Core Viewpoint - Inotiv, Inc. has reported a cybersecurity incident that occurred in early August 2025, involving unauthorized access to its systems and potential acquisition of personal data [1][2][3]. Incident Details - The unusual activity was detected on August 5, 2025, leading to an investigation that confirmed unauthorized actions by a threat actor by August 8, 2025 [3][4]. - The investigation revealed that personal information may have been acquired, including names, Social Security numbers, financial account information, and health-related data [5][6]. Response Actions - Inotiv took immediate steps to contain the incident, launched an investigation with external cybersecurity specialists, and notified regulators and law enforcement [6][7]. - The company has informed affected individuals via mail and email and is offering complimentary credit monitoring services [7][8]. Company Overview - Inotiv, Inc. is a leading contract research organization focused on nonclinical and analytical drug discovery and development services, aiming to enhance efficiency and reduce costs in bringing new drugs and medical devices to market [10][11].

Financial Performance - Total revenue for the three months ended December 31, 2025, was $120.879 million, a slight increase of 0.8% compared to $119.876 million in the same period of 2024[12] - Service revenue increased to $59.721 million, up 11.9% from $53.557 million year-over-year[12] - Consolidated net loss for the quarter was $28.378 million, compared to a net loss of $27.630 million in the prior year, reflecting a 2.7% increase in losses[12] - Basic and diluted loss per common share was $0.83, an improvement from a loss of $1.02 per share in the same quarter of 2024[12] - The company reported an operating loss of $16.330 million for the quarter, compared to an operating loss of $15.507 million in the same quarter of 2024[12] - Consolidated net loss for the three months ended December 31, 2025, was $28,378,000, compared to a loss of $27,630,000 for the same period in 2024[19] - The Company reported total segment operating income of $15,285 for the three months ended December 31, 2025, compared to $16,526 in 2024[52] - The RMS segment's operating income decreased to $7,059 for the three months ended December 31, 2025, from $9,438 in 2024[52] Assets and Liabilities - Total assets decreased to $734.336 million as of December 31, 2025, down from $771.114 million at September 30, 2025, representing a decline of 4.8%[10] - Total liabilities were $625.312 million, a decrease of 1.5% from $635.086 million in the previous quarter[10] - Cash and cash equivalents decreased to $12.732 million from $21.741 million, a decline of 41.5%[10] - Inventories decreased slightly to $44.320 million from $45.738 million, a reduction of 3.1%[10] - The Company had a balance of $6,000,000 outstanding on its $15,000,000 revolving credit facility as of December 31, 2025[26] - The Company has trade receivables of $58,650 and unbilled revenue of $11,011 as of December 31, 2025, totaling $69,661, with a net amount of $63,176 after accounting for an allowance for credit losses of $6,485[116] Cash Flow and Capital Expenditures - Net cash used in operating activities was $5,433,000 for the three months ended December 31, 2025, compared to $4,497,000 for the same period in 2024[19] - Cash and cash equivalents at the end of the period were $12,732,000, down from $38,043,000 at the end of the same period in 2024[19] - Capital expenditures for the three months ended December 31, 2025, were $5,180,000, compared to $4,459,000 for the same period in 2024[19] - Cash paid for interest during the three months ended December 31, 2025, was $9,685,000, compared to $10,888,000 for the same period in 2024[19] Revenue Recognition and Deferred Revenue - The company expects approximately 77% of deferred revenue as of December 31, 2025, to be recognized as revenue within the next twelve months[48] - Deferred revenue includes client deposits of $17,288,000 and deferred revenue of $19,740,000 as of December 31, 2025[46] - One client accounted for 14.1% of revenue during the three months ended December 31, 2025, down from 20.5% in the same period of 2024[43] Debt and Financing - The Company is exploring potential debt refinancing alternatives to address liquidity needs and compliance with covenants[31] - The Company has a Term Loan Facility with an original principal amount of $165 million, a delayed draw term loan facility of $35 million, and a revolving credit facility of $15 million[61] - The effective interest rates for the Term Loan and Initial DDTL are 11.57% and 11.56% respectively for the three months ended December 31, 2025[60] - The Company issued $22,000 in Second Lien Notes and Warrants, with $17,000 in cash and cancellation of $8,333 of existing Notes[93] - The Company issued $140,000 principal amount of Convertible Senior Notes, with an option for an additional $15,000[103] Legal and Regulatory Matters - The Company recorded a settlement accrual of $11,000 as of December 31, 2025, related to ongoing negotiations for a securities class action lawsuit[122] - The Company is involved in three putative class actions related to a cybersecurity incident in August 2025, which have been consolidated under one caption[158] - The Company is subject to a Resolution Agreement and Plea Agreement with the DOJ, involving payments totaling $22,000 in fines, with specific payment schedules[164] - The Company has taken a reserve equal to the proposed settlement amount of $795 for the PAGA Settlement Agreement, which is subject to court approval[159] Corporate Governance and Compliance - The Company agreed to implement corporate governance measures for at least five years, including having a separate CEO and Board Chairperson[156] - Management's fiscal 2026 annual operating plan forecasts noncompliance with financial covenants for the remainder of fiscal 2026[27] Other Financial Metrics - The effective tax rate for the Company was 5.5% for the three months ended December 31, 2025, down from 7.3% in the same period of 2024[144] - Stock-based compensation expense for the three months ended December 31, 2025, was $1,382 million, down from $1,770 million in the same period of 2024[140] - The Company’s accrued expenses and other current liabilities total $41,148 as of December 31, 2025, down from $44,722 as of September 30, 2025[121]

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Any forward-looking statement made by us is based only on information currently available to us and speaks only as of the date on which it is made. I ...

