Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen, and welcome to the Repligen First Quarter of 2023 Earnings Conference Call. My name is Vaishnavi, and I will be your coordinator. All participants will be in a listen-only mode. [Operator Instructions] In order to accommodate all individuals who wish to ask questions, there will be a limit of two questions at a time. Please note this event is being recorded.

to call, call Ms. like host to now today’s for would turn over the your I

Sondra Repligen. Please Head go Newman, of ahead. Investor Relations for

Sondra Newman

of XX, call, guidance year. And report. for highlights our the you. welcome financial periods to for also performance first Thank ended provide months March to everyone and financial full On We’ll will we quarter this three cover XXXX. business the our XXXX updates

our report, President Jon deliver Repligen’s CEO, Snodgres, call the and Tony then CFO, our and up and Hunt; Q&A. open we’ll will for

actual during a call, goals differ. forward-looking As financial are that the statements events reminder, for cause risks expectations those that performance business or we our results to make the company uncertainties subject this to regarding of the including and and may

our on risks Form other report X-K annual business included concerning XX-Q, on report in on filings reports and we information with related current our Form Form the is the quarterly Additional Securities make Exchange our Commission. that and XX-K, and to

reflect required comments to of could otherwise. change or events not views, management’s law. except company which result does future information, statements, as forward-looking or The commit new update obligate as itself by a current Today’s

GAAP financial Repligen’s website non-GAAP and providing and this we which to posted that morning, call, is press During are we on measures in release guidance. to Reconciliations the results included of non-GAAP are issued this sec.gov.

growth peers gross well measures, to and adjusted historical today’s enable at to benchmark income and Non-GAAP better current investors and EBITDA are currency; the our be EBITDA. when share; margin; against viewed These not intended income evaluating the and margin; measures Revenue investment adjusted per as as constant including operating figures in but and opportunities. earnings of results an R&D Repligen’s operating performance to operating alternative and performance SG&A; financial report GAAP should following: include gross profit as expenses, net

call over to Tony. turn I’ll the Now

Tony Hunt

everyone, morning, good Sondra, earnings you, and Okay, thank QX call. welcome our and to

the As market stronger delivered this with base revenue press given X% and than morning, industry bioprocessing and shown quarter, constant our gross first expected our dynamics margins. we operating currency at for in release business an excellent growth

of revenues solid The at cell currency down was increased in gains the forwards the an predicted constant COVID-related to due gene quarter non-COVID the in in X% for were reduction the in $XXX where starting and businesses proteins programs mRNA therapy of Overall saw we million demand. space. competition from quarter chromatography and our

XX% as at $XX in came year-over-year. of revenues expected around approximately COVID-related, a million, decrease

for the the intake up orders the and quarterly cell the book-to-bill of sequentially XX% we orders XX.X, base average quarter therapy front, business saw XXXX. in order strong, On of gene versus and XX% were

was The by region in down that ceiling combination inventory XX% driven region where burn-off ago. lower from China, of in orders were were XX% demand year the during sequentially Challenges built a was up pharma. versus soft and and a COVID

a China in we Based current combined on regions Base performed with book-to-bill in well the it for level projections, reasonably normalized other demand. take of another return quarters to to few orders QX X.X. will more expect

Activity customer XXXX. scaling with remains interest and customers high at level many our here in

to adjust overall given orders to year. and of second into However, APAC we the half a and pick continue lesser XXXX. the across order in situation the the the as it's China move feel do expect lack regions, year We up and the strengthen the of prudent extent, plus to growth for we X company for

spend to product an selective is key complete investments our And XXXX across with our in to is X% programs. several organic XX% to We Our business important $XX continue intent Strategically, COVID see we unchanged, approximately X% base orders of portfolio. our our to as $XX expectation at R&D our million growth now to million. revenue. year increase make

four positioning franchises half XXXX. analytics the well with launches have launches second into additional product mid-year, We in and by us filtration, planned our supporting new

continue and revenues see the We traction which to products of new ’XX ’XX, in strong overall in our XX% first contributed quarter. for the we launched many of

strong We ARTeSYN filtration for level analytics. activity system high RPM launch most and of recent her demand with saw chromatography systems inline our around

few On efforts addition the in mid-April next believe our we upon acquisition and single-use competency over build last we another the the core bag giving of M&A and the focused with play XD managements over vision, is the we management’s the that closed of us to years company Technology M&A We a front, can manufacturing on XD out few FlexBiosystems in include years. bags. something in building the FlexBiosystems and

increase the ramping up quickly manufacturing in FlexBiosystems to the foot for the and number dedicated deliver commercial $X space, revenues with square million to With newly of this in business opportunities built our approximately expect year we team X,XXX XXXX.

