Management Commentary

Robert Leasure Jr., President and Chief Executive Officer, commented, “During the third quarter of fiscal 2025, we continued to make progress towards the financial goals we outlined during our investor day in May. We were pleased that revenue and margins improved over the second quarter, and the year over year quarterly revenue increase of 23.5% was in line with our expectations.

"Our DSA net awards for the third quarter of fiscal 2025 increased 25% versus the same period last year, following a 27% year over year improvement in the second quarter. Much of this was driven by the benefits of the integration, optimization and start up investments we have implemented over the last two years. In particular, our Discovery, Medical Device, Biotherapeutics and Genetic Toxicology businesses have seen strong growth in quoting and awards over the last two quarters.

"As we experience this growth in revenue and awards, we remain highly focused on client satisfaction and delivery of on-time, high quality products and services. We consistently monitor operational data and client metrics to help build a strong recurring client base.

"This quarter’s results demonstrate continued progress in the execution of our strategic plans. We look forward to our future and want to thank all of our employees, shareholders and partners for their support and trust."

Highlights

Q3 FY 2025 Highlights

• Revenue was $130.7 million in Q3 FY 2025, an increase of $24.9 million, or 23.5%, compared to $105.8 million during the three months ended June 30, 2024 (“Q3 FY 2024”), driven by an increase of $21.0 million, or 34.1%, in Research Models and Services ("RMS") revenue and a $3.9 million, or 8.9%, increase in Discovery and Safety Assessment ("DSA") revenue.
• Consolidated net loss for Q3 FY 2025 was $17.6 million, or 13.5% of total revenue, compared to consolidated net loss of $26.1 million, or 24.7% of total revenue, in Q3 FY 2024.
• Adjusted EBITDA¹ in Q3 FY 2025 was $11.6 million, or 8.9% of total revenue, compared to $0.1 million, or 0.1% of total revenue, in Q3 FY 2024.
• Book-to-bill ratio for Q3 FY 2025 was 1.07x for the DSA services business.
• DSA backlog was $134.3 million at June 30, 2025, compared to $139.4 million at June 30, 2024, and $130.8 million at March 31, 2025.

YTD FY 2025 Highlights

• Revenue was $374.9 million in YTD FY 2025, an increase of $14.6 million, or 4.0%, compared to $360.3 million during the nine months ended June 30, 2024 (“YTD FY 2024”), driven by an increase of $13.8 million, or 6.1%, in RMS revenue and a $0.8 million, or 0.6%, increase in DSA revenue.
• Consolidated net loss for YTD FY 2025 was $60.1 million, or 16.0% of total revenue, compared to consolidated net loss of $90.0 million, or 25.0% of total revenue, in YTD FY 2024.
• Adjusted EBITDA¹ in YTD FY 2025 was $22.1 million, or 5.9% of total revenue, compared to $12.8 million, or 3.6% of total revenue, in YTD FY 2024.
• Book-to-bill ratio for YTD FY 2025 was 1.03x for the DSA services business.

^{1 This is a non-GAAP financial measure. Refer to “Note on Non-GAAP Financial Measures” in this release for further information.}

Recent Developments

• On June 2, 2025, the Securities and Exchange Commission (the "SEC") provided notice to the Company, through the Company’s external counsel, that the SEC’s Division of Enforcement (the “Division”) has concluded its previously disclosed investigation related to non-human primate ("NHP") importations from Asia, including importation practices in accordance with the U.S. Foreign Corrupt Practices Act and, based on the information available to the Division as of the date of its letter, the Division does not intend to recommend an enforcement action by the SEC against the Company.
• During Q3 FY 2025, one property previously reported as held for sale was sold. One property remains under contract to be sold and is held for sale as of June 30, 2025, in connection with our U.S. optimization plan.
• As previously disclosed, the Company and certain of its current and former directors and officers have been named as defendants in a putative securities class action lawsuit and two consolidated shareholder derivative lawsuits. Although no agreements have been reached, based on current negotiations with the plaintiffs, the Company has recorded a $10.0 million accrual for these lawsuits as of June 30, 2025 and a $10.0 million receivable, as the Company currently expects to recover the full amount of the accrual under its existing insurance policies. Although these amounts have been recorded to date, there can be no assurance that final agreements will be reached, on these or other terms. Final amounts payable or recoverable related to these lawsuits may be materially different than the amounts recorded, and are subject to final resolution of these lawsuits, including negotiations between the Company, the other defendants and the plaintiffs, and required approvals by all parties involved and the courts.

