Inotiv Discloses Initial Q4 and FY2025 Revenue Figures, Shares Surge
Stock Performance: Inotiv, Inc. (NOTV) shares surged over 23% in overnight trading following the release of preliminary fiscal Q4 and full-year results for 2025.
Revenue Growth: The company anticipates Q4 2025 revenue between $137.5 million and $138.5 million, marking a 6% increase year-over-year, with full-year revenue expected to be slightly above $512.5 million.
Service Momentum: Inotiv reported a significant 60% year-over-year growth in its Discovery and Safety Assessment (DSA) services for Q4, alongside a book-to-bill ratio of approximately 1.08x for Q4.
Future Outlook: CEO Robert Leasure Jr. emphasized ongoing financial goals and improvements in revenue visibility, with final audited results set to be released in early December and a presentation scheduled at the Jefferies Global Healthcare Conference on November 18, 2025.
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- DSA Revenue Growth: Inotiv's DSA revenue reached $48 million in Q1 2026, reflecting a 12% year-over-year increase, with discovery and translational sciences revenue up 26% and safety assessment revenue up 7%, showcasing strong performance despite challenges in the RMS segment.
- Significant New Awards: The company secured $53.6 million in new DSA awards during the quarter, a 27% increase from the previous year, indicating enhanced customer trust and scientific capabilities, which are expected to drive future revenue growth.
- Decline in RMS Revenue: RMS revenue fell to $72.9 million, a 5.4% decrease year-over-year, primarily due to lower NHP sales volumes; management anticipates margin improvements through site optimization and cost control measures in upcoming periods.
- Debt Restructuring Progress: Inotiv is collaborating with Perella Weinberg Partners to explore potential debt refinancing options; while no formal financial guidance is provided, management maintains a cautious outlook on future market clarity, emphasizing continued focus on DSA growth and innovation.
- Earnings Performance: Inotiv's Q1 GAAP EPS of -$0.83 missed expectations by $0.19, indicating challenges in profitability, while revenue of $120.88 million grew 0.8% year-over-year, aligning with market expectations and reflecting the company's efforts to stabilize income.
- Adjusted EBITDA: The adjusted EBITDA for Q1 was $1.8 million, or 1.5% of total revenue, down from $2.6 million and 2.2% in the same quarter last year, highlighting pressures on cost control and profitability.
- Book-to-Bill Ratio: The book-to-bill ratio for DSA services in Q1 was 1.16, indicating stability in new order acquisition despite profitability challenges, suggesting potential for future revenue growth.
- Backlog Growth: As of December 31, 2025, DSA backlog reached $145.4 million, up from $138.2 million on September 30, 2025, and $130.4 million on December 31, 2024, signaling positive market demand for the company's services.
- Earnings Release Schedule: Inotiv will issue its financial results for the first quarter of fiscal 2026 on February 9, 2026, before the stock market opens, demonstrating the company's commitment to transparency and information disclosure.
- Conference Call Details: On the same day, Inotiv will host a conference call at 8:30 a.m. Eastern Time to discuss the financial results, allowing investors to engage directly by dialing 1-800-445-7795 (Domestic) or 1-785-424-1699 (International), enhancing investor relations.
- Webcast Availability: The live conference call will be accessible via the Investors section of the company's website, ensuring that those unable to attend can access an online replay, reflecting the company's dedication to investor communication.
- Company Background Information: Inotiv is a leading contract research organization focused on nonclinical and analytical drug discovery and development services, committed to increasing efficiency, improving data quality, and reducing costs associated with bringing new drugs and medical devices to market, highlighting its significant role in the industry.
- Strategic Collaboration: Inotiv announces a partnership with LifeNet Health to leverage the proprietary TruVivo® system, aiming to enhance drug development efficiency and accuracy by better aligning preclinical models with human biology.
- Technological Advantage: The TruVivo® system utilizes primary human hepatocytes, providing more physiologically relevant in vitro models, thereby addressing critical challenges in drug development and potentially accelerating the development of new therapies.
- Innovation Expansion: This collaboration extends beyond liver models to other human-relevant tissue models, fostering innovation for clients addressing a wide range of human diseases and enhancing market competitiveness.
- Shared Vision: The partnership reflects a mutual mission to accelerate scientific innovation and improve patient safety, expected to bring more human-relevant technologies to clinical research, driving the development of safer and more effective therapies.
- Revenue Growth: Inotiv's Q4 FY 2025 revenue reached $138.1 million, a 5.9% increase driven primarily by a 15.7% rise in Discovery and Safety Assessment (DSA) revenue, indicating strong demand in the nonclinical drug development sector.
- Reduced Operating Loss: The operating loss for Q4 decreased by 48.5% to $6.8 million, reflecting effective cost control and revenue growth strategies, suggesting an improvement in the company's financial health.
- Annual Performance Improvement: Total revenue for FY 2025 was $513.0 million, up 4.5%, with Research Models and Services (RMS) revenue increasing by 4.7%, showcasing the company's stable growth potential in the market.
- Adjusted EBITDA Improvement: Q4 adjusted EBITDA was $11.8 million, or 8.5% of total revenue, significantly up from $5.4 million in the prior year, indicating ongoing enhancements in profitability and operational efficiency.
Oversold Stocks in Health Care: The health care sector has several oversold stocks, presenting potential buying opportunities for undervalued companies, particularly those with a Relative Strength Index (RSI) below 30.
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