NOTV — Inotiv, Inc.

Summary of Inotiv Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Total Revenue: $120.9 million, up 0.8% from $119.9 million in Q1 2025.
• DSA Revenue: Increased to $48 million (+12% YoY), driven by discovery pharmacology and surgical services.
• RMS Revenue: Decreased to $72.9 million (-5.4% YoY), primarily due to lower NHP sales.
• Operating Loss: Increased to $16.3 million from $15.5 million YoY.
• Net Loss: $28.4 million ($0.83 loss per diluted share), compared to $27.6 million ($1.02 loss per diluted share) in Q1 2025.
• Adjusted EBITDA: $1.8 million (1.5% of total revenue), down from $2.6 million (2.2% of total revenue) in Q1 2025.
• Cash Position: $12.7 million in cash, down from $21.7 million at the end of Q4 2025.
• Total Debt: Increased to $405.8 million from $402.1 million at the end of Q4 2025.

2. Strategic Updates and Business Highlights:

• DSA business showed strong momentum with a book-to-bill ratio of 1.16:1 for the quarter and 1.08:1 for the trailing 12 months.
• Significant growth in DSA net awards (+27% YoY) and a backlog of $145.4 million, indicating future revenue potential.
• Continued focus on site optimization and cost reduction in the RMS segment, with two leased facilities exited.
• New collaborations in the NAMs space to enhance innovation and improve offerings.

3. Forward Guidance and Outlook:

• No formal financial guidance provided for fiscal year 2026 due to market uncertainties and evolving tariff policies.
• Management remains optimistic about DSA growth and margin improvements in the latter half of the fiscal year, driven by pricing adjustments and operational efficiencies.

4. Bad News, Challenges, or Points of Concern:

• RMS segment continues to face challenges, particularly with NHP sales down approximately 25% YoY, impacting overall revenue and margins.
• Increased operating loss primarily attributed to RMS performance, overshadowing improvements in DSA.
• The company received a waiver for noncompliance with financial covenants, indicating potential financial strain.
• Seasonality and macroeconomic factors affecting business trends, particularly in RMS.

5. Notable Q&A Insights:

• Management acknowledged that seasonality impacts profitability, particularly in Q1, and indicated that improvements in margins are expected as pricing stabilizes.
• The DSA segment's growth is attributed to better customer relationships and increased trust, leading to repeat business.
• Future operating leverage in RMS is anticipated as cost reductions from facility closures take effect, although current NHP volume challenges hinder immediate benefits.
• Weather-related disruptions in January affected shipping and operations, but management expressed confidence in their team's ability to manage these challenges effectively.

Overall, while Inotiv demonstrated growth in its DSA business, challenges in the RMS segment and financial metrics indicate a need for continued focus on operational efficiency and market adaptation.