Charles River's 2025 results showed stabilization in demand, with a strong Q4 DSA book-to-bill of 1.12x, but Q4 revenue declined 2.6% organically. Management guides to a return to organic growth in H2 2026, driven by improved biotech funding and the KF Cambodia acquisition which will improve margins. Q4 DSA net book-to-bill hit 1.12x, a major sequential improvement from 0.82x in Q3.
Charles River's 2025 results showed stabilization in demand, with a strong Q4 DSA book-to-bill of 1.12x, but Q4 revenue declined 2.6% organically. Management guides to a return to organic growth in H2 2026, driven by improved biotech funding and the KF Cambodia acquisition which will improve margins. Q4 DSA net book-to-bill hit 1.12x, a major sequential improvement from 0.82x in Q3.
Management repeatedly characterized the demand recovery as 'cautiously optimistic,' noting it may not be linear, while highlighting improving bookings and a positive outlook for returning to growth in the second half of 2026.
Guidance · revenue to -1.25%
2026 revenue guide is -1% to flat, with a return to growth in H2 as backlog converts.
KF Cambodia acquisition, closed in January, will boost 2026 EPS by $0.25 and DSA margins by >200bps.
Management views AI as an enabling, complementary technology to their core lab business, not a near-term disruptor. They are investing in AI for virtual control groups, scientific report writing, and sales effectiveness, but expect its impact to be a gradual, long-term evolution driven by science and validation, especially in regulated safety assessment.
DSA net book-to-bill improved to 1.1x in Q4.. Management repeatedly characterized the demand recovery as 'cautiously optimistic,' noting it may not be linear, while highlighting improving bookings and a positive outlook for returning to growth in the second half of 2026.
Capital expenditures for 2026 are expected to be approximately $200 million, or about 5% of revenue, a slight reduction from 2025's $219.2 million. This reflects a disciplined approach to capital investments while continuing strategic spending to support client demand.
Management repeatedly characterized the demand recovery as 'cautiously optimistic,' noting it may not be linear, while highlighting improving bookings and a positive outlook for returning to growth in the second half of 2026.
“It will take one to two quarters to see the benefit of the stronger fourth quarter bookings.”
“For the year, we expect KF acquisition will benefit the operating margin by more than 50 basis points on a consolidated basis, and by more than 200 basis points in the DSA segment.”
“These trends reflect our clients' continued reliance on traditional in vivo methods to help ensure drug safety, even as we and our broader industry continue to evaluate applicable uses for NAMs.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Capex | FY2026 | $200M | $200M | GUIDED |
| EPS | FY2026 | $10.70–$11.20 | $10.95 | GUIDED |
| Free cash flow | FY2026 | $375M–$400M | $387.5M | GUIDED |
| Op margin | FY2026 | 20%–20.3% | 20.15% | GUIDED |
| Revenue | FY2026 | -1.5%–-1% | -1.25% | GUIDED |