Q4 2025 Bio-Rad Laboratories Inc Earnings Call

February 12, 2026

Operator: Please stand by. Good day, everyone, and welcome to the Bio-Rad Fourth Quarter and Full Year 2025 Results Conference Call. At this time, I would like to hand things over to Mr. Edward Chung. Please go ahead, sir.

Speaker #2: Please go ahead, sir. Good afternoon, everyone. Thank you for joining us. Today, we will review the fourth quarter and full year 2025 financial results and provide an update on key business trends for BIO-RAD.

Edward Chung: Good afternoon, everyone. Thank you for joining us. Today, we will review the Q4 and full year 2025 financial results, and provide an update on key business trends for Bio-Rad. With me on the call today are Norman Schwartz, our Chief Executive Officer, Jon DiVincenzo, President and Chief Operating Officer, and Roop Lakkaraju, Executive Vice President and Chief Financial Officer. Before we begin our review, I would like to remind everyone that we will be making forward-looking statements about management's goals, plans, and expectations, our future financial performance, and other matters. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals, and expectations.

Speaker #2: With me on the call today are Norman Schwartz, our Chief Executive Officer; Jon DiVincenzo, President and Chief Operating Officer; and Roop Lakkaraju, Executive Vice President and Chief Financial Officer.

Speaker #2: Before we begin our review, I would like to remind everyone that we will be making forward-looking statements about management's goals, plans, and expectations, our future financial performance, and other matters.

Edward Chung: Before we begin our review, I would like to remind everyone that we will be making forward-looking statements about management's goals, plans, and expectations, our future financial performance, and other matters. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals, and expectations.

Speaker #2: These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Our actual results may differ materially from these plans, goals, and expectations.

Speaker #2: You should not place undue reliance on these forward-looking statements, and I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business.

Edward Chung: You should not place undue reliance on these forward-looking statements, and I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles. In addition to excluding certain atypical and non-recurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG, in order to provide investors with a better understanding of Bio-Rad's underlying operational performance. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release.

Speaker #2: The company does not intend to update any forward-looking statements made during the call today. Finally, our remarks today will include references to non-GAAP financials, including net income and diluted earnings per share, which are financial measures that are not defined under generally accepted accounting principles.

Speaker #2: In addition to excluding certain atypical and non-reoccurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG in order to provide investors with a better understanding of BIO-RAD's underlying operational performance.

Edward Chung: In addition to excluding certain atypical and non-recurring items, our non-GAAP financial measures exclude changes in the equity value of our stake in Sartorius AG, in order to provide investors with a better understanding of Bio-Rad's underlying operational performance. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the investor relations section of our website for your reference. With that, I will now turn the call over to our Chief Operating Officer, Jon DiVincenzo.

Speaker #2: Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings release. We have also posted a supplemental earnings presentation in the Investor Relations section of our website for your reference.

Edward Chung: We have also posted a supplemental earnings presentation in the investor relations section of our website for your reference. With that, I will now turn the call over to our Chief Operating Officer, Jon DiVincenzo.

Speaker #2: With that, I will now turn the call over to our Chief Operating Officer, Jon DiVincenzo.

Speaker #3: Thanks, Ed. Good afternoon, everyone, and thank you for joining us. In 2025, we delivered results within our revised guidance for both revenue and operating margin.

Jon DiVincenzo: Thanks, Ed. Good afternoon, everyone, and thank you for joining us. In 2025, we delivered results within our revised guidance for both revenue and operating margin. However, gross margin did not meet our expectations or frankly, what Bio-Rad is capable of delivering. Throughout 2025, we made tangible progress in lowering our cost base through restructuring and tighter expense discipline, while navigating global trade uncertainty and tariff headwinds. In the fourth quarter, gross margin was pressured by higher than anticipated supply chain costs. These pressures are execution-related rather than structural. We have initiated actions to strengthen operational rigor, improve forecasting and planning, and drive greater consistency across manufacturing, procurement, and logistics. Turning to our segments, diagnostics returned to growth in the quarter.

Speaker #3: However, gross margin did not meet our expectations or, frankly, what BIO-RAD is capable of delivering. Throughout 2025, we made tangible progress in lowering our cost base through restructuring and tighter expense discipline, while navigating global trade uncertainty and tariff headwinds.

Jon DiVincenzo: In the fourth quarter, gross margin was pressured by higher than anticipated supply chain costs. These pressures are execution-related rather than structural. We have initiated actions to strengthen operational rigor, improve forecasting and planning, and drive greater consistency across manufacturing, procurement, and logistics. Turning to our segments, diagnostics returned to growth in the quarter.

Speaker #3: In the fourth quarter, gross margin was pressured by higher-than-anticipated supply chain costs. These pressures are execution-related rather than structural. We have initiated actions to strengthen operational rigor, improve forecasting and planning, and drive greater consistency across manufacturing, procurement, and logistics.

Speaker #3: Turning to our segments, diagnostics returned to growth in the quarter. Performance was driven by successful fulfillment of large customer orders in our quality control portfolio that were planned for the fourth quarter, as well as the annualization of the diabetes testing reimbursement change in China.

Jon DiVincenzo: Performance was driven by successful fulfillment of large customer orders in our quality control portfolio that were planned for Q4, as well as the annualization of the diabetes testing reimbursement change in China. While we're not currently seeing portfolio-specific reimbursement or VBP headwinds in China, we remain appropriately cautious and continue to closely monitor policy developments. In life science, we are particularly encouraged by the traction from our execution on the Stilla acquisition and the launch of the QX700 Droplet Digital PCR family of products. Customer response has been strong, and we saw meaningful acceleration in QX700 instrument sales during Q4. We're entering 2026 with an expanding order funnel for our ddPCR instruments, despite overall softness in our end markets. Importantly, adoption has been driven by both qPCR conversions and competitive wins.

Speaker #3: While we're not currently seeing portfolio-specific reimbursement or VBP headwinds in China, we remain appropriately cautious and continue to closely monitor policy developments. In life science, we are particularly encouraged by the traction from our execution on the still acquisition and the launch of the QX700 droplet digital PCR family of products.

Jon DiVincenzo: In life science, we are particularly encouraged by the traction from our execution on the Stilla acquisition and the launch of the QX700 Droplet Digital PCR family of products. Customer response has been strong, and we saw meaningful acceleration in QX700 instrument sales during Q4. We're entering 2026 with an expanding order funnel for our ddPCR instruments, despite overall softness in our end markets. Importantly, adoption has been driven by both qPCR conversions and competitive wins.

Speaker #3: Customer responses have been strong, and we saw meaningful acceleration in QX700 instrument sales during the fourth quarter. We're entering 2026 with an expanding order funnel for our DDPCR instruments despite overall softness in our end markets.

Speaker #3: Importantly, adoption has been driven by both QPCR conversions and competitive wins. These data points reinforce our belief that QX700 is enabling BIO-RAD to expand its served market and gain share in the entry-level digital PCR segment.

Jon DiVincenzo: These data points reinforce our belief that QX700 is enabling Bio-Rad to expand its served market and gain share in the entry-level digital PCR segment. More broadly, the early success of QX700 strengthens our conviction that digital PCR will remain a core growth pillar for Bio-Rad over the long term. With the broadest digital PCR instrument portfolio, the most comprehensive assay menu, and more than 12,000 peer-reviewed publications, we believe Bio-Rad is well positioned to sustain leadership in this market. Turning to our end markets, cautious spending persisted throughout the fourth quarter. It continues to weigh on instrument demand in academia and government. While the recent passage of the NIH budget may support improved sentiment over time, we believe academic institutions remain focused on maintaining staffing levels and sustaining ongoing research, rather than purchasing capital equipment.

