Neogen (NEOG) Q1 Earnings call transcript Oct 10, 2025

In the recent earnings call for the first quarter of Neogen Corporation's 2025 fiscal year, the company provided insights into its financial performance and strategic initiatives. Despite facing some challenges, Neogen showcased a strong commitment to its core business of food safety and expansion into new markets. Here are the key takeaways from the call.

Focus on Food Safety and Market Expansion

Neogen Corporation's focus on food safety is evident, with the company's CEO, John Adent, emphasizing the importance of the food safety market and its potential for growth. The company has been strengthened by the acquisition of 3M Food Safety, which has solidified its position as the largest player with the broadest product portfolio and geographic reach. Adent highlighted the strategic significance of this transaction, stating that it has positioned Neogen as a leader in the food safety market, which generates approximately two-thirds of the company's revenue.

Challenges and Opportunities in Animal Safety and Genomics

The call also touched upon the challenges in the Animal Safety segment, which is influenced by the cyclical lows in net farm income. However, Neogen's commercial teams have been successful in growing sales out of the distribution channel despite these challenges. In the Genomics business, there were mixed results, with a decline in revenue in the first quarter but improvements in large animal business. The company is focusing on driving growth in direct to producer beef and dairy segments while also targeting actions to rightsize the cost base.

Integration Progress and Organizational Changes

Neogen Corporation also shared updates on its integration progress, with the resolution of ERP-related challenges in the primary distribution center and the completion of the relocation of the former 3M sample collection product line. The company is currently ramping up production and expects to reach normal production levels in the third quarter. Additionally, the company announced the appointment of Thierry Bernard, CEO of QIAGEN, to its Board, bringing valuable insights and perspectives from the food safety industry.

Financial Performance and Outlook

The call provided a detailed analysis of Neogen Corporation's financial performance, with revenues of $217 million in the first quarter. While core revenue declined 1% due to foreign currency and acquisition impacts, the company is optimistic about its future outlook. Neogen expects its first quarter adjusted EBITDA margin to be the lowest of the year but anticipates improvements in the balance of the year driven by higher revenue volumes, gross margin improvements, and operating expense efficiency.

Conclusion

Neogen Corporation's earnings call highlighted the company's strong focus on food safety and its strategic moves to expand its market reach and improve operational efficiency. Despite facing challenges in certain segments, Neogen is poised for growth, particularly in its core food safety market. The company's strategic acquisitions and organizational changes, along with its commitment to innovation and customer satisfaction, position it well for future success.