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    ICCC
    Earnings call· Jun 2026(Q2 FY26)

    IMMUCELL CORP /DE/ Q2 FY26 earnings call ICCC

    Aug 14, 2026 Source

    Executive summary

    ImmuCell Q2 FY26 — Strong Commercial Growth and Capacity Expansion

    ImmuCell delivered strong commercial growth in Q2 FY26, driven by increased domestic sales and distributor volumes, alongside significant market share gains for its First Defense product. The company is actively investing in a major capacity expansion program for its colostrum processing, leveraging former Re-Tain facilities, while managing gross margin pressures from manufacturing output and cost shifts. An investigational study for Re-Tain is ongoing, with results expected by end of September or early October.

    Highlights

    5

    • Product sales increased 11.5% to $7.2 million in Q2 FY26 compared to Q2 FY25.

    • Domestic sales grew 27.7% to $6.2 million in Q2 FY26 compared to Q2 FY25.

    • Distributor volume growth was 28% in Q2 FY26 and 24% for H1 FY26 compared to the same periods last year.

    • Market share for First Defense increased from approximately 15% in December 2025 to approximately 19% at the end of June 2026.

    • Adjusted EBITDA increased 92.9% to $2.7 million in Q2 FY26 compared to Q2 FY25.

    Concerns

    4

    • International sales declined 38.9% to about $1 million in Q2 FY26 compared to Q2 FY25.

    • Gross margin as a percentage of product sales declined to 33.9% in Q2 FY26 compared to 43.7% in Q2 FY25.

    • Lower manufacturing output in Q2 FY26 reduced gross margin by approximately 7.5 percentage points sequentially.

    • Incurred approximately $150,000 of scrap caused by a purchased material in Q2 FY26.

    Guidance & targets

    4
    CategoryTargetConfidence
    Manufacturing units production
    Nearly 1 million more units
    medium materiality
    High
    Freeze-drying capacity expansion completion
    Completed
    high materiality
    High
    Liquids processing capacity expansion completion
    Completed
    high materiality
    High
    Manufacturing capacity
    More than triple current capacity
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Domestic Sales
    Strong growth in the U.S. market, contributing significantly to overall sales.
    		$6.2M27.7%——
    International Sales
    Decline primarily related to the 2025 backorder clearing, with Canada accounting for the majority of the decline.
    		$1M-38.9%——
    First Defense Products
    Tri-Shield, a flagship product, showed strong growth, and the functional feed line contributed significantly to overall product growth.
    Tri-Shield growth (H1 FY26): 25.1%Functional feed line contribution to growth: ~20%
    		————

    Operational metrics

    26
    Product sales
    $7.2M11.5% increase YoY
    Q2 FY26

    Total product sales for the second quarter.

    Product sales
    $17.5M20.9% increase YoY
    H1 FY26

    Total product sales for the first six months.

    Gross margin as percentage of product sales
    33.9%vs 43.7% in Q2 FY25
    Q2 FY26

    Year-over-year decline primarily reflected the shift of costs formerly associated with Re-Tain into COGS and lower output.

    Gross margin decline from lower manufacturing output
    7.5sequential decline from Q1
    Q2 FY26

    Impact on gross margin from lower manufacturing output in Q2, which was partly planned.

    Gross margin decline from Re-Tain cost shift
    1.9sequential decline from Q1
    Q2 FY26

    Impact on gross margin from the shift of former Re-Tain-related expenses to cost of goods sold.

    Scrap cost
    $150,000
    Q2 FY26

    Scrap caused by a purchased material issue, identified early by quality controls.

    Operating expenses (excluding settlement)
    $5.2Mvs $4.5M in H1 FY25
    H1 FY26

    Operating expenses for the first six months, excluding the $2 million settlement.

    Sales, marketing and administrative expenses
    $2.4Mvs $1.4M in Q2 FY25
    Q2 FY26

    Increase driven by investments in leadership and expanded commercial activities.

