Inotiv, Inc. Earnings Call: Growth Amid Challenges

Inotiv, Inc. ((NOTV)) has held its Q4 earnings call. Read on for the main highlights of the call.TipRanks Cyber Monday Sale Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence. Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off Inotiv, Inc. Earnings Call Highlights Growth Amid Challenges The recent earnings call for Inotiv, Inc. reflected a positive outlook, underscored by significant growth in the Discovery & Safety Assessment (DSA) segment and successful cost reduction strategies through the consolidation of RMS sites. Despite facing hurdles such as a cybersecurity incident and increased interest expenses, the company demonstrated strong operational execution, positioning itself on a path to improvement. Strong DSA Revenue Growth The DSA segment emerged as a key growth driver for Inotiv, with quarterly revenue increasing by 15.7% year-over-year. The segment also saw a remarkable 61% rise in awards, and the backlog conversion rate reached 37.4%, marking the highest in three years. This growth underscores the company’s robust performance in this critical area. RMS Site Consolidation and Cost Savings Inotiv’s strategic consolidation of RMS sites is on track, with the company expecting annual savings of $6 million to $7 million. Over the past three years, thirteen RMS facilities have been closed, reflecting the company’s commitment to cost efficiency and streamlined operations. Improved Financial Position The company reported generating $14.3 million in cash from operations in the fourth quarter, boosting its cash balance to $21.7 million. Additionally, the adjusted EBITDA for fiscal year 2025 nearly doubled to $34 million from $18.2 million in 2024, indicating a strengthened financial position. Advancements in RMS Operations Inotiv achieved a 55% reduction in RMS client complaints over the last two years and successfully transferred commercial operations to a new CRM system. These advancements are expected to enhance operational efficiencies and client satisfaction. Cybersecurity Incident Impact The company faced a disruption due to a cybersecurity incident in August 2025, which impacted financial results and operations. However, the team responded effectively, mitigating the incident’s adverse effects. High Interest Expenses Interest expenses rose to $56.6 million in fiscal year 2025 from $46.9 million in 2024, primarily due to noncash interest from second lien notes. This increase poses a challenge that the company needs to address moving forward. Operating Loss Inotiv reported an operating loss of $30.9 million for fiscal year 2025, a significant improvement from the $86.4 million loss in fiscal 2024. This reduction highlights the company’s efforts to enhance its financial health. Forward-Looking Guidance Inotiv’s forward-looking guidance for the fourth quarter of fiscal 2025 includes a total revenue of $138.1 million, a 5.9% increase compared to the same period in fiscal 2024. The company remains focused on improving DSA margins and continuing RMS site consolidations, aiming for future annual savings of $6 to $7 million and a capital investment of $6.5 million. Despite challenges, Inotiv is committed to maintaining momentum and increasing cash flow. In conclusion, Inotiv, Inc.’s earnings call highlighted a positive trajectory with strong growth in the DSA segment and effective cost management strategies. While challenges such as cybersecurity incidents and high interest expenses persist, the company’s operational execution and financial improvements signal a promising path forward.