Financial Data and Key Metrics Changes - For Q1 of fiscal 2026, total revenue was $120.9 million, a slight increase of $1 million or 0.8% from $119.9 million in Q1 of fiscal 2025, primarily driven by increased DSA revenue and partially offset by decreased RMS revenue [12][19] - DSA revenue increased to $48 million from $42.8 million, representing a year-over-year growth of 12%, with discovery pharmacology service and surgical services contributing significantly [5][12] - RMS revenue decreased by $4.1 million or 5.4% to $72.9 million, primarily due to lower NHP volumes sold [14][15] - The overall operating loss increased to $16.3 million from $15.5 million, driven by a higher RMS operating loss [16][19] - Consolidated net loss totaled $28.4 million or $0.83 loss per diluted share, compared to a net loss of $27.6 million or $1.02 loss per diluted share in the prior year [18][19] Business Line Data and Key Metrics Changes - DSA business saw strong growth with net new awards of $53.6 million, a 27% increase over Q1 of fiscal 2025, and a trailing twelve-month increase of 34% [13] - DSA margins improved, with non-GAAP operating income for the DSA segment at $8.2 million or 6.8% of total revenue, up from $7.1 million or 5.9% [17] - RMS segment's non-GAAP operating income decreased to $7.2 million or 5.9% of total revenue, down from $9.4 million or 7.9% due to lower NHP volume sales [18] Market Data and Key Metrics Changes - The book-to-bill ratio for DSA in Q1 of fiscal 2026 was 1.16 to 1, with a trailing twelve-month book-to-bill of 1.08 to 1 [14] - DSA backlog increased to $145.4 million at December 31, 2025, compared to $138.2 million at September 30, 2025 [14] Company Strategy and Development Direction - The company is focused on improving revenue and margins in the DSA business while reducing costs and diversifying revenue sources in the RMS business [10] - The company is enhancing its NAM strategy to support FDA guidance and industry expectations for innovation, with recent collaborations aimed at integrating advanced machine learning tools [10][50] - The company is committed to optimizing its operational footprint and product portfolio while maintaining client satisfaction [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the DSA business's momentum and the ongoing site optimization and cost reduction initiatives in the RMS business [9] - The company is navigating macroeconomic factors affecting the RMS business and remains committed to refinancing its debt and improving its balance sheet [9][20] - Management anticipates continued improvement in margins and revenue growth in the DSA segment as pricing stabilizes and operational efficiencies are realized [26][31] Other Important Information - The company engaged Perella Weinberg Partners for financial advisory services to explore debt refinancing alternatives [9] - Capital expenditures for Q1 of 2026 were $5.2 million, with expectations to keep annual CapEx below 4% of revenue [21][22] Q&A Session Summary Question: Can you provide more details on profitability and adjusted EBITDA trends? - Management noted that seasonality impacts the first quarter, and increased operating expenses were observed, particularly in cost of goods sold [25][26] Question: What is the outlook for DSA awards and growth? - Management highlighted that DSA growth is supported by improved customer relationships and scientific strength, with expectations for continued positive trends [28][30] Question: Can you explain the recent decline in RMS revenue and operating leverage? - Management indicated that reduced NHP volumes overshadowed operating leverage benefits, but cost reductions from facility closures are expected to yield improvements in future quarters [38][40] Question: How are recent weather conditions impacting operations and costs? - Management confirmed that weather impacts shipping and operations, but the overall cost impact is not significant [51][52]

Financial Data and Key Metrics Changes - For Q1 of fiscal 2026, total revenue was $120.9 million, a slight increase of $1 million or 0.8% from $119.9 million in Q1 of fiscal 2025, primarily driven by increased DSA revenue and partially offset by decreased RMS revenue [12][19] - DSA revenue increased to $48 million from $42.8 million, reflecting a year-over-year growth of 12%, with discovery pharmacology service and surgical services contributing significantly [5][12] - RMS revenue for Q1 of fiscal 2026 was $72.9 million, a decrease of $4.1 million or 5.4% compared to the prior year, primarily due to lower NHP volumes sold [14][15] - The overall operating loss increased to $16.3 million from $15.5 million in the prior