TECH - Earnings call transcript Q3 2024

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Operator

Good morning, and welcome to the Bio-Techne Earnings Conference Call for the Third Quarter of Fiscal Year 2024. [Operator Instructions]

I would now like to turn the call over to David Clair, Bio-Techne's Vice President of Investor Relations. Please go ahead.

David Clair

Good morning, and thank you for joining us.

me Officer; are Financial and Bio-Techne. with and Kelderman, Officer call Executive Chief Jim the this Kim morning President of On Hippel, Chief

we safe cover Before me statement. our let begin, harbor briefly

projected made of including actual that The the could certain call. statements, expectations in company's during Some for and from to comments this call differ year considered beliefs future may company's the made company's factors fiscal statements cause results during conference materially about XX-K the forward-looking be results. those forward-looking identifies the XXXX this

does within The SEC as other statements future Investor its well new undertake events company of or website company's the filings not Relations forward-looking section. are to update information XX-K as because available any or on The developments. company's any the

Bio-Techne connecting call, at available be the press measures our coming at the these Separately, Leerink, provide financial used Tables business are the we benchmark, to America and at release ongoing Corporation Investor earlier of non-GAAP many morning may forward Blair, www.bio-techne.com. measures events. to presenting Jefferies in of performance. GAAP measures on to pertinent the this Relations reconciling section issued company's most Bank look comparable to We conferences William in the weeks. Scotiabank these will the upcoming with you be website of During

to now will Kim. call the I over turn

Kim Kelderman

by continue pleased team and you Thank shoots last everyone. with quarter as that contributed year-over-year to call us report I'm green delivering of joining expectations morning, third Bio-Techne execution call. revenue our X% combined during the we've organic good to for quarter for and growth. sprout our excellent Dave, to several initial Thanks, earnings our conference our discussed third outperformed our

improve. seeing funding the eventually develop to green to forward biotech challenges have we the as faced, looking stabilize macroeconomic in and and namely continue the further China headwinds shoots We're these

fully therefore, stabilizing markets. still Our product strong challenging performance team the relative And portfolio well we that when perform we our show can are end in but extremely demonstrated recover. markets that confident end can our

delivered profitability. The recent position while taking investing this sequentially continue for XX%. organization adjusted Additionally, efficiencies operating to shows while quarter's our we to And by we hold. by growth are basis growth this initiatives future drive the across the points margin to focus XXX increasing business on to

tools performance within pillars demand new across growth quarterly continue for test, automated trends Our reagents portfolio strong for comment of prostate ExoDx instrument. analytical utilization a lead with adoption our record strong and to biology continued increase our robust to portfolio our on business, in fully GMP our proteomic our a special

and I will later the double-click on these call. in trends highlights encouraging

but your search reagent bring recognition First, awards. one, I'd did and by attention. not to two Bio-Techne receive like site Bio-Techne's just data to recent app company. services The and

received mention The most important is ELISA I first the was the the would throughout awarded receives award Supplier Year. This to Kit for being ELISA designation like manufacturer of year. that kit the citations to the

within indicator important are [indiscernible] market an particularly academia. of adoption,

Site innovation. ELISA detection our RNA portfolio Award. HiPlex long in of Innovation with of XX Bio-Techne's from acknowledging the of proud is are of tissue. role also app a We history leading spatial enabling its recognized in stemming RNAscope That

possibilities patient to This of highly commended of were recognition and initiative year, our spatial will our unlock Bio-Techne related the representative overall Our research recognized biology to also together is with as which work education. customers the [indiscernible] ongoing size. efforts vision was is of company's to for enhance work educational to

topic related second highlight I intelligence. artificial to The to want is

want ways the tools. one leveraging describe is to advancing of important bring potential AI the Given many of learning the safely, proactively significant that to and team I our machine and [indiscernible] science,

rely world portfolio use only Bio-Techne for you know, of research bioactive is many important global highly the workflow. As around leader laboratory the Researchers our in on already from proteins proteins.

as these cell and include and Some examples well screening as disease antibody production growth monitoring. differentiation, in biomarkers workflows of

with We functionalities. AI proteins are leveraging capabilities to reagents and [indiscernible], hyperactive new new create designer other

years, of been are edge protein that on XX bioactivity. leading of Today, even to we has and Bio-Techne over development power AI lead further. the using For increase the

deeper starting let's our by get Now into an overview our followed results, geographies. end quarterly of with markets

therapy point recovery compared first our calendar biopharma biotech cell performance, end year to funding in single-digit quarter. a during estimates increase to XXXX the significantly levels compared market vertical reports higher improved funding Our prior periods. led pre-COVID growth suggesting low to by a and with sequentially [indiscernible] the of with gene Industry

X-year in increase quarter after December a this low. funding However, an comes that was

