Charles River Laboratories International, Inc. · NYSE:CRL
Charles River Laboratories International — Q2 2025 Earnings Presentation
52 slides from Charles River Laboratories International's earnings presentation, Aug 6, 2025
Slide 1: Charles River Laboratories 2Q 2025 Results
Charles River Laboratories 2Q 2025 Results August 6, 2025 © 2025 Charles River Laboratories International, Inc.
Slide 2: Safe Harbor
Safe Harbor Caution Concerning Forward-Looking Statements. This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “in
Slide 3: Solid 2Q25 Performance
Solid 2Q25 Performance ▪ Another solid financial performance in 2Q25, meaningfully exceeding our prior outlook due primarily to favorable DSA results ̶ DSA benefited from strong booking activity recorded in prior quarter (1Q25) ▪ Corresponding lift in 1H25 results is primary driver leading us to rai
Slide 4: Demand Trend Update
Demand Trend Update ▪ Key DSA demand trends – coupled with constructive discussions with our biopharmaceutical clients – have reinforced our believe that the preclinical demand environment is stabilizing ▪ In 2Q25, both gross and net DSA bookings increased at mid-single-digit rates YOY ̶ Resulted in
Slide 5: Demand Trend Update
Demand Trend Update ▪ DSA business—and our overall non-GAAP financial results—continued to significantly outperform our expecations ̶ Making gradual progress towards achieving a return to organic revenue growth ▪ Recognize that some uncertainty persists in the broader healthcare landscape and contin
Slide 6: 2Q25 Revenue
2Q25 Revenue ($ in millions) 2Q25 2Q24 YOY Δ Organic Δ Revenue $1,032.1 $1,026.1 0.6% (0.5)% ▪ On a reported basis, nearly half of the 2Q25 revenue outperformance was driven by FX ▪ Organic revenue decline driven by a low-single-digit decline in DSA segment, partially offset by low-single- digit rev
Slide 7: 2Q25 Operating Margin
2Q25 Operating Margin 2Q25 2Q24 YOY Δ GAAP OM% 9.7% 14.8% (510) bps Non-GAAP OM% 22.1% 21.3% 80 bps ▪ Non-GAAP operating margin improvement across all three business segments, primarily reflecting: ̶ Benefit of cost savings from our previous restructuring actions ̶ On pace to generate a run rate of
Slide 8: 2Q25 EPS
2Q25 EPS 2Q25 2Q24 YOY Δ GAAP EPS $1.06 $1.74 (39.1)% Non-GAAP EPS $3.12 $2.80 11.4% ▪ Non-GAAP operating margin improvement was primary driver of robust earnings growth ▪ Most of earnings outperformance (non-GAAP) versus our prior outlook was operationally driven, with additional $0.12 benefit from
Slide 9: Increasing Revenue & Non-GAAP EPS Guidance
Increasing Revenue & Non-GAAP EPS Guidance ▪ Raising revenue and non-GAAP EPS guidance, largely to reflect 2Q25 outperformance ̶ Revenue guidance by +150 bps to 1%-3% decrease organically ̶ Non-GAAP EPS by +$0.55 at midpoint to $9.90-$10.30 ▪ In addition to DSA-driven operational outperformance, FY
Slide 10: Updated 2025 Guidance
Updated 2025 Guidance REVISED PRIOR Revenue growth, reported (2.5)%-(0.5)% (5.5)%-(3.5)% Impact of divestitures/(acquisitions), net N/M N/M (Favorable)/unfavorable impact of FX ~(0.5)% ~1.0% Revenue growth, organic (3.0)%-(1.0)% (4.5)%-(2.5)% GAAP EPS estimate $4.25-$4.65 $4.35-$4.85 Acquisition-rel
Slide 11: DSA Results – Revenue
DSA Results – Revenue ($ in millions) 2Q25 2Q24 YOY Δ Revenue, reported $618.0 $627.4 (1.5)% (Favorable)/unfavorable impact of FX (1.1)% Impact of divestitures 0.2% Revenue growth, organic (2.4)% ▪ Organic revenue decline driven by lower revenue for both discovery and safety assessment services ▪ Lo
Slide 12: DSA Demand KPIs
DSA Demand KPIs Period Qtr-End Backlog* Net Bookings* Net Book-to-Bill** ($ in billions) ($ in millions) (Quarterly) 2Q25 $1.93 $506 0.82x 1Q25 $1.99 $616 1.04x 4Q24 $1.97 $510 0.85x 3Q24 $2.12 $522 0.85x 2Q24 $2.16 $482 0.77x • Changes in backlog and net bookings may not foot due primarily to quart
Slide 13: DSA Demand KPIs, cont.