Speaker #3: More broadly, the early success of QX700 strengthens our conviction that digital PCR will remain a core growth pillar for Bio-Rad over the long term.

Speaker #3: With the broadest digital PCR instrument portfolio, the most comprehensive assay menu, and more than 12,000 peer-reviewed publications, we believe BIO-RAD is well positioned to sustain leadership in this market.

Jon DiVincenzo: Turning to our end markets, cautious spending persisted throughout the fourth quarter. It continues to weigh on instrument demand in academia and government. While the recent passage of the NIH budget may support improved sentiment over time, we believe academic institutions remain focused on maintaining staffing levels and sustaining ongoing research, rather than purchasing capital equipment.

Speaker #3: Turning to our end markets, cautious spending persisted throughout the fourth quarter and continues to weigh on instrument demand in academia and government. While the recent passage of the NIH budget may support improved sentiment over time, we believe academic institutions remain focused on maintaining staffing levels and sustaining ongoing research rather than purchasing capital equipment.

Speaker #3: Within biopharma, funding conditions improved during the second half of 2025, though funding is skewed towards later-stage biotech companies. We are anticipating a modest recovery of our core life science portfolio from the biopharma end market in 2026.

Jon DiVincenzo: Within biopharma, funding conditions improved during the second half of 2025, though funding is skewed towards later-stage biotech companies. We are anticipating a modest recovery of our core life science portfolio from the biopharma end market in 2026. Our process chromatography business delivered over 20% growth in 2025. Our current niche position in the polishing step of bioprocessing contributes to revenue concentration from a select number of commercial therapeutics and vaccines. This can show up as lumpiness from quarter to quarter. As our portfolio broadens over time, we'd expect to see less volatility, more comparable to the broader bioprocessing peer group. Bio-Rad remains focused on disciplined innovation. It is core to our long-term growth strategy.

Speaker #3: Our process chromatography business delivered over 20% growth in 2025. Our current niche position in the polishing step of bioprocessing contributes to revenue concentration from a select number of commercial therapeutics and vaccines.

Jon DiVincenzo: Our current niche position in the polishing step of bioprocessing contributes to revenue concentration from a select number of commercial therapeutics and vaccines. This can show up as lumpiness from quarter to quarter. As our portfolio broadens over time, we'd expect to see less volatility, more comparable to the broader bioprocessing peer group. Bio-Rad remains focused on disciplined innovation. It is core to our long-term growth strategy.

Speaker #3: This can show up as lumpiness from quarter to quarter. As our portfolio broadens over time, we'd expect to see less volatility, more comparable to the broader bioprocessing peer group.

Speaker #3: BIO-RAD remains focused on discipline innovation. It is core to our long-term growth strategy. In 2026, we plan to advance several product launches, including an IVD version of the QX600, additional high-value DDPCR assays across oncology, and incorporate artificial intelligence in our into our future platforms.

Jon DiVincenzo: In 2026, we plan to advance several product launches, including an IVD version of the QX600, additional high-value ddPCR assays across oncology, and incorporate artificial intelligence into our future platforms. Our sharpened focus on R&D accelerates the innovation engine for Bio-Rad, prioritizing areas that reinforce our high-value segments and support our portfolio optimization. In closing, we are executing actions to improve operational performance, expand margins, and focus investments in our most attractive growth platforms. We are confident these actions will translate into improved financial results over time. And with that, I'll turn the call over to Roop, who will take you through our financial results in more detail.

Speaker #3: Our sharpened focus on R&D accelerates the innovation engine for BIO-RAD. Prioritizing areas that reinforce our high-value segments and support our portfolio optimization. In closing, we are executing actions to improve operational performance.

Jon DiVincenzo: In closing, we are executing actions to improve operational performance, expand margins, and focus investments in our most attractive growth platforms. We are confident these actions will translate into improved financial results over time. And with that, I'll turn the call over to Roop, who will take you through our financial results in more detail.

Speaker #3: Expand margins, and focus investments in our most attractive growth platforms. We are confident these actions will translate into improved financial results over time, and with that, I'll turn the call over to Roop, who will take you through our financial results in more detail.

Speaker #2: Thank you, Jon, and good afternoon. I'd like to start with a review of the fourth quarter and full year 2025 results. Net sales for the fourth quarter of 2025 were approximately $693 million, which represents a 3.9% increase on a reported basis versus $668 million in Q4 of '24 on a currency-neutral basis.

Roop Lakkaraju: Thank you, Jon, and good afternoon. I'd like to start with a review of the fourth quarter and full year 2025 results. Net sales for the fourth quarter of 2025 were approximately $693 million, which represents a 3.9% increase on a reported basis versus $668 million in Q4 of 2024. On a currency-neutral basis, this represents a 1.7% year-over-year increase and was driven by our clinical diagnostics segment. Sales of the life science segment in the fourth quarter of 2025 were $268 million, compared to $275 million in Q4 of 2024, a 2.6% decrease on a reported basis and a 4% decrease on a currency-neutral basis, driven by the constrained academic research and biotech funding environment.

Speaker #2: This represents a 1.7% year-over-year increase and was driven by our clinical diagnostic segment. Sales of the life science segment in the fourth quarter of '25 were $268 million compared to $275 million in Q4 of 2024.

Roop Lakkaraju: Sales of the life science segment in the fourth quarter of 2025 were $268 million, compared to $275 million in Q4 of 2024, a 2.6% decrease on a reported basis and a 4% decrease on a currency-neutral basis, driven by the constrained academic research and biotech funding environment.

Speaker #2: A 2.6% decrease on a reported basis. And a 4% decrease on a currency-neutral basis. Driven by the constrained academic research and biotech funding environment.

Speaker #2: Currency-neutral sales decreased in the Americas, partially offset by increased sales in EMEA and Asia Pacific. Our ddPCR portfolio posted mid-single-digit year-over-year growth in Q4, driven by the success of our QX700 platform, which met our revenue expectations.

Roop Lakkaraju: Currency neutral sales decreased in the Americas, partially offset by increased sales in EMEA and Asia Pacific. Our ddPCR portfolio posted mid-single-digit year-over-year growth in Q4, driven by the success of our QX700 platform, which met our revenue expectations. The Stilla acquisition will be accretive by mid-2026, 6 to 12 months earlier than our initial view. Our process chromatography business, as expected, experienced quarter-over-quarter and year-over-year declines due to the timing of customers' orders. Excluding process chromatography sales, core life science segment revenue increased 0.7% year-over-year and decreased 0.7% on a currency neutral basis. While overall core life science consumables revenue grew mid-single-digit in Q4, we note that consumables in the Americas were flat year-over-year, reflecting the protracted US government shutdown.

Speaker #2: The still acquisition will be accretive by mid-2026, 6 to 12 months earlier than our initial view. Our process chromatography business, as expected, experienced quarter-over-quarter annual-over-year declines due to the timing of customers' orders.

Roop Lakkaraju: Excluding process chromatography sales, core life science segment revenue increased 0.7% year-over-year and decreased 0.7% on a currency neutral basis. While overall core life science consumables revenue grew mid-single-digit in Q4, we note that consumables in the Americas were flat year-over-year, reflecting the protracted US government shutdown.

Speaker #2: Excluding process chromatography sales, core life science segment revenue increased 0.7% year-over-year, and decreased 0.7% on a currency-neutral basis. While overall core life science consumables revenue grew mid-single-digit in Q4, we note that consumables in the Americas were flat year-over-year, reflecting the protracted U.S.