year, driven by an increase in RMS operating loss [16][19] - Consolidated net loss totaled $28.4 million or $0.83 loss per diluted share, compared to a net loss of $27.6 million or $1.02 loss per diluted share in Q1 of fiscal 2025 [18][19] Business Line Data and Key Metrics Changes - DSA business saw strong growth with net new awards of $53.6 million, a 27% increase over Q1 of fiscal 2025, and a 34% year-over-year increase for the trailing twelve-month period [13][19] - DSA margins improved, with non-GAAP operating income for the DSA segment at $8.2 million or 6.8% of total revenue, compared to $7.1 million or 5.9% in the prior year [17] - RMS segment reported non-GAAP operating income of $7.2 million or 5.9% of total revenue, down from $9.4 million or 7.9% in the prior year, primarily due to lower NHP volume sales [18] Market Data and Key Metrics Changes - The book-to-bill ratio for DSA in Q1 of fiscal 2026 was 1.16 to 1, with a trailing twelve-month book-to-bill ratio of 1.08 to 1, indicating a healthy order intake relative to revenue [6][14] - DSA backlog increased to $145.4 million at December 31, 2025, compared to $138.2 million at September 30, 2025, and $130.4 million at December 31, 2024 [14] Company Strategy and Development Direction - The company is focused on improving revenue and margins in the DSA business while reducing costs and diversifying revenue sources in the RMS business [10][11] - The company is enhancing its NAM strategy to support FDA guidance and industry expectations for innovation, with recent collaborations aimed at integrating advanced machine learning tools [10][50] - The site optimization plan is expected to improve margins in future periods, with the current phase set to complete by Q3 of fiscal 2026 [7][9] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the DSA business's momentum and the ongoing site optimization and cost reduction initiatives in the RMS business [9][10] - The company is navigating macroeconomic factors affecting the RMS business and remains committed to refinancing its debt and improving its balance sheet [9][20] - Management noted that while the first quarter typically experiences seasonality challenges, they expect to see improvements in margins and revenue in the latter half of the fiscal year [26][28] Other Important Information - The company has received a waiver for non-compliance with financial covenant ratios under its credit agreement for Q1 of fiscal 2026 [9] - Capital expenditures in Q1 of 2026 were $5.2 million, with expectations for annual CapEx to remain below 4% of revenue [21][22] Q&A Session Summary Question: Can you provide more details on profitability and adjusted EBITDA trends? - Management acknowledged that margins in RMS impacted adjusted EBITDA, with some operational expenses higher than expected, and indicated that seasonality will likely follow previous patterns [25][26] Question: What is driving the positive trend in DSA awards? - Management attributed the growth in DSA awards to improved customer relationships, increased sales force efforts, and scientific strengths within the company [29][31] Question: What is the outlook for RMS operating leverage? - Management indicated that reduced NHP volumes overshadowed operating leverage benefits, but cost reductions from facility closures will contribute positively in future quarters [40][42] Question: How much was NHP volume down year-over-year? - Management reported that NHP volumes were down approximately 25% year-over-year [44][45] Question: Can you elaborate on new relationships in the NAM space? - Management highlighted ongoing R&D efforts and collaborations aimed at innovation, which are expected to drive incremental revenues [49][50]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $120.9 million, a slight increase of $1 million or 0.8% compared to $119.9 million in Q1 2025, primarily driven by increased DSA revenue and partially offset by decreased RMS revenue [11][18] - DSA revenue increased to $48 million from $42.8 million, reflecting a year-over-year growth of 12% [5][11] - RMS revenue decreased by 5.4% to $72.9 million, primarily due to lower NHP volumes sold [7][13] - The overall operating loss increased to $16.3 million from $15.5 million, driven by a higher RMS operating loss [14][18] - Consolidated net loss totaled $28.4 million or $0.83 loss per diluted share, compared to a net loss of $27.6 million or $1.02 loss per diluted share in Q1 2025 [17][18] Business Line Data and Key Metrics Changes - DSA business saw strong growth with discovery awards up 44% and safety assessment awards up 22% year-over-year [6] - DSA margins improved, achieving the strongest first