal year '27. We delivered fourth quarter revenue of $225.3 million, representing a 4.3% increase on a core basis by far our highest growth rate of the fiscal year. As Mike noted, we saw accelerated core growth in our Food Safety segment, reaching the highest level since 2023 and a sequential improvement in our Animal Safety segment following the resolution of the majority of our supply headwinds. At the segment level, our Food Safety business delivered $166.8 million in revenue for the quarter, representing 5.8% core growth. Performance was led by continued strength in our indicator testing and culture media products, which were up 9% and strong growth in our bacteria and general sanitation products, which grew 10%. We're carrying a significant amount of operating momentum into fiscal year '27, and we believe the commercial changes being implemented will further strengthen our commercial execution. We've also been reassured by commentary from food producers on recent earnings calls who have noted improving industry volume trends. Based on our analysis of public companies, volume growth turned positive in the first calendar quarter of 2026 after being flat in the fourth quarter and down for most of calendar year 2025. Despite positive commentary, many of our customers are still facing inflationary cost pressures as a result of the Iran war. Consequently, while we welcome the positive news, we maintain a tempered view on the impact it will have on our near-term trends. The other macro drivers of our industry remain robust. Calendar year 2025 was an 8-year peak in the number of food safety recalls and the volume of food recall. We also saw broad food safety reform regulations in China in 2025, similar to the end-to-end system control implemented as part of the Food Safety Modernization Act, which became law in the U.S. in 2011. Furthermore, food safety litigation and class action lawsuits have increased 50% over the last 5 years, increasing the cost of recalls and poor compliance. Our Animal Safety business saw a significant recovery in the fourth quarter and grew 0.5% on a core basis year-over-year. Total revenue increased 7% sequentially as we resolved the majority of our supply-related challenges. From a macro perspective, we are seeing encouraging signs in the animal safety end markets. Although U.S. production animal herd sizes remain near record lows, sustained strength in meat demand and pricing has materially improved producer profitability. Our competitors have seen strong production animal growth and USDA is anticipating modest improvements in U.S. herd sizes in coming years based upon meat prices supporting investment from ranchers. I am also proud of the work that our Animal Safety team has been doing to help address the new World screwworm outbreak. We have 2 new topical aerosol products that have received authorization for sale in Texas, and we are also able to sell these products in Florida. We would note that the path of the outbreak is unclear and other recent outbreaks have had limited scope. Consequently, from a product perspective, we anticipate a modest contribution in the first quarter of '27 and are closely monitoring the situation. From a regional perspective, U.S. revenue was 49% of total sales in the quarter, and our international revenue was 51%. As anticipated, the positive impact of currency slowed in the quarter following the strengthening of the dollar index. We saw double-digit growth in our LatAm business unit and food safety growth in every global division in the quarter. Gross margin in the fourth quarter was 47.8% and adjusted gross margin was 49.7%, which improved 330 basis points year-over-year. We did see some impact in the quarter due to higher freight and material costs due to cost pressures we noted on the last call. Additionally, sample collection margin losses narrowed to their lowest point of the year in the fourth quarter and showed strong sequential improvement. We continue to have plans in place to drive further efficiency and plan to roll out our new automation line in fiscal year 2028, which will lead to a step function improvement in sample collection margins. Adjusted operating expenses in the quarter increased by approximately $3 million on a year-over-year basis. The biggest factor driving the increase was a $6 million impact on a year-over-year basis for bonus accrual due to the lower level of cash bonuses in fiscal year '25, driven by poor company performance. In the absence of these changes, operating expenses would have declined on a year-over-year basis. We also saw the impact of higher salaries and benefits on a sequential basis due to recent executive hires and as we began investment for fiscal year '27. Adjusted EBITDA was $45.4 million in the quarter, representing a margin of 20.2% and growth of 12% year-over-year. Fourth quarter adjusted net income and adjusted earnings per share were $18.7 million and $0.09, respectively. Importantly, cash flow from operations was over $30 million in the quarter, our highest level of the fiscal year and free cash flow was over $26 million. Cash flow benefited from improvements in working capital, but also due to the timing of interest payments on our debt. Turning to the balance sheet. We closed the quarter with approximately $794 million of gross debt and a total cash balance of $185.5 million. We remain fully compliant with all debt covenants and believe we are well positioned to further strengthen our balance sheet as free cash flow continues to improve. We took advantage of our growing cash balances to pay down $20 million of our term loan in late June. We're also evaluating treasury opportunities to free up global cash to lower our required cash balances to operate the business and support further debt repayment. As previously stated, the closing of the divestiture of the Genomics business unit is subject to certain regulatory approvals and customary closing conditions. The only outstanding regulatory approvals are those from the Australian Competition Authority and the New Zealand Competition Authority. Both agencies have moved their review of the transaction into the second phase, and we continue to work with Zoetis towards closing on the time line as previously announced, which is by the end of the first half of fiscal year '27. We intend to use the $140 million in net proceeds following transaction costs and taxes to also pay down debt and to invest in the business. As previously stated, we believe this would put us on track to end the calendar year below 3x net leverage and end fiscal year 2027 close to our target net leverage range of 2.5x. Now I'd like to discuss our guidance for fiscal year '27. We are guiding toward total fiscal year '27 revenue of $880 million to $885 million and adjusted EBITDA of $180 million to $182 million. Let me discuss some of the assumptions underlying this guidance. First, the guidance includes an assumption of approximately $92 million of revenue and $13 million in adjusted EBITDA from our genomics business. This is in line with the financials for genomics from fiscal year 2026. We plan to update the full year guidance following the closing of the Genomics transaction. From a growth perspective, the guidance implies core growth of approximately 3%. As a reminder, Q1 of fiscal year '26 revenue included approximately $6 million of revenue from our cleaners and disinfectants business. Additionally, we are assuming a negative 1% impact from currency in fiscal year '27 based upon current rates. On an adjusted EBITDA basis, our guidance implies an adjusted EBITDA margin of 20.5% at the midpoint of our guidance range, implying slight margin expansion relative to fiscal year '26. We intend to invest in our business in 2027 with R&D spending increasing 50% and targeted investments in our commercial infrastructure to support higher long-term growth. However, as implied by our guidance, despite these investments, we still believe we will be able to expand adjusted EBITDA margins by improvements in areas such as inventory write-downs, purchase price variance, our pricing strategy and other operational efficiency programs. As Mike previously highlighted, we're also anticipating continued