CRL · 8-K · 20260805PR000115

Operating Margin Drivers

CHARLES RIVER LABORATORIES INTERNATIONAL, INC. · 2026-08-05 · Importance 29 · Surprise 22 · No source text

GAAP operating margin increased to 11.9% from 9.7% year over year, primarily because of the CDMO business and lower accelerated amortization for certain client relationships. Non-GAAP operating margin decreased to 20.5% from 22.1%, driven by higher study-related direct costs in DSA and higher unallocated corporate costs. Manufacturing Solutions non-GAAP operating margin rose to 37.8% from 32.8%, while its GAAP margin increased to 34.9% from 6.0%, primarily due to the CDMO divestiture benefit. DSA non-GAAP margin fell to 25.6% from 27.4% because of higher study-related direct costs, and RMS non-GAAP margin fell to 24.5% from 25.3% because of lower volume and unfavorable geographic mix.

Key facts

• Manufacturing GAAP operating margin in Q2 2026: 34.9% compared to 6.0% in Q2 2025, with non-GAAP operating margin of 37.8% versus 32.8% in Q2 2025, driven primarily by the CDMO business including the benefit from the divestiture. source
• The GAAP operating margin increase was primarily driven by the CDMO business, including lower accelerated amortization expense related to certain client relationships. source
• DSA GAAP operating margin in Q2 2026: 20.5%, up from 19.9% in Q2 2025, driven by lower amortization related to divestiture of certain European Discovery Services sites and lower third-party legal costs related to an NHP supply matter. source
• The Company recorded investment gains associated with the deferred compensation plan that totaled a net benefit of $0.19 per share in the second quarter. source
• Non-GAAP net income for the second quarter: $146.2 million, a decrease of 5.0% from $154.0 million in the second quarter of 2025. source
• Second-quarter diluted non-GAAP earnings per share: $3.02, a decrease of 3.2% from $3.12 in the second quarter of 2025. source
• Non-GAAP operating margin increased 420 basis points sequentially to 20.5%. source
• GAAP operating margin for the second quarter: 11.9%. source

Impact estimates