So shoot that it our nonetheless, revenue into green so, root. to taking be a as call could too early a appears But we this blossom it's meaningful into if trend. XXXX. may fiscal be growth And get year to new

performance we single-digit low we from mid-teens year. academic even On side, had in the last comparable Europe delivered revenue robust growth, tough a though

remain academic proteomic outperformed Within end biology and budgets their pillars stable Europe, and the these growth U.S. spatial instrument in markets. and

improved Now [indiscernible] led in performance year-over-year the This a geography. I year X by the single North the with strong geographies. in for growth the prior in period and digits [stall] stated low mid-teens declined will therapy. digits. currently discuss Europe as America gene growth at mid-single was improvement

of was a China. line sign stabilization January is in digits least, the a performed but I mentioned not However, we CAGR been revenues in may bottom which quarter which discuss that well, confirmatory We and the in and in a reached called for we saw out, played Europe in similar that in prior decline digit QX our have versus a saw last earnings [indiscernible] be and China, revenues has year. how that call to the growth. QX, revenue December multiyear Last indeed will to basis, mid-single

on plan some revenue behind broad equipment State plan. to saw region focused in China shoots industry a With in the is China's we upgrading us, of the stimulus several [indiscernible] with innovation. across deceleration also of Council's support economic green This

a Improving fluid, $XX be remain will program in insulin remains on the proteomic of our special remain for biology health in this government and eventually technologies While priority we of bioactive health lending will have the impact this modernization the analysis that care positive multiyear anticipate Chinese specifics for business. a a reagents, that China. important will program our tools portfolios of care billion

our Now is biopharma let's reflects discuss This growth Protein starting with quarter our our the sequential where [ pillars, Sciences declined organic stabilizing improvement on segments of an ]% and and end and revenue their year-over-year basis. segment, Chinese markets. from the second a X

most to have double-digit of This tools photonic and growth our these by root. these consumables to productivity very segment strong the broad-based the continued applications installed Sciences we most base end growing benefit exposure shoots taking of was as from remain simple was green branded analytical tools. on its is the long the portfolio Protein those where protein prudence instruments Utilization of Our and markets stands and used growth. streak of expanding

Examples of new well Simple platforms, QC Maurice therapies across such gene applications as Black. QA as for are on our Flex as applications [indiscernible] fractionation and weather and

Simple this with use, users. to by double-digit well if ease very as Western comes Our our performance demonstrated resonates The speed which blot continues for of quarter. share academic to gain solutions to end it of platform manual methods, growth the reproducibility low both automated and biopharma Western compares platform and

we therapy, expand continue Simple utilization and workflows Western gene increased and from in can application. quantitative as use case potency immense see the to Customers assay

are [indiscernible] runway its and of mid-teens penetration technology. expanded in adoption this we uptake see low with long the We use encouraged of for market instrument cases, its a

for opportunity multiplex promising a ELA the discuss diagnostic let's clinical Now [indiscernible] ELISA as a platform. branded

sensitive, and consumables biomarker now with basis in as immunoassay of are opportunities ready market The utilizes diagnostic that tonic Following or highly these instruments. for of to this test. kit on potential initially their [indiscernible] This Their certification, BNP Mold will its steps a opens opportunity. to in well is future. this recently launch Bio-Techne's has as to potential globally ISO end BCID the up the pursue reagents announced Ella we of India, pathfinder, easy example partnership platform. a deploy the DX great the care XXXXX is as clinical Novo large that fast more point NovomoDX Ella,

is within the analytical development which workflow therapy. the and products customers these of of to towards media, and progress therapies. inroads our and Collectively, commercialization therapy to through in of on portfolio growth portfolio make Moving to gene of reagents, continued to over clinical trials XX% This quarter. further Sciences, gene next our novel enables next-generation pillar and the services the solutions cell performance and cell their Protein therapeutic increased

GMP antibodies a quarter, applications. be GMP cell of cornerstone proteins revenue of traction a designed of quarter, In over will especially and We offering. GMP Overall, portfolio molecules, the current in and reagents remain GMP experienced reagents, strengthening therapy cell our therapy portfolio including GMP we selection record continued in the regenerative medicine small launch reagent with during workflows. the which XX%, are for grew in resulted which our quarter. activation our

to with therapy ACD growth single our and our neuroscience, Now by and cell as Starting our medication. driving includes regenerative The business RNAi the sensitivity our which model special which the immunology, specificity shift utilization reported resolution subsidiary and well unrivaled growth in Diagnostics Genomics for quarter. offered XX% and organic let's Lunaphore gene is both segment, pillar, technology as cancer, acquisition.

