Charles River Laboratories (CRL) Q4 2025 earnings summary

Executive summary

• Q4 and full-year 2025 results were at the upper end of revenue and non-GAAP EPS guidance, despite organic revenue declines and significant non-cash impairments impacting GAAP results.

• Biopharma demand stabilized, with DSA net bookings improving, especially in Q4, driven by renewed client urgency and improved biotech funding in late 2025.

• Strategic initiatives included portfolio refinement, efficiency drives, and acquisitions (K.F. Cambodia and PathoQuest) to secure supply chains and enhance scientific capabilities.

• CEO transition announced: Birgit Girshick to succeed Jim Foster in May 2026; new CFO and Chief Legal Officer appointments to strengthen leadership.

Financial highlights

• Q4 2025 revenue: $994.2M, down 0.8% year-over-year; full-year revenue: $4.02B, down 0.9% year-over-year; organic revenue declined 1.6%.

• Q4 non-GAAP operating margin: 18.1% (down from 19.9%); full-year non-GAAP margin: 19.8% (down from 19.9%).

• Q4 non-GAAP EPS: $2.39 (down 10.2%); full-year non-GAAP EPS: $10.28 (nearly flat year-over-year).

• Free cash flow for 2025 was $518.5M; 2026 guidance is $375M–$400M.

• Significant non-cash impairments and goodwill charges, mainly in Biologics Solutions and Cell Solutions, impacted GAAP results.

Outlook and guidance

• 2026 reported revenue growth expected to be flat to up 1.5%; organic revenue growth expected between (1.0)% and flat.

• 2026 non-GAAP EPS guidance: $10.70–$11.20 (4–9% growth), driven by cost savings, acquisitions, and a lower tax rate.

• Non-GAAP operating margin expected to improve by 20–50 bps, mainly from the K.F. acquisition.

• Q1 2026 expected to be weak due to timing of NHP shipments, higher stock comp, and DSA costs, but margins to improve significantly after Q1.

• Guidance does not include the impact of planned divestitures representing about 7% of 2025 revenue.