from As to armed our base growth to products we business XX% to growth our of be portfolio broader with across is return more look historical to XXXX, a levels plus and regions. back goal the to

the as the quarter moving of cell performance quarterly franchises therapy. mentioned down overall our to was starting and performance and the So chromatography of of earlier, performance, our and proteins gene

Overall We comp In our in year. at than of XX% against pre-packed focused XX% greater in to plasma increase a mRNA, in accounts business and manufacturing. modality new excellent saw lighter quarter QX revenue last the vector had for for column orders and chrome from chromatography, viral orders an revenues close revenue. OPUS and came

in our were sequentially. XX% call, remains the chromatography base year strong As three our this target end first through highlighted tight down pharma months were of year investment in year-on-year, revenues supply and results

online. picking XXXX, as from that, will revenues resin more supply to QX be similar second with Our comes up half expectation QX of is

expect continue our year. this to approximately XX% We to franchise chromatography grow

and quarter ligands growth products. other year-over-year with than high-single-digits Our we in in factors quarter drop proteins first Cytiva Repligen in in as business to off ligands proteins developed offset had the our performance the was a good reported business QX with continue the expected growth demand by more of transform

expect proteins XXXX. to flat here be in We

In revenues. filtration, down decline driven was as predicted our reported, in sharp by approximately XX% business a COVID-related

tough were year. Base revenues in X% than come in less against were quarter. last a For filtration QX essentially the down revenue the QX the previous business, with filtration revenues in line in base

Our flow quarter performed well our in systems paths ATF revenues Excel ARTeSYN and and the systems and XXX%. path with over up flow

New modality including therapy challenging strengths from came mRNA.

to We are during and these relationships companies benefits our of programs vaccines have established seeing as in the mRNA of therapeutics. COVID many pivoted

catalyst of a be to therapeutics years new mRNA few their trials. expect vaccines make growth the next clinical as of way through and We

China aforementioned quarter a versus the APAC down for ago, driven weakness which management soft. and where orders in filtration year is were by Overall, the

filtration recover macro QX their to destocking our start will as complete and expect We customers franchise the during headwinds subside activities.

overall, and to We be expect base up XX% to down, franchise business. on this flat XX% X% to

new Finally, slightly business revenues analytics year, versus while prior excellent is were year-on-year growth our had very quarter an on process XX% encouraging. up which rate over orders, up order were

here expect continue We this to XX% business in to to XXXX. XX% growth deliver

off solid the we're year. a overall, for start So to

the the products macroenvironments, great the for traction next company. innovative areas industry year of manage market nine to XXXX given a well challenging to of to suite be a will Repligen and six to be strong months. However, with in our key continues positioned and for

medium position the up next we potential a very half see quarters. for order optimistic of We about longer through which once expect in put to remain us year the second few XXXX. will bioprocessing during pick navigate do term to good We in the

the I call to that, for over the With turn will Jon financial update.

Jon Snodgres

as financial as for mentioned, you, well year. reflect financial first all adjusted our Tony, and good results we discussed everyone. the quarter measures Today, Thank guidance financial non-GAAP day, updating otherwise XXXX, for measures. the are reporting our Unless

proteins our performance The continues grew of As shown in by our conditions. press be the in currency, despite businesses, market of challenging chromatography morning, our by release of we million delivered the base in business, $XXX.X first the X% to constant this performance quarter. driven highlight revenue which and

first total three-point quarter, of growth. at the and FX through decreased million, shift on a to year. netting we on revenue was tailwinds by about impact to first our half full the continue XX% and constant then the $X to impact in the creating half out a X% zero headwind XXXX current expect for as second conditions, FX the Based reported quarter for currency. reported For headwinds

revenue year-over-year was by For grew of X% by million $XX COVID X% $XX offset million. and on at in we overall partially This revenue reduction or business, reported which our as performance, base saw performance currency. constant our

revenue COVID revenue it growth, and expected regional saw As with to relates North to Asia, due in down performance America Europe declines. we as strong

revenues America Europe and the by by while from XX% XX% respectively. rest Asia, North XX%, increased world overall, quarter, the and of contracted For

this us last region. dropped up strong, orders in the three growth in especially XXXX quarters for in significantly was revenue off in tougher for setting While Asia China, region