publications the biology the the This scope industry to broad of most number customers' ecology utilization become recently surpassed XX,XXX. in has enabled earner spatial our as referenced

over automated the platform, capacity in up outpaced called our manufacturing in applications. Importantly, Lunaphore global throughput, ACD's XX% market these our and were our hydro Jumping adoption released hyperplex increasing awareness expanded the last fully spatial biology once spaciology further as platform years publications of in quarter. for Comet X again demand to leadership

to capacity cross-divisional However, future instrument Lunaphore's rapidly to and meet scale on the current is up track demand. platform production projects

the capable to remain the will current our This HiPlex sample. on biology track to in up visualizing year. XX on XX a simultaneously biomarkers Pro and highly launch multiomic spatial end enable X of also fiscal differentiated at Comet RNA RNAscope tissue protein platform ACD's of We novel,

growth our biopsy-based diagnostics to business. and molecular on final is pillar, the which liquid Moving fourth

kit ExoDx continues potentially should a provides both complex business. XX% growth also highlight to this clinical growth this dangerous prostate I'd a resonate surgeon's PSA during volume our biopsy to Our QX, an traction QX. test the continued on man physicians. levity patients with diagnostic approached A test their ability zone and score with With resonate for with whether prostate to solve XX% with screening oncology we over invasive, proceed challenges or with partners molecular valuable and surgeon to business information continue experiencing carrier value are as like not. gray of in

to Also, within on we diagnostics our execute division. synergies technology molecular continue

tests distributed technology and channel. monitoring surgeon DX leverage exosome exosome-based for developing be gene We various laboratory are will our our single mutation This markets. cancer through

quarter. upcoming We expect the this first launched test to be monitoring in

over through call the hand Jim to the I takeaways you for key QX to detail, summarize in financials I Before would such. walk the as

will Biopharma are China quarter, year. as to previous there well that stabilized in the the markets the as back indications early region half calendar these end improve of markets relative the and

growth platform pillars, our the enabled analysis liquid years with portfolio team. our customers portfolio medicine quality Our clearly and are in assays excellent technology gene science for positioned biology improve our superior of by to the to and to proteomic therapy, which in leading by These continue and life well by execution their reagents outperform solutions, of and catalyzing market of proteomic the remain positioning advances to growth cell enable of come. pillars comprised facial and biopsy will our

the turn call Jim? I'll that, over to Jim. With

James Hippel

on increase compared quarter with an start quarter, in then $XXX.X EPS an a financial quarter our in financial basis. material the was additional of financial the and overall I'll year-over-year year the third the was the remainder with give Starting performance QX Kim. fiscal foreign you, $X.XX exchange detail for with having of increase Thank to thoughts Adjusted a and prior the performance. on outlook some for on year. to X% some on compared $X.XX the $X.XX impact QX EPS organic prior year. basis $X.XX EPS. revenue reported GAAP on X% a million,

X% contributed to reported growth. Acquisitions

and region decreased China digits. and America by single while market Looking Europe increased QX. at North digits year-over-year, our growth in end organic low mid-single

American As academic biopharma and from our Kim an mid-teens comp last in which had regions. as mentioned, year. biopharma benefited challenging we growth Overall, year-over-year customers both noticed Europe in increased our North and improvement European a demand both

growth in with APAC macro in South partially overall, digits constraints Japan outside government low decreased Korea, funding of by single and and offset China India.

For continued the China, fund environment region. soft government the impact to

in major well the in the still our as over the stabilization spatial we life is business stabilization the our to And December content in be worst slowdown as we term, rate that our of science will China business remain biology region. Although experienced in the at the long fastest-growing though tools. run in year-over-year China QX. continued us point. reagents This the as for behind core growth It led in appears this world region

the accelerated growth, think cycles. However, down take path to we previous than back will longer

in in market margin while excluding the digits total in company Europe. single in QX, year. XX.X% of on end this decrease comps significant the improvement China, than grew by was of a By the the a P&L, biopharma in adjusted same relatively flat academic fiscal the the low growth was double-digit revenue gross challenging lower the was with Below acquisition driven quarter, in QX, but primarily the from quarter Year-over-year impact prior Lunaphore quarter, year. XX.X%

R&D revenue of while expense to in increase X.X% in of XX.X% XX.X% was Adjusted the the prior driven year, compared compared revenue SG&A R&D QX acquisition. by to SG&A primarily QX the prior year. Lunaphore X.X% The and in in was in was

offset strategy on operating impact margin QX. inflation our Our income, operating strategic pricing in continues dollar the of pricing to inflationary the impact largely to offsetting also with

Adjusted XXX points of year basis decrease operating basis points was sequentially. increase period of XX%, XXX prior an a the but QX margin for from

of Excluding to the impact for than unfavorable basis extent, margin XXX the year position Lunaphore the to lower prior growth. which acquisition, leverage due strategic lesser beginning the closed business at future the adjusted and QX, operating points a to investments volume was of

interest to below prior increasing $X.X year. debt of QX year acquisition expense levels associated due Looking operating the was million, period compared at our Lunaphore million higher Net $X.X our with to earlier numbers income. this in

on compared our the our adjusted to $XX was stood in quarter. million an pooling debt million bank and to Wolf's of the share a prior the Our compared as of QX the -- impact decrease balance to net adjusted cash reflecting of of sheet nonoperating $XXX XX% last end million increase at income $X.X Other for arrangements. million, quarter, exchange the primarily $X.X year, Wilson of related income

the P&L. down Moving

flat Our mix. but XX%, due sequentially, the basis year up adjusted prior effective rate geographic in XXX was compared to QX to points

