RGEN - Earnings call transcript Q2 2024

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Operator

Good day, ladies and gentlemen, and welcome to Repligen Corporation Second Quarter of 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would like now to turn the call over to your host, Sondra Newman, Head of Investor Relations for Repligen. Please go ahead.

Sondra Newman

Thank you, and welcome to our second quarter of 2024 report.

guidance will and highlights XX, X-month we provide we for financial XXXX, call, XXXX. will X- year the periods financial this cover and business performance and On the for ending June

Joining us Repligen's Executive Chief Olivier Tony Officer, Financial Officer, today Officer, our Commercial and current Chief Chief Hunt; Loeillot; the on call are our Jason Garland.

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

events reports concerning risks report that X-K, as does are by information our included to could the statements, Form including filing business is required of we XX-Q, law. filings other new Exchange today, in views, current our with and except annual make update report Additional XX-K Securities future that which on to reports otherwise. Form Today's comments current commit we a as on itself related result obligate the quarterly management's or or on reflect and The our other change forward-looking Commission. and information, not company

otherwise to of which non-GAAP providing results this we we morning, include measures of financial the cost viewed ongoing revenue our EBITDA this profit in but intended operations. website an income, are that pretax other GAAP effective Repligen's revenue; to rate, call, issued not are During gross adjusted be adjusted EBITDA well margin. are gross base reflect and tax the tax GAAP as operations on today's expenses, EBITDA, sec.gov. share including following: posted and report operating R&D figures organic margin; per financial included and noted. is guidance, and best measures the earnings sales, provision, from non-GAAP SG&A; income alternative These to adjusted income, revenue; Adjusted financial should non-GAAP diluted measures, as and as of nonProteins and margin; operating non-COVID in unless income, and Reconciliations performance to and press net release

call over the to Tony turn I'll Now Hunt.

Anthony Hunt

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

this an for in and X% reported of saw above for our improving with we for quarter above morning, quarter orders on orders, the both and half press revenues you release revenues first revenues the second the year. X% As pacing

continued and known of good demand outlined the As our we COVID, momentum Proteins May with China in were for headwinds had QX. in seeing a we earnings the and further exception And call, really looking in decline quarter.

We saw in and consumables continued order healthy and QX positive pickup pharma and a order CDMO year-to-date and in order and momentum a Sales a saw activity. on sales we performance momentum with sequentially bounce period XXXX. new continued, in space half our And equipment well modality in revenues orders, finally, first year-over-year. back the and same in orders and both the above

where finish midpoint revenue are narrowing related decline China, from QX, driving $XX which May additional an a versus we our This to lowers by range will in drop the coming within $XXX to FX. million X%. is also saw We We're which million, the off demand headwinds increased that between call. XXXX weak seeing we $XXX our expectation our with million is directly guidance

Lab yesterday. with the of the direction Tantti strategic that overall, including announced we the But we seeing, acquisition happy reinforced we're with pending really are Proteins being progress for

and about the XX% of the QX sequentially to the big XX% now XX% were up Pharma orders half quarter XXXX. sequentially moving were also So and Pharma up year-on-year. revenues on strong, in and X% picture first year-on-year.

We of X.X by came CDMO XX% strong, Book-to-bill was year by and in the sequentially uptick the was to how turn X.X important biologics and the orders, as X XXXX. which view for market. up an CDMO and anticipated, activity, year. as forward in the earlier, into down This for driven overall later emerging for plays were over as half first biotech the and quarter out sales in QX while both improvement CDMOs, plus look an For noted Tier we year-over-year. seeing for this

that their QX, maintained QX orders with digit revenues us. and with up finally in of year, Orders first Consumables double up destocking momentum the With QX half year in the XX% versus behind line are consumable in versus were up we XX% in our QX. prior confident is orders.

capital was on to XXXX. half revenue first sales to close first to did, of XX% in see up versus quarter. equipment. the Moving light equipment equipment however, half Similar the CDMOs, We

comps. More up importantly, rebound, last XX% versus on the and equipment orders nice easy year-to-date relatively showed XX% a quarter about very

order Supporting HX including product of at early launched our our line, strategic important have systems QX, the most in we where RS system. success in our first XX of recently strength seen wins is placements RS accounts

part While are still of QX the are there market. this the results headwinds in encouraging,

up capital pick in as still funnel we to strong a to expect further half to expect we convert second orders orders. However, we have equipment opportunity very the that

base XXXX. revenue in same QX customer growth the delivered modality new The versus mid-single-digit quarter in

were modality XX% book-to-bill a year-over-year, of orders more delivering QX X.X. than New up

First in portfolio were than than strong more we customer and base. the momentum period. this this for the in half seeing fit This market of are the importantly, And year, greater orders revenues XX% up were reflects greater XX%. the same up

to time at China regions $XX command will were China million QX now again in his call. million Our that and perform expectation will section our XXXX our continue the QX, regional orders dynamics. in exception in than more with or cover $XX Jason finance sales and the of around on we revenues is anticipating down well, China. about were lower of

but up up Sequentially, So QX revenues total X%. if non-COVID you were and decreased year-over-year, X% exclude were summary, total in X% headwinds. QX revenues Proteins

view quarter were up half. up Further We year-over-year orders orders continue franchise through of first are exclude quarter-to-quarter. is this X%. XX%, view in some if see orders in franchises a first and QX on validating half the our XX% to XXXX from our Total Sales Sequentially, the level up lumpiness performance we support that recovering. Proteins. and were