quarter margins in three years [6][15] - RMS services revenue grew by 13% compared to Q1 2025, mainly due to higher NHP colony management services revenue [7][13] - The book-to-bill ratio for DSA was 1.16 to 1 for the quarter and 1.08 to 1 for the trailing twelve months [6][13] Market Data and Key Metrics Changes - The DSA backlog increased to $145.4 million at December 31, 2025, compared to $138.2 million at September 30, 2025 [13] - The conversion rate for DSA backlog was 33.2%, slightly up from 32.8% in the prior year [12] Company Strategy and Development Direction - The company is focused on improving revenue and margins in the DSA business while reducing costs and diversifying revenue sources in the RMS business [9] - Continued emphasis on innovation through collaborations that integrate machine learning tools and enhance data analysis capabilities [9][50] - The company is committed to optimizing its operational footprint and enhancing client satisfaction [10][57] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the RMS business due to macroeconomic factors and lower NHP sales, but expressed optimism about future improvements in margins [8][9] - The company plans to resume providing financial guidance once there is greater clarity on market demand and tariff impacts [20][21] - Management remains confident in the company's strategic direction and ongoing improvements in financial performance [57] Other Important Information - The company engaged Perella Weinberg Partners for financial advisory services to explore debt refinancing alternatives [8] - Capital expenditures for Q1 2026 were $5.2 million, with expectations to keep annual CapEx below 4% of revenue [20] Q&A Session Questions and Answers Question: Can you provide more detail on profitability and adjusted EBITDA trends? - Management indicated that seasonality impacts the first quarter, and increased operating expenses were noted, particularly in cost of goods sold [23][25] Question: What is the outlook for DSA awards and growth? - Management highlighted that DSA growth is supported by improved customer relationships and scientific capabilities, contributing to increased recurring sales [28][30] Question: How will the recent lease exits impact operating costs? - Management confirmed that lease exits will lead to additional cost reductions in the upcoming quarters, although current volume reductions in NHPs overshadowed some operating leverage benefits [38][40]

Revenue Performance - Revenue for Q1 FY 2026 was $120.9 million, a slight increase of 0.8% compared to $119.9 million in Q1 FY 2025, driven by a 12.0% increase in DSA revenue[6][9] - DSA revenue reached $48.0 million, up from $42.8 million in the prior year, while RMS revenue decreased to $72.9 million from $77.1 million, reflecting a 5.4% decline[2][7] - Total revenue for the company in Q4 2025 was $120,879 million, slightly up from $119,876 million in Q4 2024, showing a marginal increase of about 0.8%[31] Profitability and Loss - Consolidated net loss for Q1 FY 2026 was $28.4 million, or 23.5% of total revenue, compared to a net loss of $27.6 million, or 23.0% of total revenue, in Q1 FY 2025[7][9] - Operating loss for Q1 FY 2026 was $16.3 million, an increase of 5.3% from $15.5 million in Q1 FY 2025, primarily due to increased RMS operating loss[10] - Consolidated net loss for the three months ended December 31, 2025, was $28,378 million, compared to a net loss of $27,630 million for the same period in 2024, indicating a year-over-year increase in losses[28] Cash Flow and Assets - Cash and cash equivalents decreased to $12.7 million at December 31, 2025, down from $21.7 million at September 30, 2025[11] - Total assets decreased from $771,114 million as of September 30, 2025, to $734,336 million as of December 31, 2025, representing a decline of approximately 4.8%[26] - Cash and cash equivalents decreased from $21,741 million at the beginning of the period to $12,732 million at the end of the period, a decrease of approximately 41.5%[28] Operational Metrics - Adjusted EBITDA for Q1 FY 2026 was $1.8 million, representing 1.5% of total revenue, down from $2.6 million, or 2.2% of total revenue, in Q1 FY 2025[7][9] - Non-GAAP adjusted EBITDA for the three months ended December 31, 2025, was $1,803 million, down from $2,610 million in the same period of 2024, indicating a decline of approximately 30.9%[32] - The company reported an operating loss of $16,330 million for the three months ended December 31, 2025, compared to an operating loss of $15,507 million for the same period in 2024, reflecting a worsening of approximately 5.3%[31] DSA Segment Performance - The book-to-bill ratio for the DSA services business was 1.16x in Q1 FY 2026, indicating strong demand for services[7] - DSA backlog increased to $145.4 million as of December 31, 2025, up from $138.2 million at September 30, 2025, and $130.4 million at December 31, 2024[7] - Revenue for the DSA segment increased to $47,955 million in Q4 2025, up from $42,822 million in Q4 2024, reflecting a growth of approximately 7.5%[30] Unusual Costs - The company incurred $2,204 million in other unusual, third-party costs during Q4 2025, primarily related to legal matters and cybersecurity incidents[34]