Regarding America represented by our XX%, Europe North represented XX% for overall XX%, revenue represented first distribution the business. global Asia region of and quarter,

Now, moving down statement. to our income

profit million, of higher in capacity $XXX.X XXXX gross a gross to volume adjusted million tied of first deleverage, XXXX expenses declines, our product the Gross and to was expansions. margin quarter quarter to compared reduction the XX%, goes in mix to material quarter. the less declines tied inflation Adjusted quarter or from first related compared margins XX.X% quarter. first XXXX the XXXX XX.X% favorable down First cost to are revenue COVID $XX.X

increases driven business. product ‘XX in performance mix our fourth improved our in improved the quarter costs, quarter by inflation optimization price XXX benefiting points and suppliers material covering cost from operational gross margins basis material Sequentially, from XX.X% our of by cost

adjusted research and quarter XXXX revenue. of for the the transitioning were expenses. operating to P&L X.X% Now first Adjusted expenses down development

XXXX to being year launch primary on focused focus in products are our we systems. filtration up market efforts mentioned, Tony the order our areas key in with here R&D As new ramping this into

to capacity of to XXXX market SG&A continue Year-over-year tied commercial growth same and gains percentage for long-term. total the the the share resources short XX% expansion first were in increases revenue, to in were Adjusted to expenses compared period. and drive ‘XX investments quarter in XX% and

adjusted moving to and earnings Now EPS.

$XX.X First to year operating in a compared quarter for in prior quarter million, reduction. operating quarter million, was net XX.X%, to the income $XX.X to prior was of year in $XX.X first XXXX the $XX.X compared was the same compared and XX% adjusted Adjusted the income XXXX same million XXXX, of margin XX.X% period. quarter million

or quarter diluted of XXXX to Adjusted the $X.XX, in a ‘XX $X.XX period, for EPS same first $X.XX compared was the decline of XX%. fully

totaled metrics investments, XXXX. equivalents, $XXX GAAP are million cash, Our short-term XXst cash March at which

transition now will full-year guidance. XXXX to We our

Our for included press today's tables financial GAAP in the XXXX non-GAAP earnings our guidance are in reconciliation reconciliations release. to

discussed As noted, otherwise guidance financial be mentioned, all unless non-GAAP. previously XXXX will

may that for include any financial Guidance XX. April Please our pursue. flat sales not keep FlexBiosys rates, includes may and year of acquisitions impact on does impacted our company mind current full in also our exchange foreign by on estimates beyond closed be that fluctuations in guidance projection acquisition XXXX of the future potential

the midpoint conditions, overall growth to to revenue reflects million This Based minus market our our guidance, and revised guidance XX% XXXX reduction GAAP metric of million minus of $XXX minus the $XXX a current constant to our of February on full guidance. view of XX% of year minus compared are currency we $XX X%. million, at and organic to range growth revising X% reported a

revenue have and we million overall million COVID revenues Our $XX from our revenue to consistent of $XX million guidance FlexBiosys of guidance included acquisition. with $X our includes February

reported constant X% to We to at $XXX compares range of and February growing are growing our of to XX% million to as our at reported at XX% This a X% $XXX guidance currency. at business $XXX as constant XX% million to base to $XXX to XX% revenue updating guidance and million, million currency.

our margin XX.X% year. projections guidance to XX.X%, to XX guidance revenue previous are basis to reduction lower the range driven for We XX%, of XXXX primarily XX% our from the gross of adjusted revising point by

$XXX our modifying guidance at operating $XX.X a million of are to million for $XXX $XXX to million from guidance adjusted of our We income the range midpoint $XXX to million February million.

continue guidance operating guidance approximately adjusted be is to guidance XX.X% to million, to to the XX% range now compared $XX $XX XX.X% other And to guidance pre-tax increased XXXX million. prior with XX.X% is the being of year adjusted expense Our range expect February of our income. in margin Adjusted of tax we compared income to XX.X% income adjusted of for revenue.

