WEST LAFAYETTE, Ind. - Inotiv, Inc. (NASDAQ: NOTV), a prominent contract research organization, reported a significant miss in its second quarter earnings and revenue, sending its shares down by 6%.
The company announced a second quarter (Q2 FY 2024) loss of -$1.86 per share, which was substantially below the analyst estimate of -$0.34 per share. Revenue also fell short, coming in at $119 million against the expected $135.68 million.
In the second quarter, Inotiv faced a sharp 21.5% decline in revenue compared to the same period last year, primarily due to a 30.7% drop in its Research Models and Services (RMS) segment. This downturn was attributed to weak demand for non-human primates (NHP) and a decrease in early-stage discovery work and orders. Despite these challenges, the company noted growth in new services launched in the previous year and is nearing the completion of a site optimization project in the U.K.
President and CEO Robert Leasure Jr. acknowledged the disappointing quarter, stating, "Following a good first quarter, revenue in this reporting period was less than expected." He cited the weak NHP demand and a reduction in early-stage discovery work as significant contributors to the period's results. In response to these challenges, Inotiv has focused on reducing expenses and ramping up sales and marketing efforts to grow revenue and margins.
Adding to the company's hurdles, Inotiv has reached an agreement in principle with the U.S. Department of Justice to resolve an ongoing investigation, which has resulted in a $26.5 million charge. This, along with the revenue shortfall, has led to a consolidated net loss of $48.1 million for the quarter, representing 40.4% of total revenue.
In light of the current uncertainty in customer demand for NHPs, Inotiv has withdrawn its financial guidance for fiscal year 2024. The company remains committed to its long-term strategic plan, focusing on growing its Discovery (NASDAQ:WBD) & Safety Assessment (DSA) segment and enhancing client satisfaction through innovative solutions.
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