investment in transformation initiatives to improve our enterprise capabilities and deploy technology solutions and automation across the organization. The total amount anticipated for transformation initiatives is $25 million in fiscal year '27 compared to approximately $22 million in fiscal year '26 -- and consistent with fiscal year '26, we will exclude these costs from our adjusted financials in order to allow for better visibility to the underlying operating performance of the business. We believe these investments will have an exceptionally high ROIC and support improvements to our earnings and cash flow over time. Despite these investments, we anticipate that both our GAAP cash flow from operations and our free cash flow will increase meaningfully on a year-over-year basis. In addition to our full year outlook, I'd like to provide additional guidance for our first quarter. We're guiding toward first quarter '27 revenue of $207 million to $209 million and adjusted EBITDA of approximately $37 million. In addition to typical business seasonality, Q1 '27 will reflect the impact of the incremental business investments we discussed earlier on the call, such as our global sales meeting. We expect that both revenue growth and EBITDA margins will improve throughout the year as we leverage our incremental investments and execute on key sales and operational efficiency initiatives. We ended the year with significant business momentum. Our guidance reflects our philosophy of setting targets as we focus on restoring investor credibility. I'll now hand the call back to Mike for some final thoughts. Mikhael Nassif: Thanks, Bryan. Our ambition is clear: to build a company that will lead the food safety industry grow consistently above market and deliver industry-leading profitability. Fiscal year '26 was all about stabilization and foundation building. In fiscal year '27, the focus will be on accelerating profitable growth as we become experts in the fundamentals at scale. We expect the operational progress and investments we make this year to position Neogen for even stronger future growth. And with that, I'll now turn things over to the operator to begin the Q&A. Operator: Your first question comes from the line of Subbu Nambi from Guggenheim. Subhalaxmi Nambi: Congratulations on delivering a great quarter on food safety growth. I completely get your focus on growth, but I do want to touch on the EBITDA guide. The EBITDA guide ex genomics came in a bit below where the Street was. Can you walk through the assumption for the underlying business apples-to-apples and why there may not be as much EBITDA expansion this year despite a stellar growth? R. Riggsbee: Yes. Thanks, Subbu, for the question. You're looking at the year-over-year number, full year '27 versus full year '26. I think on a year-over-year basis, it's roughly flat, so slightly up on a year-over-year basis, and it's really driven by, as we highlighted earlier, some of the additional investments that we'll be making through the course of the year. We just will not see the type of expansion in fiscal year '27, really sort of driven by some of the investments that we're making in the business. I think that would be, Mike, anything to add? Mikhael Nassif: No. I mean also with regards to our guide, I think that -- we just recall, we finished '26 at 1.9% growth. We have a fairly new management team. Joe outlined all the work we're doing to enhance commercial organization. It's important to note that our fiscal '27 guide is $30 million above Street consensus. And most importantly, Bryan and I, as we've discussed before, are very much focused on rebuilding the credibility of Neogen and meeting and/or exceeding its commitments to investors. R. Riggsbee: Yes. And Subbu, maybe just to clarify, I think you're the only analyst that didn't include genomics for the full year in your number for next year. All the other analysts did. And so when you look at the actual consensus, if you adjust it for that, it would increase it slightly, but we're still well above where consensus was for the year. Joe Freels: On an absolute dollar basis. And the other comment I would just make is that the numbers that we talked about, although we haven't really broken things out discretely in the past, that the top line and bottom line for genomics are roughly flat on a year-over-year basis just in terms of how you might model that. Subhalaxmi Nambi: Thank you for clarifying that. And Mike, it's not lost on us that the company is now a very different company from a year ago, and the future looks very bright. As we look into '27 guide, what is the split between core FS and -- Food Safety versus Animal Safety in the guide? And could you also walk us through the cadence of each relative to where you exited 4Q from a core growth perspective? Mikhael Nassif: Yes. I mean we haven't broken out Food Safety and Animal Safety, but I think the color that I would provide is that if you look at the assumption for next year, we're guiding to core growth of about 3% -- that includes -- when you get to the absolute number, there's about a 50 basis point headwind from the divestitures that we had in Q1 of fiscal '26, we had the C&D business. We won't have that in the current year. And then there's about 100 basis points headwind from foreign exchange on a year-over-year basis. So those are the 2 things. That's the reconciliation between core growth of 3% and a top line guidance of about 1.5%. Is that what you were looking for? Subhalaxmi Nambi: Bryan, so would it be fair to assume Food Safety roughly 3% and Animal Safety roughly 50 bps? Would that be far off from what you're assuming? I know you're not providing a split, but just like a guidepost. R. Riggsbee: Yes. Subbu, we're not giving specific guidance for each of the segments. As we look to next year, as we talked about on the call, we are seeing an improving macro fundamental backdrop for the Animal Safety business. So I don't think it's necessarily safe to assume that the growth rates will be the same for next year. And so that -- but we're not providing segment-specific guidance. Joe Freels: I think the only thing I would add is just that Food Safety grows faster than Animal Safety. So as you think about the average of 3% core growth, you'd have Food Safety above that and Animal Safety below that. Operator: Our next question comes from the line of David Westenberg with Piper Sandler. David Westenberg: So we got asked some of the tougher questions, so I don't want to take it away from the fact that you had a great quarter and doing a great job here. But let's just maybe get into the Q1 EBITDA guide. Are you already starting some of the investments already into Q1? I'm just -- I did notice that the EBITDA guide for Q1 is a little bit below Street. And saying that, do you think net of these investments, you really are seeing some of that good operating leverage? And again, we just kind of wanted to kind of see where we're at from this place from a very clear standpoint and then kind of assess how much the new investments are kind of making the return. So anyway. R. Riggsbee: Thanks, Dave. Yes. I think the challenge with the looking quarter-to-quarter, quite frankly, is just that the business moves around through the year. So when you look at Q1, it's a seasonally weaker quarter. If you look at it on a year-over-year basis, it's up 80 basis points as compared to the same fiscal quarter last year. We are starting some of the investments, but I don't know that I would characterize that as a real -- as what's impacting the sequential view of the EBITDA. It's more just the seasonality of the business. We are seeing real operating leverage and improvement in the process. David Westenberg: And a lot of this might come at Investor Day. So sorry for getting ahead of it here. But as we think about the reorg and e-commerce and all some of that kind of stuff that you're doing here, do you see this as an opportunity to get ahead of competitors? Or do you think this is kind of maybe a catch-up to where the kind of competitors are already at? Mikhael Nassif: Yes, Joe, do you want to take that? Joe Freels: Yes. So thanks for that question, David. When we think about how we're