difference our We're million range $XXX to guidance million February net income midpoint the to million adjusted $XXX revising a of guidance the $XX.X million. million, of from $XXX $XXX at of to our

to EPS adjusted the to share, per previous range $X.XX of $X.XX our $X.XX of $X.XX. fully diluted our revising guidance reduction are from cents a $X.XX to of We guidance

Our weighted diluted XX.X adjusted outstanding year-end XXXX. million shares assumes EPS at guidance fully average

million midpoint respectively. EBITDA Adjusted amortization from to $XX a our guidance range expected $XX.X now depreciation to the be be and to million the $XXX million, is intangible is million approximately of of $XX.X prior to $XXX million $XXX in reduction at $XXX and million of expense expected with million,

and year margins the our are Adjusted be strong range expansions to fixed be metrics. XX.X% continue in to of reflective cost the XX.X% from EBITDA of from of this expected depreciation for capacity to the exclusion

year-end cash cash cash the $XXX $XX to provides cash in figures fully cash be CapEx metric This to of $XXX by acquisition April funded generation investments expect any GAAP inclusive from million We million for and equivalents, range a being operations. of of million our of our FlexBiosys. payments made with

This our call lines to I back And operator update. the now report the financial completes open and guidance to for the turn will questions.

Operator

Arias Please Instructions] comes from Thank with Our first question Dan ahead. [Operator you. Stifel. go

Dan Arias

in between a overlap little the the questions. modality maybe here. just guys. the on heavy accounts dynamics things to feel there some you like to improving where builders might new Is the right where are activity start do Tony, a separate trough? good pickup that an those of be are during Or bit seeing be, those Hey, for and now? inventory COVID order look morning, you two Thanks

overall? And play. just extrapolate where is last should bucket tend biotech, that that comments there to the subset given there companies discussion emerging How quite of to then, is, bit we small on and that question a of within this a week. those customer Obviously,

Tony Hunt

Yeah.

So, thanks Dan.

in kind in related inventory were plus on indications. on your mRNA new So touch if be the focusing the buildup question, at don't companies we the between first would think I they're companies involved going that any of COVID,

there of up to a involved really last the lot be number growth position you of done well order what And a us and saw that's the nice get in mRNA-based mRNA-based revenue And for therapeutics, going is focused put I or new catalyst years a vaccines, few in that's think terms of setting companies be we've the three as of those terms So, I of able have that of good think years. on us growth. programs. a significant we through go work to many to over kind us in in again two next

at exposure emerging look gene well. biotechs place, a small exposure some have week, obviously where are biotech, from in we no our the last most long there's term in right? cell we and therapy discussion On from the looking that is that accounts, as And the revenue that probably The space. on in

with – we're does focus at revenue We that just split on don't CDMO just biotech biotechs. that’s of - be caveat, So We're comes of right? from little what them. XX% a We small versus any our not revenue would north at have CDMOs percent our one small the idea. small impede of large into We biotechs biotech. is

little XX%. in closer north to but a it's So, general, of like, XX%

Dan Arias

Okay. that during It’s were around helpful. comments just maybe And made some of relationships that then on the the you pandemic. made

some new players business may themselves gear larger during idea have felt been COVID One as the pieces seems the or there shifts wins of to the this of be some in constrained. equation that just

state we're of and situation, in should decently removed of, what away guys. notable of can stick from maybe maybe Now just you're on current of you're height affairs big seeing business terms Anything comment back gains you're the the the share that just moves taking to that you in seeing terms there? think you from versus that the

Jon Snodgres

players right to We deeply right Yeah, they with that have serve COVID share during to be that, companies we most fracturing. products can't say to were work with I were involved were say I for the with honestly And had capacity able vaccine continued of part many COVID involved would the the in that us. gains. the the deeply that

those have of in also continued And our to players that's well. other and all into as opportunities. And programs. those relationships of we continue rolled companies The bioprocessing get those companies, working share other are the

So it's it's Repligen. not this, like to unique

it's out market, that, think market the I make I there. tough comment the is would the broader, broader overall a

every right to macroenvironment everybody's working tough secure and bioprocessing is it's various And in everybody that But gets a now company accounts. space of through. is traction the working working, hard just kind at orders

Dan Arias

Yes.

Okay. Thank you, Tony.