Speaker #2: government shutdown. Sales of the clinical diagnostic segment in the fourth quarter of 2025 were approximately $425 million, compared to $393 million in Q4 of '24, an increase of 8.4% on a reported basis and 5.6% on a currency-neutral basis.

Roop Lakkaraju: Sales of the clinical diagnostics segment in Q4 2025 were approximately $425 million, compared to $393 million in Q4 2024, an increase of 8.4% on a reported basis and 5.6% on a currency neutral basis. The increase was primarily driven by higher sales of quality control and blood typing products. On a geographic basis, currency neutral sales increased in all three regions. Q4 reported GAAP gross margin was 49.8%, as compared to 51.2% in Q4 2024. On a non-GAAP basis, Q4 gross margin was 52.5% versus 53.9% in the year-ago period.

Speaker #2: The increase was primarily driven by higher sales of quality control and blood typing products. On a geographic basis, currency-neutral sales increased in all three regions.

Speaker #2: Q4 reported gap gross margin was 49.8% as compared to 51.2% in the fourth quarter of 2024. On a non-gap basis, fourth quarter gross margin was 52.5% versus 53.9% in the year-ago-period.

Speaker #2: Note that the Q4 2025 non-gap gross margin excluded 13 million in one-time inventory and other write-offs, associated with product portfolio rationalization on top of restructuring and amortization of purchase intangible charges.

Roop Lakkaraju: Note that the Q4 2025 non-GAAP gross margin excluded $13 million in one-time inventory and other write-offs associated with product portfolio rationalization, on top of restructuring and amortization of purchased intangible charges. Specifically, due to the extended US government shutdown, which shifted sales to later in the quarter, we effectively had to do 90 days of work in 30 days to support our customers. As a result, we incurred higher expenses for expedited freight and service costs, including overtime, resulting from compressed timelines for instrument delivery and installation. Moreover, we saw slower than expected progress on our procurement initiatives that were backloaded in our forecast. SG&A expense for the fourth quarter of 2025 was $221 million, or 31.9% of sales, compared to $204 million, or 30.6% in Q4 of 2024.

Speaker #2: Specifically, due to the extended U.S. government shutdown, which shifted sales to later in the quarter, we effectively had to do 90 days of work in 30 days to support our customers.

Speaker #2: As a result, we incurred higher expenses for expedited freight and service costs, including overtime, resulting from compressed timelines for instrument delivery and installation. Moreover, we saw slower-than-expected progress on our procurement initiatives that were backloaded in our forecast.

Roop Lakkaraju: As a result, we incurred higher expenses for expedited freight and service costs, including overtime, resulting from compressed timelines for instrument delivery and installation. Moreover, we saw slower than expected progress on our procurement initiatives that were backloaded in our forecast. SG&A expense for the fourth quarter of 2025 was $221 million, or 31.9% of sales, compared to $204 million, or 30.6% in Q4 of 2024.

Speaker #2: SG&A expense for the fourth quarter of 2025 was $221 million, or 31.9% of sales, compared to $204 million, or 30.6%, in Q4 2024. Fourth quarter non-GAAP SG&A spend was $215 million, versus $200 million in the year-ago period.

Roop Lakkaraju: Fourth quarter non-GAAP SG&A spend was $215 million, versus $200 million in the year-ago period. The year-over-year increase in SG&A expense was primarily due to higher employee-related costs. Research and development expense in the fourth quarter of 2025 was $70 million, or 10.1% of sales, compared to $80 million, or 11.9% of sales in Q4 of 2024. Fourth quarter non-GAAP R&D spend was $66 million, versus $68 million in the year-ago period. Q4 operating loss was approximately $119 million, compared to operating income of approximately $58 million in Q4 of 2024. In Q4 of 2025, our GAAP operating loss included, in aggregate, $173 million dollar impairment charges for purchased intangibles and other items.

Speaker #2: The year-over-year increase in SG&A expense was primarily due to higher employee-related costs. Research and development expense in the fourth quarter of 2025 was $70 million or 10.1% of sales compared to $80 million or 11.9% of sales in Q4 of '24.

Roop Lakkaraju: Fourth quarter non-GAAP R&D spend was $66 million, versus $68 million in the year-ago period. Q4 operating loss was approximately $119 million, compared to operating income of approximately $58 million in Q4 of 2024. In Q4 of 2025, our GAAP operating loss included, in aggregate, $173 million dollar impairment charges for purchased intangibles and other items.

Speaker #2: Fourth quarter non-gap R&D spend was $66 million versus $68 million in the year-ago-period. Q4 operating loss was approximately $119 million compared to operating income of approximately $58 million in Q4 of '24.

Speaker #2: In Q4 of '25, our gap operating loss included in aggregate $173 million of impairment charges for purchase intangibles and other items. These charges resulted from our decision to discontinue and reprioritize certain R&D programs as part of our ongoing portfolio rationalization.

Roop Lakkaraju: These charges resulted from our decision to discontinue and reprioritize certain R&D programs as part of our ongoing portfolio rationalization. On a Non-GAAP basis, fourth quarter operating margin was 12%, compared to 13.8% in Q4 of 2024, reflecting the impact from the lower gross margin. The change in fair market value of equity security holdings and loan receivable, primarily related to the ownership of Sartorius AG shares, contributed $800 million to our reported net income of $720 million, or $26.65 per diluted share. Non-GAAP net income, which excludes the impact of the change in equity value of the Sartorius shares, was $68 million, or $2.51 diluted earnings per share for the fourth quarter of 2025, versus $81 million or $2.90 diluted earnings per share for Q4 2024.

Speaker #2: On a non-gap basis, fourth quarter operating margin was 12% compared to 13.8% in Q4 of '24, reflecting the impact from the lower gross margin.

Roop Lakkaraju: The change in fair market value of equity security holdings and loan receivable, primarily related to the ownership of Sartorius AG shares, contributed $800 million to our reported net income of $720 million, or $26.65 per diluted share. Non-GAAP net income, which excludes the impact of the change in equity value of the Sartorius shares, was $68 million, or $2.51 diluted earnings per share for the fourth quarter of 2025, versus $81 million or $2.90 diluted earnings per share for Q4 2024.

Speaker #2: The change in fair market value of equity security holdings and loan receivable primarily related to the ownership of Sartorius AG shares contributed $800 million to our reported net income of $720 million, or $26.65 per diluted share.

Speaker #2: Non-gap net income, which excludes the impact of the change in equity value that Sartorius shares, was $68 million or $2.51 diluted earnings per share, for the fourth quarter of '25.

Speaker #2: Versus $81 million or $2.90 diluted earnings per share for Q4 of 2024. Now for the full-year results. Net sales for the full year of 2025 were $2,583,000,000, which represents a 0.7% increase on a reported basis versus $2,567,000,000 in 2024.

Roop Lakkaraju: Now for the full year results. Net sales for the full year of 2025 were $2,583 million, which represents a 0.7% increase on a reported basis versus $2,567 million in 2024. On a currency-neutral basis, sales were essentially flat compared to the same period in 2024. Sales of the Life Science segment for 2025 were approximately $1,021 million, compared to $1,028 million in 2024, which is a decline of 0.7% on a reported basis and 1.3% on a currency-neutral basis. Currency-neutral sales decreased in the Americas, partially offset by increased sales in EMEA and Asia Pacific.