XXXX. for guidance revenue updated our to Moving

earlier, to noted narrowing to a reflecting from are the guidance million, incremental we of $XXX headwinds exchange. $XXX our foreign million China and range As

We half revenue encouraged in businesses our as the and year. our of first are the performing targets achieved expected that we are

held Orders half steady, X.XX areas and higher supporting a first modalities. CDMOs market new book-to-bill important in and of like

year. Our opportunity XXXX. period up funnel the the continues funnel the through in is versus first of to same strengthen we move as half significantly The

reflected the our XXXX. second are fully more of healthy quarter move the our for lens and another as orders we half that into the funnel Our view support markets was performance to in is recovering

uptick along half expect improving revenue positive of strength, funnel orders versus the visibility, in and stronger year With we first half. the with be the to second

to XXXX. a see half the robust the year, revenue growth to versus of expect same in non-COVID revenues with period XX% second up also We be in projected return to

revenue continue funnel, QX especially we we the and strong to are given and known momentum expect the believe we an market. finally to funnel be XXXX, going these We the market about seeing associated our Based grow challenges trends quarter, above where are and to markets, into seasonality the the in expect we excited healthy QX. on with turnaround

Olivier and develop efforts to over the call account program. talk key to franchise a to commercial the hand now about I'll our performance

Olivier Loeillot

Tony. you, Thank

changed Proteins, Let the where Starting over million me for each X not months. last highlights non-headwinds provide of have of the some quarterly our with $XX franchises.

million deliver franchise in million this expecting still this to are $XX year. We $XX to revenue

in be XXXX mAb markets. launched modality protein will the a in space. we we about rebound based Proteins, resin, very technology on new the down While new a Purolite with in for are optimistic the year XXXX of and impact solid the Tantti

The we've DuloCore from scientists prepacked for we pending Tantti Tantti is couple Avitide a microporous already expect and to our the acquisition resins Tantti's OPUS been company. for as soon combine us X. content strategically to under important the allows quarter technology our to with affinity Because It technology Columns. able speed as of of working a Tantti's years, launch first be with play

So markets to in with take a best-in-class with portfolio built disrupt Tantti. market Purolite rating mAb as and we affinity out this exciting time modality new and for share both franchise

business perform greater continued XX% Strength digits revenues COVID, in QX excluding XX% coming assets up orders and of and revenues XXXX. in sheet TangenX franchise year-to-date. the greater up Total from in first systems. with flat were than filtration quarter than Total Our ATF, ATF systems XX% up the have year-to-date. XX% half almost is robust, been well, for to mid-single and also the

accelerating behind us for QX, sheet that TangenX, we we demand The which CDMO base In broad have [indiscernible] pharma. is spanning year-over-year. destocking saw customer another a up is flat and as XX% sign was

integration where with another had Systems differentiate CTX systems [indiscernible] on Finally, strong of we ourselves continue the Flow analytics technology. to quarter,

chromatography. to Moving

piece significant the half showed quarter, of XX% year-on-year, saw quarter digits in total in and of increase revenues greater in single of sequentially we year. first OPUS the the for the revenues up growth chrome Otherwise, of mid-single our we up most And with our down a XX% and digits demand, While positive year-to-date. nearly than about up chromatography saw XX% significant the slightly XX%. portfolio, sequential recovery signs high franchise, were the

field. For see ARTeSYN first driven first half of OPUS, robust, orders a through the our X on of line of to up in the this, months product On Chrome we quarter quarter top orders year and our Artisan for by than had the in modalities. in XXXX, continue the new as strong strength XX% Systems greater have been traction

had analytics in business was nice mid-single up a pickup and Our year-over-year. QX versus revenues digits

new to and product the our as promoting ARTeSYN Flow offering. continue modality technology efforts We our system focus of adoption on part

over our key XX for strategy Finally, account I team out focus covers a the that was key now big delighted months management for accounts. of the top account me last our area of building company. X our am

in beyond. it our impact XXXX it growth believe XXXX, in key to already happy about has very are and We had and will be the

and had bring and present innovation especially team product recent positive, pharma We on depth portfolio. the meetings of feedback what with to now very the we our broad is numerous breadth C-suite most to table. The

A and level I in the increased is across visibility key into as have of for maintain our on customer base. make that markets sure technologies and role the impact disruptive CEO the we innovation move focus senior at to me our

be in long-term early and commercial, growth above expect that funnel sustained opportunities market are for We combination the our of from catalyst rate. consistently with the late-stage to growth this, will moving clinical

business to section. turn Tony will Now to the up I back wrap it

Anthony Hunt

Yes. Thanks, Olivier.

we've summary, in completed tracking solid revenues with right X%. ahead in and expectations revenues with XXXX, line to half our by first orders of So a

modalities by in we're new consumables uptick encouraged in CDMOs in are equipment and positive pharma, the seeing capital QX. We strength and and by the the continued saw we

headwinds There's back midpoint at facing XX% Repligen about in of done. We're moving onetime half, XXXX be lot of confident behind a many still XXXX second guidance. into growth in to our about growth the us. remain of will here non-COVID mode of with excited work be as projected the We

a It's the last our capable the to in Repligen, a giving me the note, over I'm such I company I investors XX for helm. future, success with and the very to When like about and been personal brilliant very years. look experience. On Olivier would thank employees, is hands confident the of customers at support

hand it for I'll update. the Jason to over Now financial

Jason Garland

Thank good morning, you, everyone. Tony, and

and This our we financial financial results year-over-year. second XXXX million. of million an sequentially second approximately up of XXXX. our have updated for reported we guidance the down basis. delivered $XXX first the We're X% organic a Today, decline for from in on quarter quarter X% the as reported was quarter Revenue $X is revenue of

currency X% and a contributed and created of growth headwind. acquisitions X% our Recent COVID reported about

quarter, grew Excluding other X%. of headwind Proteins, with per $X our approximately million a known franchises

the our half of with XXXX, reported we $XXX in For revenue, line of expectations. first million