quarter capital cash of capital outstanding. dividends. diluted the Turning $XX.X $XX.X of from a operations finished of and was million in $XX and return generated in with way $XXX.X during cash we net was to returned to capital. in the million. We million expenditures QX, shares by our flow average Also investment shareholders quarter million

below strong balance sheet with position on a EBITDA. Our QX our in total $XXX finished cash approximately and million in hand, Xx leverage ratio was

allocation. forward, priority Going capital top M&A remains for a

Now segments, with decreasing $XXX.X revenue I'll of reporting discuss sales the prior to performance year Sciences. compared X% the starting QX million, with period. Protein reported our were

approximately an FBS decided growth a annual have As has the last long-term discussed and bovine of portfolio, business following company business. FBS to review quarter, the rate margin divest average. we profile strategic we serum, or our $XX below fetal with million revenue operating

Thus, organic growth impacted FBS X%. by exclusion revenue revenue The decreased unfavorably segment of reported X%.

result the to and to of as and for is Sciences China has segment quarter well decrease alignment and by XX.X%, basis, product Sciences market. Protein partially as were as initiatives end the XX prior operating the year compared segment improved points reminder, exposure of to these volume segment XXX geographic it as On Sciences the a cost As Operating region increased volume unfavorable most basis Protein a the margin that Protein initiatives. basis a management margin mix a leverage. biotech our points cost sequential offset structural was

having revenue with division X% up the growth across were the Genomics $XX.X segment. the QX growth with compared was same Growth XX% Turning the Diagnostics year. reported with a increasing Molecular was quarter solid Lunaphore impact. XX% entire Diagnostics Organic our million, way. to segment and acquisition sales leading last to the

segment's the Genomics primarily segment to the XX.X% to the due margin Diagnostics Lunaphore the on and margin of compared prior acquisition. operating Moving X.X%, at to year's impact decreased operating the

QX, due basis XXX product sequentially points and improving margin leverage operating volume mix. improved QX from However, favorable to

close market we China end markets biotech that our year, stable, with similar look fiscal the remain expect the and just QX As out to our region. our ended namely we QX to

Our growth the outperformance should revenue. incremental continue pillars with improvement sequential drive relative [indiscernible] overall to in to

cost QX. With our QX, incremental we relative improvement our together the with operating expectation QX should of in adjusted management see margins in revenue in incremental also actions, to

year. revenue tougher However, in also comps year-over-year we in in facing we of where QX did China, growth in we especially are fiscal in grew last mid-teens QX than QX, the

in business be more organic trajectory of relative to our While growth to these we [indiscernible] QX, difficult improving. the may are comps that is pleased QX the

what in will Chinese outlook to plans. monitoring recently the the our fiscal closely government as impact by progress as longer-term we in end be have operating of well increases our the fiscal and announced we year, may funding very 'XX recent stimulus biotech As the

our the the At root. green to turn comments. That questions. these to updating call on line with the for call, open to earnings concludes forward we back next I'll operator look you progress And of over my that, the shoots prepared taking

Operator

[Operator Instructions]

line from The Leerink question first the comes Partners. Puneet Souda of with

Puneet Souda

Jim.

So in really see seeing get a what not on bit fiscal if the here I potentially single quarter, but on good as and of based core know to year the do and next the to for XX% well. plus Jim, sort we first business. today, if, chapter high it's digit, congrats here 'XX wondering turn look, nascent, it's the still to of some you're But all, in comps as recovery year we -- easier start organic can if get as growth you

that to or you you see XX% single the to look in high order what light to line like see plus? wondering, would when just maybe a accounts, So potentially at digit

James Hippel

you but the our era record, also of call when Like And we over COVID combine what been quarter to no almost a for as market growth at look it. couple XXX both Puneet, during basis to we COVID our have the question. the X,XXX upswing, the be track you points last said before, different. hangover, Yes, this organic thanks years, than between rates consistently during all better appears

not rates confidence our that historical the returns in to when And if better. us market to digit, the that confidence at we gives gap execution. our is And so that mid-single gives positioning portfolio, in market growth relative bottom back its line performance least us in expect our be same, to of

that's do the we'll And the when single of not will mid-single-digit double-digit question So is we kind they if well growth high be get digit, real do, believe markets when growth? that be And in territory. an is peers, all shoots we debate question. that there's good ahead the open and opposed to our the green analysts of us as And headwinds. news perceived that. and But

that's back that out of for from is be to come normal seem when behind and to very there, the that. our the as to plans kind definitely are rate. why improving. so the prepare sentiment own dollars to not operating exactly But exactly we be we'll I'm to monitoring the markets as here And sit reports prepare going well. And going here predict their to analyst try that But it least be at closely

Puneet Souda

Okay. That's maybe, first obviously, the with quarter. excitement some at in wondering, I look funding you when helpful. Kim, And customers, mean, just then there's biopharma the

currently? more elaborate sort conversations, then you the gene versus of GMP, on therapeutics. at are had stage the where as dollars we're developmental is growth those that sustainable of just look And could bit early-stage XX% that, seeing potentially much the of a therapy environment the more come stronger in you on the the wondering discovery As could you're stages you to how the given in the side, how you customers cell and

