Revenue Recognition

12 Months Ended

May 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

The Company derives revenue from two primary sources — product revenue and service revenue.

Product revenue consists primarily of shipments of:

•Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation;

•Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and

•Rodent control products, disinfectants and insect control products to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities.

Revenues for Neogen’s products are recognized and invoiced when the product is shipped to the customer.

Service revenue consists primarily of:

•Genomic identification and related interpretive bioinformatic services; and

•Other commercial laboratory services.

Revenues for Neogen’s genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer.

Payment terms for products and services are generally 30 to 60 days.

Contract liabilities represent deposits made by customers before the satisfaction of performance obligation(s) and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer, the liability for the customer deposit is relieved and revenue is recognized. These customer deposits are listed as Deferred revenue on the consolidated balance sheets. As of May 31, 2022, deferred revenue was $5,460 within the consolidated balance sheets. During fiscal year 2024 and 2023, the Company recorded additions of $13,267 and $11,046 to deferred revenue, respectively. During fiscal year 2024 and 2023, the Company recognized $13,251 and $11,890, respectively, of deferred revenue amounts into revenue. Changes in the balances relate primarily to sales of the Company's genomics services.

On September 1, 2022, Neogen closed on a Reverse Morris Trust transaction to combine with 3M’s Food Safety business. Similar to Neogen, 3M’s former Food Safety business sells diagnostic test kits, dehydrated culture media and related products used by food producers and processors to detect foodborne bacteria, allergens and levels of general sanitation. Revenues for these products are recognized and invoiced when the product is shipped to the customer. These products were manufactured, invoiced and distributed by 3M on behalf of, and as directed by, Neogen to its customers under a number of transition service contracts. The Company has completed the exit of distribution and back office-related service contracts and currently only has a contract manufacturing agreement in place with 3M for certain products.

The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2024, 2023 and 2022:

	Year Ended May 31,
	2024		2023		2022
Food Safety:
Natural Toxins & Allergens	$	82,240	$	82,567	$	79,395
Bacterial & General Sanitation		171,217		134,934		47,282
Indicator Testing, Culture Media & Other		334,636		267,178		75,278
Rodent Control, Insect Control & Disinfectants		42,965		39,655		35,691
Genomics Services		24,283		22,463		22,333
	$	655,341	$	546,797	$	259,979
Animal Safety:
Life Sciences		6,515		6,254		5,685
Veterinary Instruments & Disposables		65,848		63,843		63,938
Animal Care & Other		36,978		39,068		39,805
Rodent Control, Insect Control & Disinfectants		88,732		87,423		83,610
Genomics Services		70,808		79,062		74,142
	$	268,881	$	275,650	$	267,180
Total Revenue	$	924,222	$	822,447	$	527,159