DSA Demand KPIs, cont. ▪ 2Q25 gross and net bookings both improved at mid-single-digit rates YOY, but declined sequentially primarily for global biopharma clients ▪ Sequential decline was not a surprise, as we had previously said that global biopharma clients started the year strong, with a resurgen
Slide 14: DSA Outlook
DSA Outlook ▪ Reflecting solid 2Q25 performance and DSA KPIs that underpin our outlook, now expect DSA revenue to decline at a low- to mid-single-digit rate in 2025 ̶ Improvement from prior outlook of a mid-single-digit decline ▪ As we have said many times, our business is not linear, and we need to
Slide 15: DSA Outlook – Staffing
DSA Outlook – Staffing ▪ Have begun to modestly increase DSA staffing levels in support of our improved demand outlook ▪ Doing so to ensure we can fully support clients’ programs and to position resources appropriately for 2H25 ▪ Due to increased hiring, DSA headcount costs are expected to create a
Slide 16: DSA Results – Operating Margin
DSA Results – Operating Margin 2Q25 2Q24 YOY Δ DSA GAAP OM% 19.9% 22.1% (220) bps DSA Non-GAAP OM% 27.4% 27.1% 30 bps ▪ YOY non-GAAP improvement primarily a result of DSA operating leverage from better-than-expected demand which we accommodated without a meaningful headcount increase ▪ Also reflecte
Slide 17: NAMs Strategy Update
NAMs Strategy Update ▪ Recently updated the Board on strategic imperatives to continue to build our growing NAMs portfolio – or new approach methods ▪ As we said last quarter, firmly believe that utilizing more NAMs-enabled approaches will be a gradual, long-term transition by our clients and that s
Slide 18: NAMs Strategy Update, cont.
NAMs Strategy Update, cont. ▪ In addition to well-established capabilities we discussed in May, also working on enhancing NAMs solutions across many DSA sites. For example: ̶ Montreal: Developing in vitro liver-on-a-chip assay to replace in vivo genetox testing ̶ Hungary: Developing a number of in v
Slide 19: RMS Results – Revenue
RMS Results – Revenue ($ in millions) 2Q25 2Q24 YOY Δ Revenue, reported $213.3 $206.4 3.3% (Favorable)/unfavorable impact of FX (1.0)% Revenue growth, organic 2.3% ▪ YOY revenue increase primarily driven by timing of NHP shipments and higher revenue for research model services, including GEMS and In
Slide 20: RMS Results – Academic/Government Clients & CRADL
RMS Results – Academic/Government Clients & CRADL ▪ Revenue from both academic and government clients increased in 2Q25, despite frequent headlines about potential NIH budget cuts ▪ To date, only experienced a small impact from uncertainty in Washington ̶ Modest reduction in scope of an Insourcing S
Slide 21: RMS Results – Research Models
RMS Results – Research Models ▪ Revenue for small research models in all geographic regions was relatively flat overall ▪ Higher pricing continued to offset unit volume declines ▪ China was an exception, as volume continued to increase, albeit at more moderate pace than historical levels 21
Slide 22: RMS Results – Operating Margin
RMS Results – Operating Margin 2Q25 2Q24 YOY Δ RMS GAAP OM% 16.8% 14.5% 230 bps RMS Non-GAAP OM% 25.3% 23.1% 220 bps ▪ Improvement was primarily due to favorable mix resulting from higher NHP revenue and higher revenue for research model services, as well as benefit of cost savings resulting from re
Slide 23: Manufacturing Results – Revenue
Manufacturing Results – Revenue ($ in millions) 2Q25 2Q24 YOY Δ Revenue, reported $200.8 $192.3 4.4% (Favorable)/unfavorable impact of FX (1.5)% Revenue growth, organic 2.9% ▪ Revenue improvement driven by another solid quarter from Microbial Solutions, as well as revenue from commercial CDMO client
Slide 24: Manufacturing Results – Microbial Solutions
Manufacturing Results – Microbial Solutions ▪ Microbial Solutions reported another quarter of robust growth, led by: ̶ Accugenix® microbial identification services ̶ Celsis® microbial detection platform ▪ Endosafe® also performed well, as clients continued to choose our leading portfolio of rapid ma
Slide 25: Manufacturing Results – CDMO