Speaker #2: On a currency-neutral basis, sales were essentially flat compared to the same period in 2024. Sales of the life science segment for 2025 were approximately $1,021,000,000 compared to $1,028,000,000 in 2024.

Speaker #2: Which is a decline of 0.7% on a reported basis and 1.3% on a currency-neutral basis. Currency-neutral sales decreased in the Americas, partially offset by increased sales in EMEA and Asia Pacific.

Speaker #2: Sales of the clinical diagnostic segment for 2025 were $1,562,000,000 compared to $1,538,000,000 in 2024, which represents a 1.6% increase on a reported basis and 0.8% growth on a currency-neutral basis.

Roop Lakkaraju: Sales of the Clinical Diagnostics segment for 2025 were $1,562 million, compared to $1,538 million in 2024, which represents a 1.6% increase on a reported basis and 0.8% growth on a currency-neutral basis. Growth of Clinical Diagnostics was primarily driven by higher quality control and blood typing product sales, partially offset by lower reimbursement rates for diabetes testing in China. On a geographic basis, currency-neutral sales increased in the Americas and EMEA, partially offset by decreased sales in Asia Pacific. Overall, full-year non-GAAP gross margin was 53.3% compared to 55% in 2024. The year-over-year margin decline was driven mainly by reduced fixed manufacturing absorption and higher material costs.

Speaker #2: Growth of clinical diagnostics was primarily driven by higher quality control and blood typing product sales partially offset by lower reimbursement rates for diabetes testing in China.

Speaker #2: On a geographic basis, currency-neutral sales increased in the Americas and EMEA, partially offset by decreased sales in Asia Pacific. Overall, full-year non-GAAP gross margin was 53.3% compared to 55% in 2024.

Roop Lakkaraju: On a geographic basis, currency-neutral sales increased in the Americas and EMEA, partially offset by decreased sales in Asia Pacific. Overall, full-year non-GAAP gross margin was 53.3% compared to 55% in 2024. The year-over-year margin decline was driven mainly by reduced fixed manufacturing absorption and higher material costs.

Speaker #2: The year-over-year margin decline was driven mainly by reduced fixed manufacturing absorption and higher material costs. Full-year non-gap SG&A expense was $809,000,000 or 31.5% of sales compared to $799,000,000 or 31.1% in 2024.

Roop Lakkaraju: Full-year non-GAAP SG&A expense was $809 million, or 31.5% of sales, compared to $799 million, or 31.1% in 2024. The increase in dollars of SG&A expense was primarily due to higher employee-related costs. Full-year non-GAAP R&D was $257 million, or 9.9% of sales, versus $282 million, or 11% in 2024. The lower year-over-year R&D was primarily due to in-process R&D charges associated with an acquisition in 2024, which resulted in a $30 million IPR&D expense in 2024 and an $8 million charge in 2025. Full-year non-GAAP operating margin was 12.1% compared to 12.9% in 2024, which primarily reflects the impact of the gross margin headwinds.

Speaker #2: The increase in dollars of SG&A expense was primarily due to higher employee-related costs. Full-year non-gap R&D was $257,000,000 or 9.9% of sales versus $282,000,000 or 11% 2024.

Speaker #2: The lower year-over-year R&D was primarily due to in-process R&D charges associated with an acquisition in 2024, which resulted in a $30,000,000 IPR&D expense in '24 and an $8,000,000 charge in '25.

Roop Lakkaraju: The lower year-over-year R&D was primarily due to in-process R&D charges associated with an acquisition in 2024, which resulted in a $30 million IPR&D expense in 2024 and an $8 million charge in 2025. Full-year non-GAAP operating margin was 12.1% compared to 12.9% in 2024, which primarily reflects the impact of the gross margin headwinds.

Speaker #2: Full-year non-gap operating margin was 12.1% compared to 12.9% in '24, which primarily reflects the impact of the gross margin headwinds. Non-gap net income was $271,000,000 or $9.92 diluted earnings per share for full year '25 versus $291,000,000 or $10.31 diluted earnings per share for 2024.

Roop Lakkaraju: Non-GAAP net income was $271 million, or $9.92 diluted earnings per share for full year 2025, versus two hundred and ninety-one million, or $10.31 diluted earnings per share for 2024. Moving on to the balance sheet. Total cash and short-term investments at the end of Q4 2025 were $1,541 million, compared to $1,665 million at the end of 2024. Inventory at the end of Q4 was $741 million, down from $760 million at the end of 2024. Moving on to cash flow. For the fourth quarter of 2025, net cash generated from operating activities was $165 million, compared to $124 million for Q4 of 2024.

Speaker #2: Moving on to the balance sheet, total cash and short-term investments at the end of Q4 '25 were $1,541,000,000 compared to $1,665,000,000 at the end of 2024.

Speaker #2: Inventory at the end of Q4 was $741 million, down from $760 million at the end of 2024. Moving on to cash flow, for the fourth quarter of 2025, net cash generated from operating activities was $165 million compared to $124 million for Q4 of '24.

Speaker #2: For the full year of '25, net cash generated from operations improved to $532,000,000 versus $455,000,000 in 2024 and was driven by the focused efforts in improving working capital efficiency.

Roop Lakkaraju: For the full year of 2025, net cash generated from operations improved to $532 million versus $455 million in 2024, and was driven by the focused efforts in improving working capital efficiency. Net capital expenditures for the fourth quarter of 2025 were approximately $46 million, and full-year net capital expenditures were $158 million. Depreciation and amortization for the fourth quarter was $36 million and $141 million for the full year. Free cash flow for the fourth quarter was $119 million, which compares to $81 million in Q4 of 2024.

Speaker #2: Net capital expenditures for the fourth quarter of '25 were approximately $46,000,000 and full-year net capital expenditures were $158,000,000. Depreciation and amortization for the fourth quarter was $36,000,000 and $141,000,000 for the full year.

Speaker #2: Free cash flow for the fourth quarter was $119,000,000, which compares to $81,000,000 in Q4 of '24. For the full year of '25, free cash flow improved to approximately $375,000,000 versus $290,000,000 for '24.

Roop Lakkaraju: For the full year of 2025, free cash flow improved to approximately $375 million versus $290 million for 2024, and represents a free cash flow to non-GAAP and income conversion ratio of 138% for 2025. During 2025, we retired 1.2 million shares through our buyback program at a total cost of approximately $296 million. We did not repurchase any shares during Q4. Since Q1 2024, we have spent $494 million to repurchase 1.9 million shares at an average price per share of approximately $261, which represents a 6.6% reduction in our share count. Moving on to our non-GAAP guidance for 2026.

Speaker #2: And represents a free cash flow to non-GAAP net income conversion ratio of 138% for 2025. During 2025, we retired 1.2 million shares for a buyback program at a total cost of approximately $296 million.

Speaker #2: We did not repurchase any shares during the fourth quarter. Since Q1 2024, we have spent $494,000,000 to repurchase $1.9 million shares at an average price per share of approximately $261,000,000, which represents a 6.6% reduction in our share count.

Speaker #2: Moving on to our non-gap guidance for '26. We are guiding currency-neutral revenue growth for the full year to be between 0.5 and 1.5%. Q1 is expected to be down low single-digit on a year-over-year basis and then sequentially improving each quarter.

