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Jun 30, 2023
Inotiv Q3 2023 Earnings Report
Inotiv's financial performance decreased due to challenges related to importation of NHPs, decline in biotech funding and the timing of toxicology services.
Key Takeaways
Inotiv reported a decrease in revenue for Q3 FY 2023 compared to Q3 FY 2022, driven by lower revenue in both the Discovery and Safety Assessment (DSA) and Research Models and Services (RMS) segments. However, the company achieved consolidated net income compared to a net loss in the same period last year. The company is focused on completing integration projects, optimizing infrastructure, and right-sizing its global footprint.
Revenue was $157.5 million in Q3 FY 2023, down from $172.7 million in Q3 FY 2022.
Consolidated net income for Q3 FY 2023 was $0.4 million, compared to a net loss of $(3.6) million in Q3 FY 2022.
Adjusted EBITDA was $30.5 million, or 19.4% of total revenue, compared to $37.0 million, or 21.4% of total revenue, in Q3 FY 2022.
Net book-to-bill ratio was 1.08x for the DSA services business.
Inotiv
Inotiv
Inotiv Revenue by Segment
Revenue by Segment
RMS Revenue
CapyFin.comDSA Revenue
CapyFin.com Forward Guidance
Due to the decreasing availability of NHPs in the U.S., the company is recasting its full year revenue guidance to at least $570 million and adjusted EBITDA guidance to be at least $60 million. Capital expenditures are expected to be approximately 5% of revenue in fiscal 2023.
Positive Outlook
- Expect to remain in compliance with financial covenants for the fiscal year.
- Anticipate a more modest level of capital investment in 2024, of less than 5% of revenue.
- Confident in the product and service portfolio.
- Continue to optimize the product and service portfolio.
- Confident in the client service value proposition that is particularly attractive to the biopharma sector.
Challenges Ahead
- Decreasing availability of NHPs in the U.S.
- Full year revenue guidance recasted to at least $570 million, down from $580 million in previous guidance.
- Fiscal 2023 adjusted EBITDA guidance updated to be at least $60 million, down from the previous guidance of $70 million.
- Industry challenges related to importation of NHPs this fiscal year.
- Decline in overall biotech funding in the market.
Revenue & Expenses
Visualization of income flow from segment revenue to net income