Neogen Q3 Earnings Fall Short On Expectations, Cuts Guidance Amid Macro Headwinds And Tariff Concerns

Neogen Corp. NEOG reported third-quarter 2025 adjusted EPS of 10 cents on Wednesday, down from 12 cents a year ago, missing the consensus of 11 cents.

The company reported sales of $220.98 million, down 3.4% year over year, missing the consensus of $224.88 million.

Core revenue, which excludes the impacts of foreign currency translation and acquisitions completed and product lines discontinued in the last 12 months, increased by 0.2%.

Acquisitions and discontinued product lines had a negative impact of 0.5% while foreign currency had a negative impact of 3.1%.

The gross margin was 49.9% down from 51.1% a year ago, mainly due to lower revenue and higher integration costs. Excluding integration and restructuring costs, gross margin was 51.5% in the third quarter compared to 51.8% in the prior-year quarter.

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Third-quarter Adjusted EBITDA was $48.5 million, representing an adjusted EBITDA margin of 22%, compared with $52.7 million and a margin of 23% a year earlier.

Revenues for the Food Safety segment were $152.7 million, a decrease of 3.2%, consisting of 1.5% core growth, a negative 0.3% impact from discontinued product lines, and a negative foreign currency impact of 4.4%.

• Core growth was driven largely by biosecurity and bacterial and general sanitation product categories, which benefited from strong growth in pathogen detection products.

Revenues for the Animal Safety segment were $68.2 million, a decrease of 4%, consisting of a 2.6% core revenue decline, an unfavorable 0.4% foreign currency impact and a negative 1% impact from discontinued product lines.

• Growth was led by the animal care and other and biosecurity product categories, particularly in small-animal supplements, rodent control, and cleaner and disinfectant products, and offset by a decline in the vet instruments product category.

The company’s Genomics business experienced a core revenue decline in the mid-single-digit range. Increased sales into bovine markets were offset by declines in other areas, consistent with the focused restructuring activities executed in the second quarter.

Guidance: The company is updating its full-year outlook, primarily due to lower-than-expected third-quarter results, the rising level of macroeconomic uncertainty affecting the company’s end markets, and the expected impact of tariffs in the fourth quarter.

Neogen expects fiscal year 2025 sales of approximately $895 million, down from prior guidance of $905 million-$925 million and consensus of $910.23 million.

The company forecasts 2025 adjusted EBITDA of approximately $195 million compared to prior guidance of $205 million-$215 million.

Management Update: Neogen CEO John Adent will be stepping down after eight years the company. Adent will continue to serve in his existing roles until his successor has been appointed.

Price Action: NEOG stock is down 17.6% at $5.80 during the premarket session at the last check Wednesday.

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