Neogen Corporation Reports Q2 Fiscal 2026 Revenue of $224.7 Million, Down 2.8%

Neogen Corporation reported its financial results for the second quarter of fiscal year 2026, revealing a total revenue of $224.7 million for the three months ended November 30, 2025, a decrease of 2.8% from $231.3 million in the same period last year. The decline was attributed primarily to a $15.4 million negative impact from divestitures, particularly the sale of its Cleaners and Disinfectants business, which was partially offset by a $6.8 million increase in core business growth and a favorable foreign exchange impact of $2.0 million. For the six-month period, total revenue also fell to $433.9 million from $448.2 million, reflecting similar trends.

The company's gross profit for the quarter was $106.7 million, down from $113.3 million a year earlier, resulting in a gross margin of 47.5%, compared to 49.0% in the prior year. This decrease in margin was primarily due to higher manufacturing costs and inventory write-offs. Operating expenses for the quarter were significantly lower at $112.1 million, compared to $570.8 million in the previous year, which included a substantial goodwill impairment charge of $461.4 million. The operating loss narrowed to $5.4 million from $457.5 million in the prior year, while the net loss for the quarter was $15.9 million, or $(0.07) per share, compared to a net loss of $456.3 million, or $(2.10) per share, in the same quarter last year.

Strategically, Neogen has been focusing on divesting non-core assets, including the Cleaners and Disinfectants business, which generated $121.7 million in cash proceeds. The company also recognized a gain of $76.4 million from this sale, contributing positively to its financial position. Additionally, Neogen has initiated a restructuring plan aimed at reducing its global headcount by approximately 10% to streamline operations and reduce costs. This restructuring is expected to enhance operational efficiency and align the workforce with current market demands.

Operationally, Neogen's Food Safety segment reported revenues of $165.6 million, a slight increase from $164.2 million in the previous year, driven by growth in pathogen detection and sample collection products. In contrast, the Animal Safety segment saw a revenue decline to $59.1 million from $67.0 million, primarily due to the impact of divestitures and lower sales of veterinary instruments. The company continues to face challenges in the market, including inflationary pressures and supply chain disruptions, but remains optimistic about future growth opportunities, particularly in its core product lines.

Looking ahead, Neogen's management expressed cautious optimism regarding the company's long-term prospects, despite ongoing economic headwinds. The company is focused on improving operational efficiencies and leveraging its established distribution partnerships to drive revenue growth. Neogen plans to continue investing in its business, with an estimated capital expenditure of approximately $50 million for fiscal year 2026, primarily for the integration of acquired products and the development of new manufacturing facilities.