Neogen Corporation Reports Q2 Fiscal 2025 Results with Increased Revenue but Significant Net Loss

Neogen Corporation reported its financial results for the second quarter of fiscal year 2025, revealing a total revenue of $231.3 million for the three months ended November 30, 2024, a slight increase from $229.6 million in the same period last year. However, for the six months ended November 30, 2024, revenue decreased to $448.2 million from $458.6 million in the prior year. The company experienced a net loss of $456.3 million for the quarter, significantly higher than the loss of $3.5 million reported in the same quarter of the previous year. The loss for the six-month period also widened to $468.9 million from $2.0 million in the prior year, primarily due to a goodwill impairment charge of $461.4 million.

The financial performance reflects several operational challenges, including a $14.7 million unfavorable impact from foreign exchange rates and a $0.6 million decline due to discontinued product lines. Despite these challenges, Neogen noted growth in its food quality and nutritional analysis product lines, as well as continued strength in its indicator testing and rodent control products. However, the company faced reduced sales in its sample collection products and lower genomics volume, particularly in the companion animal market.

In terms of strategic developments, Neogen has been undergoing restructuring initiatives aimed at streamlining operations and focusing on its global genomics business. The restructuring has resulted in increased operating expenses, which totaled $570.8 million for the quarter, compared to $102.3 million in the same period last year. This increase includes significant charges related to the goodwill impairment and restructuring efforts. The company also reported a rise in general and administrative expenses, attributed to higher headcount and costs associated with its enterprise resource planning system implementation.

Geographically, Neogen's international sales reached $117.5 million for the quarter, up from $116.1 million in the prior year, driven by growth in the Asia Pacific and European regions. However, the company faced challenges in the Latin American and South American markets. The total number of shares outstanding as of November 30, 2024, was 216,944,017, reflecting a slight increase from the previous quarter.

Looking ahead, Neogen remains optimistic about its long-term prospects despite the current challenges. The company is focused on resolving production delays and restoring historical production levels in its sample collection product line. Management is also closely monitoring market conditions and expects gradual improvements in the food safety and animal safety segments, particularly as the distribution channel begins to restock inventory. However, the company acknowledges that ongoing geopolitical tensions and economic headwinds may continue to impact its operations in the near term.