Roop Lakkaraju: We are guiding currency-neutral revenue growth for the full year to be between 0.5% and 1.5%. Q1 is expected to be down low single-digit on a year-over-year basis and then sequentially improving each quarter. The Life Science segment year-over-year currency-neutral revenue growth is expected to be between 0 and 0.5%. We are anticipating growth of nearly 4% for our core life science business, excluding process chromatography, with the ddPCR business expected to grow mid-single-digit. Process chromatography is projected to decline approximately mid-teens and reflects recent changes to government regulations on certain therapeutics usage and vaccines, as well as our customers' improved production efficiencies. Long-term, we expect process chromatography to be a mid-single-digit growth area for us. For the diagnostics segment, we estimate currency-neutral revenue growth to be between 1% and 2%.

Speaker #2: The life science segment year-over-year currency-neutral revenue growth is expected to be between 0 and 0.5%. We are anticipating growth of nearly 4% for our core life science business, excluding process chromatography.

Speaker #2: With the DDPCR business expected to grow mid-single digit. Process chromatography is projected to decline approximately mid-teens and reflects recent changes to government regulations on certain therapeutics usage and vaccines, as well as our customers' improved production efficiencies.

Roop Lakkaraju: Process chromatography is projected to decline approximately mid-teens and reflects recent changes to government regulations on certain therapeutics usage and vaccines, as well as our customers' improved production efficiencies. Long-term, we expect process chromatography to be a mid-single-digit growth area for us. For the diagnostics segment, we estimate currency-neutral revenue growth to be between 1% and 2%.

Speaker #2: Long-term, we expect process chromatography to be a mid-single-digit growth area for us. For the diagnostic segment, we estimate currency-neutral revenue growth to be between 1 and 2%.

Speaker #2: We project mid-single-digit growth for our quality controls, business, while the remaining diagnostics portfolio X quality controls is expected to be in the low single-digit growth range.

Roop Lakkaraju: We project mid-single-digit growth for our quality controls business, while the remaining diagnostics portfolio, ex quality controls, is expected to be in the low single-digit growth range. Full-year non-GAAP gross margin is projected to be between 54% and 54.5%. On a quarterly basis, we expect Q1 2026's gross margin to step up a net 100 basis points from Q4 2025, as the elevated freight and service costs from Q4 do not recur, partially offset by the impact of lower revenues in the first quarter. Subsequent to Q1, we are targeting sequential improvement that reflects expected productivity and efficiency benefits from our operational initiatives. Full-year non-GAAP operating margin is projected to be between 12% and 12.5%. This reflects the improvements to gross margin, partially offset by approximately a fifty basis point impact from the reduced process chromatography sales.

Speaker #2: Full-year non-gap gross margin is projected to be between 54 and 54.5% on a quarterly basis. We expect Q1 2026's gross margin to step up a net 100 basis points from Q4 of 2025 as the elevated freight and service costs from Q4 do not recur.

Speaker #2: Partially offset by the impact of lower revenues in the first quarter. Subsequent to Q1, we are targeting sequential improvement that reflects expected productivity and efficiency benefits from our operational initiatives.

Roop Lakkaraju: Subsequent to Q1, we are targeting sequential improvement that reflects expected productivity and efficiency benefits from our operational initiatives. Full-year non-GAAP operating margin is projected to be between 12% and 12.5%. This reflects the improvements to gross margin, partially offset by approximately a fifty basis point impact from the reduced process chromatography sales.

Speaker #2: Full-year non-gap operating margin is projected to be between 12 and 12.5%. This reflects the improvements to gross margin, partially offset by approximately a 50 basis point impact from the reduced process chromatography sales.

Speaker #2: Our 2025 restructuring was effectively completed, and the savings are reflected in our 2026 outlook. We estimate the non-GAAP full-year tax rate to be approximately 23%.

Roop Lakkaraju: Our 2025 restructuring was effectively completed, and the savings are reflected in our 2026 outlook. We estimate the non-GAAP full-year tax rate to be approximately 23%. We anticipate full-year free cash flow of approximately $375 million to $395 million for 2026. Regarding share repurchases, we will continue to be opportunistic and have approximately $285 million available for additional buybacks under the current board-authorized program. Finally, we are deferring our Investor Day to a later time. We continue to make progress on our business transformation, including an assessment of our product portfolios, to reinvigorate our top-line growth rate and to define an improved cost structure, but more remains to be done. With that, I'll turn the call over to Norman.

Speaker #2: We anticipate full-year free cash flow of approximately $375,000,000 to $395,000,000 for for 2026. Regarding share repurchases, we will continue to be opportunistic and have approximately $285,000,000 available for additional buybacks under the current board-authorized program.

Roop Lakkaraju: Finally, we are deferring our Investor Day to a later time. We continue to make progress on our business transformation, including an assessment of our product portfolios, to reinvigorate our top-line growth rate and to define an improved cost structure, but more remains to be done. With that, I'll turn the call over to Norman.

Speaker #2: Finally, we are deferring our investor day to a later time. We continue to make progress on our business transformation including an assessment of our product portfolios to reinvigorate our top-line growth rate and to define and improve cost structure.

Speaker #2: But more remains to be done. With that, I'll turn the call over to Norman.

Speaker #1: Okay. Thanks, Roop. So I just thought I'd take a few minutes to close today's call with a few thoughts. Maybe to start out, you know, I think as we enter 2026, you know, we are seeing early signs of stabilization.

Norman Schwartz: Okay, thanks, Roop. So I, I just thought I'd take a few minutes to close today's call with a few thoughts. Maybe to start out, you know, I, I think as we enter 2026, you know, we are seeing early signs of stabilization across several of our core markets, with NIH and related funding set and steady improvements in biopharma funding. Also on the diagnostic side, there's a return to growth, and in particular, we are seeing stronger demand for, for our quality control reagents. So if we take all that together, I think we believe these early trends set an encouraging tone for 2026. We do remain highly focused on driving long-term value and are already seeing the impact of an intentional, performance-related approach.

Speaker #1: Across several of our core markets, with NIH and related funding set and steady improvements in biopharma funding. Also on the diagnostic side, there are return to growth and in particular, we are seeing stronger demand for our quality control reagents.

Norman Schwartz: Also on the diagnostic side, there's a return to growth, and in particular, we are seeing stronger demand for, for our quality control reagents. So if we take all that together, I think we believe these early trends set an encouraging tone for 2026. We do remain highly focused on driving long-term value and are already seeing the impact of an intentional, performance-related approach.

Speaker #1: So if we take all that together, I think we believe these early trends set an encouraging tone for 2026. We do remain highly focused on driving long-term value.

Speaker #1: And already seeing the impact of an intentional performance-related approach. Kind of against the dynamic backdrop of last year, you know, BIO-RAD delivered results that reflect both the challenges of the environment, but also I think the resilience of our business.

Norman Schwartz: Kind of against the dynamic backdrop of last year, you know, Bio-Rad delivered results that reflect both the challenges of the environment, but also, I think, the resilience of our business. The team, I think, successfully mitigated much of the impact on our supply chain from what we saw as shifting trade policies and tariffs, and we delivered, as a result, really strong free cash flow of $375 million for the year, as Roop mentioned. So kind of building on our strong foundation, you know, we're continuing to invest in innovation across our portfolio. You know, not only ddPCR and quality controls, but other product areas, all in an effort to maximize overall growth opportunities.

Speaker #1: The team, I think, successfully mitigated much of the impact on our supply chain from what we saw as shifting trade policies and tariffs and we delivered as a result really strong free cash flow of $375,000,000 for the year as Roop mentioned.

Norman Schwartz: So kind of building on our strong foundation, you know, we're continuing to invest in innovation across our portfolio. You know, not only ddPCR and quality controls, but other product areas, all in an effort to maximize overall growth opportunities. I would say, supported by a strong balance sheet, you know, we're also looking for additional assets to help accelerate the top line and, and certainly margin expansion.

