Qiagen (QGEN) Q4 2023 earnings summary

Executive summary

• Q4 net sales were $509M (+2% reported, +1% CER); adjusted diluted EPS was $0.55 CER, above the $0.53 CER outlook, with 8% CER growth in non-COVID products.

• FY 2023 sales were $1.97B, meeting CER outlook; non-COVID products grew 8% CER and adjusted diluted EPS of $2.09 CER exceeded the $2.07 CER outlook.

• Q4 adjusted operating margin improved to 28.0% from 27.1% YoY; FY adjusted operating margin was 26.9% versus 30.6% in 2022.

Financial highlights

• Q4 reported operating income was $110.6M, net income $97.7M and diluted EPS $0.42; adjusted net income was $127.2M and adjusted diluted EPS $0.55.

• FY reported operating income was $409.9M, net income $341.3M and diluted EPS $1.48; adjusted operating income was $528.6M, adjusted net income $476.9M and adjusted diluted EPS $2.07.

• Q4 adjusted gross margin was 65.7%, down from 67.0% YoY; lower capacity utilization and adverse product mix weighed on margin.

• Operating cash flow was $459M and free cash flow $310M in FY 2023, versus $715M and $586M, respectively, in 2022.

Outlook and guidance

• FY 2024 net sales expected at least $2.0B CER, representing at least 2% CER growth; non-COVID sales growth is expected to reach a solid mid-single-digit rate in H2.

• Adjusted diluted EPS expected at least $2.10 CER; adjusted operating margin projected above 28%, improving at least 1 percentage point YoY while supporting portfolio investment.

• Guidance includes ~1 percentage point of COVID-19 sales headwinds from 2023; consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging.

• FY 2024 non-operating income faces significant pressure from lower interest income and a higher tax rate; currency is expected neutral for sales and to reduce adjusted EPS by ~$0.01 per share.

• Q1 2024 net sales expected at least $455M CER and adjusted diluted EPS at least $0.44 CER; currency impact expected neutral on sales and negative ~$0.01 per share on adjusted EPS.