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Neogen Corporation (NASDAQ: NEOG) reported its financial results for the first quarter of 2025, ending August 31, 2024, showing a revenue of $217.0 million. The company experienced a net loss of $12.6 million, translating to a loss of $0.06 per diluted share.

However, on an adjusted basis, Neogen reported a net income of $14.4 million or $0.07 per diluted share, and an adjusted EBITDA of $43.7 million. These results highlight the company’s ability to navigate a challenging market environment while focusing on strategic growth initiatives.

The quarter was marked by operational improvements, particularly in the Food Safety segment, where Neogen saw positive core revenue growth. CEO John Adent noted that the company successfully resolved system-related issues in its distribution center, which had previously impacted order fulfillment rates.

This resolution allowed Neogen to focus on gaining market share without the constraints of shipping delays. Despite facing soft end-market conditions, the company leveraged its expertise in food safety solutions to drive constructive dialogues with customers, emphasizing the critical role of rapid detection of contaminants in food and beverage production.

In the Animal Safety segment, Neogen faced challenges due to what it perceives as cyclical lows in the end market. The decline in core revenue was attributed to mixed channel inventory movements at distribution partners and timing impacts.

Despite these challenges, sales to end users remained supportive. Neogen is actively pursuing mitigating initiatives to address the impact of lower total volumes and higher shipping and distribution costs on its margins. The company remains committed to protecting its margins through targeted actions.

Neogen Reports Beats Revenue Expectations in Q1, Falls Short on Earnings

Neogen’s first-quarter performance exceeded expectations in terms of revenue but fell short in earnings per share (EPS). Analysts had anticipated revenue of $214.67 million, but Neogen surpassed this expectation with actual revenue of $217.0 million. This positive revenue performance can be attributed to the company’s strategic initiatives in the Food Safety segment and its ability to resolve operational challenges that previously hindered growth.

On the other hand, the company’s EPS did not meet expectations. Analysts had projected an EPS of $-0.04, whereas Neogen reported an actual EPS of $-0.06. This shortfall can be linked to the challenges faced in the Animal Safety segment, where cyclical lows and inventory movements at distribution partners impacted core revenue. Despite the EPS miss, Neogen’s adjusted net income of $14.4 million, or $0.07 per diluted share, indicates the company’s underlying strength and potential for future profitability.

Neogen’s ability to outperform revenue expectations demonstrates its resilience and adaptability in a dynamic market environment. The company’s focus on food safety solutions and operational improvements positions it well to capitalize on growth opportunities. However, the EPS miss underscores the need for continued vigilance in managing costs and addressing challenges in the Animal Safety segment. Neogen’s ongoing initiatives to protect margins and enhance operational efficiency will be critical in achieving its financial objectives.

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Neogen Maintains Full-Year Guidance

Neogen has maintained its full-year guidance, signaling confidence in its strategic initiatives and the potential for continued growth. The company remains focused on leveraging its expertise in food safety solutions to drive market share gains and capitalize on emerging opportunities. Neogen’s commitment to providing a robust line of defense in the rapid detection of contaminants positions it as a trusted partner in the food and beverage industry.

Neogen is poised to benefit from its longstanding experience and broad portfolio of globally validated products. The company actively engages with customers to structure robust food safety testing programs, helping them mitigate risks associated with contaminated products. This proactive approach strengthens customer relationships and reinforces Neogen’s position as a leader in food safety solutions.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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