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- **Strategic Restructuring**: Divesting 7% of revenue to drive $0.30 EPS accretion, with $225M+ cost savings by 2026. 
- **Mixed Segment Growth**: RMS up 6.5% YoY, DSA down 3.1%, Manufacturing down 5.1% due to CDMO loss. 
- **Financial Resilience**: Q3 EPS $2.43, guiding to $10.10-$10.30 Non-GAAP, with $470M-$500M free cash flow. 
- **Biotech Recovery**: Q3 biotech proposal up high single-digits, but 2026 DSA growth hinges on capital access. 
- **New Initiatives**: Investing in NAMs (e.g., Trillium), with long-term margin upside. 
- **Share Buybacks**: $1B authorization to enhance returns.

**【CEO Summary Section】**
- **Strategic Review Update**: Board supports focus on core markets, divesting 7% of 2025 revenue (non-core assets), and $0.30 EPS accretion from divestitures by mid-2026. 
- **Cost Savings**: $225M annualized cost savings by 2026, plus $70M incremental savings from restructuring and efficiency initiatives. 
- **Segment Performance**: 
  - **DSA**: Q3 revenue down 3.1% YoY, but bookings stable at 0.82x net book-to-bill. Biotech proposal activity up high single-digits YoY. 
  - **RMS**: +6.5% YoY growth driven by NHP shipments, operating margin 25% (vs. 21% YoY). 
  - **Manufacturing**: Down 5.1% YoY due to CDMO client loss, but Microbial Solutions up high single-digits. 
- **NAMs**: Investing in in vitro solutions (e.g., Trillium endotoxin test), but long-term adoption gradual. 

**【CFO Financial Commentary】**
- **Q3 2025 Results**: 
  - Revenue: $1B (-0.5% YoY), organic -1.6%. 
  - EPS: $2.43 (-6.2% YoY), Non-GAAP EPS at top of guidance ($10.10-$10.30). 
  - Free Cash Flow: $178M (vs. $213M YoY), guiding to $470M-$500M for FY25. 
- **Financial Targets**: 
  - FY25 Revenue: -1.5% to -2.5% organic. 
  - Operating Margin: Flat to -30bps. 
  - Tax Rate: 23.5%-24.5%. 
  - New $1B stock buyback authorization. 

**【Q&A Highlights】**
- **Demand Trends**: Biotech funding improved in Q3, but cautious on 2026 DSA growth. Book-to-bill improving monthly, but needs sustained biotech capital access. 
- **Cost Savings**: $100M incremental savings in 2026, offsetting inflation. 
- **Divestitures**: 7% revenue impact, targeting mid-2026 completion. 
- **NAMs**: Early-stage adoption, but long-term opportunity with FDA-aligned in vitro solutions. 
- **Capacity**: DSA utilization below optimal, adding staff to meet demand. 
- **Pricing**: Spot pricing stable, strategic discounting to protect share.

Charles River Laboratories International, Inc. (CRL) Q3 2025 Earnings Call Transcript

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