Kim Kelderman

Puneet. Thank Yes. you,

before discussed thank funding do we a quarter, Regarding believe consumables flow you, I longer this bit that the through. larger right? have and earliest be that Pharma do through funding, early and have earlier their for would fundings to I you a flow of seen CapEx, part, in the lead believe events time will little So

of quarters we delay do the biopharma the a there's or like We couple we funding mentioned that that know funding months And into do also a seen flows good earlier, know have so areas. there that before pharma, we now business. of X usually is that for

end overall, are months, looks I But I mentioned, this also think at and disastrous trends that good X only as those the months we year. of the some very had for calendar right now.

like that and going we indication. things like good up, early It prognosis. are be yes, days, but green So looks careful want a it's to shoot, therefore, looks

The growth cell been and gene for therapy, has outpacing our overall it time. company's long a

strong very we a verticals. opportunity great all are I product a it's of think there. as And line are that think our having I X

in space. And We therapy have for consolidate as GRx reagents cell a you gene opportunity place best the reagents have to know, and the we the into our real that to all good space.

bullish in because pipeline can companies very that very make be we're know from larger on the and that little a swing. be can it. quarters -- of their lumpy So orders are bit a do of can We some food the quarter really these that

to of are, and saw more stable building companies. numbers. us However, put to because these that that But course, are with started foundation their so and for in in we or in ordering pipelines that therapy see momentum more up cell earlier we very glad in growth gene the better here will really customers of have play strong earlier-stage our a give now, us some market. And XXX a to encouraged end will very great continue we if that foundation give

Operator

Next line question of from comes in. the with Johnson Stephen Jacob

Unknown Analyst

on is This for Jacob. Mac

me. peers biopharma from earlier. commentary for that There's most the prospect recently, you I mentioned muted appreciate commentary the Just a but also the ones quick been China. stimulus few your in some around around of

point time. this signal backdrop I'm that curious country for in you're to improved So as what watching to in an at

Kim Kelderman

Thanks, Yes. Mac.

know, it driver be business. used improving as As China be in growth that situation the true over we the a and of time for will big to this believers are you a

that by tough We are the is our funding the we also shoots As We is there government or very real build, of mainly instrumentation. eye floor funding efforts. paced the billion innovating do quarters And momentum some lack of that also yes, loan instrumentation will improving there the specifically that's the right we the keeping $XX you had at and know base. that's in laid green aimed know, the China for hear out funding. that and to laying out now,

the we we from -- getting And customers interested sales in from to positive the our can it's And about very hear we positivity our They automation and meantime, think and our benefit brings. results. hearing brings are force. that efficient more customers funding. talk benefits consistency, their automation And the it's got fast

well So into that through really, fits flowing value potentially China. proposition really new funding with the

Unknown Analyst

And need on go-to-market that think depends change environment or then is better the macro just could relates on the reacceleration think Or as you or your quickly, largely current in there you in a it anything you to environment? to do opportunities strategy? growth capitalize to change

Kim Kelderman

that we direct -- Yes, have efficient latter. right We it's always well the the I the feel indirect. a done got right in that region. clear coverage, think I it's in really positioning. we The China. the think versus very have we've sales force product We've And

GMP the in In we portfolio, which also right as with to channels. as that, the quarters. the China are, right that, plant, you for well will have proposition addition investing value I China think in as right come know, coming And line we go-to-market the over

currently we with the So have that I'm there. situation happy very

Operator

of question from Next with Donnelly Citi. the comes Patrick line

Patrick Donnelly

I margin off the that the Maybe make sure Is up to sequentially range phase XQ. think to you Jim, then and And the Is ] in the right year? next mid-[ have talk I piece. rep as you, the about of sequentially, for just organic. you wanted side? one sounds is in to this XQ the growth for side? like clarify just It are rate it I want up similar just number that right. on maybe on X% to about just guidance build that Can dollars

James Hippel

Yes, Patrick. sure. Thanks,

on it's talked to quarters of a do couple that the slam margin this first this to point, a we dunk we XX that got still about fiscal that. reach go get not to type get to exit the to time to by of at now out but margin So It's year. We point. question, that our from ways not was goal mid-XXs a for

I the nice which think, fiscal QX, right honestly, where a launching So 'XX. us pad right into feels gives now has for year consensus about us

And it's on growth where growth. really markets I've talked the the depend market and -- are of expectation revenue beyond the above already about going what to and our

QX, margin So saw expansion from much of you increased QX amount had of is on seasonal. as to the the we that [indiscernible],

have gross margins in pull-through, amazing We products. amazing our

So it we're the because line. bottom you get we course, volume investing term. when contributes tremendously continue invest of And long to to for that the

the We've got pillars they these down so XX growth can of years, beats road. have amazing full that X those we to years feed to kind their continue reach potential

call. we'll you So to balancing that next through providing go to forward some more this insight be as we that plan our operating year and look

be revenue have clarity the that. question, on to to clear, regards With

will of that we As growth bit China. because QX. But mainly higher mentioned, believe organic than the be comp in I percentage do challenged, we year-over-year QX revenues be might slightly tough a have in the

X.X running right our now, we business, that's being of think you China where had versus of last up it's just XX% to X% points itself. in growth about mid-teens If year, headwind

the of kind we're that's where terms at now right So organic range in of of growth.