    Product development expenses
    $120,000vs $800,000 in Q2 FY25
    Q2 FY26

    Decline driven by reductions in spending on Re-Tain product development and shift of related expenses to COGS.

    Net income (GAAP)
    $1.8Mvs $500,000 in Q2 FY25
    Q2 FY26

    GAAP net income for the second quarter. Captured per explicit user instruction despite general rule to omit GAAP statement lines.

    EPS (GAAP)
    $0.20vs $0.06 in Q2 FY25
    Q2 FY26

    GAAP EPS for the second quarter. Captured per explicit user instruction despite general rule to omit GAAP statement lines.

    Net income (GAAP)
    $3.8Mvs $1.9M in H1 FY25
    H1 FY26

    GAAP net income for the first six months. Captured per explicit user instruction despite general rule to omit GAAP statement lines.

    Adjusted EBITDA
    $2.7Mvs $1.4M in Q2 FY25
    Q2 FY26

    Adjusted EBITDA for the second quarter, including the $2 million legal settlement.

    Adjusted EBITDA
    $5.4Mvs $3.7M in H1 FY25
    H1 FY26

    Adjusted EBITDA for the first six months, including the $2 million legal settlement.

    Cash on hand
    $8.9M
    As of June 30, 2026

    Balance sheet item.

    Inventory
    $9.1M
    As of June 30, 2026

    Balance sheet item.

    Working capital
    $16.6Mincreased from $13M at end of 2025
    As of June 30, 2026

    Improvement partly due to the $2 million settlement.

    Freeze-drying capacity investment
    $3.5M
    Initial phase

    Investment to build scalable manufacturing capabilities.

    Liquids processing capacity investment
    $4.5M
    Phase 2

    Investment leveraging existing equipment and facilities.

    Manufacturing output
    >450,000record production
    Q1 FY26

    Production volume in the first quarter.

    Manufacturing output
    ~350,000reduction from Q1
    Q2 FY26

    Average production volume in the second quarter, with most reduction in June.

    Processing time reduction
    Less than 1 monthfrom 2 to 3 months today
    Future

    Expected reduction in total processing time due to modernization of manufacturing approach.

    Colostrum cost as percentage of product costs
    Approximately half
    Current

    Indicates the significance of colostrum sourcing and yield improvement.

    Value of day-old calf
    $1,700increased from ~$400 since 2024
    Current

    Strengthens the economic case for preventing scours.

    Annual economic losses from scours in US
    Up to $1B
    Annual

    Highlights the market opportunity for scours prevention products.

    Calves not receiving biological scours preventative
    More than half
    Current

    Indicates significant untapped market potential.

    Industry KPIs

    4
    MetricValueDetails
    Pipeline read out calendarRe-Tain investigational study
    Therapeutic drug market share19%%
    Prescription volume new starts24%%
    Clinical trial efficacy safety dataRe-Tain investigational study

    Deals & partnerships

    1
    Former Re-Tain contract manufacturerLegal settlement$2M

    Settlement received from the former Re-Tain contract manufacturer.

    Risks & headwinds

    7
    Gross margin declineQ2 FY26

    33.9% in Q2 FY26 vs 43.7% in Q2 FY25

    Mitigation: Planned process changes, quality investments, maintenance work intended to improve future yields.

    Lower manufacturing outputQ2 FY26

    Reduced gross margin by 7.5 percentage points sequentially

    Mitigation: Partly planned due to seasonal demand and process changes; still met demand and increased finished goods inventory.

    Scrap from purchased materialQ2 FY26

    $150,000

    Mitigation: Quality controls identified the issue early, stopped manufacturing, and limited impact.

    International sales declineQ2 FY26

    -38.9% to $1 million

    Mitigation: Transitioning to a more proactive and strategic international approach with a new business development executive.

    Increasing competition for high-quality colostrumOngoing

    Not quantified

    Mitigation: Responding with new payment programs, enhanced technical services, and expanded farm recruitment efforts.