COVID XX% and up but decreased we're revenues exclude protein year-over-year, known X% if half First headwind. you

our quarter. while on shared our represented America XX% XX%. In of our business our performance versus XX% represented second the color more Europe of the the on quarter regions. and approximately Pacific X% XX% the franchise world second was of rest business, I'll detail represented Within XXXX, in Asia total of represented of the China down and Olivier Asia, and As XXXX global the quarter performance, provide across North global

XXXX. strength down all Proteins, digit X%, decline are entirely driven across up North the by low ligand. in single affinity double year-over-year America franchises, orders high regions on grew was digit in All and than the half Europe on the to except with second when of compare the you down in and first half of XXXX XX% year, more of half of was to first China. XXXX, our the first exception almost of the half China XX%

and We seen do have recovery a of XXXX. no turnaround not to expect signs in see

essentially previous our our versus our our drives of range approximately X%, $XX first drop to Based half now on revenue X% expect to performance, we million China in which X% be worldwide sales of guidance. of

versus adjusted driven year-over-year decrease quarter. million, With revenue. Second $XX headwind, $X million was we down gross That it last in XX productivity. the XX.X% first this, margin. of volume a a quarter lower by was adjusted points on delivered year, said, million This $X XXX XXXX by gross offset is up basis sequentially from compensation and year-over-year incentive basis mostly points profit

with remains guidance XX% half Continuing P&L, First of quarter, margin year second of by prior year. decline from incentive majority improvement was gross was in and the $X price The achieving the $XX down savings. partially adjusted compensation consistent total and XXXX to this operations was approximately $XX million remaining from some driven compared of productivity of million million to XX.X% income and inflation, XXXX volume offset through adjusted our and our XX%. the by incremental

million our further adjusted first Sequentially, reduction are the an estimated so quarter, versus the in we were from $X operating operating rate. of second the first half down X% run adjusted executing half expenses expenses

that million a move to impact reflect expenses. While add our reduction our key also of resources. more to is in reduction, the $X critical team will seeing are of we We're the account year our additional adjusted we year. this of later commercial have updating some in full guidance meaningful initiatives an to the operating cost Therefore, also investments increased

increase year-over-year down approximately quarter year-over-year compensation improved earlier driven volume, XX%. initiatives. sequentially margins points, from second to operating offset Our basis and roughly reduction some adjusted income adjusted by X noted a cost the with margin incentive points operating income XXXX percentage lower by are basis, On XXX

margin X-percentage-point quarter which Our rate EBITDA reflects drag XX%, adjusted XXXX second approximately was depreciation. a from

in we a programs continue to With of to less quarter. future evaluate restructuring That actions. million $X and restructuring cost need incurred the optimization priority, execute than second we expansion remaining the said, charges and optimization margin expect for and

year. $XX tax the income, quarter Income less our net interest was by in million it million improved This [indiscernible] interest and by income, $X operating $XX million provision. driven for includes adjusted $XX was the rates approximately versus higher drop offset million position, $X than adjusted cash last interest of greater million from on expense of

was second XX.X%, compensation. discrete quarter rate Our adjusted effective a which stock-based benefit includes tax from

Given and XX%, the XX%. are rate, the tax expected to from our year be prior approximately rate first outlook updating run total of half we down adjusted effective guidance

strength of cash $X us we addition, interest to income will In balance allow believe increase that and the other continued by adjusted our our rates outlook approximately million.

second same Adjusted $X.XX the fully diluted earnings compared in per share for $X.XX in XXXX. was quarter period the to

of strong end we up the $XXX of quarter position $XX in the with up Finally, million, from flow from million the generation operations to and cash first from our increased cash the $XX XXXX. quarter, million

I'll for now the financial update I'll our an move guidance XXXX. adjusted to year full speak guidance. on to

guidance included impact made And clarity, the FlexBiosys excludes in fully our is XXXX, to So pending Metenova press acquisition we from please further note guidance are earnings in tables of in today's acquisitions but GAAP release. and our for that any XXXX the the Tantti. non-GAAP for our reconciliations reconciliation inclusive

by updated our that we Tony, ranges earlier April. shared and in adjusted year highlighted we February As total have guidance

While we guidance total and between we range, million. in are our now to XXXX revenue $XXX within maintaining million expect $XXX be

second that XX%. for points we to year-over-year our be We growth. expect half be of revenue growth the Overall, year-over-year percentage M&A non-COVID growth to of we growth At to approximately X% in half midpoint, expect for the revenue growth X X% revenue X% year. in contributing total with guidance non-COVID second business, expect XXXX the and of full year, our the to

revenue down essentially to from XXXX. income of $XX adjusted expect $XX remaining earlier. with coming between flat now XX% million million guidance, adjusted million operating to operating from from be XX% margin to range discussed adjusted to expect point our our the in still rate, We gross in the We guidance, of XX%, XX% to and million percentage operations the associated to million deliver or $X expenses lower margin $X revised coming our increase $X the $X is is volumes down from adjusted million decline and X respectively. prior

to first XX% the to the operating the leverage second X%, margin and half reductions through from of XX% With in we reach able to volume operating expense further half. be expect both cost adjusted

be expected the margins for of XX% XX% points EBITDA to in Adjusted of have year, the are of capacity now of to fixed the costs we exclusion XXX depreciation basis range made. reflective expansions from roughly

