Neogen Raises FY27 Forecast as Growth Builds and Petrifilm Transfer Advances

Key Points

• Neogen’s fiscal first-quarter revenue rose 6.5% to $222.8 million, with core growth of 8.1%.
• Adjusted EBITDA increased 17% to $41.6 million, and adjusted earnings per share doubled to $0.08.
• The company raised FY27 revenue guidance to $885 million–$890 million and adjusted EBITDA guidance to $181 million–$183 million.
• Validation of the first Petrifilm product clears an important hurdle ahead of the manufacturing transfer scheduled to begin in November.
• Some quarterly growth reflected timing benefits, while the larger margin gains from Petrifilm are not expected until FY29.

Neogen (NASDAQ: NEOG) started fiscal 2027 with growth across its Food Safety and Animal Safety businesses, stronger adjusted profitability and a higher full-year forecast. The company also advanced its Petrifilm manufacturing transition, a major part of its longer-term plan to improve margins.

Food and Animal Safety Support Broad Growth

Food Safety revenue reached $163.2 million, rising 7.4% on a reported basis and 8.1% on a core basis. Indicator testing and culture media, which includes Petrifilm, grew 11% to $85.6 million, while pathogen detection posted double-digit growth.

Animal Safety revenue totaled $59.6 million, up 4.2% reported and 8.0% core. Better needle and syringe availability, veterinary instruments and insect-control demand helped drive the increase.

All regions recorded growth, with Asia Pacific delivering double-digit gains. This was Neogen’s fifth consecutive quarter of core growth, and strategic accounts increased 6.2%, providing an early indication of progress under its revised sales model.

Improved Earnings Support Higher FY27 Guidance

Adjusted EBITDA margin rose 170 basis points to 18.7%, while adjusted gross margin reached 49.8%. Despite those improvements, Neogen reported a GAAP net loss of $11.9 million. Its operating loss narrowed to $1.8 million from $16.1 million.

Neogen now expects FY27 revenue of $885 million–$890 million, compared with its previous forecast of $880 million–$885 million. Adjusted EBITDA guidance increased to $181 million–$183 million from $180 million–$182 million.

Free cash flow reached $4.7 million, an approximately $18 million year-over-year improvement. The company also repaid $30 million in term loans, leaving approximately $774 million in debt against $172 million in cash.

Petrifilm Transfer Remains the Long-Term Margin Driver

Neogen validated its first Petrifilm SKU in August, a milestone management described as significantly reducing transition risk. The multi-quarter transfer of production from 3M to Neogen’s Lansing facility is scheduled to start in November and covers 17 SKUs.

Moving production in-house offers a substantial margin opportunity, but the transition still carries supplier, inventory and customer-continuity risks. Management does not expect the anticipated 200–300-basis-point margin benefit until FY29.

Separately, Neogen formed a collaboration with Hinalea Imaging and made an equity investment to explore hyperspectral imaging for food inspection. Its planned Genomics sale to Zoetis is expected to close by year-end 2026, pending Australia and New Zealand regulatory approval. Approximately $140 million in proceeds is earmarked for debt reduction, and current guidance still includes Genomics.

Investor Takeaway: Stronger Momentum, Longer-Term Payoff

The quarter shows progress, but its growth rate should not be treated as the pace for the full year. About three percentage points of core growth came from order timing and a prior-year distributor adjustment. Management expects first-half core growth near 3.5%, with Q2 the low point.

FY27 EBITDA margins are expected to remain broadly in line with FY26 as Neogen continues investing in R&D and commercial capabilities. For NEOG investors, the key tests are sustaining growth beyond timing benefits, completing the Genomics sale and executing the Petrifilm transfer without disruption. The higher forecast improves near-term visibility, while the larger margin payoff remains further out.