Inotiv (NASDAQ:NOTV) reported a mixed start to fiscal 2026, as robust demand for its Discovery and Safety Assessment (DSA) services was offset by ongoing restructuring costs and a contraction in its research models segment.
The West Lafayette, Indiana-based contract research organization (CRO) posted first-quarter revenue of $120.9 million, a slight 0.8% increase year-over-year.
The results highlighted a sharp divergence between segments: DSA revenue surged 12% to $48 million, fueled by a 27% jump in net awards and a growing backlog of $145.4 million.
Conversely, the Research Models and Services (RMS) segment fell 5.4% to $72.9 million, primarily due to lower non-human primate (NHP) volumes, despite higher average selling prices.
On the bottom line, Inotiv’s net loss widened to $28.4 million, or $0.83 per share, missing analyst expectations of a $0.51 loss.
The company’s "site optimization plan"—aimed at consolidating its small animal production footprint from 22 locations in 2023 down to just 10 by Spring 2026—led to the exit of two more leased facilities during the quarter.
While these closures pressured short-term results, management expects the streamlined footprint to eventually drive $4 million to $5 million in annual cost savings.