And other $XX adjusted adjusted tax our an expect we approximately effective earlier, XX%. million. estimated be XXXX now rate to now discussed As to is expected our be income

the And we to per other $X.XX able for at adjusted in adjusted and guidance $XX offset $XX adjusted holding adjusted to rate, our adjusted were effective of and reduction. our are income income diluted share operating improvements these million to With $X.XX. earnings income net we tax million

are In market second technologies profitability quarter. that for a the and are up by Tantti, the us focus exit on and through we acquire continuing the the differentiated revenue delivering encouraged momentum of closing, accounts, like We to on we our sets seeing in innovation, executing successful XXXX. well key on year believe coming into goals and our out

the back operator the And for I'll turn questions. that, the with to call open to lines

Operator

from comes question first Rachel The Instructions] of Vatnsdal JPMorgan. [Operator

Rachel Vatnsdal Olson

So within this to on great order see of the book. around first intake, It's continued question is some my especially the CDMO the progress just customers. order

the of you of been And have over vocal side. you been you book-to-bill growth about order and out CDMO within said X.X, of well. today, I You've called that believe as CDMOs seeing some XX% that on a lumpiness over

CDMOs, is? strength us consumables you whether strength can market? certain think modalities areas durable what how those CDMO really some in And rebounding there or well? equipment any as faster, unpack that you And for that's are or then the this that are drove So within of do

Anthony Hunt

we think general, at our book-to-bill the company. look around a last not expand little when than a higher I over consistent quarters, we've X We X. been very Look, in as X,

last average should the the quarters over X think I been X.XX.

results. I So some we've shown consistent think

We the we activity having a where from actually of year CDMO talked XX XXXX, in first at top end in QX. that the saw last CDMOs. really strong quarter about came our And

So there strong quarter-on-quarter last in of year. QX is really

have QX, different. CDMOs. of a what top it in Tier little a under the QX, QX, we down come lighter the ordering versus time the pattern In We're in a we've saw seen CDMOs past. we had X back. where XX large the In quarter We was couple first

look last Tier flat. quarters, the been at modes you the If senior X X have

Basically, the we're uptick. after amount quarter same but seeing any in quarter, not

really encouraging we that in the it's did So CDMOs. saw in growth Tier come the CDMOs X from QX

X So the it, CDMOs' been like. of X if quarters have look at encouraging last for you very been

will the I tell us couple of lot. think next quarters a

just the coming smaller as saw an we CDMOs CDMOs. the aside, And in from strength

We the also a pharma saw similar pattern space. biotech in

accounts So else we encouraging again, of long that has that some of and kind another industry in tail is beginning to have the the sign show everybody light.

Rachel Vatnsdal Olson

on Great. follow-up. And then just my

For remarks far. so comments XQ. peers seasonality, out that for your prepared you some reported you've mean the varying I the have seasonality across on in heard called seasonality

broadly, remind So sequential then walk us sequential can more guys and XQ consider well? into year you growth you of through And what do then into what in the terms can normal XQ you you as Repligen? throughout seasonality just assuming us growth for revenue revenue are

Anthony Hunt

Yes.

with you years, lighter in the don't XX, it I to typically this the year, that over the strong the weird our QX course in very for if anyone it. for QX. industry look tends for latest being last tell the quarter. to Lighter of of there's industry QX the seasonality QX few wouldn't XX, that's start for think question, that the maybe last be -- is So and XX Repligen bioprocessing years. No, at you part your being strong But

I think of to year. normal a we're back more

half If year, up Proteins at first have our COVID, you you look we're revenue. X% we performance of headwind, know ex-Proteins, ex year, this the on where this

at we're for half ex-COVID XX% second half the be without growth, into the X% the And to second go COVID, of we're of up midpoint. year even calling our you the Repligen. year, going If as

us, and a we a strong be I a really We very funnel. QX expect that's So sign do think positive had to strong quarter. for

orders We have of that a lot in came QX.

Third QX. one out is in shipped

versus definitely we're heavily QX. weighted QX So towards

Operator

comes from next Stifel. question of Arias Dan The

Daniel Arias

customers is it says a then makes Tony, do in And solid. a new about -- to improvement? something there and of individual modality XX%. order this sensitivity you that therapy that, That's less is forecast or like a growth is where kind gene you comment? think that relatedly, the Do projects terms pretty at of industry have the broad-based year? point, do up have for of Or you cell

Puneet Souda

Yes.

and you if into We cell therapy forecast might moved cell a turned place haven't gene and modality. we put the a for we've -- Dan, gene in remember, new year. therapy

you So when we're cell would exosomes, in talk the modalities gene put new therapy, capturing And growth. about is mRNA, that what we overall. everything

would really top late-stage this biggest And we'll what That's long in encouraging so for that's strength in Having the that's the X.X is we space. saw growth been really very be what accounts. coming our when was year gene QX. this commercial. and XXXX, saw book-to-bill But say above QX. It's for a And slightly It and the last from modality top at hasn't new I been we scaling. tail we look the of year, therapy and accounts. XXXX cell has been us

if not And that? Olivier, anything want to add sure, you I'm to

Olivier Loeillot

XX% obviously from were Yes, the forward. than benefiting commercial was those our than around mentioned, we order revenue as And and late drug [indiscernible] -- moving more stage more Tony are XX%. half and first

the these now, traction across So have right we Dan. really on board great new modalities