Manufacturing Results – CDMO ▪ Cell and Gene Therapy CDMO business reported essentially flat revenue, principally related to work for one commercial cell therapy client to wind down and transfer their program ̶ Revenue from gene therapy offering also continued to be strong ▪ While our CDMO relations
Slide 26: Manufacturing Results – Operating Margin
Manufacturing Results – Operating Margin 2Q25 2Q24 YOY Δ Manufacturing GAAP OM% 6.0% 19.4% (1340) bps Manufacturing Non-GAAP OM% 32.8% 26.6% 620 bps ▪ Non-GAAP operating margin improvement due principally to revenue and payments from commercial CDMO clients, as well as operating leverage from Microb
Slide 27: Strategic Review Status
Strategic Review Status ▪ Strategic review is well underway; encouraged by progress we have made so far ▪ A thorough review process takes time, but we are moving forward with a sense of urgency ̶ Do not intend to provide updates until the strategic review has been completed ▪ This is a comprehensive
Slide 28: NHP Supply Update – DOJ Investigations Closed
NHP Supply Update – DOJ Investigations Closed ▪ In July 2025, Department of the Interior and U.S. Fish and Wildlife Service cleared for legal entry into the U.S. all NHP shipments from Cambodia from late 2022 and early 2023 that were under investigation ▪ Also informed that the U.S. Department of Ju
Slide 29: 2Q25 Results
2Q25 Results ($ in millions, except per share amounts) 2Q25 2Q24 YOY Δ Organic Δ Revenue $1,032.1 $1,026.1 0.6% (0.5)% GAAP OM% 9.7% 14.8% (510) bps Non-GAAP OM% 22.1% 21.3% 80 bps GAAP EPS $1.06 $1.74 (39.1)% Non-GAAP EPS $3.12 $2.80 11.4% ▪ 2Q25 revenue and non-GAAP EPS exceeded prior outlook ̶ Pr
Slide 30: Updated 2025 Guidance
Updated 2025 Guidance 2025 Guidance Revenue growth/(decrease), reported (2.5)%-(0.5)% Revenue growth/(decrease), organic (3.0)%-(1.0)% GAAP EPS $4.25-$4.65 Non-GAAP EPS $9.90-$10.30 ▪ $0.55 guidance raise for 2025 at midpoint expected to be driven by two main components: ̶ Operational outperformance
Slide 31: Updated 2025 Guidance – FX and Tax / Interest Expense
Updated 2025 Guidance – FX and Tax / Interest Expense ▪ As you may recall, we forecast FX based on recent bank forecast rates rather than current rates ▪ Based on continued weakness of U.S. dollar, FX will represent ~50 bps tailwind to 2025 revenue compared to prior outlook of ~1% headwind ̶ ~150 bp
Slide 32: Updated 2025 Guidance – Operating Margin
Updated 2025 Guidance – Operating Margin ▪ Updated non-GAAP EPS guidance also implies that 2H25 operating margin will be below 1H25 level of 20.7% ̶ Largely consistent with our expectations at the start of the year and the gap was further widened by 1H25 outperformance ▪ For FY 2025, we now expect c
Slide 33: 2025 Segment Revenue Outlook
2025 Segment Revenue Outlook 2025 Reported 2025 Organic Revenue Growth Revenue Growth(1) RMS Flat to slightly positive Flat to slightly positive DSA Low- to mid-single-digit decline Low- mid-single-digit decline Manufacturing Flat to slightly positive Approximately flat Consolidated (2.5)%-(0.5)% de
Slide 34: Unallocated Corporate Expenses
Unallocated Corporate Expenses ($ in millions) 2Q25 1Q25 2Q24 GAAP $70.5 $54.3 $53.9 Non-GAAP $60.7 $52.4 $50.5 ▪ 2Q25 non-GAAP increase to 5.9% of revenue (from 4.9% in 2Q24) due primarily to higher performance-based compensation ─ Higher bonus accruals (both in Corporate and for total Company) wil
Slide 35: Net Interest Expense
Net Interest Expense ($ in millions) 2Q25 1Q25 2Q24 Interest expense, net $28.9 $26.5 $29.8 ▪ Net interest expense increased sequentially primarily driven by impact from short-term borrowing to facilitate 1Q25 stock repurchases ▪ Expect total net interest expense will be $100M-$105M, or ~$7M-$12M lo
Slide 36: Tax Rate
Tax Rate 2Q25 1Q25 2Q24 GAAP 26.2% 28.1% 21.2% Non-GAAP 22.7% 22.7% 21.1% ▪ Increase in non-GAAP tax rate YOY was primarily due to impact of stock-based compensation expense ▪ 2Q25 non-GAAP tax rate was more favorable than our prior expectations, benefiting non- GAAP EPS by ~$0.12 because of: ̶ Timi
Slide 37: Tax Rate, cont.
