QuidelOrtho (QDEL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $727 million, down 2% year-over-year, with recurring revenue at $598 million and Labs recurring revenue up 6% in constant currency.

• Adjusted EBITDA for Q3 was $171 million (23.5% margin), and adjusted diluted EPS was $0.85, reflecting margin improvement from cost-saving and operational initiatives.

• Leadership changes included new CTO and CHRO, and a flatter organizational structure to enhance efficiency and customer focus.

• A non-cash goodwill impairment charge of $1.7 billion was recorded for the North America reporting unit, driving a net loss of $1.87 billion for the nine months ended September 29, 2024.

• The company reinstated full-year 2024 guidance, projecting total revenue of $2.75–$2.80 billion, adjusted EBITDA of $530–$550 million, and adjusted diluted EPS of $1.69–$1.91.

Financial highlights

• Q3 adjusted EBITDA was $171 million (23.5% margin), up 80 basis points year-over-year; adjusted diluted EPS was $0.85, down from $0.90 prior year.

• Q3 adjusted gross profit margin was 49.2%, down 130 basis points from the prior year, mainly due to product mix.

• Q3 GAAP net loss was $20 million, with a net loss margin of (3%) and GAAP operating margin of 2%.

• Adjusted free cash flow in Q3 was $120 million, representing 70% of adjusted EBITDA.

• YTD 2024 revenue was $2.08 billion, down 7% year-over-year; recurring revenue grew 5% to $1.74 billion.

Outlook and guidance

• Full-year 2024 revenue expected at $2.75–$2.80 billion, adjusted EBITDA $530–$550 million, and adjusted diluted EPS $1.69–$1.91.

• 2024 COVID-19 revenue projected at $160–$170 million; Labs and transfusion medicine (excluding U.S. Donor Screening) expected to grow mid- and low-single digits, respectively.

• 2025 outlook anticipates mid-single digit top-line growth (excluding COVID-19 and U.S. Donor Screening), with further margin improvement of 100–200 basis points.

• The wind-down of the U.S. donor screening portfolio is expected to be substantially complete by the end of 2025.

• The company anticipates sufficient liquidity to fund near-term capital and operating needs for at least the next 12 months.