Daniel Arias

and mid Okay. feel I Jason, to it its do in course. fall. Helpful. longer are forecasting, maybe, speaking, comes biotech like no free And destockings better when getting you then predictability mean run is Small here? generally

to in have trying we'll out. back But all XXXX. dial half be come to how going fall, we're shakes to see the obviously, So the

be outlook outlook as bars of just for you and be And Visibility tighter. should the optimistic you're more XXXX so year the kind that I'm there, whether that to start better. around can about next curious error talk

chance guess being be that so initial a forecast idea of you that therefore, finish would better an has one I just with. the And the

Puneet Souda

to mean, the opportunity of pipeline. We've market. positive in our as sign, talked gives Look, we're also higher overall, continue just, seeing growth in an on see that and right, the the again, us Yes. confidence our more about the let's what I say, in we funnel, green shoots

normalized also year. as going kind we've then backlog, into of back a into traditional and to And more right, quarter the going a

So I help go think into of those visibility. all exit that elements and certainly, more better we'll us of XX we give as have And next year.

Operator

The next question comes from Jacob Johnson of Stephens.

Jacob Johnson

of congrats China, of on out run. commentary a kind Tony, market, end on around your And there? China, strategy just of end guys And will great much than you that previously, On smaller your that what just then that business around I'm we've X% change incremental you seeing muted heard Can but be called exposure given unpack kind market? this does year, this you're pressures. curious

Jason Garland

this I'll take question.

this pretty forecast coming through think this only is is team which the for and And why in guidance the decided really million, reduce further from half I went is to of we order expectation our by XX our China. that can we deterioration from QX. tough year, second really we

So in now are around looking the we've we to region, in even probably taken down team the will action We've and XX rightsize we decided XXXX. like and million some there.

last us year. year a significant this versus drop for So it's

Jacob Johnson

the the about, XH. on and Okay. about just us Got you margins to half? I think, maybe another half help in come of And back OpEx you on Jason it. talked timing Can pacing of as out of and in year, modeling in kind X% thinking we're XQ the just that XQ between then this back

Jason Garland

and site diligent we've on about, Yes, to very I definitely. continuing mean, drive Look, our optimization that RPS be right, programs spending. our activities we've for talked the margins, cost-saving consolidations been

So then second the you the margin the first already, went margins. both right, gross quarter, in up operating that also in saw some improvement and we of quarter versus

to the margin slightly high goes already then and maybe actions taken above. benefits that level, guide we've given, stay And we flight expect as in the as take we've that to expense as Gross fourth again, quarter in little the in higher end the maybe that in of that at kind to tracking quarter. is that actions a the the we there, see year that kind then more the of already continue range step third are again and operating of see of total

revenue a into look And then you see fourth guidance that's bit where a quarter, we've that at profile, the the higher get really leverage quarter. overall again, fourth you'll from you when given

So in that's really volume more the a get again, volume And in expense the with quarter. step get margin operating And reduction. year. bit up by that X, would as and that as op that around then leverage XX% to as you fourth to us XX% for in both improvement driven well the well the

execute. to continue So

Operator

question from Partners. Souda next The comes Puneet Leerink of

Puneet Souda

with the years. And Olivier, you Tony, congrats. Great pleasure working to have you on board. And it's been a really over

on continue little you -- it CDMOs? the it going behind You being the Tier underutilized in tell funding? more facilities. some question Is to and growth rationalization driving CDMOs. out Tony, first can my what a growth facilities biotech Can in bit you is about is about So the We hear X. Is on pointed modality-specific?

much drug through running is just CDMOs I this maybe here? the new and dynamics modalities of picking how to the understand want And So up? the maybe DMD

Anthony Hunt

Yes.

the So on XX really the was last quarter out from days, orders was real space. been revenue the the that CDMOs, right? would talking we're growth. -- One then has X I about And here in light say we it good. Tier our X. -- because quarters showing look QX, CDMO So order obviously, CDMO X And early of top more the

Tier over, destocking of of we're finally the We of top a on spot. that is lower X a encouraged CDMOs projects through. being had honestly, inventory had really a think we're either a or coming the So hand that combination, number lot it's where

projects. been that's think year. But second of encouraging. more in been the see go pickup through to we obviously, there's a It's that the we need as and activity, half a few So pickup of in we a quarters

Puneet Souda

guidance Could XXXX. say the it continue long-term you point way flat XX% the fourth it And is helpful. Okay. we the the mid-teens fair the elaborate this is And versus questions then now That's outlined -- to to year, right maybe jumping lower of to XX% quarter? a to is previously? with had to to frequently from off for one get think growth low you long-term that about teens XX%

Anthony Hunt

Yes. up a talk half wait the the XXXX. year we're the if following, going This to We're about XX% need, to I'll said, you right? be to is ex That of XXXX, say going second of end question COVID. until

or We that the forecast think we grow is XXXX, So place the for in half into very put our achievable. going I the year think we when market. We we're expect fully to in guidance year of get above encouraging. that that's very second --

we by wait we'll a end so more in on But give lot of get the to the obviously, we'll the first commentary performed very XXXX. half and how kind encouraged of And year, until year. of we

You half can see we're year. where of second the the in going

Next year, market we're growth. confident about being above

Operator

The next question Bowers comes Deutsche of from Justin Bank.

Justin Bowers

and opportunity things about early that's a maybe into could you then more one throughout questions, the the how in paced how talk But on little XQ two strategic. bit changed the funnel And and funnel So one XQ? and year?