Patrick Donnelly

Understood. trying my -- you opportunity week, our you for head Just Can that announced wrap And to last impactful the just way about you talk agree. we to into as could Kim, think it 'XX Europe. Fisher agreement around Okay. was I how expanded guys? then, there, work that just be guys on the

Kim Kelderman

and of transactions ease Fisher use Patrick. channel you, Scientific a and is Scientific provides of capabilities, our channels, customers. for Thank ton the that ThermoFisher Yes. the has but great ones one big of reach for

As a about now. similar one very know, since XXXX, you agreement, distribution in XX we've so the U.S. might years had for a

is trend the channel. comfortable can we we're similar reach our And the with a footprint, Fisher can important where Fisher also that better. the reach as Europe, that And well. and European come very, I our therefore, Scientific very this similar And with a to course, can hope and in commercial the setup very dealing channel. transactions collaborating with we -- ease used this customers expect and we of serve can of for the and customers from us benefit convenience

course, Bio-Techne company. direct and the of and we well really to work make well. Fisher have together the that customers' optimize Nonetheless, fine-tune will U.S.A. as grow with we maintain we as a in and we our have sure collaborate channels eventually channel convenience our done reach will the And and as

Operator

Bowers with from comes the Deutsche question line Justin of Next Bank.

Justin Bowers

the and over do existing Or the strength durability of programs customer market And sort customer just of cohort? that gene I of talk in like you want Or for about is on that Can customers? of forward? end the new quarters, to to and activity? you're go back sort there. supported pivot growth the you the see greenfield of that is couple cell what to next and need sort by just you seeing

Kim Kelderman

Yes. Justin, the Thank you, question. for

would think Wilson sell As a earlier, play XX% very right? because you Wolf, grow cell mentioned grow we it As container and this these GRx, have really it, have the know, Wilson that our to T Wolf T you efficient need which a core to I our different of therapy stake I grow we strong easy and cells, in products. cells. gene -- To is into makes and just is

to T GMP high-value market. are very these of our have cell you therapy make fine-tune these can chemokines the to sure that the And we ingredients and growth So cells. gene all proteins, cytokines,

used on that that all obviously example, say, setup We about are in that that, the all are space, know half well. of sure very we GRx going being XX% the ingredients is let's keen know this on in are just making in as for that our we clinical trials do

the now on growth our of proteins GMP and So We've very at record in are annualized about we proud pull-through. seen a quarter. revenue that million. create fantastic had $XX basing yes, we an And that we're

their growth But higher, As larger of be variation they where we we excited in companies lumpy cell to solutions quarter-over-quarter. back can been more -- race able some been gene not and go I of any it diseases to are the entering are we little seen we're customers cure because the And us mentioned this have that clinicals be are and so very results very and that space. find within able more overall, earlier, space. the therapy consistent to create because this about high shown end previously a will have for volumes know has that

Justin Bowers

Okay.

pull-through again? it that still on Is it be helpful. And sounds there then to and like grow Or So increased would Wolf Any stable? commentary starting trends what is scaling there? are up? like Wilson

Kim Kelderman

we commercializing, in of Wilson are Yes, all as the collaborate finish companies of which in the several we're that sitting I quarter these started it those. but have clinicals. very this it's reached [ is Wolf, rate. and overall, line around that again fantastic with growing mentioned, participate XX% good now ] are -- the There a in have And not least, and company then digits. last over a indication, and run double XX%, It's has

we the definitely is also time, happy that very it And XX%. will important our well. And then high because and as over we as we're Wolf own company, data to very, specifically north can reagent. this from yes, having imagine, really traction have margins, will benefit such know in you market, we really, that But with see Wilson the of Bio-Techne will benefit

Operator

the Stifel. Dan Next question comes line Arias of from with

Daniel Arias

for ACD you think and the business, pay order going portfolio to Comet? you Kim, it's What on grow time getting just plan the meet getting production manufacturing firming ready to on and needs should what see view then spatial you're press the forward? the to the Lunaphore, spatial And at can you be line do demand? what maybe in as on up

Kim Kelderman

the Thank you, facing now. production right really, The output constraints really Dan. Yes. are

foremost, exceeding happy, we the like, demand would see are we and that that actually right, then and We expectations. first really

be that's We very But So that in that our the where to get the first fiscal we as book what during do the as in, can our most currently important fundamental. get this close we're quarter real believe Comets that year ordered will produce we many [indiscernible] quarter. is. quarter, will

So the then year. of reel fiscal backlog will first quarter our we the in calendar continue the third in and half to

the enthusiasm all you've to in reagent it's asked winner with the You being and fast-growing But early is if workflow that full space, to that about ACD days. the we in it. system been the Comet, a in know that automation, only we And the Comet it's then a very huge. about field, gotten peer you've know -- my real systems it's has compare benefits spatial, Obviously, we instrument used other market, a right?