Core Viewpoint - Inotiv, Inc. reported a slight revenue increase in Q1 FY 2026, driven by growth in its Discovery and Safety Assessment (DSA) segment, while facing challenges in its Research Models and Services (RMS) segment [1][3][6]. Financial Performance - Total revenue for Q1 FY 2026 was $120.9 million, a 0.8% increase from $119.9 million in Q1 FY 2025, attributed to a $5.1 million (12.0%) rise in DSA revenue, offset by a $4.1 million (5.4%) decline in RMS revenue [2][7][8]. - The consolidated net loss for Q1 FY 2026 was $28.4 million, or 23.5% of total revenue, compared to a net loss of $27.6 million, or 23.0% of total revenue, in Q1 FY 2025 [7][30]. - Adjusted EBITDA for Q1 FY 2026 was $1.8 million, representing 1.5% of total revenue, down from $2.6 million, or 2.2% of total revenue, in Q1 FY 2025 [7][30]. Segment Performance - DSA segment revenue increased to $48.0 million in Q1 FY 2026 from $42.8 million in Q1 FY 2025, reflecting a 12.0% growth [2][8]. - RMS segment revenue decreased to $72.9 million in Q1 FY 2026 from $77.1 million in Q1 FY 2025, marking a 5.4% decline [2][8]. - The DSA backlog was $145.4 million at December 31, 2025, up from $138.2 million at September 30, 2025, and $130.4 million at December 31, 2024 [7]. Operational Insights - The company exited two leased facilities as part of its U.S. site optimization plan during Q1 FY 2026 [5]. - Management emphasized a focus on client service and margin discipline, with a 27% year-over-year growth in DSA net awards, indicating strong demand trends [3][6]. Cash Flow and Capital Structure - Cash and cash equivalents decreased to $12.7 million at December 31, 2025, from $21.7 million at September 30, 2025 [10]. - Cash used in operating activities was $5.4 million for Q1 FY 2026, compared to $4.5 million in Q1 FY 2025 [10][25]. - Total debt as of December 31, 2025, was $405.8 million, up from $402.1 million on September 30, 2025 [10].

Core Viewpoint - Inotiv, Inc. will release its financial results for the fiscal 2026 first quarter on February 9, 2026, before the market opens, and will host a conference call to discuss these results [1]. Company Overview - Inotiv, Inc. is a leading contract research organization that specializes in nonclinical and analytical drug discovery and development services, as well as research models and related products [3]. - The company's focus is on enhancing the efficiency and data quality of drug and medical device development while reducing costs associated with bringing new products to market [3]. - Inotiv is dedicated to supporting research and development objectives, aiming to help researchers maximize the potential of their projects for a healthier and safer world [3].

Core Insights - Inotiv, Inc. announced a strategic initiative to integrate LifeNet Health's proprietary TruVivo system into its Discovery and Translational Sciences business, enhancing its drug development capabilities [1][3] Group 1: Company Overview - Inotiv, Inc. is a leading contract research organization focused on nonclinical and analytical drug discovery and development services, aiming to improve efficiency and reduce costs in bringing new drugs and medical devices to market [4] - The company is dedicated to supporting research and development objectives while promoting a healthier and safer world [4] Group 2: Technology and Collaboration - LifeNet Health has developed the TruVivo system, which utilizes primary human hepatocytes with human-derived feeder cells to create in vitro models that better predict human responses to therapies, addressing significant challenges in drug development [2] - The integration of the TruVivo platform into Inotiv's offerings will enhance the alignment of preclinical models with human biology and expand human-relevant tissue models beyond the liver, facilitating innovation across various human diseases [3] Group 3: Mission and Vision - Both Inotiv and LifeNet Health share a mission to accelerate scientific innovation that translates into meaningful human impact, emphasizing the importance of human-relevant technologies in preclinical research [3][5]