    Managing contamination risk in manufacturingOngoing

    Not quantified

    Mitigation: Continuous focus on process discipline and yield improvement.

    Executing major capacity expansion while improving yieldsThrough 2027

    Not quantified

    Mitigation: Two-phase expansion program designed to modernize manufacturing and improve long-term economics; team focused on yield improvement.

    What to watch in Q3 FY26

    5

    Re-Tain investigational study results

    End of September/Beginning of October
    CurrentStudy ongoing, interim results discussed
    TargetFull results released

    Why it matters

    The results will determine future decisions regarding the Re-Tain product, including potential licensing.

    That study is ongoing. Discussions about the interim results are ongoing, and it will not be completed until, I would say, end of September, maybe even beginning of October. And so at that point, when we have the full results, we will be sharing those with the investors.

    Q&A highlights

    6

    Seeking an update on the ongoing Re-Tain investigation studies with Michigan State and potential timelines for completion.

    The investigational study with Michigan State for an additional use case for Re-Tain is ongoing, with interim results under discussion. Full results are expected by the end of September or beginning of October, at which point they will be shared with investors.

    “That study is ongoing. Discussions about the interim results are ongoing, and it will not be completed until, I would say, end of September, maybe even beginning of October. And so at that point, when we have the full results, we will be sharing those with the investors.”

    asked by Unknown Attendee · answered by P. F. Te Boekhorst

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Focus and Investments

    ImmuCell made a strategic shift in late 2025 to focus on the calf scours market and its First Defense product, driven by its highly differentiated nature and significant growth potential. This involved investments in leadership, sales force expansion, and manufacturing to enhance its competitive position. The company aims to leverage its effective competition in the large and growing calf health market, with opportunities for domestic, international, and innovation-led expansion.

    02

    Gross Margin Dynamics and Manufacturing Output

    Gross margin declined to 33.9% in Q2 FY26 from 43.7% in Q2 FY25, primarily due to the shift of costs formerly associated with the discontinued Re-Tain product into cost of goods sold. Additionally, lower manufacturing output in one sub-process, partly planned due to seasonal demand and process changes for future yield improvements, contributed 7.5 percentage points to the sequential decline. The company also incurred a $150,000 scrap cost from a purchased material issue, though quality controls limited its impact.

    03

    Capacity Expansion Program

    ImmuCell is undertaking an approximately $8 million investment in freeze-drying and colostrum processing capacity. This two-phase program, leveraging existing facilities and equipment from the former Re-Tain program, includes a $3.5 million investment in freeze-drying capacity expected to complete in H1 2027 and a $4.5 million investment in liquids processing capacity expected to complete by end of 2027. The expansion is designed to modernize manufacturing, shorten processing times from 2-3 months to less than 1 month, and more than triple current capacity, which is expected to improve long-term product economics. The majority of this expansion will be financed by cash on hand and cash from operations, supplemented by a line of credit if needed.

    04

    Colostrum Sourcing and Yield Improvement

    The company is prioritizing product cost improvements and strengthening colostrum sourcing capabilities, recognizing that colostrum represents approximately half of its product costs. With increasing competition for high-quality colostrum, ImmuCell is implementing new payment programs, enhanced technical services, and expanded farm recruitment efforts. Improving yields from the existing plant remains a primary focus, alongside managing contamination risk and supporting colostrum suppliers, while simultaneously executing the major capacity expansion.

    05

    International Strategy and Market Opportunity

    ImmuCell is transitioning to a more proactive and strategic approach to international markets with a newly hired international business development executive. This involves actively assessing market opportunities against regulatory and go-to-market investment requirements, with results expected to materialize over time⏳. Domestically, the company benefits from an attractive market supported by significantly higher calf values (from ~$400 to ~$1,700 since 2024), strengthening the economic case for scours prevention, which causes up to $1 billion in annual economic losses in the U.S.

    AI-generated summary of the company’s earnings call. Not investment advice.