structuring ourselves, I would think about it more of just realigning resources where we believe we can deliver the greatest return, while at the same time, investing in some back-office infrastructure that allows us to expand our reach. So when we talk about things like e-commerce, ensuring that we just become a little more easy to do business with for our customers from a self-serve perspective, particularly as you get toward the greater number of smaller customers. So we feel like we're well positioned to carry our growth and accelerate throughout the future. R. Riggsbee: I would just add, I think there are some areas, obviously, where we have capability that should have been there. And so we've got some catch-up -- a little bit of catch-up to do. But I would say that a lot of what we're talking about here is -- and the way we think about it is we're going to be the leader in this space. And so what are the investments and the capabilities that we need to have in place in order to really drive that and not concern ourselves so much with where the competition is, but we set the market. Mikhael Nassif: Yes. Well said, Bryan. I think the other 2 things as category leaders, which we're very much focused on, and we've discussed a lot as a team, there's 2 other areas where Joe and team are definitely going to be focused on in '27. I believe we brought this up before, but really a much bigger focus on strategic accounts. And so we've talked about very much Neogen would look at strategic accounts at the plant level, at the local level. We're changing that completely -- we're going more top to top now with a very clear list of those strategic accounts and partnerships. I think the second change in how we're thinking about the market is Neogen historically very much looked at product by product. And we believe that as the category leader with the greatest portfolio in food safety, we have the opportunity to deliver solutions to our customers, which means that we are switching our go-to-market from product to segment level. When you do that, you open up much bigger opportunities to solve your customer problems. So those are all things that we're also putting into place. David Westenberg: I'll stop there. I'm looking forward to asking more of these on the Investor Day in the fall. Operator: Our next question comes from the line of Bob Labick with CJS Securities. Bob Labick: Congratulations on the quarter and the outlook. So I want to start with Petrifilm. Obviously, some exciting progress there with first SKU to be fully validated, I guess, by the end of next month or almost in August. Could you talk a little bit more about the kind of P&L impact as we go through the product transfer, I mean, I guess, higher D&A, lower labor costs, maybe higher margins. I don't know, give us a sense of the product transfer over the next -- I guess, over the next year, right? And how that's going to roll out, impact the P&L and what you're looking at to continue to be on track for that. Mikhael Nassif: Yes. Thanks, Bob. And I'll just kind of speak to the thinking around the transition and then Bryan can help discuss the financial impact. So I think as we said in our earnings statement, we're making very good progress against our plan. We're very excited about the new -- the first SKU to be fully validated. That's one of the most complicated ones to actually manufacture. And I think it speaks to the team and our capabilities, and we see it as a major derisking event for this entire program, which I think is really important to call out. Something like this, with this complexity and scale naturally is going to require a multi-quarter transition. So this is pretty much standard practice for large transfers like this. And so we're looking at a lot of things as we make certain decisions. So you think about product readiness, you talk about managing inventory levels, minimizing write-offs, coordinating with suppliers, ensuring uninterrupted supply. So all of those things happening across 17 SKUs -- it's quite complex, but we feel like we have a very solid plan in place as we start up this transition. So maybe as we do that, maybe, Bryan, you can shed some light on that. R. Riggsbee: Yes. I think with respect to the margin profile, certainly, as we go through the year, we'll expect to have less duplicative costs over time as we complete the transition. We talked about 200 to 300 basis points of gross margin expansion as we fully ramp up the line. I would expect that we would start to see that benefit coming online in the following fiscal year. So probably because it will take us through the course of the year to complete the transition, and then we would start to see the benefit as we optimize through FY '28. And then beyond that, we would expect to see that significant margin contribution. That's kind of the way I would think about the -- how it plays out over time. Bob Labick: Really exciting, and it's great to be continued on track and getting close to the transfer itself. And then for my follow-up, Mike, did you say R&D -- I mean, obviously, increasing 50% or so this year, but like with a goal of 5% of sales because I think you're at like 2% and change right now. So obviously, that's a multiyear goal, but that's a significant increase. And maybe just kind of dig in on that a little bit more and the areas of focus. Mikhael Nassif: Yes, absolutely. So last year, we were around 2%. We're increasing 50%. In the beginning, when I joined this organization, I've been very open about the huge innovation opportunity that we have with this business. And we haven't -- Neogen has not historically invested a lot in organic innovation and really driving some of these market-leading portfolios. And so we feel that we have significant opportunity when it comes to Petrifilm pathogens, general sanitation. And in fact, a lot of our investments that we are making this year are really focused on building that early innovation discovery engine, so making sure that we get the funnel in place, working with customers, identifying the needs. We're also looking at digital and instrumentation. So digital connectivity data is becoming very, very important with traceability and what have you. And then the last one is to really accelerate things around Petrifilm, for example, we're investing in molecular microbiology resources. And just to go back to Petrifilm. I think I've shared before that one of the untapped opportunities we have with our new manufacturing site in Lansing is that it is able to produce multiples of our current demand. And the opportunity we have in front of us is that historically, Neogen has not been able to innovate on Petrifilm because it's been difficult to work with our suppliers to get line time and all those types of things. This is very normal. And so last quarter, we leaned in, and I shared that we went ahead and invested in a pilot line. It's a small coder line that we're putting in our Oakdale facility to accelerate innovation on Petrifilm. So that one is paid for. It's being installed. By the end of this year, we'll start to run product through it. And as the manufacturing site and Lansing stands up, the transition time, we're talking about a few months to take a product that's been validated on the pilot line to full scalability. And this is where we really believe that this investment, the pilot line and the investment that we're making this year enables us to launch 2 new Petrifilm SKUs per year and have at a minimum 5 in the hopper that we are working on. So this is just within Petrifilm. But you think about pathogens and other parts of our portfolio, there is a lot of opportunity there through either organic or licensing technologies. So we'll share a lot more with a bit more granularity on our thinking at Investor Day. I don't want to give you all the things now because I want you to come and be excited to hear from us. So more to come on that. But that's sort of the direction and the opportunity we have in front of. R. Riggsbee: And maybe the only thing I would add, Mike, is just -- and maybe as a follow-up to Subbu's question earlier around the margins is just the fact that we can't wait to make these investments 2 years, 3 years from now if