So in you workflow. there's any steps your utilize in no antibodies the that workflow. to can manual you've use interference Comet or manual used The

machine. multiomic targets, RNA XX,XXX truly have a We

you protein sanely same the see RNA So your slide. your and targets in can

antibodies. Bio-Techne know, XXX,XXX has you As

in in to there's we And So instrument. highest the slides order we have from run pull-through boost the can pick on and throughput choice know, in X plenty you the market. our as to of parallel, there

as from to extremely as reagent point system their way and will some special pleased to eventually operation our continue make for our from our a all work seamlessly automation we analysis with I'm what convenient an to working well the from antibodies to perform make view, our of as So positioning the to biology customers together most image test. reagents, it

Daniel Arias

Okay. finish And your out related year the to here. then, Jim, round the fiscal to just to comments maybe

margins. wanted You ask top line. just touched on I about to the

there? expecting to modest you overall, but Sounds the that China the conditions, some have What's like in Does comp tougher notably XQ? translate hard. growth outlook similar slightly you're

James Hippel

Yes, in stay sure. we're absolutely are we about -- black helping the for --

terms of So in growth.

Operator

Next question William Blair. comes Larew line Matt from with the of

Matthew Larew

potential. of different margin today do have the the up be, would to flip within to just side Lunaphore. Or say you're scale make you of generally about the long-term making that on they're forward? expected you wanted you that or I up I to bounds the investments would And expectations guess they're perhaps worse manufacturing, pulled follow what

once So for perhaps to discovered just scale demand this deal? to accelerated get is you sense something meet you trying up whether or a did the

Kim Kelderman

And That increase And traction just was our means lofty market our that very is in course, capacity, question, a do. It's an that the outpacing the No, that but something not is something overwhelming. projections, we used Matt. which, discovered. of had orders initial to of truly we the good very projections. in-house we're to versus it's fortunately, we have

from We well used the businesses teams as the as Simple team that such business, from U.S. fantastic gets have producing Protein and operations just Switzerland operations by to other very supported a much high-volume across instrumentation. in

can can the we you So I'm some increase imagine, pull-through the very capacity. also But vendors. that hit of confident as

great of there, just So are the have also parts have thing. is So we that out right? up underlying problem to having get make the confident volumes, now, upscaling a the we it's we're sure to to have, to help we beef and these this overall, resolve capacity. certain good are issue a that of. By aware new It's we no vendors we critical that there used other to can very or and with constrained that

Matthew Larew

Okay. of That's and great the is question The to ScaleReady next about hear. components that.

business, your partnership Wolf. So Wilson own GMP and protein

some And now Wilson it's talk kind feedback any pickup to curious out Wolf about translated of get of technology. has that there way obviously, proteins? to rates? in been driver Just a what of there's that's the some been been getting Is you've GMP if how for win leading that

is looming there. probably I out think some there competition

platform are GRx do areas that offer a like to also already, additional improvement as Beyond automated and solution more full you're broader with for suite just well. integration there or to trying

Kim Kelderman

question. and talk real have our to customers therapy for you the good gene just cell reputation. in that ScaleReady Yes. the I I space, when Thank say a to has

of the not full chemokines I volume -- the traction revenue that and of up believe also end in that in And that's for see it that such and and the the that only but setup. in GRx we associated it, the in pull-through customers of proteins cell particular cytokines with using And truly So brand a course, solution therapy now you why it's gene has a customers. space.

to scalable, way the to about it's I And the that's the have. other to really egg, the market solution solution. the because easy compared a relatively ScaleReady right? the get of solution a is we competitive complete chicken It's bringing in yes, customers implement team workflows. of well the option. is doing some around, ScaleReady is And benefit [indiscernible] and because fantastic our efficient that and educating customers It's do it to think really and a

Operator

line Baird. the from with Catherine Schulte question comes Next of

Catherine Ramsey

growth Organic X better than about came you've guided. in points what

that stabilizing, you it as You but out talked sounded like about China played expected.

So upside there drove surprised? really through broad-based? you a market it expectations? Was Or just category end that versus your that's talk or was particular what

James Hippel

I we I performed Yes, Yes. Catherine, generally, the is think for Jim. this broad-based Thanks mean, market the question. as expected.

we expected well. as As you as mentioned, was overall

this -- to been the back it how look there think is growth they our down gets are we in cycle you I we've pillars even [indiscernible] in. Sciences, and if within Protein

call would was gene I'd out one cell So and X-point a be therapy.

we when places and So one we believe gene will funding that of came you'd back, cell biotech see always said be it. the first that

but And And quickly I'm the not as thing of And positive for third saying as Wilson direct was there, bit same quarter. the in some us we a there's a Kim Wolf again, here saw well. correlation sign. in rebounded how us mentioned, over, for a definitely surprise a it therapy

not was necessarily It encouraging. our very was that So in quarter outlook a ago.