Tony Hunt

Dan. Thanks

Operator

go Johnson The Stephens. comes Please next from ahead. question Jacob with

Jacob Johnson

macro is unpack this in seeing what off you unpack just, Hey. scuttlebutt But on destocking. can weakness some what what turning Tony. been of Can a Good there's Asia-Pacific. morning, from the going It seeing you where just tough Thanks. like Maybe I Maybe some environment Asia-Pacific? China. ended just in in sounds think and some competition also - that you you're reshoring around to local you're just on region?

Tony Hunt

with China. at we specific very recovered that seeing up of line what be in year I'm half followed in about in saw and And just Most first saw China challenges much and the it. are of in order then year. we Europe QX look down very if to of Yeah, then APAC are North this XXXX, dipping patterns just America with strong in and we down we the in significantly kind in China the QX. QX,

it a happens COVID, And our is, of because of not view of is not of stocking because COVID vaccine it that manufacturing. that because, it’s combination

scheduled Just the don't was amount second first year that was in stop a the for that procured China manufacturing half there half used last just for was of throughout such product that in the the the actually I that think stride that year. of maybe

year. in it's has in said, we a beyond I going and of were reset that through we that's to orders that and soft do relatively destocking. and weak the is China quarter expect been just that The think This That demand bit most demand revenue. on going think good there's on soft of a a continue

popping competition That years. over to there competition the five ten And players there's be always China. in hasn't local changed are side, more last up. the On to going

competition always to some now. share. primary reason probably, there's always secondary some right and that what But be it's going So not a are it's not, we changes observing in or there's

Jacob Johnson

how you returning Tony. environment. kind kind the the then, XXXX, now in Thanks. of compare to XX% comment to think visibility one curious, follow-up of going to just you especially back for less Got your the of growth XX% And right of current about confidence it. light Thanks in address visibility kind week, gives kind around, I that. what pre-COVID, be in of in - that I'd your peers maybe And of last talk versus

Tony Hunt

a good of what's is going America of and happening Asia. customers industry timing going have scale through. Yeah, on. projects There's with activity up conversations North our scale Europe, the a about lot there's ton our is The definitely we and of that activities they're about

there is So of lots opportunities.

continues is of and we taking those orders that, to for in little this I Philips to a opportunity seen strengthen. materialize. commented funnel Our have longer on other companies What think bioprocessing, it's

We seeing to seeing year the pushed second projects versus and longer, are into orders We're what might we the early just getting of out last years. secured four half just or seen have three XXXX. the into time get over

that's dynamic. the really So,

kind some of also not in a any delays. project accounts. and slowdown it's of timing issue activity seeing just the We're That's overall

Jacob Johnson

Got it. Thanks for taking the questions, Tony.

Operator

The comes Securities. with next go ahead. Souda question Puneet SVB from Please

Puneet Souda

Thanks. Tony. hi, Yeah,

us appreciate that's biotech Phase So, I exposure maybe for but being could an you question. remind about X? the XX%, and emerging one. important Obviously, what's X first just just on your comments

adopters in technologies what you X? X of more terms obviously, within seeing early In been to and of segment of innovators Phase you've you're the the levered that for and

Tony Hunt

question, clinical, asking in broader way a so, think commercial coming from Puneet, ex-COVID. your that's revenue and general comes maybe is from our I XX% Yeah, of XX% right, that maybe

how But And I serving percent of is pre-clinical my XX% caveat that's would I maybe our in that X, small, part on don't is of X. phase and at X that sense. much a looking customer But percent. X. a small would don't base, have again, CDMO add could that's a part business. base biotech biotech a Phase the X, that percentage phase So emerging it we be small the phase as all what you that assume know split our

Puneet Souda

to X%. Got X% be it. excluding FlexBiosys, year clarification should on, versus at guide And a for then, X% the to X% a looking just we

the to wanted pointing improving, side, improve out recovery obviously half resin still confirm the things second Tony it then, on, are should that. Just is like things into And you were but that, seems more. this

you visibility on Can you elaborate chromatography bit sort Thank for your and the that that conversations of you and the getting? just are drop you. a segment have shipments

Tony Hunt

X% resin versus Yeah, - I throughout XX% it's we the include So out in to we seen of does Flex, right? The our slowdown versus effect so, X% not think, terms the we QX revenue sequential tight provided on what a saw we February I X% why supply base. and of I supply had for right? to call resin in QX, year-end called was in last the that X% think drop-off XXXX, year that that's in QX. QX,

our to That indicating into conversations through we QX, move have, said, that better. get and going as I supply are QX is

feel we second confident up we've the fairly to open So, the Things start based conversations in will on been that year. half the having. of

high. Our order pre-packed has stayed strength the our order, columns on

have we up fulfilled. But second half dropshipping that nice so, dependent And to that be orders And all on of year. again it's need that of open expect we to resin. the the in backlog of a

Puneet Souda

Got it.

