Bio-Rad Laboratories (BIO) investor relations material

Financial and operational highlights

• Q2 saw strong revenue, driven by process chromatography and consumables, with operating margin improvement due to tariff stabilization and tight expense management.

• Free cash flow was robust, and the Stillia acquisition was completed, with positive customer feedback and pipeline growth.

• The company raised its full-year guide for process chromatography, expecting low double-digit growth, and sees improved visibility and stability in this segment.

• Diagnostics ex-China grew 3.7% in Q2, with Quality Systems as a key contributor; China remains a headwind due to reimbursement changes.

• Tariff headwinds have been largely mitigated, with only a 30–40 basis point impact expected for the rest of the year.

Market and segment trends

• Biopharma instrument demand remains soft, especially among smaller players, while consumables show steady activity; large pharma has stabilized.

• Academic and government (A&G) markets in the US are stable but cautious, awaiting NIH budget clarity; Europe faces pressure from budget shifts, and China remains challenged.

• ddPCR portfolio expansion, including the launch of Continuum, is expected to drive mid single-digit growth in the near term, with long-term goals of high single-digit to double-digit growth.

• Adoption of digital PCR in diagnostics is in early stages, with growth opportunities in oncology and rare event detection.

• The Stillia acquisition is expected to reach accretion within 18–24 months, with ongoing updates based on market uptake.

Strategic initiatives and outlook

• Supply chain improvements, including lean manufacturing and logistics consolidation, have increased productivity and capacity, especially in Singapore.

• Working capital efficiency is a focus, with initiatives to improve inventory turns and procurement leverage, aiming for better free cash flow.

• Q4 revenue ramp is expected, driven by Quality Systems lot releases and ddPCR portfolio sales; 4–5% organic growth is anticipated for Q4, but 2026 guidance remains cautious.

• Margin expansion requires at least 3% top-line growth, with SG&A leverage targeted through productivity and expense management.

• Capital allocation priorities include reinvestment in the business, strategic acquisitions, and opportunistic share repurchases.