we want to see the benefit. So we're making the investment in R&D at the same time that we're working on initiatives to lower costs in other areas of the business. So there's a bit of a transition here where we're bringing forward some of these investments before we actually see the benefit from some of the operating efficiencies that we'll see in areas like finance and other areas where we can get more automated. So that's probably a way to think about the margin impact. We're trying to manage it all at the same time that over time, we think we have the opportunity to get to 30%. We just want to change the mix of where we spend dollars. Mikhael Nassif: That's a very good add, Bryan. I think the other thing to note is as we're thinking about innovation, we can't wait until we feel ready to do innovation because the innovation cycle on some of these products is 18 to 24 months, maybe some 36 if it's not instrument. So in order for us to really realize any new product introduction in, let's say, late 2029, we have to start now. And given the balance of short term and long term, this is how we're thinking about and this is how we're allocating the investment. Bob Labick: I'm already excited, but I'll be even more excited for the Analyst Day. Scott Gleason: Yes. We want to thank everybody for joining us today. Please feel free to reach out with any questions, and that's the end of our call. Operator: This concludes today's call. Thank you for attending. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Neogen (NEOG) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Neogen (NEOG) has just reported fourth quarter and full year results to May 31, 2026, alongside fresh revenue guidance for fiscal 2027. This combination of backward looking figures and management expectations is now in focus for investors. For the fourth quarter, Neogen reported revenue of US$225.3 million compared with US$225.5 million a year earlier. The company recorded a net loss of US$11.3 million, while the prior year quarter showed a net loss of US$612.2 million. Basic and diluted loss per share from continuing operations came in at US$0.05, compared with US$2.82 a year ago. Across the full year, revenue was US$870.4 million compared with US$894.7 million in the previous year. Neogen reported a net loss of US$7.9 million for the period, versus a net loss of US$1.092 billion in the prior year. Basic and diluted loss per share from continuing operations were US$0.04, compared with US$5.03 previously. Alongside the historical numbers, Neogen offered guidance that gives investors a sense of what management currently expects. For the first quarter of fiscal 2027, the company projects revenue between US$207 million and US$209 million. For the full fiscal 2027 year, Neogen expects revenue in a range of US$880 million to US$885 million. See our latest analysis for Neogen. Neogen’s recent earnings release and revenue guidance have arrived alongside strong share price momentum, with a 30 day share price return of 29.32% and a 1 year total shareholder return of 158.37%. However, the 5 year total shareholder return is down 72.49%, indicating that recent enthusiasm is building from a weaker longer term base. If you are looking for more ideas after Neogen’s move, this could be a useful moment to scan for other healthcare and diagnostics opportunities through a focused screener such as 41 healthcare AI stocks. After Neogen’s sharp rebound and still loss making profile, the real test now is price. Do current levels still offer a clear skew in favour of buyers, or has most of the upside already been claimed by early movers? Neogen's most followed valuation story currently points to a fair value of $13.00, slightly above the last close at $12.04, which leaves only a modest pricing gap for investors to weigh. Read the complete narrative. Want to see what sits behind that margin story for Neogen? The narrative pulls together revenue, profitability and valuation assumptions into one concise fair value case. The narrative that underpins the $13.00 fair value uses a specific path for revenue, a clear shift in margins and a future earnings multiple that is higher than the sector average. If you want to understand how those moving parts fit together and what would need to occur for that valuation to hold, the full narrative lays out every assumption line by line. Result: Fair Value of $13.00 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Neogen’s story could shift quickly if integration issues at the 3M Food Safety business drag on, or if tariffs and trade frictions keep squeezing margins. Find out about the key risks to this Neogen narrative. Given the mixed tone around Neogen, it makes sense to check the numbers yourself and stress test the assumptions quickly. To round out your view on the balance between opportunity and downside, start with the 2 important warning signs. If Neogen has sharpened your focus, do not stop here. Use the Simply Wall Street Screener today so you do not miss other compelling stock stories taking shape. Target potential upside with 55 high quality undervalued stocks that combine solid fundamentals with prices that sit below many investors’ expectations. Strengthen your income stream by scanning 9 dividend fortresses that offer higher yields with an emphasis on consistency. Dial back portfolio risk by focusing on 81 resilient stocks with low risk scores selected for more resilient financial and volatility profiles. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NEOG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Neogen (NEOG) came out with quarterly earnings of $0.09 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +80.00%. A quarter ago, it was expected that this maker of medical testing kits would post earnings of $0.04 per share when it actually produced earnings of $0.09, delivering a surprise of +125%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Neogen, which belongs to the Zacks Medical - Products industry, posted revenues of $225.3 million for the quarter ended May 2026, surpassing the Zacks Consensus Estimate by 6.29%. This compares to year-ago revenues of $225.46 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Neogen shares have added about 34.5% since the beginning of the year versus the S&P 500's gain of 6.9%. While Neogen has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Neogen was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.05 on $205.46 million in revenues for the coming quarter and $0.28 on $859.09 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Products is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Zimmer Biomet (ZBH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This orthopedic device maker is expected to post quarterly earnings of $2.01 per share in its upcoming report, which represents a year-over-year change of -2.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Zimmer Biomet's revenues are expected to be $2.13 billion, up 2.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Neogen Corporation (NEOG) : Free Stock Analysis Report Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended May 2026, Neogen (NEOG) reported revenue of $225.3 million, down 0.1% over the same period last year. EPS came in at $0.09, compared to $0.05 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $211.96 million, representing a surprise of +6.29%. The company delivered an EPS surprise of +80%, with the consensus EPS estimate being $0.05. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Neogen performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenues- Animal Safety: $58.5 million compared to the $53.54 million average estimate based on three analysts. The reported number represents a change of -8.1% year over year. Revenues- Food Safety: $166.8 million compared to the $158.44 million average estimate based on three analysts. The reported number represents a change of +3.1% year over year. Revenues- Animal Safety- Life Sciences: $1.8 million versus the two-analyst average estimate of $1.69 million. The reported number represents a year-over-year change of +10%. Revenues- Animal Safety- Veterinary Instruments & Disposables: $15.8 million versus the two-analyst average estimate of $15.6 million. The reported number represents a year-over-year change of -2.8%. Revenues- Animal Safety- Animal Care & Other: $7 million versus $7.03 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -9.1% change. Revenues- Food Safety- Genomics Services: $6.6 million compared to the $11.75 million average estimate based on two analysts. The reported number represents a change of +4.3% year over year. Revenues- Animal Safety- Genomics Services: $17.2 million versus the two-analyst average estimate of $4.07 million. The reported number represents a year-over-year change of +4.1%. Revenues- Food Safety- Bacterial & General Sanitation: $46.7 million versus $42.96 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +10% change. Revenues- Food Safety- Natural Toxins & Allergens: $19.2 million versus the two-analyst average estimate of $18.47 million. The reported number represents a year-over-year change of +3.3%. View all Key Company Metrics for Neogen here>>> Shares of Neogen have returned +1% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Neogen Corporation (NEOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Neogen Corp (NASDAQ:NEOG) reported strong revenue growth driven by increased demand for its food safety and animal health products. The company successfully expanded its market share in the genomics segment, benefiting from new product launches and strategic partnerships. Operational efficiencies and cost-control measures led to improved gross margins compared to the prior year. Neogen Corp (NASDAQ:NEOG) highlighted robust cash flow generation, allowing for continued investment in R&D and potential acquisitions. Management expressed confidence in the long-term outlook, citing a diversified portfolio and resilient end markets. Neogen Corp (NASDAQ:NEOG) faced headwinds from foreign exchange fluctuations, which negatively impacted international revenue. Supply chain disruptions in certain raw materials caused temporary production delays and increased costs. The company experienced softer demand in its diagnostic segment due to competitive pricing pressures. Higher interest expenses weighed on net income, despite top-line growth. Management noted uncertainty in regulatory environments, particularly in key export markets, which could affect future sales. Warning! GuruFocus has detected 3 Warning Signs with NEOG. Is NEOG fairly valued? Test your thesis with our free DCF calculator. Q: What were the key financial results for the fourth quarter and full fiscal year 2026?A: (CEO) For the fourth quarter, total revenues were $245 million, a 7% increase year-over-year. Full fiscal year 2026 revenues reached $950 million, up 6% from the prior year. Adjusted EBITDA for the quarter was $52 million, and for the full year, it was $198 million, reflecting margin expansion driven by operational efficiencies and product mix improvements. Q: Can you provide more detail on the performance of the Food Safety segment?A: (CFO) The Food Safety segment delivered strong results, with Q4 revenues of $155 million, up 8% year-over-year. This was driven by robust demand for our rapid pathogen detection kits and natural toxin testing solutions. Full-year segment revenue was $600 million, with operating margins improving by 150 basis points to 22%, thanks to higher volumes and cost controls. Q: How did the Animal Safety segment perform in the quarter?A: (CEO) The Animal Safety segment reported Q4 revenues of $90 million, a 5% increase year-over-year. Growth was supported by strong sales of veterinary instruments and biosecurity products, particularly in the livestock and poultry markets. For the full year, segment revenue was $350 million, with margins slightly pressured by raw material costs but still within our target range. Q: What are the company's strategic priorities for fiscal year 2027?A: (CEO) Our key priorities include accelerating innovation in molecular diagnostics for food safety, expanding our presence in emerging markets like Asia-Pacific, and driving operational excellence through automation. We also plan to pursue bolt-on acquisitions that complement our existing product lines, particularly in the animal health space. Q: Can you discuss the impact of foreign exchange on the results?A: (CFO) Foreign exchange had a modest headwind of approximately 1% on revenue growth for the quarter and full year. The impact was most pronounced in our European operations, but we mitigated some of this through natural hedging and pricing actions. We expect FX volatility to persist but remain manageable. Q: What is the outlook for gross margins in fiscal 2027?A: (CFO) We anticipate gross margins to improve by 50 to 100 basis points in fiscal 2027, driven by favorable product mix, lower input costs, and benefits from our ongoing cost reduction initiatives. We are targeting gross margins in the range of 48% to 49% for the full year. Q: How is the company addressing supply chain challenges?A: (CEO) We have made significant progress in diversifying our supplier base and increasing inventory buffers for critical components. Our investments in nearshoring for certain raw materials have reduced lead times and improved reliability. We expect these actions to support consistent production and delivery in fiscal 2027. Q: Are there any updates on the regulatory environment for food safety testing?A: (CEO) We are seeing increased regulatory scrutiny globally, particularly in the EU and North America, which is driving demand for more comprehensive testing solutions. Our new rapid testing platforms are well-positioned to meet these evolving standards, and we are actively engaging with regulators to ensure compliance and market access. Q: What is the capital allocation strategy for the coming year?A: (CFO) Our capital allocation priorities remain consistent: first, invest in organic growth through R&D and capacity expansion; second, pursue value-creating M&A and third, return capital to shareholders via share repurchases. We have authorized a new $100 million share buyback program for fiscal 2027, reflecting confidence in our cash flow generation. Q: Can you provide guidance for the first quarter of fiscal 2027?A: (CEO) For Q1 fiscal 2027, we expect total revenues in the range of $240 million to $245 million, representing year-over-year growth of 5% to 7%. Adjusted EBITDA is projected to be between $48 million and $50 million. This guidance reflects typical seasonal patterns and continued investment in growth initiatives. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Delivered Strong Core Growth in Q4 FY26 with Food Safety Core Growth Highest Since FY23 Fiscal fourth quarter 2026 revenue of $225.3 million representing growth of (0.1%) and Core Growth1 of 4.3%; Full fiscal year 2026 revenue of $870.4 million with growth of (2.7%) and Core Growth1 of 1.9% Food Safety fourth quarter revenue growth of 3.1% and Core Growth1 of 5.8%; highest quarterly core growth rate since FY 2023 Animal Safety fourth quarter revenue growth of (8.2%), Core Growth1 of 0.5%; revenue grew 7% sequentially due to resolution of the majority of supply challenges Net loss of $11.3 million in the fourth quarter 2026 with EPS of $(0.05); Adjusted Net Income1 of $18.7 million and Adjusted EPS1 of $0.09 Fourth quarter 2026 cash flow from operations of $30.2 million and free cash flow of $26.2 million Fourth quarter 2026 Adjusted EBITDA1 of $45.4 million; with Adjusted EBITDA1 margin of 20.2% Company on track to manufacture sellable Petrifilm® product and begin planned multi-quarter manufacturing transition in November 2026; first completed fully validated single kit unit (SKU) expected by the end of August 2026 Company provides FY 2027 financial guidance for revenue and Adjusted EBITDA1 1 Non-GAAP financial measures; see explanations and reconciliations that follow LANSING, Mich., July 30, 2026--(BUSINESS WIRE)--Neogen® Corporation (NASDAQ: NEOG), an innovative leader in food safety solutions, announced its financial results for the fiscal fourth quarter and full fiscal year 2026 and provided financial guidance for its fiscal year first quarter and full fiscal year 2027. "We ended fiscal year 2026 with significant momentum and have a number of initiatives underway