Thank you. Okay.

Tony Hunt

Puneet. Thanks,

Operator

go comes The JPM from next with Chase. Kim question ahead. Please Julia

Julia Kim

question. morning. taking the good for Hi, Thanks

customers. coming you to want And out in through and what I terms of have about talk quarter trends that was the X.XX what book-to-bill some of strength on at mentioned, of quarter book-to-bill customers? you rest mRNA order trends been for excluding generally, mRNA up Tony the So, seeing the follow XQ? order the And during is Could year? you and

the pressures is mentioned, that light holding And expectations? how then, your pricing versus you in prior of

Tony Hunt

repeat the one. missed part Julia Could again, I that you last

Julia Kim

expectation? your versus up prior How is pricing holding

Tony Hunt

pricing. Maybe our inflation. covering It's pretty held has start well. Okay. Pricing with

it'll have would lower But than it XXXX. with that's massive play that the and myself it The be a obviously, not contributor. I a the way X.XX, during would mRNA. and I but out think would, I exact it's book-to-bill, team figured how little don't John the it - exactly is going - I So, the that, say book-to-bill know it's

just a market is off. this Obviously that's taking

traction reasonable orders, I type the not beyond fact big down. to So getting actually enough strong really multimillion-dollar we're - really just it's the needle that and up orders, or move

So, sure. it not it's lot nothing maybe big out. less, really not exactly. when it's there's when take I'm a detractor a it's he, But whole you X.X.

orders expecting up all in think pick we're second trends, But Order of I will the half pace what back it's thought year. that in we slower the than February.

So us that XXXX But is orders go the have that's us piece through obviously in will as on pick a get better contribute all sets an expectation really we half eye and up year keep we revenue QX the the we to QX. and second into QX of the in and XXXX. and up towards for the for that overall that

Julia Kim

helpful. have kind seeing dynamics. recovery any, China if a terms what any types lines? it. of within guidance, then to And activity you a China? customers for product or And what Thanks. Are expectation order in on patterns Got that of your That’s between return in between follow-up different supports baked you normal differences your your of And different in? or confidence

Tony Hunt

in would Yeah, year. said, is down in a are in a everybody than the challenging situation. a, I was for it's the significant expecting what That it's the pharma more I think China, it say companies. CDMOs drop-off China

for China we've out year. taken So we have derisked - the

revenue. QX start pick but QX, any not contribution We expect to orders have soon that up enough will the meaningful to to

to investment. anyone believes customers think conversations that there's activity a don't stay a I we’re around bioprocessing in And lot in still with that having China of slump. prolonged But it’s is the and going

we'll that is situation per this that China, I work least the even now the and can few of growth that has pre-COVID. by have more returns at expect the or end everybody to rates se to And normal we in and only in to think I for past work speak we a year through, our seen carried out quarters get China. to we've

Julia Kim

Thank you. Okay.

Operator

question from comes with Blair. ahead. next William go Matt Please The Larew

Matt Larew

Hey, good morning.

additional picking enough Just here for what the guidance the year. up an there as for the could trying the expectation be talk balance might give guidance year, sense of thinking half When to about a in reduction for in and you you or of us second the assesswWhether risk that? underlies orders about the

Is sort for what year? order into metrics the internally the activity? within customer actual inventory, second shelf kind half of optimism qualitative customer it product are Is of assessment surveys, of that the treat it of more conversations? lives that on-the-ground Just other

Tony Hunt

at look Yeah, that at move through when the we think those is funnel look you opportunities to - funnel progression opportunities level, getting and as I higher look that we our our better. up of probability the at the

year lot customers of We of around to half a activities. are talking second the and programs

So, again that gives us some confidence.

