Mesa Laboratories Reports Revenue of $62.336 Million and Issues First Fiscal 2027 Guidance
Key Facts
Mesa Laboratories reported on Nov. 9 results for its fiscal second quarter ended Sept. 30, 2026, with revenue of $62.336 million, up 2.6% from the year-earlier period. Operating income rose 77.6% to $8.388 million, while net income was $4.341 million. The company said organic revenue grew 2.6%, or 3.1% on a constant-currency basis, with positive organic growth in each quarter of fiscal 2027 to that point. Meanwhile, adjusted EBITDA rose to 27.8% of revenue, compared with 23.5% a year earlier. The results reflected differences among the company’s units: sterilization and calibration solutions supported growth, while declines in biopharmaceutical development and clinical genomics limited it, according to the company’s filing with the U.S. Securities and Exchange Commission.
Excluding the clinical genomics segment, quarterly revenue was $52.171 million, with organic growth of 5.2%, or 5.8% on a constant-currency basis. In the first half of the fiscal year, revenue excluding the segment reached $102.020 million, up 3.2% organically, or 3.3% on a constant-currency basis. The chief financial officer said quarterly organic growth was 2.6%, or 3.1% on a constant-currency basis, and that positive growth had continued in each quarter of fiscal 2027 so far. The sterilization and infection control unit and the calibration solutions unit led the expansion, while the biopharmaceutical development and clinical genomics units weighed on it. The difference between total revenue and revenue excluding clinical genomics shows the effect of the business’s decline on the company’s overall performance during the quarter.
In the sterilization and infection control segment, revenue rose to $25.342 million, with organic growth of 14.6% during the quarter. The company said the comparison benefited from the year-earlier period’s impact from delayed order fulfillment due to production challenges, adding that it had addressed production issues across most product lines and shipment volumes had increased. In the twelve months ended September 2026, segment revenue increased 8.5% to $103.897 million, its highest total for any twelve-month period in its history. By contrast, biopharmaceutical development revenue was $12.779 million, down 8.2% organically. The company attributed the decline to lower peptide instrument sales and delays in processing export controls for some products, while consumables and services revenue helped offset the decline in immunoassay instrument sales.
Clinical genomics revenue was $10.165 million, down 8.8% organically in the quarter and 4.6% in the first half of the fiscal year. The company attributed the decline mainly to the timing of consumables orders from a large customer, alongside a modest decline in revenue from China. The segment’s gross margin also fell 80 basis points during the quarter. Mesa said it would manage the business for profitability rather than expansion, focusing on pharmacogenomics, oncology and high-utilization customers. The company linked this approach to reducing lower-margin products and accounts, while expecting segment revenue to decline in the second half of fiscal 2027 and continue falling into fiscal 2028.
Mesa issued its first guidance for fiscal 2027, and Chief Executive Siddhartha Kadia said the company built its outlook conservatively on the basis of half a year of data under the changes it had made. He added: "We built it conservatively, based on half a year of data under the changes we made, because a number our shareholders can rely on is better than a number that makes one quarter's results look good." The company said third-quarter fiscal revenue is expected to be roughly flat compared with the year-earlier period, mainly because of lower clinical genomics revenue. It expects revenue to continue growing when that segment is excluded. The trajectory of clinical genomics remains a factor in assessing the near-term outlook, as the company linked its expected decline to flat overall revenue in the third quarter.
On costs, the savings plan targets an annual reduction of about $9.3 million in operating costs, with about $4.3 million reinvested in the business, leaving a net annual reduction of about $5 million. The company estimated pretax restructuring charges of between $2.6 million and $3.4 million, primarily in the second half of fiscal 2027. The plan includes exiting the Hamburg facility when its lease expires in February 2027, and Mesa expects the savings to be fully reflected in its annual cost structure by the end of fiscal 2028. During the quarter, the company repaid $11.406 million of debt and reduced its net leverage ratio to 1.75 times as of Sept. 30, 2026. This combines cost restructuring and debt reduction during the period in which the company issued its first annual guidance.
As part of its capital allocation, the board authorized a new share repurchase program of up to $40 million on Nov. 4, 2026, after ending the previous program approved in 2005. The new program expires on Dec. 31, 2028, and does not require the company to purchase a specific number of shares. In another operational development, Mesa said the U.S. Food and Drug Administration inspected its Bozeman, Montana, facility, where biological indicators are manufactured, in September, and issued no Form 483 observations at the close of the inspection. The company also appointed Sanket Shah vice president, general counsel and secretary, effective Nov. 2, 2026; he has more than 17 years of legal experience at public companies. These developments accompanied the quarterly results and new annual guidance.