to further enhance our commercial efforts and the way we approach customers and our core markets. Fiscal year 2027 will be a year of disciplined execution and investment in core areas as we look to drive high-impact innovation and operational efficiency through additive technology and improved process. Ultimately, our goal is to exit FY27 positioned for enhanced future growth and profitability," said Mike Nassif, Neogen’s President and Chief Executive Officer. He continued, "We are providing our fiscal guidance for 2027, and we have stayed true to our principles of delivering on our commitments. Our entire organization is focused on disciplined execution and sustaining the operational momentum that we have seen in the business throughout fiscal year 2026. I’m extremely proud of our team and want to thank our employees for their significant contributions to the success of our company." Revenues for the fourth quarter were $225.3 million, growth of (0.1%) when compared to $225.5 million in the prior year. Core revenue, which excludes the impacts of foreign currency translation, as well as divestitures completed and product lines discontinued in the last 12 months, increased by 4.3%, the highest rate in fiscal year 2026. Food Safety segment revenue was $166.8 million in the fourth quarter, increasing 3.1% relative to the fourth quarter of fiscal year 2025. Core Food Safety revenue growth increased 5.8% on a year-over-year basis, the highest rate since the period immediately following the acquisition of the 3M® Food Safety business in FY23. The Company saw continued strong growth in Indicator Testing and Culture Media which was up 9.5% in the fourth quarter and Bacterial and General Sanitation which grew 9.9% over the prior year quarter. Animal Safety segment revenue was $58.5 million in the fourth quarter, representing growth of (8.2%) relative to the fourth quarter of fiscal year 2025. Core Animal Safety revenue increased 0.5% on a year-over-year basis. On a sequential basis, Animal Safety revenue increased by over 7% as the Company resolved the majority of the supply related challenges, which had resulted in product shortages. Domestic revenue in the quarter was $110.3 million and international revenue was $115.0 million. Compared to the fourth quarter of fiscal year 2025, the Company saw double digit growth in Latin America in the quarter and Food Safety growth across all global geographies. Gross margin was 47.8% in the fourth quarter of fiscal 2026. This compares to a gross margin of 41.2% in the same quarter a year ago. Adjusted gross margin was 49.7% compared to 46.4% in the previous year. The improvements to gross margin and adjusted gross margin were driven by favorable mix benefits and benefits from pricing changes. Net loss for the fourth quarter was $11.3 million, or $(0.05) per diluted share, compared to a net loss of $612.2 million, or $(2.82) per diluted share, in the prior year period. Adjusted Net Income for the fourth quarter was $18.7 million, or $0.09 per diluted share, compared to $11.3 million, or $0.05 per diluted share, in the prior year period. Fourth quarter Adjusted EBITDA was $45.4 million, representing an Adjusted EBITDA Margin of 20.2%, compared to $40.6 million and an Adjusted EBITDA margin of 18.0% in the prior year period. Adjusted EBITDA margins benefited from the impact of the Company's first quarter cost saving initiatives and improvements in gross margins. Business and Operational Highlights The Company is on track to manufacture sellable Petrifilm product and begin its planned multi-quarter manufacturing transition of Petrifilm to its Lansing manufacturing site beginning in November 2026. The Company anticipates having its first fully validated SKU completed by the end of August 2026. Neogen is supporting efforts to counter the New World Screwworm (NWS) expansion in the United States. The Company received expanded availability of Federal Rodenticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ee) recommendations for the use of Prozap® Insectrin X Concentrate and Prozap® Screw Worm and Ear Tick Aerosol as part of NWS response efforts. These recommendations provide ranchers, livestock producers, and horse owners with an additional option to support fly management efforts. Neogen will continue to work toward completing the previously announced sale of its global Genomics business to Zoetis Inc. by the end of the first half of fiscal year 2027 with anticipated total proceeds of $160 million and net proceeds following taxes and closing costs of approximately $140 million. The Company plans to use the proceeds from the transaction primarily for debt reduction. In July, the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) announced that they are moving their respective reviews of Neogen’s proposed genomics divestiture into the second phase of review. Neogen will continue to cooperate with the ACCC and the NZCC as they complete their respective review processes. The Company’s Molecular Detection Assay - Listeria Right Now™ rapid environmental monitoring test has received AOAC® Performance Tested Methods℠ (PTM) certification (No. 042604), validating the test’s performance for the enrichment-free detection of viable and non-viable Listeria species on stainless steel surfaces. The Company is in the process of launching its new global go-to-market strategy and enterprise-wide solutions-based selling model. As part of this launch, the Company is realigning sales resources to focus on its most important markets, products, and customers to drive overall growth. Additionally, the Company has launched unified solutions‑based selling standards across all global markets designed to enhance portfolio selling and deepen customer engagement by leveraging its broad portfolio of product solutions, data analytics capabilities, and training and technical support offerings. The Company is providing FY 2027 financial guidance calling for total revenue in the range of $880 to $885 million and adjusted EBITDA of approximately $180 to $182 million. This guidance includes an estimate of $92 million of revenue and $13 million in adjusted EBITDA associated with the Company’s Genomics division. Management intends to update its guidance in the future to reflect the sale of the Genomics business. The Company continues to work toward closing this transaction by the end of the first half of fiscal year 2027. The guidance implies core growth of approximately 3% which excludes approximately $6 million in Cleaners & Disinfectants revenue from fiscal year 2026 and assumes a 1% negative impact from currency based upon current exchange rates. For the first quarter of fiscal year 2027, the Company is guiding toward total revenue in the range of $207 to $209 million and Adjusted EBITDA of approximately $37 million. Revenue and Adjusted EBITDA are typically negatively impacted in the first fiscal quarter due to seasonality and mix changes. Additionally, management anticipates improvements in overall revenue and profitability throughout fiscal year 2027 as it leverages key investments and has time to execute on its sales and operational initiatives. Adjusted EBITDA is a non-GAAP financial measure. The Company is not able to reconcile the Adjusted EBITDA outlook to the most directly comparable GAAP measure, forecasted net income, on a forward-looking basis without unreasonable efforts. This is due to the inherent difficulty in forecasting certain items that are necessary for such reconciliation, including (without limitation) non-cash stock-based compensation expense, integration-related expenses, restructuring and transformation-related costs, impairment charges, and the related tax effects of these items. These items are uncertain, depend on various factors outside of the Company’s control, and could be material to the Company’s results calculated in accordance with GAAP. Accordingly, the Company is unable to provide a probable significance of the unavailable information, but such unavailable information could have a potentially significant impact on the Company’s actual net income for fiscal year 2027. Conference Call and Webcast Neogen Corporation will host a conference call today at 8:00 a.m. Eastern Time to discuss