Speaker #1: So kind of building on our strong foundation, you know, we're continuing to invest in innovation across our portfolio. You know, not only DDPCR and quality controls, but other products areas all in an effort to maximize overall growth opportunities.

Speaker #1: And I would say supported by a strong balance sheet, you know, we're also looking for additional assets to help accelerate the top line and certainly margin expansion.

Norman Schwartz: I would say, supported by a strong balance sheet, you know, we're also looking for additional assets to help accelerate the top line and, and certainly margin expansion. Just as, you know, one example, I think our success with the Stilla acquisition, this concept of measured scale, it's an example of our renewed focus here. Overall, I guess, top of mind is driving continuous revenue growth and margin expansion through improved sustainable operating performance and cost structure management. You know, I think by committing to these kind of strategic priorities, you know, Bio-Rad can and will achieve enduring success, deliver value to stakeholders, and maintain a strong competitive position in the marketplace.

Norman Schwartz: Just as, you know, one example, I think our success with the Stilla acquisition, this concept of measured scale, it's an example of our renewed focus here. Overall, I guess, top of mind is driving continuous revenue growth and margin expansion through improved sustainable operating performance and cost structure management. You know, I think by committing to these kind of strategic priorities, you know, Bio-Rad can and will achieve enduring success, deliver value to stakeholders, and maintain a strong competitive position in the marketplace.

Speaker #1: Just as you know, one example I think our recent success with the Stella acquisition—this concept of measured scale—is an example of our renewed focus here.

Speaker #1: Overall, I guess top of mind is driving continuous revenue growth and margin expansion through improved, sustainable operating performance and cost structure management. You know, I think by committing to these kinds of strategic priorities, you know, BIO-RAD can and will achieve enduring success, deliver value to stakeholders, and maintain a strong competitive position in the marketplace.

Speaker #1: I think you should see continued actions from this team around the operational rigor, simplification, and prioritization that we've initiated. You know, we are moving quickly.

Norman Schwartz: I think you should see continued actions from this team around the operational rigor, simplification, and prioritization that we've initiated. You know, we are moving quickly, but I would say we're also moving thoughtfully to ensure that these changes, at the end of the day, are durable. So that concludes our prepared remarks. Operator, we're now open to take questions.

Speaker #1: But I would say we're also moving thoughtfully to ensure that these changes at the end of the day are durable. So that concludes our prepared remarks.

Speaker #1: Operator, we're now open to take questions.

Speaker #2: Thank you, sir. And everyone, if you would like to ask a question, please press star one on your telephone keypad. Once again, if you have a question, that is star one. We'll go first to Jack Mehan from Nephron.

Operator: Thank you, sir. And everyone, if you would like to ask a question, please press star one on your telephone keypad. Once again, if you have a question, that is star one. We'll go first to Jack Meehan from Nephron.

Speaker #3: Thank you. And good afternoon, everyone. I wanted to start by asking about

Jack Meehan: Thank you, and good afternoon, everyone. Wanted to start by asking about the ddPCR business. So if my math is right, always, got to be careful with that, but looks like this was the strongest quarterly growth in at least a couple of years. So I was wondering if you could unpack the Stilla contribution versus the legacy portfolio, and why is mid-single digit kind of the right rate to continue in the next year?

Speaker #1: Up DD PCR business . So if my math is right , always got to be careful with that . But looks like this was the strongest quarterly growth and at least a couple of years .

Speaker #1: So, I was wondering if you could unpack this—still a contribution versus the legacy portfolio? And why is mid-single digit kind of the right rate to continue into next year?

Speaker #2: Yeah . Hey Jack , it's John . Appreciate the call . You know , first of all , we have a large installed base , which means the ongoing reagents assay business is the largest part of our portfolio .

Jon DiVincenzo: Yeah. Hey, Jack, it's Jon. Appreciate the call. You know, first of all, we have a large install base, which means the ongoing reagents assay business is the largest part of our portfolio. So we certainly saw very strong success in the sales of QX700 platform, kind of right on target, where we're hoping for in the Q4 and planning for. It was also indicative of the fact that we're able to convert some qPCR applications to ddPCR and continue to move along kind of our legacy QX200 and QX600. I'd say it was dominated by the QX700. There are three instruments in that platform.

Speaker #2: So we certainly saw very strong success in the sales of Sh700 platform right on target , where we're hoping for in the fourth quarter and planning for it was also indicative of the fact that we're able to convert some qPCR applications to the qPCR and continue to move along kind of our legacy 206 hundred .

Jon DiVincenzo: It was also indicative of the fact that we're able to convert some qPCR applications to ddPCR and continue to move along kind of our legacy QX200 and QX600. I'd say it was dominated by the QX700. There are three instruments in that platform. We had, we moved kind of what we were, historically, seeing revenues, about 80-something% coming from assays and 20% from instruments during the last kind of soft quarters to last year.

Speaker #2: Let's say it was dominated by the 700. There are three instruments in that platform. We had... we moved kind of what we were historically seeing.

Jon DiVincenzo: We had, we moved kind of what we were, historically, seeing revenues, about 80-something% coming from assays and 20% from instruments during the last kind of soft quarters to last year.

Speaker #2: Revenues about 80 something percent coming from assays and 20% from instruments during the last kind of soft quarters to last year , it actually moved up to about , I guess , two thirds assays and about a third coming from instruments .

Jack Meehan: Mm-hmm.

Jon DiVincenzo: It actually moved up to about, I guess, 2/3 assays and about 1/3 coming from instruments. So I can kind of show you the growth there.

Jon DiVincenzo: It actually moved up to about, I guess, 2/3 assays and about 1/3 coming from instruments. So I can kind of show you the growth there. And because of that large base is exactly why we're, we're guiding towards mid-single digit, because we think that overall, you know, the consumables will continue to march along at, at kind of maybe, mid-single digit growth, which dominates the overall growth of that platform, with some, you know, optimism that maybe we can move up those numbers as the year progresses and as the kind of marketplace stabilizes.

Speaker #2: So they can kind of show you the growth there . And because of that large base is exactly why we're guiding towards mid-single digit , because we think that overall , you know , the consumables will continue to march along at kind of maybe mid-single digit growth , which dominates the overall growth of that platform with some , you know , optimism that maybe we can move up those numbers as the year progresses and as the kind of marketplace stabilizes .

Jack Meehan: Mm-hmm.

Jon DiVincenzo: And because of that large base is exactly why we're, we're guiding towards mid-single digit, because we think that overall, you know, the consumables will continue to march along at, at kind of maybe, mid-single digit growth, which dominates the overall growth of that platform, with some, you know, optimism that maybe we can move up those numbers as the year progresses and as the kind of marketplace stabilizes.

Speaker #1: Got it . That makes sense . And then John , on Process Chrome , I forget if it was John or you mentioned there were some recent changes in terms of guidelines around vaccine and production efficiencies embedded in the process .

Jack Meehan: Got it. That makes sense. And then, Jon, on Process Chromatography, I forget if it was Jon or Roop, you mentioned there were some recent changes in terms of guidelines around vaccine and production efficiencies embedded in the Process Chromatography forecast. Could you just elaborate on what that is, and the impact?

Speaker #1: Chrome forecast—could you just elaborate on what that is and the impact?

Speaker #2: Yeah , I mean , we can't share . Obviously the customer that we're supporting , but there's a family of vaccines which The the expectation of who was going to be vaccinated by a certain geographies has changed .

