Charles River Raises 2026 Organic Growth Outlook After DSA Beat

The Tip Desk · November 4, 2026 · 4 min read

Organic revenue growth reached 4.7% in the third quarter, and 2026 organic guidance moved to at least 1.5% from a 0.0% to 1.0% range.

Charles River Laboratories International, Inc. (CRL) reported third-quarter organic revenue growth of 4.7%, a second consecutive quarter of organic expansion after a 1.5% organic decline in the first quarter and 0.1% growth in the second. The company said the pace outperformed its prior outlook and led it to raise 2026 guidance.

Reported revenue was $982.7 million, down 2.2% from $1,004.9 million a year earlier, primarily because of May 2026 divestitures. Organic growth excludes acquisitions, divestitures and foreign currency. The company said the organic increase was driven by Manufacturing Solutions and Discovery and Safety Assessment.

Non-GAAP diluted earnings were $3.09 a share, up 27.2% from $2.43 a year earlier, after $3.02 in the second quarter and $2.06 in the first. Non-GAAP net income was $150.1 million. The company said the non-GAAP increase was driven primarily by a higher operating margin and a lower tax rate. Non-GAAP operating margin expanded 330 basis points year-over-year to 23.0% from 19.7%.

GAAP results included a large tax item. GAAP net income available to common shareholders was $333.1 million, or $6.86 a share, versus $54.4 million, or $1.10 a share, a year earlier. That increase included a $245.6 million, or $5.06 a share, benefit from the reversal of acquired tax reserves following newly enacted tax legislation and completion of certain tax requirements in a foreign jurisdiction. GAAP operating margin rose to 20.6% from 13.3%, including a $44.6 million DSA tax-reserve reversal.

Discovery and Safety Assessment, the largest reportable segment, generated $596.3 million of revenue, down 0.7% from $600.7 million a year earlier on the divestiture of certain European Discovery Services sites. Organic DSA revenue increased 5.9%, which the company attributed primarily to higher study volume for regulated safety assessment services. Non-GAAP DSA operating margin rose to 26.8% from 25.4%, which the company said was driven primarily by operating leverage from that volume and lower sourcing costs for large research models. DSA GAAP operating margin was 28.9%.

Manufacturing Solutions revenue was $178.9 million, down 6.2% from $190.7 million a year earlier on the CDMO divestiture. Organic Manufacturing revenue increased 7.4%, which the company said was driven by demand in Biologics Testing Solutions and Microbial Solutions. Non-GAAP Manufacturing operating margin increased to 38.6% from 26.7%, driven primarily by the CDMO divestiture benefit. GAAP Manufacturing operating margin was 35.7%.

Research Models and Services revenue was $207.5 million, down 2.8% from $213.5 million a year earlier on the Cell Solutions divestiture. Organic RMS revenue decreased 0.6%, after a 5.5% organic decline in the first quarter. The company said the third-quarter organic decline was due primarily to lower revenue for small research models in North America and for large research models, partly offset by higher revenue for small research models in China and for research model services, particularly Insourcing Solutions. Non-GAAP RMS operating margin decreased to 24.4% from 25.0%, which the company said was driven primarily by an unfavorable revenue mix, both geographically and related to large research models. GAAP RMS operating margin increased to 19.9% from 16.2%, primarily due to lower costs related to the Cell Solutions divestiture and restructuring initiatives.

Chief Executive Officer Birgit Girshick said the company was encouraged by continued strength in the biopharmaceutical demand environment, that revenue and earnings per share outperformed prior expectations, and that DSA net bookings and proposals continued to show robust year-over-year increases.

The company is increasing 2026 revenue and earnings-per-share guidance, last updated on August 5, 2026. It said the increase primarily reflects third-quarter outperformance, principally better-than-expected DSA performance and a lower tax rate. Organic revenue guidance is now at least +1.5%, up from 0.0% to 1.0%. Non-GAAP EPS guidance is $11.35 to $11.55, versus $11.15 to $11.45. GAAP EPS guidance is $8.15 to $8.35, versus $3.05 to $3.35, reflecting the third-quarter tax-reserve reversal. Reported revenue growth guidance is (2.0)% to (1.5)%, versus (3.5)% to (2.5)%.