Jason Garland

quarter of XX-plus very also continues from So [indiscernible] to increasing. strengthen. happy quarter it's also on increasing the significantly year-over-year up mean sequentially to but that, probability about funnel I keeps but we're X X,

had discipline in those the so really being newcomers much are as is team that. joining got well, more more we've we dates, and about quantifying we for which much accounting [indiscernible]. With some So the happy of

Justin Bowers

ago. made this had market then some growth that your for there? couple and X to in of opportunity strategy, years the partnership talk can thoughts contribute high-level terms you about the the a to Okay. years? the acquisition that and approach how on you to resin beads And with Can you've X And Purolite just how next of over

Jason Garland

Yes.

start, hand Olivier I'll over for So and then I'll additional comments. it some to

with So partnership that. forward And mAb the in Ecolab been of on is and our terms changed we're we way going the our much products. we've or view launching interaction that fully Purolite Purolite because is nothing to it committed side, with has very now

and also protease is Protein that A resistance. In fact, high-cost, launched capacity a QX, in brand-new resin high we

unique how in So that's a presence marketplace. do that's going we're launched, ligand hopeful a it's and the very about to Protein being

our that molecules. One way was going the a moving the The of in Avitide new was challenge is that the space. in, large space Avitide majority very new when we into did modality to do in molecules of modality the are modality the deeper be we things really new tried to way of in deal

viruses, like requires feed structure. acids, base nucleic they're unique very vectors. viral a So they're It

required suppliers this So the that space. a use agros need use do address throughput and that's or for higher feeds customers usually even capacity higher in not the typical

So capacity. look lot but low times, have a people membranes, membranes then at of pretty

when started the that about. spoke with perfect So with the speed working we Tantti, you base Tantti that our just I Avitide content realized is that gives the combination of the we technology attributes

this to that hopeful of very really unlock combination Tantti, days, early So going without get there. is Avitide. But you the power can't

X the it's disruptive that the So in be will together industry.

add not sure want you I'm Olivier, if that. to to

Olivier Loeillot

clarification of yet, new can required offering but the technologies. kind a Tantti, said, customization ligands. you yes, modalities also X very And product a those modalities, develop different within now is would I because every is within because good new do [indiscernible] important like not X new full for solutions we have new rating within operational customers. our months Avitide requires with very can that we very months, And just

opportunity about very So here. we're that excited

Operator

Matt question William comes Blair. next of The from Larew

Matthew Larew

and historically there forces positive very of in sole with sources, funding that And There in was what community terms market change the perhaps pipelines and the et right capacity pass cetera. size perception environment, I working you ability the investor substantial the to a because have be throughout through COVID was by inflation, a others the there to think added in of would industry. the in been

So I'm cetera? the market just now versus whether curious past that's on your of as forces sort position, you forward? going what emerge single-source [indiscernible] of pricing et Again, competitive multisource on is initial take sort destocking

Olivier Loeillot

I [indiscernible] what at Matthew, table here. about mean portfolio, which that lines product the competition is -- we're of because I I think different the lot situation. to there think this, we you when innovation, we factors are think profit bringing the the our much we're look different don't bio with very into, unique product of have a

are is much that years. that, the I the there us in available be products, But available enable really, seems expect and to And demand having mention a the industry, So single-use likely today, opportunity to because real competitive at you probably this probably be will some specific field. capacity in having look obviously, fact, to thanks key will our areas, again, between that that Then we few more capacity [indiscernible]. capacity the [indiscernible]. a next customers in from capacity and available innovation generate -- in if great price support [indiscernible] a more growing would

Matthew Larew

one Okay. side. on just the more And maybe then CDMO follow-up

is You perhaps being on? be versus of CDMO you're versus for of color just into broadly additional being referenced in Tier sort new equipment perhaps kind started curious And projects consumables? earlier, indicative old the strength consumables, Any there what that's terms as seeing would helpful. X brought projects of if turned of equipment

Anthony Hunt

on start that. I'll Maybe

that on think I equipment, for had it at definitely at expand we the the QX, and capital on look pharma. orders orders a look we capital quarter and in expand for CDMO because CDMOs But strong. we came capital revenue lighter were when in equipment but equipment front,

towards pharma. there CDMO particular I in versus the a was think weighting don't quarter

on. I we've which competitiveness of I it think was the reflects focused line. the line, it something across board. ARTeSYN product And that very been it's And the RS product just our think really is

quarter. stronger you sure portfolio there's not I'm had in in think the think for update in I if capital we that? CDMO want whether uptick draw of just I Olivier, don't the was versus So equipment anything in to to terms to pharma. add RS an orders

Olivier Loeillot

No.

Operator

Capital of Markets. next Our RBC comes from question McNamara Connor

Conor Noel McNamara

in Just in what some about like of improving. relative on the sounds definitely prepared funnel funnel orders remarks not commentary QX. and everything guide you the talked given improving your Because revenue increase? to the Why non-China did

increase So through how on a business? that non-China flow guidance the to did

Anthony Hunt

Yes.

place at only we off when range is the the midpoint X% off The of the put, in drop drop guidance good right, guidance today. sort be outlined have year. Everything our China. the We at going believe honestly, really we think is China. right holding. the So in guidance, We Connor. of you're look question, you beginning Look, to is that really from coming we'll

we're We range. expect, going be by to the year, in end of the that

consistency of we're second quarter-to-quarter, which I we're very Conor, from and -- showing, showing encouraging, half COVID year. is in the think It's XX% the growth ex

I think that's really encouraging.

