Charles River Laboratories International (NYSE:CRL) outlined a strategy to accelerate growth, expand margins and modernize its operations during its 2026 Investor Day, setting financial targets through 2030 that include 5% to 7% organic revenue growth, an approximately 24% non-GAAP operating margin and low-double-digit non-GAAP earnings-per-share growth.
Chief Executive Officer Birgit Girshick said the company’s refreshed strategic framework, called “Pathway to Purpose,” centers on three priorities: modernizing the company and industry, strengthening its scientific portfolio and growing through a customized client-centric approach.
Modernization program targets $300 million in savings
Charles River said its “Create the Future” modernization initiative is expected to produce at least $300 million in cumulative incremental savings between 2027 and 2030, in addition to $300 million in cost savings implemented in recent years, primarily through restructuring.
Mark Mintz, the company’s chief information officer and head of global shared services, said the program will focus on AI, automation, digitization, workflow simplification and enterprise optimization. The company has identified more than 15 core business processes for simplification and has more than 50 AI-enabled projects supporting the transformation, according to Mintz.
“This is not simply a one-time cost program,” Mintz said. “It is a structural transformation designed to improve how work gets done and support sustainable growth and margin expansion over time.”
The company plans to use digital tools to support functions including scientific reporting, study design, commercial processes, financial processes, laboratory operations and manufacturing workflows. It also highlighted Apollo, its digital client engagement platform, which supports research-model purchases, vivarium management, study visibility and biologics-testing sample tracking. Mintz said Apollo has more than 18,000 client users and that about 92% of eligible users utilize the platform.
Investment focus includes bioanalysis and scientific technologies
Girshick identified bioanalysis, or BioA, as one of Charles River’s clearest growth opportunities. The company currently performs BioA work primarily in the preclinical setting but is expanding capabilities to support clinical sample testing, rather than clinical trials. Management said that expansion could shift the company’s revenue mix from approximately 60% pre-IND and 40% post-IND toward a roughly even split.
The company expects BioA revenue to rise organically from approximately $300 million in 2025 to $450 million in 2030, according to Shannon Parisotto, corporate executive vice president of global Discovery and Safety Assessment, or DSA. Charles River is pursuing five organic BioA expansions and may consider acquisitions involving high-science, complex-modality providers, management said.
Charles River also said it is evaluating potential expansion of preclinical services in China, where management estimated the addressable market at $1.2 billion to $1.5 billion. Girshick said the company would take a measured approach and weigh potential investments against geopolitical risks, competition and alternative uses of capital.
Another scientific focus is new approach methodologies, or NAMs, which combine in vivo, in vitro and in silico methods. Chief Scientific and Innovation Officer Namandjé Bumpus said Charles River has more than 220 in vitro and in silico assays and methods operating across major organ systems.
Bumpus said the company does not view NAMs as an immediate replacement for animal-based research. Instead, Charles River is developing integrated test batteries designed to provide more detailed and decision-useful evidence alongside in vivo studies. The company also uses machine learning and historical study data in virtual control groups, which can reduce the number of live control animals used while maintaining scientific rigor.
“We need these in vivo models,” Bumpus said during the question-and-answer session, adding that she did not expect animal testing to be fully replaced during her lifetime.
Segment targets through 2030
- Discovery and Safety Assessment: Charles River expects 5% to 7% organic revenue growth from 2027 through 2030 and non-GAAP operating margins of at least 27% by 2030. The company said its DSA business holds approximately 33% of the outsourced in vivo safety-assessment market.
- Manufacturing Solutions: The company targets 7% to 9% organic revenue growth and non-GAAP operating margins exceeding 40% by 2030. Management said the segment will benefit from recurring consumables revenue, microbial testing launches, biologics testing and the earlier divestiture of its CDMO business.
- Research Models & Services: Charles River projects 2% to 4% organic revenue growth and operating margins in the mid-20% range. Management expects growth in China, CRADL vivarium services and government and academic markets, while assuming mid-single-digit volume declines in North American research models.
Chief Financial Officer Glenn Coleman said Charles River expects an improvement in market conditions, citing a net book-to-bill ratio above one for three consecutive quarters and a 1.19 ratio in the second quarter, its highest in nearly four years. He said proposal volumes have increased sequentially for three quarters and rose by a double-digit percentage year over year in the most recent quarter.
The company reaffirmed its 2026 guidance for revenue, operating margin and non-GAAP EPS, while stating that it expects to finish at the upper end of its revenue and non-GAAP EPS ranges. Coleman said organic sales declined 0.7% in the first half, but the company expects low-single-digit growth, or potentially slightly higher, in the second half.
Charles River ended June with approximately $2.6 billion of total debt and a net debt-to-EBITDA leverage ratio of about 2.5 times. Coleman said the company intends to maintain a long-term leverage range of two to three times, while retaining flexibility for strategic acquisitions.
Girshick said the company’s financial objectives are based on current initiatives rather than major unproven assumptions. “We know where the value is, we know what we need to do, and we are already executing on it,” she said.
About Charles River Laboratories International (NYSE:CRL)
Charles River Laboratories International, Inc is a global provider of drug discovery, nonclinical development and laboratory services for pharmaceutical, biotechnology and medical device companies, as well as academic and government research institutions. The company supports customers throughout the development process, from early-stage research and target identification through preclinical testing and regulatory preparation.
Its offerings include research models and related products, discovery and development services, toxicology and safety assessment, efficacy testing, bioanalysis, and laboratory testing.