Jon DiVincenzo: Yeah, I mean, we can't share, obviously, the customer that we're supporting, but there's a family of vaccines which the expectation of who was going to be vaccinated by certain geographies has changed. And as our customers' demand changed, they also obviously demand... The manufacturing strategy that they have has changed as well. So we were notified going towards very end of last year, as we were getting ready for the 2026 plan, that they were changing some of their strategies due to that shortfall in demand, and that's what the impact is in our business.

Speaker #2: And , and as our customers demand changed , obviously demand the manufacturing strategy that they have has changed as well . So we were notified towards the very end of last year as we were getting ready for 2026 .

Speaker #2: Plan that they were changing some of their strategies due to that shortfall and demand . And that's what the impact is on our business .

Speaker #1: Okay . And then maybe the last one for Ruth , I was trying to do like a bridge from 2025 to 2026 on app margins .

Jack Meehan: Okay. And then maybe the last one for Roop. I was trying to do, like, a bridge from 2025 to 2026 on op margins. So you ended the year at 12.1%. You have the in-process warranty should go away. That was 30 bps. I think you called out the Q4 gross margin issue. I was thinking that could be, like, 40 bps for the full year. So it just feels like the EBIT range you provided of 12 to 12.5% seems pretty conservative. Maybe there's some headwinds from Process Chromatography in there, but what else am I missing? Can you just help us with that?

Speaker #1: So you ended the year at 12.1% . You have the in-process R&D should go away . That was 30 Bips . I think you called out the fourth quarter , fourth quarter GM issue .

Speaker #1: I was thinking that could be like 40 bips for the full year . So it just feels like the Ebit range you provided of 12 to 12.5% seems pretty conservative .

Speaker #1: Maybe there's some headwinds from process Chrome in there , but what else am I missing ? Can you just help us with that ?

Speaker #3: Yeah , Jack , I think you you you netted it out pretty well . I think we're trying to be very realistic . The process Chrome impact is 50 basis points to the OP margin .

Roop Lakkaraju: Yeah, Jack, I think you netted it out pretty well. I think we're trying to be very realistic. The Process Chromatography impact is fifty basis points to the op margin.

Roop Lakkaraju: Yeah, Jack, I think you netted it out pretty well. I think we're trying to be very realistic. The Process Chromatography impact is fifty basis points to the op margin. And so, you know, as we said, that some of the Q4 costs that we incurred, we don't expect to recur. And we are seeing improved operational improvements as we go through. There's some mix improvements, but that process chromatography is 50 basis points, which is a headwind that, you know, bring her down just a bit in terms of that range.

Speaker #3: And so as we said that some of the Q4 costs that we incurred , we don't expect to recur . And we are seeing improved operational improvements as we go through .

Jack Meehan: Mm-hmm.

Roop Lakkaraju: And so, you know, as we said, that some of the Q4 costs that we incurred, we don't expect to recur. And we are seeing improved operational improvements as we go through. There's some mix improvements, but that process chromatography is 50 basis points, which is a headwind that, you know, bring her down just a bit in terms of that range.

Speaker #3: There's some mixed improvements, but that process, Chrome is 50 basis points, which is a headwind that brings it down just a bit in terms of that range.

Jack Meehan: Mm-hmm.

Speaker #3: But with that said , as we talked about and John mentioned , as we think about the Ddpcr platforms and especially the 700 opportunities for further growth , there , that gives us , you know , possible margin enhancement because those are strong margin products .

Roop Lakkaraju: But with that said, as we talked about and John mentioned, as we think about the ddPCR platforms, especially the QX700, opportunities for further growth there, that gives us, you know, possible margin enhancement because those are strong margin products.

Speaker #1: Okay. Thank you, guys.

Jack Meehan: Okay. Thank you, guys.

Roop Lakkaraju: Thanks, Jack.

Speaker #3: Thanks , Jack

Jon DiVincenzo: Thanks, Jack. Operator, are you still there? Sorry, sorry, operator. We couldn't hear you clearly.

Speaker #4: Operator: Are you still there?

Speaker #3: Sorry, operator. We couldn't hear you clearly.

Speaker #5: It's there . And

Operator: It's their end.

Speaker #6: Hello

Jack Meehan: Hello?

Operator: Your next question comes from the line of Dan Leonard with UBS. Please go ahead.

Speaker #7: Your next question comes from the line of Dan Leonard with UBS . Please go ahead .

Dan Leonard: ... Thank you very much. I wanted to circle back on the process chromatography comments. I appreciate that there are near-term issues there, but that long-term forecast of mid-single-digit growth, what would, what would drive that view? Is there a mix issue there, or, or why wouldn't you otherwise think that that, product line for you could be faster growing long term?

Speaker #8: Thank you very much . I wanted to circle back on the process chromatography comments . I appreciate that there are near issues there , but that long term forecast of mid-single digit growth , what would what would drive that view ?

Dan Leonard: Thank you very much. I wanted to circle back on the process chromatography comments. I appreciate that there are near-term issues there, but that long-term forecast of mid-single-digit growth, what would, what would drive that view? Is there a mix issue there, or, or why wouldn't you otherwise think that that, product line for you could be faster growing long term?

Speaker #8: Is there a mix issue there or why wouldn't you otherwise think that that product line for you could be faster growing long term ?

Speaker #3: Yeah . Dan . Hey , appreciate the question . And I think there's a couple of different things here . One , with the change conditions that we saw occur late in the fourth quarter from government regulations and efficiencies that our customers are driving .

Roop Lakkaraju: Yeah, Dan, hey, appreciate the question, and I think there's a couple of different things here. One, with the changing conditions that we saw occur late in the fourth quarter, from government regulations and some of the efficiencies that our customers are driving, I think, one, we're trying to be conservative about it. The second part of it, and we've talked about this before, and you—when we look at the growth in our customers in the clinical phases, we do have strength there, and it's a growing pipeline of potential customers that can move to that commercial range. And so we kind of are looking at it with all of these conditions, concurrently operating, if you will, and trying to set it towards a mid-single digit longer term.

Speaker #3: I think one , we're trying to be conservative about it . The second part of it , and we've talked about this before , and when we look at the growth in our customers and the clinical phases , we do have strength there .

Roop Lakkaraju: The second part of it, and we've talked about this before, and you—when we look at the growth in our customers in the clinical phases, we do have strength there, and it's a growing pipeline of potential customers that can move to that commercial range. And so we kind of are looking at it with all of these conditions, concurrently operating, if you will, and trying to set it towards a mid-single digit longer term.

Speaker #3: And it's a growing pipeline of potential customers that can move to that commercial . Range . And so we kind of are looking at it with all of these conditions concurrently operating , if you will , and trying to set it towards a mid-single digit longer term , I think there's the potential , depending upon how some of these customers move through clinical to commercial , that it could be a higher growth rate .

Roop Lakkaraju: I think there is the potential, depending upon how some of these customers move through clinical to commercial, that it could be a higher growth rate. But at this time, I think as we think about all the different moving pieces, we were trying to be a set of reasonable growth right there.

Speaker #3: But at this time, I think as we think about all the different moving pieces, we are trying to be at a set of reasonable growth rate.

Speaker #3: There .

Speaker #8: Understood . But but , Roop , is it fair to assume that maybe your portfolio in aggregate is overindexed to vaccines compared to the average of of the bioprocess industry ?

Dan Leonard: Understood. But Roop, is it fair to assume that maybe your portfolio on aggregate is over-indexed to vaccines compared to the average of the bioprocess industry, and that's part of the pressure here in the mid-term framing?

