Neogen Corporation

Neogen reported fourth-quarter revenue of $225.3 million, up 4.3% on a core basis. Food Safety revenue was $166.8 million, up 5.8% core, while Animal Safety grew 0.5% core year over year and 7% sequentially. Gross margin was 47.8%, adjusted gross margin was 49.7%, up 330 basis points year over year, adjusted EBITDA was $45.4 million at a 20.2% margin, and adjusted EPS was $0.09. Cash flow from operations was over $30 million and free cash flow was over $26 million; cash at quarter-end was $185.5 million and gross debt was approximately $794 million. For fiscal 2027, management guided to revenue of $880 million-$885 million and adjusted EBITDA of $180 million-$182 million, including approximately $92 million of revenue and $13 million of adjusted EBITDA from genomics; the guide implies about 3% core growth, roughly 20.5% adjusted EBITDA margin at the midpoint, and a negative 1% FX impact. Q1 fiscal 2027 guidance is revenue of $207 million-$209 million and adjusted EBITDA of about $37 million.

Mike Nassif framed the quarter as evidence that the business is turning the corner after fiscal 2025 weakness, emphasizing improving core growth across both segments and restored product availability. He said Neogen is shifting from a defensive posture to offense, with three priorities: commercial prowess, high-impact innovation and operational efficiency. His tone was confident but measured, stressing that fiscal 2027 is about investing for a stronger long-term growth profile while remaining disciplined on costs and execution.

Bryan Riggsbee highlighted that Q4 adjusted gross margin improved to 49.7% and adjusted EBITDA reached $45.4 million, despite higher freight and material costs and $3 million of higher adjusted operating expenses year over year. He said operating cash flow was over $30 million and free cash flow over $26 million, aided by working capital and timing of interest payments. On the balance sheet, he cited approximately $794 million of gross debt, $185.5 million of cash, and a $20 million term-loan paydown in late June, and said the company expects to end calendar 2026 below 3x net leverage and fiscal 2027 near its 2.5x target after genomics proceeds. He also noted fiscal 2027 transformation investments of $25 million, versus about $22 million in fiscal 2026, and said these are excluded from adjusted financials.

Analysts pressed management on why fiscal 2027 EBITDA expansion looks modest despite stronger Food Safety growth and whether the guidance was conservative. Riggsbee said the year-over-year EBITDA profile is only slightly up because of planned investments, and Nassif added that the company is focused on rebuilding investor credibility and that the guide sits above Street consensus. Questions also focused on whether the commercial reorganization and e-commerce push are catch-up moves or competitive advantages; management said the actions are mainly about reallocating resources to the highest-return opportunities, while also admitting there is some catch-up in capability. On Petrifilm and R&D, management said the first SKU validation is expected in August, the manufacturing transition begins in November 2026, and R&D spending is being increased because innovation lead times are long and the company needs to start now for future launches.