Third Quarter Fiscal 2025 Financial Results (Three Months Ended June 30, 2025)

Revenue increased 23.5% to $130.7 million in Q3 FY 2025 as compared to $105.8 million in Q3 FY 2024. The higher total revenue in Q3 FY 2025 was driven by a $21.0 million increase in RMS revenue and a $3.9 million increase in DSA revenue. The increase in RMS revenue was due primarily to increased NHP-related product and service revenue. DSA revenue increased primarily due to an increase in general toxicology services revenue, as well as an increase in biotherapeutic services revenue and medical device services revenue.

Operating loss was $5.7 million in Q3 FY 2025 as compared to $20.8 million in Q3 FY 2024. The decrease in operating loss was primarily driven by a change from RMS operating loss of $7.4 million in Q3 FY 2024 to RMS operating income of $6.4 million in Q3 FY 2025, an improvement of $13.8 million. The change in RMS operating income (loss) was primarily driven by the increase in revenue discussed above and decreased operating expenses, partially offset by increased cost of services provided and cost of products sold (collectively, "cost of revenue"). The decrease in operating expenses was primarily due to the $2.0 million charge related to the Resolution Agreement and Plea Agreement with the U.S. Department of Justice (the "DOJ") that was incurred during Q3 FY 2024, which did not repeat during Q3 FY 2025. The increase in cost of revenue primarily related to increased costs associated with the increased NHP-related product and service revenue discussed above.

Fiscal 2025 Financial Results (Nine Months Ended June 30, 2025)

Revenue increased 4.0% to $374.9 million in YTD FY 2025 as compared to $360.3 million in YTD FY 2024. The higher total revenue was primarily driven by a $13.8 million increase in RMS revenue. The increase in RMS revenue was primarily due to higher NHP-related product and service revenue.

Operating loss was $24.1 million in YTD FY 2025 as compared to $73.2 million in YTD FY 2024. The decrease in operating loss was primarily driven by a change from RMS operating loss of $33.0 million in YTD FY 2024 to RMS operating income of $16.6 million in YTD FY 2025, an improvement of $49.6 million. The change in RMS operating income (loss) was primarily due to the $28.5 million charge related to the Resolution Agreement and Plea Agreement that was incurred during YTD FY 2024, which did not repeat during YTD FY 2025, the increase in RMS revenue discussed above and the $7.6 million settlement payment we received from Freese and Nichols Inc. ("FNI") during YTD FY 2025.

Cash and cash equivalents was $6.2 million at June 30, 2025, compared to $21.4 million at September 30, 2024. Cash used in operating activities was $24.8 million for YTD FY 2025 compared to $4.4 million of cash used in operating activities for YTD FY 2024. For YTD FY 2025, capital expenditures totaled $13.9 million compared to $17.0 million for YTD FY 2024. Total debt, net of debt issuance costs, as of June 30, 2025, was $396.5 million compared to $393.3 million on September 30, 2024. As of June 30, 2025, there were no borrowings on the Company’s $15.0 million revolving credit facility. Recently, the Company has requested a draw of $3.0 million on its revolving credit facility.

