Neogen 2026 Q1 Earnings Strong Performance as Net Income Surges 388.2%

Neogen (NEOG) reported its fiscal 2026 Q1 earnings on Oct 09th, 2025. The company significantly outperformed expectations, turning a year-ago loss into a strong profit. Neogen delivered a 388.2% year-over-year net income increase and reaffirmed its full-year outlook, signaling confidence in its strategic initiatives and cost management efforts.

Revenue
Total revenue for the first quarter of fiscal 2026 declined by 3.6% to $209.19 million compared to $216.96 million in the prior-year period. This reduction was primarily attributed to the negative impact from the divestiture of the Cleaners & Disinfectants business and the discontinuation of certain product lines, which together reduced revenue by 4.4%. On a core basis, excluding currency translation and these strategic changes, revenue showed a modest 0.3% increase. A 0.5% favorable impact from foreign currency helped moderate the decline. The company also reported a 45.4% gross margin for the quarter, though this marked a decline from the 48.4% recorded in the same period the prior year, mainly due to integration costs and lower revenue.

Earnings/Net Income
Neogen returned to profitability with net income of $36.34 million for Q1 2026, or $0.17 per diluted share, compared to a net loss of $12.61 million, or $0.06 per share, in the prior year. This represents a 388.2% positive swing in net income and a 383.3% improvement in EPS. The company also reported Adjusted Net Income of $9.4 million, or $0.04 per diluted share, a decline from the prior-year figure of $14.4 million, or $0.07 per share, due to lower operating income. Despite the drop in adjusted net income, the turnaround in reported net income and EPS was remarkable and underscores the company’s successful cost restructuring and one-time gains.

Price Action
The stock price of Neogen has shown strong performance following the earnings report, with a 2.73% gain during the latest trading day, a 17.00% increase during the most recent full trading week, and an 18.32% surge month-to-date.

Post Earnings Price Action Review
Following the release of its Q1 2026 earnings, Neogen’s shares experienced a notable rally across both short-term and weekly timeframes, reflecting investor optimism about the company’s profitability turnaround and strategic direction. The stock’s month-to-date performance further reinforced market confidence in the company’s ability to stabilize and grow its operations. The positive price momentum suggests that investors are responding favorably to the company’s financial improvement and long-term strategic outlook.

CEO Commentary
Mike Nassif, newly appointed Chief Executive Officer and President, emphasized Neogen’s leadership in food and animal safety and acknowledged recent execution challenges. He outlined a strategy focused on commercial excellence, cost efficiency, and innovation. Nassif highlighted the recent restructuring initiatives and workforce adjustments, noting that these steps will support margin growth and enable strategic reinvestment in high-potential areas. He expressed confidence in the company’s ability to deliver innovation and improved financial performance, with a clear path to sustainable value creation for shareholders.

Guidance
Neogen reaffirmed its full-year 2026 guidance, with expected cost savings of $20 million in annualized benefits and $12 million in immediate savings. The company anticipates improved Adjusted EBITDA margins as integration costs and inefficiencies are addressed, alongside a stronger free cash flow position due to reduced capital expenditures and optimized working capital. Neogen aims to complete the Petrifilm production transfer by Q2 2026 and is focused on deleveraging through enhanced commercial and operational performance.

Additional News
In addition to its Q1 earnings, Neogen completed the divestiture of its global Cleaners & Disinfectants business, repaying $100.0 million of debt as part of its cost optimization strategy. The company also welcomed Mike Nassif as CEO and President in mid-August and implemented restructuring measures at the end of September to right-size the cost base, including workforce reductions. These actions are expected to fuel margin expansion and allow the company to reinvest in high-growth areas. Neogen is confident in its ability to regain market share through improved execution and deliver sustainable value creation for shareholders.