Charles River Laboratories International, Inc.

CRL · NYSE · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

After three flat years, bookings have run ahead of the work being delivered for three straight quarters, and buying its own supplier of research monkeys plus selling non-core units is rebuilding profit faster than sales. How much of the fourth-quarter margin jump comes from the farms it bought?

  • Bookings have run ahead of delivered work for three straight quarters.

    DSA net book-to-bill hit nearly 1.2x in Q2 FY2026, the highest in almost four years, with biotech clients now joining large pharma. Booked studies take one to two quarters to start, so this is a promise of revenue, not revenue yet. Which segment is carrying the revenue recovery so far?

  • Profit is being rebuilt by owning the supply chain, not by selling more.

    The company now breeds most of its own study monkeys after buying its Cambodian supplier, which management calls the biggest reason safety-testing profit jumps in the fourth quarter. Selling the CDMO lifted manufacturing margin to 37.8%.

  • The recovery is narrow: research models are still shrinking.

    RMS revenue fell again in Q2 FY2026 as North American small-model volume slipped and flat NIH budgets held academic labs back. Safety-study pricing has not moved in two years, so almost all the growth now rests on one segment. How much of RMS revenue comes from academic and government clients?

Bullish
  • Demand recovery in safety assessment
    The bull case is that biotech funding and pharma budgets have turned, so stronger bookings should now convert into safety-assessment revenue growth after two years of decline.
  • Ownership of NHP supply
    Owning the Cambodian and Mauritian monkey farms secures the scarce models clients need and lowers sourcing costs, which supports both revenue and margin.
  • Portfolio simplification and cost cuts
    Divesting slower businesses while cutting costs and repurchasing shares lifts earnings per share even if the top line grows slowly.
Bearish
  • Bookings convert slowly to revenue
    The bear case is that booked work takes several quarters to reach revenue and pricing is flat, so the bookings recovery adds little to near-term sales.
  • Research models under pressure
    North American small-model volumes, flat NIH budgets and weak early-stage company formation keep the research models segment shrinking.
  • Margin gains from portfolio actions
    Much of the second-half margin improvement comes from divestitures and an acquisition rather than operations, so it may not repeat in the following year.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Purchase≥$15KMar 25May 13
Ro Khanna
Democratic · House · CA-17
Purchase≥$1KMay 15Jun 9
Ro Khanna
Democratic · House · CA-17
Purchase≥$1KMar 30Apr 7
Ro Khanna
Democratic · House · CA-17
Sale≥$1KFeb 5Mar 9
Jefferson Shreve
Republican · House · IN-6
Purchase≥$15KMay 8Jun 22

Congressional trading data provided by QuiverQuant

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Product segmentsGeography
FY2025 · USD

How Charles River Laboratories International turned $4.0B of revenue into $25.2M of operating income.

Revenue
Discovery and Safety Assessment$2.4B▼ 1.97% YoY
Research Models and Services$846.1M▲ 2.01% YoY
Manufacturing Support$766.4M▼ 0.38% YoY
Total revenue$4.0B
Gross profit$1.2B30.5%
Operating income$25.2M0.6%
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