Speaker #8: And that's part of the pressure here in the mid mid term , framing ?

Speaker #2: I think that's fair to say . Although the projects which are still in clinical trials , I think has a normal balance , but our commercial product .

Roop Lakkaraju: I think that's fair to say, although the projects which are still in clinical trials, I think has a normal balance. But our commercial product, yeah, I think that's a fair statement, Dan.

Speaker #2: Yeah , I think that's a fair statement .

Speaker #8: Dan okay . And then just a quick follow up . Is it possible to frame when thinking about the outlook growth outlook here .

Dan Leonard: Okay. And then, just a quick follow-up, is it possible to frame, when thinking about the outlook, growth outlook here, you know, what's the organic forecast in comparison to what the acquisition contribution would be before Stilla is annualized at midyear?

Speaker #8: You know , what's the organic forecast in comparison to what the acquisition contribution would be before . Still is annualized at mid-year

Roop Lakkaraju: Yeah. I mean, if you think about, you know, as we said in Q4, Stilla would be mid-single-digit millions of revenue in Q4, and that was achieved. And outside of that, we had some negative growth rate in some of the other platforms. So when you think about ex-Stilla overall, you're looking at, you know, just slightly under 1% negative on LSG, but that's driven by the process chromatography impacts to that, if you will.

Speaker #3: Yeah . I mean , if you think about , you know , as we said in the fourth quarter , Stila would be mid-single digit millions of revenue in the fourth quarter .

Speaker #3: And that was achieved . And outside of that , we had some negative growth rate in some of the other platforms . So when you think about X , Stila overall , you're looking at , you know , just slightly under 1% negative on LSD , but that's driven by the process chromatography impact to that , if you will

Speaker #8: Okay . Thank you very much .

Dan Leonard: Okay. Thank you very much.

Speaker #4: Thanks , Dan .

Roop Lakkaraju: Thanks, Dan.

Speaker #7: Your next question comes from the line of Tycho Peterson with Jefferies . Please go ahead .

Operator: Your next question comes from the line of Tycho Peterson with Jefferies. Please go ahead.

Speaker #9: Hey , thanks . Why don't to touch on clinical diagnostics ? You know , kind of 1 to 2% . This was a 2 to 3% growth business pre-COVID .

Tycho Peterson: Hey, thanks. Wanted to touch on clinical diagnostics. You know, guided 1 to 2%. This was a 2 to 3% growth business pre-COVID. I'm just curious why, you know, it's not doing better, you know, especially as China headwinds are abating potentially. So maybe just talk a little bit about, you know, why the growth is, you know, muted relative to where you were, you know, pre-COVID.

Speaker #9: I'm just curious why it's not doing better , especially as China headwinds are abating potentially . So maybe just talk a little bit about why the growth is , you know , muted relative to where you were pre-COVID

Speaker #2: Hey thanks . This is John . Yeah I think it's a mix of the portfolio overall . We see you know leading the way with our quality controls .

Roop Lakkaraju: Hi, Tycho. Thanks. This is Jon. Yeah, I think it's a mix of the portfolio overall. We see, you know, leading the way with our quality controls, largest part of our diagnostic business doing well. Others, you know, we have some platforms where the markets aren't as strong overall, and some of that relies on China. So I think it's a mix of our product mix and the geographies.

Jon DiVincenzo: Hi, Tycho. Thanks. This is Jon. Yeah, I think it's a mix of the portfolio overall. We see, you know, leading the way with our quality controls, largest part of our diagnostic business doing well. Others, you know, we have some platforms where the markets aren't as strong overall, and some of that relies on China. So I think it's a mix of our product mix and the geographies.

Speaker #2: Largest part of our diagnostic business doing well . Others we have some platforms where the markets aren't as strong overall . And some of that relied on China .

Speaker #2: So I think it's a mix of our product mix and geographies .

Speaker #9: Okay. I'm going to ask the process Chrome question a third way because it is a big swing. And I think we're all going to get a lot of questions on this tomorrow.

Tycho Peterson: Okay. I'm going to ask the process chromatography question a third way, 'cause it is a big swing, and I think we're all going to get a lot of questions on this tomorrow. But, you know, just kind of the guide for this year obviously assumes no recovery, no, you know, recapture that business. But when you talk about mid-single digit longer term, how do we think about when you could get back there? Is that a 2027 story or further out?

Speaker #9: But you know , kind of the guide for this year obviously assumes no no recovery . No . You know , recapture that business .

Speaker #9: But when you talk about mid-single digit longer term , how do we think about when you could get back ? There . Is that a 27 story or further out ?

Speaker #3: I think it's a possibility to get back to low single digit growth rate in 27 . And then it's maybe a year or two out from there .

Roop Lakkaraju: I think it's a possibility to get back to low single-digit growth rate in 2027, and then it's maybe a year or two out from there, Tycho, to get towards that mid. But with that said, I mean, it could accelerate faster depending upon how folks are moving through the clinical phases and how that might evolve, right?

Jon DiVincenzo: I think it's a possibility to get back to low single-digit growth rate in 2027, and then it's maybe a year or two out from there, Tycho, to get towards that mid. But with that said, I mean, it could accelerate faster depending upon how folks are moving through the clinical phases and how that might evolve, right?

Speaker #3: Tycho , to get towards that mid . But with that said , I mean , it could accelerate faster depending upon how folks are moving through the clinical phases and how that might evolve .

Speaker #3: Right . So there's a number of moving pieces there . But 27 is probably low single . If we were to think about it that way , flat to low single , I think what we would seek is beyond that to to try and drive back towards that mid-single digits .

Tycho Peterson: Yeah.

Roop Lakkaraju: So, there, there's a number of moving pieces there, but, 27 is probably low single, if, if we were to think about it that way, flat to low single. I think what we would seek is beyond that, to, to try and drive back towards that mid-single digits.

Speaker #9: Okay . And the last one , how should we interpret the lack of a buyback this quarter ? I know you did 300 million almost for the year , but you do have a billion and a half of cash and balance sheet .

Tycho Peterson: Okay. And then last one, how should we interpret the lack of a buyback this quarter? I know you did $300 million almost for the year, but you do have $1.5 billion of cash in balance sheet. Are you signaling anything here? You know, I mean, you have talked about potentially doing M&A, so I'm just curious if there's anything to read there.

Speaker #9: Are you signaling anything here ? You know , I mean , you have talked about potentially doing doing M&A . So I'm just curious if there's anything to read there .

Speaker #3: No , I don't think there's anything to read . I think we try and look at things opportunistically . Tycho . We are actively looking at assets , as Norman said .

Roop Lakkaraju: No, I don't think there's anything to read. I think we try and look at things opportunistically, Tycho. We are actively looking at assets, as Norman said, and we've said previously, but I wouldn't have that be a leading indicator of any particular thing happening.

Jon DiVincenzo: No, I don't think there's anything to read. I think we try and look at things opportunistically, Tycho. We are actively looking at assets, as Norman said, and we've said previously, but I wouldn't have that be a leading indicator of any particular thing happening.

Speaker #3: And we've said previously , but I wouldn't have that be a leading indicator of any particular thing happening .

Speaker #9: Okay . Thank you .

Tycho Peterson: Okay. Thank you.

Speaker #4: Thanks

Roop Lakkaraju: Thanks, Tycho.

Operator: That concludes our question and answer session, and that also concludes our call today. Thank you all for joining, and you may now disconnect.

Q4 2025 Bio-Rad Laboratories Inc Earnings Call

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