Tax Rate, cont. ▪ For FY 2025, the tax rate will now be an earning headwind that had not been anticipated at the beginning of the year ▪ This will more than offset the 2Q25 favorability because of headwind from recent U.S. tax legislation changes enacted on July 4th as part of the One Big Beautiful
Slide 38: Cash Flow
Cash Flow FY 2025 ($ in millions) 2Q25 2Q24 GUIDANCE Free cash flow (FCF) $169.3 $154.0 $430-$470 Capex $35.3 $39.5 ~$230 Depreciation $44.3 $47.7 ~$180 Amortization (1) $75.2 $38.4 ~$230 ▪ 2Q25 FCF improvement was primarily driven by higher earnings and improved working capital ▪ Capex reflects foc
Slide 39: 2025 Guidance Summary
2025 Guidance Summary GAAP Non-GAAP Revenue growth/(decrease) (2.5)%-(0.5%) reported (3.0)%-(1.0)% organic(1) Unallocated corporate ~6.0% of revenue ~5.5% of revenue Operating margin Low-double-digit OM% Flat to 30 bps decrease vs. 2024 Net interest expense $100M-$105M $100M-$105M Tax rate 26.5%-27.
Slide 40: 3Q25 Outlook
3Q25 Outlook 3Q25 Outlook Reported revenue YOY (4)%-(2)% YOY decline Organic revenue YOY (4)%-(2)% YOY decline Non-GAAP EPS YOY Low-double-digit YOY decline vs. 3Q24 ▪ Expect Manufacturing and DSA revenue will decrease moderately in 3Q25 partially offset by higher RMS revenue due to favorable timing
Slide 41: Closing Remarks
Closing Remarks ▪ Pleased with performance through 1H25, which reflected stronger-than-expected demand and solid operational execution ▪ Our restructuring program, the goal of which has been to reduce cost structure by >5%, is on track to deliver annualized cost savings of >$175M in 2025 and ~$225M
Slide 42: 2Q25 Regulation G Financial Reconciliations & Appendix
2Q25 Regulation G Financial Reconciliations & Appendix © 2025 Charles River Laboratories International, Inc.
Slide 43: Reconciliation of GAAP to Non-GAAP Selected Business Segment Information
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) (in thousands, except percentages) Three Months Ended Six Months Ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Research Models and Services Revenue $
Slide 44: Reconciliation of GAAP to Non-GAAP Selected Business Segment Information
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP (1) SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) (in thousands, except percentages) Three Months Ended Six Months Ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 CONTINUED FROM PREVIOUS SLIDE Unalloc
Slide 45: Reconciliation of GAAP Earnings to Non-GAAP Earnings
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (1) RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED) (in thousands, except per share data) Three Months Ended Six Months Ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Net income available to Charles River Laboratories Int
Slide 46: Reconciliation of GAAP Revenue Growth to Non-GAAP Organic Revenue Growth
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP REVENUE GROWTH (1) TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) Three Months Ended June 28, 2025 Total CRL RMS Segment DSA Segment MS Segment Revenue growth, reported 0.6 % 3.3 % (1.5)% 4.4 % (Increase) decrease due to foreign
Slide 47: Reconciliation of GAAP to Non-GAAP Revenue and EPS Guidance
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND EARNINGS PER SHARE (EPS) Guidance for the Twelve Months Ended December 27, 2025E 2025 GUIDANCE CURRENT PRIOR Revenue growth/(decrease), reported (2.5)% – (0.5)% (5.5)% – (3.5)% Impact of divestitures/(acqui
Slide 48: Reconciliation of GAAP Tax Rate to Non-GAAP Tax Rate
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TAX RATE TO NON-GAAP TAX RATE (UNAUDITED) (1) (in thousands) Three Months Ended Six Months Ended June 28, 2025 March 29, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Income before income taxes & noncontrolling interests $ 71,418
Slide 49: Reconciliation of Gross/Net Leverage Ratio to Adjusted EBITDA
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GROSS/NET LEVERAGE RATIO, INCLUDING GAAP NET INCOME TO ADJUSTED EBITDA (UNAUDITED) (1) (dollars in thousands, except for per share data) June 28, 2025 March 29, 2025 December 28, 2024 December 30, 2023 December 31, 2022 December 25, 20
Slide 50: Reconciliation of Free Cash Flow (Non-GAAP)
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF FREE CASH FLOW (NON-GAAP) (UNAUDITED) (1) (in thousands) Three Months Ended Six Months Ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Net cash provided by operating activities $ 204,603 $ 193,535 $ 376,300 $ 323,423 Less
Slide 51: Reconciliation of GAAP to Non-GAAP Selected Business Segment Information
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) (1) (in thousands, except percentages) Three Months Ended March 29, 2025 Unallocated Corporate Overhead $ (54,268) Add back: Acquisition, integration, and divestiture-r
Slide 52: © 2025 Charles River Laboratories International, Inc.
© 2025 Charles River Laboratories International, Inc.
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