Neogen Raises Fiscal 2027 Outlook After Core Growth Rebound
First-quarter revenue was $222.8 million, up 6.5% from a year earlier, and the company lifted full-year revenue guidance to $885 million to $890 million.
Neogen Corporation (NEOG), an innovative leader in food safety solutions, reported first-quarter fiscal 2027 revenue of $222.8 million, up 6.5% from a year earlier, reversing the 0.1% year-over-year decline in the immediately preceding quarter. Core growth, which strips out currency, completed divestitures, and discontinued lines, accelerated to 8.1% from 4.3% in the fiscal fourth quarter.
The company said core revenue included a benefit of about 3% from inventory adjustments at certain distributors in the prior-year quarter and the timing of certain customer orders.
Food Safety, the larger of the two reportable segments, generated $163.2 million, up 7.4% year over year, with core growth of 8.1%. That compared with 3.1% reported growth and 5.8% core growth in the prior quarter. Indicator Testing and Culture Media, including Petrifilm, was $85.6 million. Bacterial and General Sanitation was $44.6 million. Natural Toxins and Allergens was $19.3 million. Biosecurity Products in Food Safety were $4.6 million, and Genomics Services were $6.7 million.
Animal Safety revenue was $59.6 million, up 4.2% year over year, with core growth of 8.0%. That followed an 8.2% year-over-year decline and 0.5% core growth in the prior quarter, when the company had cited third-party supply challenges. Veterinary Instruments and Consumables were $14.1 million. Animal Care and Other were $7.7 million. Biosecurity Products in Animal Safety were $18.9 million. Genomics Services in Animal Safety were $17.3 million. Life Sciences were $1.6 million. The company said it saw strong growth in Veterinary Instruments and Consumables and in Biosecurity Products, primarily from insect control.
Domestic revenue was $110.1 million and international revenue was $112.7 million. The company saw growth in all regions globally, including double-digit growth in Asia Pacific.
Gross margin was 47.4%, compared with 45.4% a year earlier. Adjusted gross margin was 49.8%. The improvement in gross margin was driven primarily by lower costs related to integrating the former 3M Food Safety business, while the improvement in adjusted gross margin was driven primarily by higher revenue. Operating expenses were $107.3 million. The operating loss narrowed to $1.8 million from $16.1 million a year earlier.
GAAP results swung to a net loss of $11.9 million, or $(0.05) a share, from net income of $36.3 million, or $0.17 a share, a year earlier. The higher net income in the prior-year quarter was driven primarily by a non-cash gain on the divestiture of the Cleaners and Disinfectants business. Adjusted net income was $17.5 million, or $0.08 a share, versus $9.5 million, or $0.04 a share. Adjusted EBITDA was $41.6 million, with an 18.7% margin, versus $35.5 million and a 17.0% margin a year earlier. Adjusted operating income was $36.5 million, a 16.4% margin. Adjusted EBITDA margin benefited primarily from higher revenue driving operating leverage with operating expenses.
Cash flow from operations was $12.9 million and free cash flow was $4.7 million. Cash and cash equivalents were $172.0 million at August 31, 2026. Non-current debt was $774.2 million.
President and Chief Executive Officer Mike Nassif said the company’s focus had shifted from strengthening fundamentals to scaling them, and that first-quarter results reflected progress as changes across the organization continued to take hold.
Neogen remains on track to manufacture saleable Petrifilm product and to begin a planned multi-quarter manufacturing transition to its Lansing site in November 2026. It completed full validation of its first single kit unit in August 2026.
The company announced a strategic collaboration and equity investment in Hinalea Imaging Corp. to develop digital imaging solutions for food safety and quality inspection. It continues to work toward completing the previously announced sale of its global Genomics business to Zoetis Inc., with regulatory reviews currently expected to conclude by the end of December 2026.
Neogen now expects fiscal 2027 revenue of $885 million to $890 million, up from prior guidance of $880 million to $885 million, and Adjusted EBITDA of $181 million to $183 million, up from $180 million to $182 million.