Financial Data and Key Metrics Changes - The company reported Q4 2025 revenue of $994.2 million, a 2.6% decline on an organic basis from the previous year, with full-year revenue of $4.02 billion, reflecting a 1.6% organic revenue decrease [17][19] - Non-GAAP earnings per share for Q4 were $2.39, a decrease of 10.2% from $2.66 in Q4 2024, while full-year earnings per share were nearly flat at $10.28 compared to $10.32 in 2024 [19][20] - The operating margin decreased by 100 basis points year-over-year to 18.1% in Q4, primarily due to lower revenue and higher costs [18][23] Business Segment Data and Key Metrics Changes - DSA revenue in Q4 was $591.6 million, a decrease of 3.3% on an organic basis, with a full-year decline of 2.6% [20][23] - RMS revenue in Q4 was $206.3 million, a decrease of 0.9% on an organic basis, while full-year RMS revenue increased by 1.2% [24][25] - Manufacturing solutions revenue for Q4 was $196.4 million, a decrease of 2.1% on an organic basis, with full-year revenue declining 1.6% [26][27] Market Data and Key Metrics Changes - The DSA net book-to-bill improved to 1.1 times in Q4, driven by small and mid-sized biotech clients, with net bookings of $665 million [9][22] - The biotech funding environment saw a record level of $28 billion in Q4, contributing to a steady increase in DSA net book-to-bill [8][9] Company Strategy and Development Direction - The company is focused on strategic acquisitions to strengthen its portfolio, including the acquisition of K.F. Cambodia and PathoQuest, aimed at enhancing operational efficiency and securing supply chains [10][12] - The company plans to continue evaluating additional M&A opportunities to support clients in drug development programs [13][14] - The transition in leadership to Birgit Girshick as the new CEO is expected to drive forward the company's strategic direction and operational excellence [30][34] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding favorable DSA demand trends continuing into 2026, anticipating a return to organic revenue growth in the second half of the year [9][37] - The company expects operating margin improvement in 2026, driven by the acquisition of K.F. Cambodia and cost-saving initiatives [35][39] - Management acknowledged challenges in the first quarter of 2026, including higher NHP sourcing costs and stock compensation expenses due to the CEO transition [54][42] Other Important Information - The company plans to generate at least $100 million in incremental cost savings in 2026, building on previous restructuring initiatives [41][58] - The anticipated Non-GAAP tax rate for 2026 is expected to decrease to 22%-23% from 24.6% in 2025, benefiting from favorable geographic mix and tax rate changes [56][57] Q&A Session Summary Question: Dynamics between RMS and DSA regarding NHPs - Management clarified that RMS volumes were impacted by timing, while DSA faced higher sourcing costs due to unexpected demand for NHP studies [63][65] Question: DSA cancellations and their impact - Management indicated that cancellations were within normal ranges and manageable due to a strong backlog [83][85] Question: Hiring needs in relation to DSA bookings - Management stated that they are in good shape regarding capacity and headcount, with careful alignment to demand [72][74] Question: Impact of AI on the business - Management emphasized that AI is viewed as an enabling technology rather than a disruptor, and they are embracing it strategically [76][78]

Charles River Laboratories (NYSE:CRL) Q4 2025 Earnings call February 18, 2026 08:30 AM ET Company ParticipantsBirgit Girshick - EVP and COOCasey Woodring - VP, Equity ResearchDave Windley - Managing DirectorElizabeth Anderson - Senior Managing DirectorEric Coldwell - Managing DirectorJames Foster - Chair, President and CEOLuke Sergott - Director - Healthcare Equity ResearchMichael Knell - VP and Chief Financial OfficerMichael Ryskin - Managing DirectorTodd Spencer - VP of Investor RelationsConference Call P ...