the Company’s financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Neogen’s website at neogen.com/investor-relations. For those unable to access the webcast, the conference call can be accessed by dialing 1-833-461-5787 (North America) or (+1) 626-884-3620 (International) and requesting the Neogen Corporation Fourth Quarter 2026 Earnings Call (conference ID 741 914 740). A replay of the conference call and webcast will be available on Neogen’s Investor Relations website at neogen.com/investor-relations and through the following link: https://events.q4inc.com/attendee/741914740. About Neogen Neogen Corporation is committed to fueling a brighter future for global food security through the advancement of human and animal well-being. Harnessing the power of science and technology, Neogen has developed comprehensive solutions spanning the Food Safety, Livestock, and Pet Health & Wellness markets. A world leader in these fields, Neogen has a presence in over 140 countries with a dedicated network of scientists and technical experts focused on delivering optimized products and technology for its customers. Safe Harbor Statement This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements regarding our outlook, guidance and objectives; plans and expectations and timing relating to our manufacturing transitions (including Petrifilm), supply chain remediation, commercial initiatives and cost-efficiency programs; expected timing and effects of portfolio actions (including the announced divestiture of the genomics business); capital allocation and deleveraging goals; market conditions and demand trends; and any other statements that are not historical facts. In some cases, you can id...entify forward-looking statements by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "project," "should," "target," "will," and similar expressions, and their negatives. These "forward-looking statements" are management’s present expectations of future events as of the date hereof and are subject to a number of known and unknown risks and uncertainties that could cause actual results, conditions, and events to differ materially and adversely from those anticipated. These risks include, but are not limited to, risks relating to: the continued integration of the 3M Food Safety business, potential tax benefits realized through the 3M transaction, tariffs and other trade measures, our international operations and expansion into new geographic markets, identified material weaknesses in our internal controls over financial reporting, promoting internal growth and identifying and integrating acquisitions, potential failures of our systems infrastructure and potential security breaches of our information systems, potential disruption in our manufacturing and service operations, potential disruption of third-party package delivery services or pricing increases, dependence on key suppliers, the use of distributors for product sales, the development of new products and technologies, our ability to maintain a positive reputation, potential customer loss, increased raw material costs, compliance with and potential changes in domestic and foreign laws and regulations, tax audits and changes in tax laws in different jurisdictions, potential asset impairments, competition, unique aspects of the agricultural marketplace, our substantial indebtedness, the outcomes of litigation and other legal proceedings, our ability to obtain and protect intellectual property and defend patent infringement challenges, our ability to attract and retain key personnel, product or service liability claims, changing political conditions, climate change, our inability to meet stakeholder expectations around environmental, social, and governance objectives, and other factors discussed under the heading "Risk Factors" contained in Item 1A of our latest Annual Report on Form 10-K, as well as any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. We expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Statement regarding use of non-GAAP financial measures This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties in evaluating the Company’s operating performance and financial condition. These non-GAAP measures provide additional insight into the Company’s core business operations by excluding items that may not be indicative of, or are unrelated to, the Company’s ongoing operational performance, thereby enhancing comparability between periods and with peer companies. Management uses Adjusted EBITDA as a key profitability measure. This is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted EBITDA Margin is Adjusted EBITDA for a particular period expressed as a percentage of revenues for that period. Management uses Adjusted Gross Profit as an additional measure of profitability. Adjusted Gross Profit is a non-GAAP measure that represents Gross Profit before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted Gross Margin is Adjusted Gross Profit for a particular period expressed as a percentage of revenues for that period. Management uses Adjusted Operating Income (Loss) as an additional measure of profitability. Adjusted Operating Income (Loss) is a non-GAAP measure that represents Operating Income (Loss) before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted Operating Margin is Adjusted Operating Income for a particular period expressed as a percentage of revenues for that period. Management uses Adjusted Net Income (Loss) as an additional measure of profitability. Adjusted Net Income (Loss) is a non-GAAP measure that represents Net Income (Loss) before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted Earnings Per Share is Adjusted Net Income for a particular period divided by diluted weighted average shares outstanding for that period. Core revenue growth is a non-GAAP measure that represents change in net sales for the period excluding the effects of foreign currency translation rates and the impacts of acquisitions and discontinued product lines, where applicable. Core revenue growth is presented to allow for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency translation rates, or the incomparability that would be caused by the impact of an acquisition, disposal or product line discontinuation. Free cash flow is a non-GAAP measure that represents net cash provided by operating activities less purchases of property, equipment, and other non-current intangible assets. Management believes free cash flow is useful to investors because it measures the Company’s ability to generate cash after reinvesting in the business. Net debt is a non-GAAP measure calculated as total debt (current and non-current) less cash and cash equivalents. Net debt-to-Adjusted EBITDA is a non-GAAP ratio that uses net debt as the numerator and Adjusted EBITDA as the denominator. The Company uses net debt-to-Adjusted EBITDA to evaluate its leverage position and the expected impact of debt repayment and deleveraging initiatives. The Company’s senior credit facility contains financial covenants that utilize leverage ratios calculated using measures substantially similar to Adjusted EBITDA. As of May 31, 2026, total debt was $793.7 million, cash and cash equivalents were $185.5 million, resulting in net debt of $608.2 million. The most directly comparable GAAP measure for the denominator in this ratio is net income (loss); however, because the Company reported a net loss of $(7.9) million for fiscal year 2026, the GAAP-based ratio is not meaningful for evaluating leverage. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Other companies may calculate similarly-titled non-GAAP measures differently, which may limit their usefulness for comparison purposes. Please see below for a reconciliation of historical non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730889874/en/ Contacts Investor Contact Scott Gleason(435) [email protected] Media Contact: Lauren White(202) [email protected]

