Charles River reported a strong quarter, beating its own expectations for revenue and EPS, and raised full-year guidance. Most notably, DSA book-to-bill reached a near four-year high at 1.19x, signaling a sustained recovery in preclinical demand. The company is increasingly focused on portfolio refinement and integrating AI-era partnerships, while NHP sourcing advantages and divestitures drive margin expansion, especially in Q4. Raises FY2026 revenue (organic growth now flat to +1%), EPS ($11.15-$11.45), and free cash flow guidance ($400-$420M).
Charles River reported a strong quarter, beating its own expectations for revenue and EPS, and raised full-year guidance. Most notably, DSA book-to-bill reached a near four-year high at 1.19x, signaling a sustained recovery in preclinical demand. The company is increasingly focused on portfolio refinement and integrating AI-era partnerships, while NHP sourcing advantages and divestitures drive margin expansion, especially in Q4. Raises FY2026 revenue (organic growth now flat to +1%), EPS ($11.15-$11.45), and free cash flow guidance ($400-$420M).
DSA net book-to-bill rose to 1.19x in Q2, the highest in nearly four years, and backlog increased to $1.97 billion. Biotech funding is strong (~$100 billion trailing 12 months), and the company expects organic growth to accelerate in the second half, though the recovery is…
Guidance · revenue to 0.5%
DSA net bookings hit $701M in Q2, a book-to-bill of 1.19x—the highest in nearly four years, driven by both pre- and post-IND studies, with a notable uptick in IND-enabling work.
Reported gross margin was 36.19%, reinforcing the quarter's better-than-guided profitability.
Management discussed AI as a driver of future demand, noting AI-native drug discovery companies are running more programs than typical biotechs and expect this to be a tailwind for validation and safety assessment work over the next year or two. They are also investing in AI tools to improve internal efficiency and client speed.
DSA net book-to-bill rose to 1.19x in Q2, the highest in nearly four years, and backlog increased to $1.97 billion. Biotech funding is strong (~$100 billion trailing 12 months), and the company expects organic growth to accelerate in the second half, though the recovery is gradual due to timing between bookings and revenue.
Capital expenditures were $31 million in Q2 (3.1% of revenue), down slightly from $35 million last year. The company is continuing organic investments in lab capacity, including a bioanalytical expansion in Scotland, one of five global lab science expansions, to support future growth.
Management expressed optimism about demand recovery, highlighted strong booking trends and raised guidance, while acknowledging gradual progress and timing lags.
“But we don't see a bottleneck there.”
“lower NHP sourcing costs from the KF acquisition, which will largely benefit the fourth quarter”
“the DSA Netbook to Bill rose to nearly 1.2 times in the second quarter, making this the third consecutive quarter”
“pricing has not materially improved yet. So pricing is still stable... But we are looking to kind of forward to the time where pricing becomes a little bit more available.”
“This business is still a bit hindered. If you think about the company formation is growing but only by 2% and far off from the COVID levels.”
“we are expecting to hear back literally any day now on what the changes are going to be... we've factored it into our guidance.”
| Показатель | Период | Диапазон | Середина | Статус |
|---|---|---|---|---|
| EPS | FY2026 Q4 | $11.15–$11.45 | $11.30 | RAISED |
| EPS | FY2026 Q3 | $2.90–$3.00 | $2.95 | GUIDED |
| Free cash flow | FY2026 Q4 | $400–$420 | $410 | RAISED |
| Revenue | FY2026 Q4 | 0%–1% | 0.5% | RAISED |
| Revenue | FY2026 Q3 | 1%–3% | 2% | GUIDED |
| RevenueDSA | FY2026 Q4 | 2%–4% | 3% | RAISED |
Charles River is providing wet lab expertise to Eli Lilly's AI drug discovery platform, indicating Lilly is investing in integrating external data with its AI models, potentially increasing demand for outsourced testing.
“we announced a unique collaboration with Eli Lilly's two lab drug discovery platform. In support of Lilly's goal to advance R&D modernization efforts”
… second quarter, making this the third consecutive quarter that the DSA Netbook to Bill has been above one time and also the highest level achieved in nearly four years. Our constructive view was also supported by a return to organic revenue growth of We firmly believe these trends positioned us well to drive higher organic growth during the second half of the year. As part of our efforts to further deepen client relationships, In June, we announced a unique collaboration with Eli Lilly's two lab drug discovery platform. In support of Lilly's goal to advance R&D modernization efforts, we will provide our non-clinical or wet lab testing expertise to help build and optimize Eli Lilly's AI and machine learning drug discovery model. We believe this type of collaboration demonstrates that the future state of drug discovery and development will require traditional in vivo and in vitro solutions even when integrated with AI or other in silico approaches to help enhance the speed and scientific data needed to support our clients' R&D programs. and Charles River is a scientific partner that is uniquely positioned to be able to integrate traditional, in vivo, in vitro and new innovative …
DSA bookings and book-to-bill hit their highest level in nearly four years (Q3 2022), signalling the start of an industry-wide recovery in preclinical demand, earlier than many expected. — Strong DSA demand may indicate a broader CRO recovery trend; competitors may also see improvements later in 2026.
… to drive growth. Execution of our pathway to purpose strategic initiatives and our financial goals will be the key to our future success. Let me now provide you with the recent highlights that demonstrates our progress on our pathway to purpose initiatives, as well as our second quarter performance. First, we were encouraged that the biopharmaceutical demand environment continued to strengthen in the second quarter, particularly in the DSA segment. The DSA Netbook to Bill rose to nearly 1.2 times in the second quarter, making this the third consecutive quarter that the DSA Netbook to Bill has been above one time and also the highest level achieved in nearly four years. Our constructive view was also supported by a return to organic revenue growth of We firmly believe these trends positioned us well to drive higher organic growth during the second half of the year. As part of our efforts to further deepen client relationships, In June, we announced a unique collaboration with Eli Lilly's two lab drug discovery platform. In support of Lilly's goal to advance R&D modernization efforts, we will provide our non-clinical or wet lab testing expertise to help build and optimize Eli …