Neogen (NASDAQ:NEOG) outlined a multi-year strategy at its first Investor Day, emphasizing a shift from business stabilization toward accelerated growth, higher margins and stronger cash generation. Management said the company has delivered positive core growth for four consecutive quarters and is targeting high-single-digit to low-double-digit long-term revenue growth, adjusted gross margins in the high-50% range, adjusted EBITDA margins of approximately 30% and free-cash-flow conversion of about 80% by fiscal 2031.
President and CEO Mike Nassif said the company’s fiscal 2026 focus was stabilizing the business and rebuilding credibility following challenges integrating a large carve-out, as well as supply and service issues. He said Neogen’s transformation has improved supply reliability, customer service and coordination among commercial and cross-functional teams, while cautioning that more work remains.
Food safety strategy centers on point-of-processing testing
Tammi Ranalli, general manager of Food Safety, said customer demand is shifting away from centralized laboratory testing and toward faster testing at the point of processing. She said food producers increasingly want integrated, on-site and data-connected systems that can support quick product-release decisions and audit readiness.
Ranalli said the point-of-processing testing market is already a $5 billion market and is expanding by roughly $140 million annually. She cited customer frustration with fragmented vendor systems and delayed laboratory results as a key opportunity for Neogen.
The company is seeking to combine its Petrifilm products, rapid diagnostics and Neogen Analytics data platform into more comprehensive customer solutions. Ranalli said customers using Neogen Analytics have increased consumable usage by more than 1.5 times, as greater visibility into testing results can lead customers to test more frequently and at additional sample points.
Neogen said its food safety portfolio includes more than 10,000 SKUs and 10 platforms, six of which management said hold market-leading positions. Nassif said foodborne illness outbreaks have increased 50% over the past decade and food recalls cost more than $75 billion annually, creating durable demand for food safety testing.
Commercial transformation targets strategic accounts and international growth
Chief Commercial Officer Joe Freels said Neogen is restructuring its go-to-market approach around strategic accounts, solutions-based selling, digital commerce and tighter sales accountability. Under the new strategic-account model, a single Neogen representative will be responsible for enterprise-wide relationships with large global customers, replacing a more fragmented regional coverage model.
Freels said strategic accounts were growing 6.2% year to date, with the company targeting growth of more than 8% by year-end. He also cited a 32% increase in new opportunities, a qualified sales pipeline of $142 million and first-quarter wins of $13 million. On-time fulfillment improved 5%, while back orders declined 27%, according to Freels.
In animal safety, Neogen sees an opportunity to expand internationally. Freels said only about 15% of animal safety revenue currently comes from outside the U.S. and that the company intends to use its existing global infrastructure and distribution capabilities to extend its brands in Europe, Latin America and Asia-Pacific.
Innovation plans include Petrifilm, analytics and imaging
Chief Scientific Officer Jeremy Yarwood said Neogen has identified 18 development projects across multiple product categories after implementing a more structured product-development process. The company aims to increase its new product vitality index, or the percentage of revenue from new products, more than tenfold over the next five years.
Yarwood said Neogen expects investments made in fiscal 2027 new product introductions to contribute meaningfully to incremental growth beginning in fiscal 2028. He also said the company is developing technologies designed to improve test speed, workflow integration and the use of food-safety data.
Neogen announced an investment in and collaboration with Hinalea Imaging, which will give Neogen exclusive rights for hyperspectral imaging applications in food safety testing. The company said the technology could support applications including product quality testing, food grading, automated inspection and potentially faster results for Petrifilm products.
Management said Petrifilm remains a major focus. Neogen has built a new manufacturing facility with more than three times its current Petrifilm capacity and plans to transition 17 SKUs from 3M supply over multiple quarters. The company said it has an agreement with 3M through August 2027 but expects Neogen-made products to begin reaching customers in the early part of the next calendar year.
Margin and cash-flow targets rely on multiple initiatives
Senior Vice President of Manufacturing and Operations Jim Walter said the company has reduced complaints by 65%, inventory by 23% and improved service levels by 45% over the past year. He said operations will support margin expansion through automation, improved planning, logistics efficiency, manufacturing control and capacity utilization.
Chief Financial Officer Bryan Riggsbee said the company sees five principal contributors to gross-margin expansion: Petrifilm manufacturing improvements, supplier-management savings, manufacturing and logistics consolidation, higher-margin innovation and greater operating leverage. Neogen expects Petrifilm margins to improve by 200 to 300 basis points over time following the manufacturing transition.
Riggsbee said Neogen is increasing research-and-development investment and expects R&D to approach 5% of revenue by fiscal 2031. The company also plans to use proceeds from its genomics transaction to reduce debt, targets net leverage below 2.5 times, and said it expects fiscal 2027 capital expenditures to decline from fiscal 2026 levels as major Petrifilm investments wind down.
Nassif said management’s focus is to execute consistently, improve profitability across the business and use innovation to address customer needs. “The business has stabilized, and we’re gaining momentum,” he said in closing remarks.
About Neogen (NASDAQ:NEOG)
Neogen Corporation is a global provider of food safety and animal safety products and services. The company develops diagnostic tests, laboratory products, and related solutions that help customers detect foodborne pathogens, allergens, toxins, residues, and other contaminants throughout the food production process.
Its food safety portfolio includes test kits, culture media, molecular testing systems, sanitation monitoring products, and laboratory supplies used by food manufacturers, processors, retailers, and regulatory organizations.
