- DSA Segment Growth: Revenue grew 15.7% in Q4 2025 ($7.1M increase) and 4.3% YoY, with a 61% surge in net awards and a 37.4% backlog conversion rate (highest in 3 years).
- Operating Loss Reduction: Declined to $6.8M in Q4 2025 from $13.2M in Q4 2024, alongside $11.8M Adjusted EBITDA and $28.5M annual non-GAAP operating income.
- Cash Flow and Liquidity: Generated $14.3M cash from operations in Q4 2025, ending with $21.7M cash, and maintains a $15M revolver with $3M drawn.
- Capital Efficiency: Q4 CapEx fell to $2.7M (1.9% of revenue) from $5.3M (4.1%), with 12M total fiscal 2025 CapEx (3.2% of revenue).
- Cybersecurity Resilience: Despite operational disruptions from a cybersecurity incident, DSA awards surged 63% in Q4 2025, offsetting intangible costs.
Segment Performance
The DSA segment saw revenue growth of 15.7% in Q4 2025 and 4.3% for fiscal year 2025, with a 61% year-over-year increase in net DSA awards. The DSA backlog conversion rate was 37.4% in Q4 2025, the highest in 3 years. RMS revenue increased 0.8% in Q4 2025 and 4.7% for fiscal year 2025. The company's animal services business in Texas is growing, with a mix of buying, selling, boarding, breeding, and services.
Cash Flow and Balance Sheet
The company generated $14.3 million in cash from operations in Q4 2025 and ended the quarter with $21.7 million in cash and cash equivalents. Inotiv is exploring potential debt refinancing alternatives with the goal of improving its balance sheet. Total debt, net of debt issuance costs, was $402.1 million, compared to $393.3 million on September 30, 2024. The company had access to a $15 million revolver with an outstanding balance of $3 million as of September 30, 2025.
Valuation and Outlook
Analysts estimate next year's revenue growth at 4.9%. With a P/S Ratio of 0.05 and EV/EBITDA of 12.57, the market is pricing in a relatively low growth rate. The company's ROE is -54.86%, and ROIC is -3.67%, indicating a challenging operating environment. However, the company is encouraged by its recent growth and progress toward its financial goals, citing a 63% increase in awards during the quarter despite a cybersecurity incident.
Operational Headwinds and Tailwinds
The company cited a cybersecurity incident as a headwind in the quarter, which had intangible costs and impacts on operations and customers. However, the company is seeing an increase in quoting activity and closing deals, with a more stable pricing environment. The RMS business is seeing improving margins in its small animal and diet business due to reduced sites and fixed costs.