Conor Noel McNamara

can so progress any far in comment in then can And you just on the intra-quarter what if you're activity? Great. -- seeing July? you And progression

Anthony Hunt

are QX progress QX. progress, intra-quarter in the So Conor, intra-quarter

Conor Noel McNamara

how July and stacking so is QX far? up

Anthony Hunt

Yes.

June June little QX, when was April, the at then think think So stronger -- were stronger definitely solid reported May, nothing know, solid the first but stronger with being was being I -- of out to pretty July, you we And And than start. then months. X as was all they I -- there consistent, a was a a we had than end April. off

a still of we're days the on And the August. of one of and most mean at quarters is quarter. I least typically, early just Europe vacation, of because month of this seasonality later simply for

Operator

Leonard of from UBS. next question Dan Our comes

Daniel Leonard

revenue. down you the and I expect half be year. also lower have correct? that a second revenue QX than sequentially the phasing follow-up you QX question Can clarify sales Is in on of to

Anthony Hunt

We're not QX. that it's saying lower thinking that's No, be going to of to in revenue. than QX QX we're range

to probably definitely see range. X we it's where it. XX the in So That's X

Daniel Leonard

that QX order quarter clarify assumption Got what ramp? And it. then, growth assumption growth sequentially, required Tony, in the is can order fourth to you hit

Anthony Hunt

the is no like order there year -- of the is order second assumption. half our assumption Yes,

assumption So guidance. revenue second to in the second half half midpoint of growth the is of the in order of growth our year the hit the X% X% order the That it's year [indiscernible].

Operator

of from comes question next The Paul KeyBanc. Knight

Paul Knight

revenue say, But OPUS, of Olivier really would be that, I percentage the range more definition what talk such modalities? Avitide. where from, to you revenue is BPE, portion or would new of limited think ATF, your of you I What's competition, Could -- have as what Tony? kind on percent

Anthony Hunt

Yes.

So modalities. XXXX revenue had modalities, from growth XX% from Paul, I new The is about a would say the we've the accounts. year. coming is first coming good half our of of top new on Obviously,

unique it's are other that product really somewhat to the bundle think would hard say we I Repligen. all we that to have lines

you unique and if sort general, management independent. space, take In else outside is our somewhat of everything

how So in second COVID year. on to the second hard it. proxy a of XX% year, is would a say, the those growth growing good But put half of half for the in businesses number are probably the ex the I all

Paul Knight

better the under that question structure of that. implemented. from the And then management how growth seeing the would account be a to last you is it. we're I coming think Olivier, on guess, Or much my way about side

how much Can half is it sales change? this growth, you XX% that a coming about think Is from the we to As quarter? talk of that? of effectiveness

Olivier Loeillot

early It's [indiscernible]. there. little still a bit

about know, you a an as put As we place ago. really year in organization

we to really off So very are a start. great

performance the both In of order and view is point a fact, from sales really great.

is want be yes, details actually by we're key give we account far, really more plays the then we how to XXXX. able from So will team probably and to But getting out, see XXXX [indiscernible] traction right now.

Operator

Craig-Hallum question Hewitt Group. next of Capital The from comes Matt

Matthew Hewitt

view. up on first a high-level Maybe

lag the you orders Are have the flow. already that pretty to Or yet a you your seeing of funding? or the noted to -- chance about book-to-bill, maybe even could you seen with strong from talked environment in strong because of there in that an purchases, Some and improving order you've here earlier of a peers funding have see acceleration a QX? the patterns progress some is spoke ordering

Anthony Hunt

from I to doubt a our about it. no the as orders. consistent and peers There's Yes, commentary think funding definitely improving with is is thoughts well. from lag our feelings There biotech

was seen. what at higher rightfully, and have look you're others pointing our we when than out QX that our book-to-bill So

that I more company we been perform the over the we've as put into think how a quarters. consistency it's able last around to X

average. I the So is our around X.X, think -- been that and X.XX, we've

lot have a portfolio. a products lot in of have said we Olivier unique We earlier, our -- as

So I think that helps a little bit.

also deal to of the of the destocking in other some didn't much as players industry. the probably with have as We

us. that's think a also for I So positive

we being feel the is turning this But like point the markets. in

XXXX. We into we a we exit COVID, into overall that's growth single-digit as the expect, move XXXX ex and high low as real move sign positive to that double-digit

Matthew Hewitt

you're you're separately, flat-footed another headcount get there kind or markets forecasting back faster in X% of maybe half. second that a from perspective. any come reduction little implementing you the Is then risk And a it. here and cost anticipating caught Got than the

is if cost quickly, any what here And wondering able the I'm that fast back there's be to adapt risk come optimization you you've year this just enough. if past implemented the third the or think markets so. not that might I in

Anthony Hunt

well, the will say, more set I of and the execute. think have happen been lot savings to then and to continuing the I'll we continue that we're operating we're feel And side. expense fall on be half up like cost to -- in a to flight through second

to into the and at have we capacity in second the here we factory that 'XX. half Certainly, established grow level, to go

I this So been don't closely as and sight. us. see really very risk of We've good that managing a have line for

the over productivity it as done deals reductions and to we And most. more like a Matt, because gives more cost on about or us focus are in-sourcing reduce internal think put It's we a wouldn't now opportunities X the I costs. last as mode XX That of where in we've years. all lot

but profile there's in-sourcing improving going on lot a help positive for company margin those just that the are related, productivity-related, management, of bigger towards of things of internally picture kind So looking more at all of it's company. a supplier an the in reduction, things cost

