Lifecore Biomedical Reports $128.9 Million Revenue for Fiscal Year Ending May 2025

Lifecore Biomedical, Inc. reported a total revenue of $128.9 million for the fiscal year ending May 25, 2025, reflecting a slight increase of 0.5% compared to $128.3 million in the previous fiscal year. The company's revenue was bolstered by a 23% increase in its hyaluronic acid (HA) manufacturing segment, which generated $38.8 million, up from $31.6 million. However, this growth was partially offset by a 7% decline in contract development and manufacturing organization (CDMO) revenues, which fell to $90.1 million from $96.6 million. The decrease in CDMO revenue was attributed to lower development revenue from completed projects, reduced volumes as customers worked down inventory, and a customer termination, despite some positive pricing initiatives.

In terms of profitability, Lifecore reported a gross profit of $40.3 million, down from $41.9 million in the prior year, resulting in a gross profit margin of 31.3%. The decline in gross profit was primarily due to a significant drop in CDMO gross profit, which was impacted by inventory adjustments and a customer termination that led to a write-off of inventory and equipment. Operating expenses increased by 14% to $57.5 million, driven by higher selling, general, and administrative costs, including legal expenses related to legacy matters and stock-based compensation for new executive hires.

Strategically, Lifecore has made significant organizational changes, including the appointment of a new CEO and CFO in 2024, and the divestiture of its food businesses in May 2023 to focus solely on its CDMO operations. The company also enhanced its revenue-generating capacity by installing a new fully automated high-speed aseptic isolator filler, which is expected to support up to $300 million in annual revenue. Lifecore has also strengthened its financial position through a private placement of common stock that raised $24.3 million and the sale of excess capital equipment for $17 million.

As of May 25, 2025, Lifecore employed 406 full-time staff, with a focus on retaining skilled personnel to support its CDMO operations. The company has emphasized improving its operational efficiency and productivity through various process enhancements. Lifecore's customer base remains concentrated, with three major customers accounting for 72% of its revenue, raising concerns about dependency on these relationships. The company is actively working to diversify its customer portfolio to mitigate risks associated with customer concentration.

Looking ahead, Lifecore anticipates continued challenges in maintaining revenue growth and profitability, particularly given the competitive landscape and reliance on a few key customers. The company is focused on executing its strategic initiatives to enhance operational performance and expand its market presence. However, it acknowledges the need for additional capital to support its growth strategies and operational needs, particularly as it navigates the complexities of regulatory compliance and market conditions.