Key Takeaways
- • Charles River Laboratories (NYSE: CRL) reported third-quarter 2026 revenue of $982.7 million, down 2.2% year over year from $1,004.9 million, but organic revenue grew 4.7%, ahead of the company's prior outlook.
- • GAAP EPS of $6.86 was inflated by a $245.6 million ($5.06 per share) benefit from reversing acquired tax reserves; non-GAAP EPS of $3.09 rose 27.2% from $2.43.
- • Non-GAAP operating margin expanded 330 basis points to 23.0%, driven by the CDMO divestiture benefit and operating leverage in safety assessment services.
- • The company raised 2026 organic revenue guidance by 100 basis points and non-GAAP EPS guidance by $0.15 at midpoint, primarily on DSA outperformance and a lower tax rate.
- • DSA segment organic growth of 5.9% and Manufacturing organic growth of 7.4% offset weaker RMS organic revenue, which declined 0.6%.
Summary
Charles River Laboratories International (NYSE: CRL) reported results for the third quarter ended September 26, 2026. Total revenue was $982.7 million, down 2.2% from $1,004.9 million a year earlier, primarily reflecting the May 2026 divestitures. Organic revenue, which excludes acquisitions, divestitures and currency effects, rose 4.7%, marking a return to organic growth for the second consecutive quarter. CEO Birgit Girshick said demand for biopharmaceutical services remained strong and that revenue and earnings per share exceeded the company's prior expectations.
Profitability figures diverge sharply between GAAP and non-GAAP measures. GAAP net income available to common shareholders was $333.1 million, or $6.86 per diluted share, versus $54.4 million, or $1.10, a year earlier. That result includes a $245.6 million benefit ($5.06 per share) tied to reversing acquired tax reserves after newly enacted tax legislation and completion of certain requirements in a foreign jurisdiction. On a non-GAAP basis, net income was $150.1 million, up 24.8%, and diluted EPS was $3.09, up 27.2% from $2.43. Non-GAAP operating margin rose to 23.0% from 19.7%, with GAAP operating margin at 20.6%.
By segment, DSA revenue was $596.3 million, down 0.7% reported but up 5.9% organically on higher regulated safety assessment study volume. DSA GAAP operating margin reached 28.9%, while non-GAAP margin rose to 26.8% from 25.4%. Manufacturing Solutions revenue was $178.9 million, down 6.2% reported after the CDMO divestiture, with organic growth of 7.4% led by Biologics Testing Solutions and Microbial Solutions; non-GAAP operating margin was 38.6%. Research Models and Services revenue was $207.5 million, down 2.8% reported and 0.6% organically, with non-GAAP margin declining to 24.4% from 25.0% on unfavorable geographic and large-model revenue mix.
The company raised 2026 revenue and non-GAAP EPS guidance, primarily reflecting third-quarter outperformance in DSA and a lower tax rate; GAAP EPS guidance was also raised due to the tax reserve reversal. Guidance was previously updated on August 5, 2026. Management also unveiled its Pathway to Purpose strategy and Create the Future initiative at its 2026 Investor Day, and highlighted operational initiatives including the Endosafe Cartridge Technology Automated Manufacturing Suite and the Apollo Orchestrate platform developed with Autolomous. A webcast to discuss results is scheduled for November 4, 2026 at 9:00 a.m. ET.
Profitability figures diverge sharply between GAAP and non-GAAP measures. GAAP net income available to common shareholders was $333.1 million, or $6.86 per diluted share, versus $54.4 million, or $1.10, a year earlier. That result includes a $245.6 million benefit ($5.06 per share) tied to reversing acquired tax reserves after newly enacted tax legislation and completion of certain requirements in a foreign jurisdiction. On a non-GAAP basis, net income was $150.1 million, up 24.8%, and diluted EPS was $3.09, up 27.2% from $2.43. Non-GAAP operating margin rose to 23.0% from 19.7%, with GAAP operating margin at 20.6%.
By segment, DSA revenue was $596.3 million, down 0.7% reported but up 5.9% organically on higher regulated safety assessment study volume. DSA GAAP operating margin reached 28.9%, while non-GAAP margin rose to 26.8% from 25.4%. Manufacturing Solutions revenue was $178.9 million, down 6.2% reported after the CDMO divestiture, with organic growth of 7.4% led by Biologics Testing Solutions and Microbial Solutions; non-GAAP operating margin was 38.6%. Research Models and Services revenue was $207.5 million, down 2.8% reported and 0.6% organically, with non-GAAP margin declining to 24.4% from 25.0% on unfavorable geographic and large-model revenue mix.
The company raised 2026 revenue and non-GAAP EPS guidance, primarily reflecting third-quarter outperformance in DSA and a lower tax rate; GAAP EPS guidance was also raised due to the tax reserve reversal. Guidance was previously updated on August 5, 2026. Management also unveiled its Pathway to Purpose strategy and Create the Future initiative at its 2026 Investor Day, and highlighted operational initiatives including the Endosafe Cartridge Technology Automated Manufacturing Suite and the Apollo Orchestrate platform developed with Autolomous. A webcast to discuss results is scheduled for November 4, 2026 at 9:00 a.m. ET.
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