Inotiv 2025 Q4 Earnings Narrowed Losses and DSA Growth Highlight Progress

Inotiv (NOTV) reported fiscal 2025 Q4 earnings on Dec 5, 2025, with a 5.9% revenue increase and significantly narrowed losses. The company’s DSA segment drove growth, while RMS revenue rose modestly. Management provided no formal 2026 guidance but expressed confidence in DSA momentum and cost savings from site consolidations.

Revenue

Inotiv’s total revenue rose 5.9% to $138.14 million in 2025 Q4, driven by robust performance in its Discovery and Safety Assessment (DSA) segment, which saw a 15.7% year-over-year increase to $51.6 million. The Research Models and Services (RMS) segment contributed a more modest 0.8% growth to $86.5 million, reflecting stable demand for non-human primate-related services and operational efficiencies from site closures.

Earnings/Net Income

The company narrowed its net loss to $-8.55 million in Q4 2025, a 54.7% reduction from $-18.89 million in the prior year. Earnings per share improved by 65.7%, with a loss of $0.25 per share compared to $0.73 in 2024 Q4. The improvement reflects cost discipline in both segments, particularly in RMS, where operating expenses declined sharply.

Price Action

Post-earnings, NOTV’s stock price fell 7.16% in the latest trading day, 12.74% in the week, and 29.15% month-to-date. The strategy of buying NOTV when revenue beats and holding for 30 days yielded 0.00% returns, underperforming the 52.15% benchmark.

CEO Commentary

CEO Robert Leasure highlighted DSA’s 15.7% revenue growth and 61% increase in awards, driven by biotherapeutics and genetic toxicology. He noted challenges from a cybersecurity incident in August 2025 but emphasized progress in site consolidation and IT system streamlining. Strategic priorities include $6–7 million annualized cost savings from RMS closures and optimism about DSA’s 50%+ incremental margins.

Guidance

Inotiv did not provide formal 2026 guidance, citing uncertainty around tariffs and macroeconomic risks. However, management expects continued DSA margin expansion, RMS cost savings, and $14.3 million in Q4 2025 operating cash flow. Leasure expressed confidence in Q1 2026 trends, though no specific targets were outlined.

Post-Earnings Price Action Review

The stock’s post-earnings underperformance underscores investor skepticism despite improved financials. While the cybersecurity incident and debt refinancing efforts weigh on sentiment, DSA’s strong backlog and RMS cost savings remain key long-term catalysts.

Additional News

Inotiv disclosed a cybersecurity incident in August 2025, which disrupted operations but was mitigated. The company also engaged Perella Weinberg Partners to explore debt refinancing options, signaling a focus on capital structure optimization. RMS site consolidation plans advanced, with two of three planned facilities closed, and IT systems reduced from 249 to 162 to streamline operations.

Financial Highlights

Inotiv’s fiscal 2025 full-year revenue reached $513.0 million, up 4.5% from $490.7 million in 2024. Adjusted EBITDA for the year improved to $34.0 million (6.6% of revenue) from $18.2 million (3.7%), reflecting operational efficiency gains. The company’s debt stood at $402.1 million as of Sept 30, 2025, with proceeds from property sales used to repay term loans.

Strategic Priorities

Management emphasized DSA margin expansion, RMS cost reductions, and technology upgrades to enhance profitability. Leasure noted that DSA’s incremental margins exceed 50%, positioning the segment as a key growth driver. Meanwhile, RMS site closures are expected to yield $6–7 million in annualized savings, supporting long-term cash flow stability.

Risks and Outlook

Despite progress, risks persist, including macroeconomic headwinds, geopolitical uncertainties, and the lingering impact of the cybersecurity incident. Inotiv’s reliance on NHP supply and demand dynamics also poses challenges for RMS margins. However, the company remains focused on operational execution, client satisfaction, and debt management to sustain its recovery trajectory.