Inotiv 2025 Q4 Earnings 54.7% Reduction in Net Loss Amid DSA Growth

Inotiv (NOTV) reported Q4 2025 earnings on Dec 5, 2025, with revenue rising 5.9% to $138.14 million, surpassing estimates. The company narrowed its net loss by 54.7% to $8.55 million, driven by strong DSA growth. However, shares fell 29.15% month-to-date despite the improved performance.

Revenue

The Discovery and Safety Assessment (DSA) segment drove growth with a 15.7% year-over-year revenue increase to $51.6 million, while the Research Models and Services (RMS) segment saw a modest 0.8% rise to $86.5 million. Total revenue reached $138.14 million, reflecting a $7.7 million year-over-year gain, primarily attributed to DSA’s robust performance in biotherapeutics and toxicology services.

Earnings/Net Income

Inotiv reduced its net loss to $8.55 million in Q4 2025, a 54.7% improvement from $18.89 million in Q4 2024. Earnings per share (EPS) narrowed to -$0.25 from -$0.73, a 65.7% improvement. The EPS improvement of 65.7% to -$0.25 per share and a 54.7% reduction in net loss demonstrate significant progress in narrowing losses.

Post-Earnings Price Action Review

The strategy of buying NOTV when revenue beats and holding for 30 days resulted in no returns, yielding a 0.00% return compared to a benchmark gain of 52.15%.

Shares declined 7.16% on the latest trading day, 12.74% in the week, and 29.15% month-to-date, reflecting investor concerns over debt refinancing and operational risks. Despite improved financials, the stock underperformed, with the backtested strategy showing no gains and a maximum drawdown of 0.00%.

CEO Commentary

CEO Robert Leasure highlighted DSA’s 15.7% revenue growth and 61% award increase, driven by biotherapeutics and toxicology services. He noted challenges from a Q3 cybersecurity incident but emphasized operational recovery. Strategic priorities include DSA margin expansion, RMS site consolidation (60% of facilities closed since 2022), and IT system streamlining.

Guidance

Inotiv did not provide formal 2026 guidance due to uncertainty around tariffs and market demand. However, Leasure expects continued DSA revenue growth (12.4% in the last two quarters) and margin improvements. RMS site consolidation is projected to save $6M–$7M annually post-completion, with capital expenditures focused on RMS modernization.

Additional News

Inotiv disclosed a cybersecurity incident in August 2025 that disrupted operations but was mitigated without long-term impact. The company engaged Perella Weinberg Partners to explore debt refinancing options, signaling urgency to address its $402.1 million net debt. Additionally, Inotiv sold two U.S. properties to repay term loans as part of site optimization plans. The company also reported 55% fewer RMS client complaints YoY and progress in debt refinancing discussions, though no specific targets were disclosed.

Key Strategic Moves

• Cybersecurity Incident: Resolved by Q4, with no long-term operational impact.

• Debt Refinancing: Partnering with Perella Weinberg to explore alternatives amid $402.1 million debt.

• Site Consolidation: Closed 60% of RMS facilities since 2022, targeting $6M–$7M annual savings.

• IT Streamlining: Reduced IT systems by 35% to enhance operational efficiency.

Risks and Outlook

Inotiv faces macroeconomic risks, including tariffs and NHP cost volatility. While DSA margins are expected to expand, RMS profitability remains sensitive to NHP supply and transportation costs. The company aims to stabilize pricing and improve client satisfaction, with a focus on converting $138.2 million in DSA backlog.

Final Takeaway

Inotiv’s Q4 results highlight DSA growth and operational improvements, despite a cybersecurity incident and debt challenges. The company’s focus on margin expansion, site consolidation, and debt refinancing positions it for long-term resilience, though near-term risks persist. Investors remain cautious, with shares underperforming despite improved financial metrics.