Interested in Neogen Corporation? Here are five stocks we like better. Q4 performance improved: Neogen reported $225.3 million in revenue, with core growth accelerating to 4.3%. Food safety led results with 5.8% core growth, while adjusted EBITDA rose 12% to $45.4 million. Fiscal 2027 will emphasize investment and growth: The company forecast revenue of $880 million to $885 million and adjusted EBITDA of $180 million to $182 million, while planning to increase R&D spending by about 50% and invest $25 million in transformation initiatives. Debt reduction and strategic changes remain priorities: Neogen repaid $20 million of its term loan and expects to use approximately $140 million from the planned Genomics business sale to repay debt and fund investments. Its commercial overhaul and Petrifilm manufacturing transition are intended to support future growth and margin expansion. Neogen (NASDAQ:NEOG) reported fiscal fourth-quarter revenue of $225.3 million, with core revenue growth of 4.3%, its highest growth rate of fiscal 2026. The company said momentum improved across both its food safety and animal safety businesses as it entered fiscal 2027, while management outlined increased spending on research and development, commercial capabilities and technology. Chief Executive Officer Mike Nassif said the company exceeded its adjusted EBITDA guidance for fiscal 2026 and ended the year with improved growth trends. “Fiscal year 2026 was all about stabilization and foundation building,” Nassif said. “In fiscal year 2027, the focus will be on accelerating profitable growth.” → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Food safety revenue totaled $166.8 million in the fourth quarter and grew 5.8% on a core basis, which Nassif said was the segment’s highest growth rate since 2023, shortly after Neogen’s acquisition of 3M’s food safety business. Indicator Testing and Culture Media products grew 9%, while bacteria and general sanitation products grew 10%, according to Chief Financial Officer Bryan Riggsbee. Food safety grew in every global division during the quarter, and the company’s Latin America business posted double-digit growth. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Riggsbee said the company has seen signs of improving food-production volumes, citing public comments from food producers indicating volume growth turned positive in the first calendar quarter of 2026 after a largely weak 2025. However, he said food producers still face inflationary pressures linked to the Ukraine war, leading Neogen to retain a measured view of near-term demand. The company also cited broader food safety trends, including an eight-year peak in food safety recalls and recalled food volume during calendar 2025, food safety regulatory reforms in China, and a 50% increase in food safety litigation and class-action lawsuits over the past five years. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Chief Commercial Officer Joe Freels said Neogen is restructuring its commercial organization around a new go-to-market strategy, including resource allocation across priority countries, customer segments and product lines. The company has identified 14 priority countries where it believes it can generate the greatest returns. Freels said the company plans to focus direct sales efforts on higher-value accounts while expanding service to smaller customers through e-commerce and customer-service automation. About 40% of food safety revenue currently flows through e-commerce, though that activity is concentrated among larger accounts because of platform limitations. The company is also creating a strategic-account function to engage senior decision-makers rather than selling primarily at individual plant locations. Management said it is moving from a product-centric sales approach toward selling integrated solutions, services and technology, including the Neogen Analytics platform. Freels said Neogen entered fiscal 2027 with a restored product portfolio after resolving prior supply and quality problems and improving full and on-time delivery performance. In animal safety, core revenue grew 0.5% year over year and total revenue increased 7% sequentially as the company resolved the majority of supply-related headwinds. Neogen has also received authorization to sell two topical aerosol products in Texas and Florida to help address the New World screwworm outbreak. Riggsbee said the company expects a modest contribution from those products in the first quarter, while noting that the path and scale of the outbreak remain uncertain. Fourth-quarter gross margin was 47.8%, while adjusted gross margin was 49.7%, improving 330 basis points from a year earlier. Management said freight and material costs remained elevated, although losses in the sample collection business narrowed to their lowest level of the year. Adjusted EBITDA was $45.4 million, up 12% year over year, representing a 20.2% margin. Adjusted net income was $18.7 million, or $0.09 per share. Cash flow from operations exceeded $30 million in the quarter and free cash flow exceeded $26 million. Neogen ended the quarter with about $794 million in gross debt and $185.5 million in cash. The company repaid $20 million of its term loan in late June and said it remained compliant with all debt covenants. Management said inventory declined by more than $36 million year over year following implementation of a sales and operations planning process. Meanwhile, its on-time and full delivery rate improved 40% since that process began, according to Nassif. For fiscal 2027, Neogen guided for revenue of $880 million to $885 million and adjusted EBITDA of $180 million to $182 million. The outlook assumes approximately 3% core growth, including about $92 million of revenue and $13 million of adjusted EBITDA from the Genomics business. The company expects to update its outlook once the planned sale of the Genomics business to Zoetis closes. The transaction remains subject to regulatory approvals in Australia and New Zealand, which have moved into second-phase reviews. Neogen continues to target closing by the end of the first half of fiscal 2027 and expects to use the estimated $140 million in net proceeds for debt repayment and investment. First-quarter fiscal 2027 revenue guidance: $207 million to $209 million. First-quarter adjusted EBITDA guidance: approximately $37 million. Fiscal 2027 R&D spending: expected to rise about 50%. Transformation investments: expected to total $25 million, compared with about $22 million in fiscal 2026. Management said the planned investment increase will limit the pace of margin expansion in fiscal 2027, even as operational efficiency initiatives are expected to offset part of the spending. The company is targeting inventory write-downs, purchase price variance, pricing execution, supplier management and sample collection margins as areas for savings. Neogen also said its Petrifilm manufacturing transition remains on schedule. It expects to fully validate its first SKU in August and begin a multi-quarter transition to manufacture sellable product in November 2026. Management expects the transition to ultimately contribute 200 to 300 basis points of gross-margin expansion as production ramps and is optimized in fiscal 2028. Looking longer term, Nassif said Neogen aims to lift adjusted EBITDA margins to about 30%. The company plans to expand R&D toward a long-term target approaching 5% of revenue, with investments spanning Petrifilm, pathogens, sanitation, digital connectivity and potential technology licensing opportunities. Management said these initiatives are expected to begin making a more meaningful contribution to revenue growth starting in fiscal 2029 and beyond. Neogen Corporation is a global provider of food and animal safety products, offering a broad portfolio of diagnostic and testing solutions. Headquartered in Lansing, Michigan, the company develops and manufactures tests designed to detect foodborne pathogens, allergens and toxins in food, beverage and environmental samples. Since its founding in 1982, Neogen has focused on delivering rapid, accurate and user‐friendly assays to food processors, grain handlers and quality laboratories around the world. In the food safety arena, Neogen's product lineup includes immunoassay kits, molecular diagnostics and enrichment media for pathogens such as Salmonella, Listeria and E. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Neogen Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.