Operator

comes question of next from Jefferies. Matt Stanton Our

Matthew Stanton

I to that a want ask Maybe bit Olivier. one earlier. talked about little Tony for was question or a

about here better, You market levels? a the modalities How for forward? Biotech funding growth improvements, think going mAbs and yield do I on what the about if to the the forward? 'XX. debate outgrow you're growth? how pieces. algorithm Commercial your is market the But Clearly, of year ongoing growth but outgrowing? above-market driver. an the to question pre-COVID is There's -- it, package remain what it is be moving pricing. to guess Repligen's little lot market up. we scaling a do of There's it ability industry growth talked is, volumes, growth about had drive we guess kind in going a new of market the ability I call tough. less back Should at, about think China big half really in you it's up,

Anthony Hunt

I is the you it in look progress everybody way bioprocessing especially see QX. the in made, has Yes, that can at

more peers the than as I now last reported green shoots a ago. XX there to days, there's months lot out think So week was over our XX

And yes, it the a we be determined going we bit not be to needs as forward. what overall market need We're go to leader. -- is to little growth market

So percent market is in growth it's you tell going to our x kind be of hard for me that to XXXX.

I of think XX% what XX, X, the a X% to course over we XX know and market proxy do bioprocesses. been is, good really historically, years has to represent

going growth the whether overall the whether out of that, on see definitely overall in low better direction that, to at it's or when is players year next market market next than the of the year So end year as medium actually report XXXX, we're for end be everyone. right be remains But the I And growth. bigger think the end trending at they beginning and the of see of to seen. we'll what

Matthew Stanton

the I of is commercial back color understand updated more margins, where like coming Jason, year, you helpful. on on guide 'XX. a year. about the lot in operating we depends back kind on of site sounds the provide spending top lands efficiency, a terms Any next as [indiscernible] implied little your it cost line maybe half out That's but can in bit of of side. margins And one in think mid-teens

And about incremental little of to And double healthy. next digits talk in top are pretty then could top comes what's line the tied the on I as second line? think Can bit you you talk incrementals put back finer any what's year? point potential kind control margins -- for here your a half to and return 'XX? maybe

as on we your point, for think So on you XXXX? can put incrementals about

Jason Garland

our -- on on manage every each to day. costs 'XX. drive go back But we're point and I Tony's to about Well, a effort continue not certainly, picture issue our how we've got to we guide efficiency Yes. ready and bigger full guide

as 'XX. go into be will that a And certainly so tailwind for we us

guide margin we've to more as our gives as as gross and level. and look second improvement. drive the quarter on And it quarter us which good as the of by go as framework 'XX really that's through, line through again, margin well And getting then will, on we'll go gone third you And that but see where also, top fourth, at you be continuing fall if jump-off certainly, ultimately to we leverage, outpacing from will first at the OpEx, XXXX. profitability growth a profile operating point from into we'll to we

we positioning the we're into comments of more So and year. beginning I ourselves think well get the as

Operator

next Tom Research. DeBourcy Nephron Our comes from of question

Unknown Analyst

have could But X-month in of I'll visibility? visibility keep at in of is on pretty just terms terms firm -- Just me this short [indiscernible] if a orders. you over. more my typically strong that recollection your you basis remind

questions there's I so weakness been And around, QX. some in to guess, QX moving

can little you just -- year? the through So just of of this specific visibility a kind bit you comment more about that end that have

Olivier Loeillot

the X companies. the before about to hand. bioprocessing X mean, most of in I to for Yes. up months backlog each COVID, And COVID, during of of company had [indiscernible] months bioprocessing XX about then

back -- typical hand. a completely. So we book-to-bill X been reasons the they're very of X on of in picture went changed backlog it probably the one to why like because period But has last the from behind our left all to months the the is

and [indiscernible]. backlog of second months XX% you when in of your bit the it, in about and you typically in in then months think having then your have X new X/X the quarter. have the enter And of you backlog a the X to But beyond. little about you need XX%, X about yes, the XX%, quarter being quarter. typically rest to to Meaning, [indiscernible] you to next or quarter about when quarter quarter the in So XX% collect backlog, X

Operator

question Nambi of Securities. next The comes from Guggenheim Subbu

Subhalaxmi Nambi

on it would customer half? say you have pharma? Tom's an you Would it the be would extension [indiscernible]? best Actually versus [indiscernible] [indiscernible]. CDMO to second be sizes? Would Or Where question for be it

Anthony Hunt

going to CDMO by be the pharma? asking half was it hard hear. if repeat, the driven versus of is second you more year To Are to

Subhalaxmi Nambi

Exactly.

you better the gives So Would a CDMOs pharma have you the say side? half [indiscernible] trends. you or confidence handle customer or second biotech on on or

Anthony Hunt

Yes, the us I a first strength year. pharma been real would half say for has through of the that

Consumables the strong strong. Same really second year. I half modalities. expect consumables for first the Organic will of the continue have half So been that, stayed new on of that year. thing

little purchase we I in the think from how QX. expect the we how a capital tend into but and QX bit of that stronger of late you're back, second wildcards be right, going comes capital year, equipment would the equipment much CDMOs consistency customers see given to much half in to

I is to the X% for midpoint X% piece We get need So important us, the for guidance. growth, growth. the more us of revenue order think

I think that's achievable.

Operator

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

Anthony Hunt

to and conversations, you we'll November. And the Thanks, time will look Great. me us. in back Olivier as through this, will guys, the be leading forward in for the on Repligen for And year. that go last we making be joining to say but see the listening guys obviously, progress

Operator

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

You disconnect. may now

Repligen (RGEN) 30 Jul 242024 Q2 Earnings call transcript