that's up. not. really laps going if we it's go expect So we obviously, pick going or the based street to X it’s that And next will and of heat year all of materialize conversations as months, on to the on half the second the the we to through X

Matt Larew

like and balance year I Okay. build quarter strong conversation to the the the the year, first XX.X% But just for was obviously And a imply of that. I of think COVID start margins Jon, sort then would the something part to looks initial were guide the XX% gross maybe then, in year. a think for with throughout it

us on quarterly on know, the COVID of for is think of I revenues within just help QX QX through I understand majority just maybe gross QX. above your are rest exactly was margin the in the year? a based for what the from QX. But guidance that perspective Again, going

Jon Snodgres

Sure.

with came of a bit product a than mix QX. we in better projecting. QX color little on Just give were originally to

bit So proteins a in our higher. came

product little supply Our than OPUS revenues mix overall then came favorable in higher a bit low equipment. with filtration more we had we some versus bit being even or some on within resin products our expected. a consumable of the pressure business And mix

we The to with that the is, back to though assumption year. move that correct budget year, original as go expect the and a challenge the for was So, we itself that positive. full through

So, that's of second year. creating half some pressure on mix in the the

taken point. at revenue The is, our other million $XX out top-line thing this of we’ve

material year cost right, the, actually with overhead of costs, And types do of those your come the most out and of the things costs, equation. that, costs have not facilities that this dropped – all all

that as see major on And deleverage, we as pressure right volume the I'll So, call overall it headwind dropping that's the putting through, margins. there.

other impact. So, The stronger half gauge the XX.X% second bringing the revenue to those margin the impact the again the And are year some - roughly of gross at first the you the we the we year drivers. through rest for at with expect expect But at year the overall of on than projection, down phasing, be of half that’s the the for that's point. these overall this if in a midpoint revenue. revenue that, good be look phasing of should headwinds

Matt Larew

Okay. you. Thank

Operator

next question ahead. with Knight from comes Paul The Please go KeyBanc.

Paul Knight

give you a building to know or factory to product growth. get year's little a you positioning the a next color, Could I are you're us

for management? Is at ‘XX. So, the about XXXX? doing for it looking Technologies? what ready Is get what an to mean, fiber? should whole I fluid manufacturing Expansion ARTeSYN? we kind think it of this levers at Sea and you're the Is of year three

Tony Hunt

Yeah, great Paul. question,

think that, three highlighted. you I exactly the it's at you I think look when it, areas that

on the management. with there's that a fluid investing the clear a for big assembly are management. destocking component challenge think of management heavily fluid goes But fluid side Obviously, is side we very right? I on us, lever of the

we work We business were a we've a custom ever in systems and expect lot a transform for trying the that shop standardized part been more driver of system next system able year. There's a shop, did our from that be really the we to into growth that's since, most which to acquisition XXXX. for going do going ARTeSYN, to of portfolio us to

continuing right us for do But have benchtop, to driver combination to advanced whether overall build eyes what of that of that been a Spectrum to That's around systems. a big is, systems years up care portfolio, with to trying be now in it's It's the going the came next a analytics we're by for our out analytics. advanced adding year. number

right, a now more the evolution that systems of seen you But our some is talk we will And as a fact product-by-product see is company can solutions. think I the other growth between individual really that for us. would as two serve and And and happening to there fluid the have us consumables we're integrated that ago, go in our catalyst you company. lot we'll a years year management Paul our products for about

that offering. kind integrated going to be it's I get us think for to we a But it's driver So, of XXXX. as

Paul Knight

Thanks.

Operator

Our next with ahead. Please question Garcia comes from Lisa go UBS.

Lisa Garcia

Thanks the guys. question. taking morning, for Good

in kind So, XX% out the of, this quarter. about Is to this are guys were revenue of how guys kind I acquisition new products and of for still number know new this XX% you the thinking through right XXXX new think, the about kind you think the that of about year, you build? also kind year? guys I of called products

Tony Hunt

a products I think the good last for very year. mid were XX% number is Remember, in number still of a late the to year. launched

the to the So, we time end picking that up is expect at fully encouraging I very by and that year. I closer will get the XX% think around we be of to XX%

Lisa Garcia

are and ratios I we the and you have of, you able don't these are, build those then, thinking last to sit? of Great. kind about the versus parking qualitatively kind type think kind of kind where thinking quarter, you’ve about two between customer at kind And book know of CDMO. maybe kind order I fingertips. even your if - numbers of kind of speak pharma where types about customer But by discussed And

