Inotiv reported a mixed first quarter for fiscal 2026, with total revenue of $120.9 million, up 0.8% year over year, driven by a 12% rise in Contract Research Services (DSA) revenue to $48.0 million. This was offset by a 5.4% decline in RMS (Research Methods & Services) revenue to $72.9 million, primarily due to weaker non‑human primate (NHP) volumes. The company posted a GAAP net loss of approximately $28.4 million ($0.83 per diluted share) and generated non‑GAAP EBITDA of about $1.8 million (1.5% of revenue). DSA delivered the quarter’s strongest margins in three years (non‑GAAP), while RMS margins contracted due to lower NHP volumes despite ongoing cost optimizations. Key operational milestones included exiting two leased RMS facilities as part of a multi‑quarter site optimization program expected to complete by Q3 FY2026, and continued investments in NAMs (New Approach Methods) with machine‑learning collaborations aimed at making discovery more human-relevant earlier in development cycles.
Management emphasized a balanced path to improved profitability through DSA growth, cost discipline, revenue diversification, and portfolio optimization. They also signaled ongoing efforts to refinance debt and improve the balance sheet, including obtaining a covenant waiver for Q1 FY2026 and retaining advisory support from Perella Weinberg Partners. Given the absence of formal fiscal 2026 guidance, the near‑term focus remains on cash flow management, backlog execution, and margin expansion in the back half of the year as pricing adjustments and site‑level efficiencies translate into operating leverage.
Overall, investors should monitor (1) DSA backlog and book‑to‑bill trends, (2) RMS revenue stability and NHP volumes, (3) the cadence of margin recovery in RMS as site optimizations flow through, (4) progress toward debt refinancing and covenant compliance, and (5) the impact of NAMs collaborations on future new business and pricing power.