Neogen (NASDAQ:NEOG) shares are in focus after the food and animal safety leader reported second-quarter revenue of $224.7 million, a 2.8% decline from the previous year.
While the headline figure retreated, the company highlighted a 2.9% rise in core revenue—a metric that strips out the noise of discontinued product lines and foreign exchange.
The results suggest the company is successfully navigating a complex integration period following significant restructuring.
The bottom line showed dramatic improvement on a GAAP basis, with a net loss of $15.9 million, or $0.07 per share, compared to a massive $456.3 million loss a year ago.
That prior-year figure was bloated by a non-cash goodwill impairment charge that did not repeat this quarter.
On an adjusted basis, which many analysts use to gauge operational health, Neogen earned $0.10 per share, narrowly missing the $0.11 reported in the same period last year due to lower operating income.
Profitability margins faced pressure during the quarter.
Gross margin contracted to 47.5% from 49%, squeezed by a combination of higher tariff costs, inventory write-offs, and a less favorable product mix.
Adjusted EBITDA reached $48.7 million, representing a margin of 21.7%.
Management managed to offset some of the gross margin erosion through tighter control of operating expenses, keeping the EBITDA margin within half a percentage point of the prior year's performance.
The company’s balance sheet remains leveraged but stable, ending the period with $145.3 million in cash against $800 million in total debt.
Despite the debt load, Neogen’s decision to raise its full-year 2026 revenue outlook to a range of $845 million to $855 million—up from previous estimates—suggests a pivot toward growth.
The company also expects adjusted EBITDA to reach approximately $175 million for the fiscal year, supported by $50 million in planned capital expenditures.