Tony Hunt

we a which positive we the little A row, I saw quarter is, of back for second a bit, sort uptick, to say but would year CDMO on the a were ago. not where side in encouraging, that

of all have to didn't clearly, a So China, having very right? book a and CDMOs where were, on is back get CDMOs in APAC Right? go help journey low to a order that. we And to that there bit on

So, back but in general, have CDMOs up. moved

I I excluding QX think pharma APAC, line. in intake pharma, take pharma if is average much you at versus in pharma, think XXXX if you pretty look China, in the

intake was where much was QX. it year, pharma strong So, last average order in we in versus had an lower outstanding line. was very But the QX

Lisa Garcia

Great. Thanks so guys. much,

Operator

Craig-Hallum go Capital ahead. Hewitt next Group. The Matt from comes question with Please

Matt Hewitt

the ramp you you do Thank expect be How to taking over during year? feedback on the curious that course you launched first controller morning. the May large-scale for up, gotten the what quarter. Good just the questions. you've of I'm that

Tony Hunt

really evolution just portfolio. an our is Yeah, of this ATF

last XX of making So from we've XX very a companies Feedback the companies positive. been for probably really really, to months. over custom controllers those have large-scale handful been

of And here. as technical probably QX you'll through we controllers launch so in we did QX, on it of a marketing a see more start go to launch the done

sets really on our done said, it's last ATF customers large-scale much units like what's a in we use terms where which that which happening feature think customer of controllers is They what we've was and a year, done anything taking they more of be are larger in But We've that now. lab expect than portfolio. But satisfaction I around ease it. think the lot general right of a I with controller should modernization else. ATF. it's it's wanted They added

Matt Hewitt

of the are as Got the it. that along one to I really two of the of lines, needle that of year beyond. you plan could evolution at number there you the there or products? introduce more you - and guess new the majority ‘XX think into is type in is you market, and remainder get Or move And look launches as the those those in products that

Tony Hunt

it products but only just have to to I not great think get you customers takes traction some remember definitely market get this how takes going a that transformer adopt, an It's the and it launched products account. to long going while, even to to But those while when TFTF, it's had get had little about that a conversations some technologies we year. to start are take to platform as when

get to what you into a is really So process platforms. you but be want

disruptive products and would where about systems, the year the most the buckets the looking the of number into this go getting a And we products. that through forward kind have to those of think going talking of as say is be year products. that, They're I filtration We we're to analytics, around, really we're I are market. what Expect products fall.

Matt Hewitt

Understood. All right. Thank you.

Tony Hunt

Matt. thanks, Yeah,

Operator

comes question go Brandon Jefferies. Please with next from The ahead. Couillard

Brandon Couillard

how on for guide. China, you to mix. there be longer-term, And Tony, China, Good morning. assuming the is, China new growth to do competitive big you thanks. were What need remind Hey, of manufacturing in pursuit what's the it And previously? China in is you you just locally? for have will embedded more think the us

Tony Hunt

general great our Yeah, Brandon. exposure question, China is In last year. that XX% of revenue

for So idea well. gives did is that include you an quite of COVID-related big rapidly. as of how That XX% grown Repligen has accounts, kind China

growth into the but would at don't fingertips, the terms to I year, into year. this my close been have probably XX% going going of have In business, it exact base assumptions on probably growth

The that right the to competitors we internally. region we're at the manufacturing there Fairly team in about that's well. going on we're local dynamics manufacturer dealing been to of with is and - for with China. challenge other that the with. peer China, compete also in But And clearly that's to that's in talk now, really I something and we've level a continuing be going get real great China a think a given outside our China, plenty able

just manufacturing do in today. won't we future. we mean to Just where are the It’s in China's

Brandon Couillard

Thanks.

Operator

Tony over closing and This turn back for to any answer like would to session. I the remarks. concludes question Hunt our conference

a discussions talking Good gone year and with joining. time through for everybody forward for today. how Look rest the to connecting in thanks everybody us. has months of few Yeah, the

for So joining. thanks everybody

Operator

conference for Thank now concluded. attending The has you today's presentation.

You may now disconnect.

Repligen (RGEN) 2 May 232023 Q1 Earnings call transcript