Webcast and Conference Call

Management will host a conference call on Wednesday, August 6, 2025, at 4:30 pm ET to discuss third fiscal quarter of 2025 results.
Interested parties may participate in the call by dialing:

• (800) 245-3047 (Domestic)
• (203) 518-9765(International)
• "INOTIV" (Conference ID)

The live conference call webcast will be accessible in the Investors section of the Company’s web site and directly via the following link:

https://viavid.webcasts.com/starthere.jsp?ei=1725515&tp_key=690c604cf0

For those who cannot listen to the live broadcast, an online replay will be available in the Investors section of Inotiv’s web site at: https://ir.inotiv.com/events-and-presentations/default.aspx

Note on Non-GAAP Financial Measures

This press release contains financial measures that are not calculated in accordance with generally accepted accounting principles in the United States ("GAAP:), including Adjusted EBITDA and Adjusted EBITDA as a percentage of total revenue for the three and nine months ended June 30, 2025 and 2024 and selected business segment information for those periods. Adjusted EBITDA as reported herein refers to a financial measure that excludes from consolidated net loss statements of operations line items interest expense, net and income tax benefit, as well as non-cash charges for depreciation and amortization, stock compensation expense, startup costs, restructuring costs, unrealized foreign exchange (gain) loss, amortization of inventory step up, loss (gain) on disposition of assets, amounts received from the legal settlement with FNI, other unusual, third party costs and the charge in connection with the Resolution Agreement and Plea Agreement. The adjusted business segment information excludes from operating loss and unallocated corporate operating expenses for these same expenses. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.

The Company believes that these non-GAAP measures provide useful information to investors. Among other things, they may help investors evaluate the Company’s ongoing operations. They can assist in making meaningful period-over-period comparisons and in identifying operating trends that would otherwise be masked or distorted by the items subject to the adjustments. Management uses these non-GAAP measures internally to evaluate the performance of the business, including to allocate resources. Investors should consider these non-GAAP measures as supplemental and in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP.

Management has chosen to provide this supplemental information to investors, analysts, and other interested parties to enable them to perform additional analyses of our results and to illustrate our results giving effect to the non-GAAP adjustments. Management strongly encourages investors to review the Company's condensed consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

About the Company

Inotiv, Inc. is a leading contract research organization dedicated to providing nonclinical and analytical drug discovery and development services and research models and related products and services. The Company’s products and services focus on bringing new drugs and medical devices through the discovery and preclinical phases of development, all while increasing efficiency, improving data, and reducing the cost of taking new drugs and medical devices to market. Inotiv is committed to supporting discovery and development objectives as well as helping researchers realize the full potential of their critical research and development projects, all while working together to build a healthier and safer world. Further information about Inotiv can be found here: https://www.inotiv.com/.

This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our intent, belief or current expectations with respect to (i) our strategic plans; (ii) trends in the demand for our services and products; (iii) trends in the industries that consume our services and products; (iv) market and company-specific impacts of NHP supply and demand matters; (v) compliance with the Resolution Agreement and Plea Agreement and the expected impacts on the Company related to the compliance plan and compliance monitor, and the expected amounts, timing and expense treatment of cash payments and other investments thereunder; (vi) our ability to service our outstanding indebtedness and to comply or regain compliance with financial covenants, including those established by the Seventh Amendment to our Credit Agreement; (vii) our current and forecasted cash position; (viii) our ability to make capital expenditures, fund our operations and satisfy our obligations; (ix) our ability to manage recurring and unusual costs; (x) our ability to execute on and realize the expected benefits related to our restructuring and site optimization plans; (xi) our expectations regarding the volume of new bookings, pre-sales, pricing, cost savings initiatives, expansion of services, operating income or losses and liquidity; (xii) our ability to effectively fill the recent expanded capacity or any future expansion or acquisition initiatives undertaken by us; (xiii) our ability to develop and build infrastructure and teams to manage growth and projects; (xiv) our ability to continue to retain and hire key talent; (xv) our ability to market our services and products under our corporate name and relevant brand names; (xvi) our ability to develop new services and products; (xvii) our ability to negotiate amendments to the Credit Agreement or obtain waivers related to the financial covenants defined within the Credit Agreement; (xviii) the potential outcome of litigation against us, including any settlement and amounts accrued or recoverable; and (xix) the impact of macroeconomic factors, including but not limited to tariffs, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission. Further discussion of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in our Annual Report on Form 10-K as filed on December 4, 2024, as well as other filings we make with the Securities and Exchange Commission.

INOTIV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)