Simple our well actually grew The Simple performed portfolio digit more consumables. in well within and specifically, Western. double other instrument -- as and Protein even instrument in proteomics as Sciences Western pillars growth extremely instruments

came sign of it's broad first would when that always market So that we the the used that platforms. applications. gene see in our underpenetrated of we most back, of also figured base very X therapy, It's cell part it a good portfolio our would very a instrument and because given the also be widely and it's

I'd if Genomics So there turn outlook back over so surgeon strong Diagnostics and nice this not necessarily that was business. call out our was come to then business, And here and see a I the to our is, it in quarter. ago, quarter very that

growth since As new surgeon momentum highest owned of pretty some there, well, performing continue. nearing very we launches our rates And think the got -- one we've and seen and growth we rates are talked epi product the company there we're with the that about the out test will much with -- so extremely they Exosome. we've

So see. that was very also to nice

Catherine Ramsey

when of quarter? timing curious Great. any stocking signed And quarter fourth was European the you partnership. -- Or contribution fiscal there if be then there's the just given there in Fisher to from in any stocking the will any deal related just that the

Kim Kelderman

no that is in warehouse. the influences Catherine, will quarter our question. them quarter either, for Fisher the the in expect because such and the don't from thank were you directly ship bring this we setup there will past in next and No, leads, specifically

not will if dynamics, any So you of see sense. that makes those

Operator

of comes Sung question Ji from Bank. the line Next with Nam Scotia

Sung Ji Nam

on the end market the Maybe juncture. academic on quarter. perspective this Congratulations just at

have continued you especially ahead. that if guys Just you're growth and visibility kind stable difficult seeing of U.S. more Obviously, there, curious market, the Europe. potentially comps into in but

of your the for kind quarters. just be outlook curious might So what coming

Patrick Donnelly

Yes.

Horizon stable there. markets overall, have well well pretty we in see must with And I done say a as relatively funding right, academic the that environment, we've in I as the -- think in U.S. Europe

So it's a stable market.

some biotech course, industry, found the of with our as into innovative well accounts started have way in and the sales some the of their lull academic have Of refocusing there. reps

customers in and focus up further as So as us the bump nice having the the there connections between for is right just sales well a by rep. the developing academic

X the at or X is is So this for quarter that not a day, end the something just quarters. I of think

better, funding it at see or and gets will stays from end benefit continue to as continue to market, is as we a even be that we or serving think long I good will academic as it. the better

for expect I and quarters. what the So that's -- coming

Sung Ji Nam

Got have a Lunaphore also you. I And bio. and spatial on follow-up then

there, than current a think? towards are just market disproportional -- would color your be just you Or end addressable of driving be Lunaphore curious may it kind curious, And but market, performance competitive great. what's -- there wins your just do of currently? from for the standpoint, just bio kind addressable on early, seeing funding going environment, market kind the an Just other you general, spatial are in of any

Kim Kelderman

tool markets. doing just which biomarker important you're Thanks under is research results. I going end just less determining Yes. spatial of pressure way It's market end markets. question biology do that believe such validating for an around into other your new your after. than your a and end It's

are as Dan believe are the grow market. to unique Yes, their for asked market I will foreseeable it automation competitive wins, benefits that grow continue future. Comet in digits we tremendous that question, lead mentioned are So double are in there we market system a other very also that in that from significantly, reagents, and systems over earlier, here and antibodies to the the see it's the stay, and will when

now combination is in have So the accounts Comets systems. other we is just of experience have to a And have one. that then second Comet, found But an ordered the companies even stronger signal very that third want moment if into larger customers I yes, the some we have with market, right? we that the And strong. trends able several that sell at look been pharma

good that, really good workflow the only value real and it, first-hand gives proposition value strong that it's a and it's other not them means but market. solutions you the at still value is position the that real confidence So indeed me in a moment gives a you to buy experience, compared the that it, that proposition moment use

Operator

from of Capital Paul Markets. KeyBanc Knight, comes the question line Next

Paul Knight

just Kim, product kind portions would Protein be And refresh thanks Jim Simple is the business, you and of The the of a the as now of great. fastest-growing for Simple Protein large well. there highlight time well? line. could as How one

James Hippel

Yes. Jim. is Paul, this

that earlier double-digit double-digit to instrument in Simple earlier and well quarter as overall -- Western highlighted growth We Good both competitive product But with as the of size perspective. question, in from I growth on platform So you. try specifically line for highlight much this so an a of portfolio placements anymore. the was as question. to the thanks the avoid to hear by Not consumables. a given as that from answer

a portfolio struggles to been last product downturn. being to the quarters, this very said, offset the X entire instrument lines continue consumables instrument with those keep several Despite that overall. state placements very through platforms on That our in resilient has the stable all

has portfolio that see and the us kind of gives very that that confidence how when -- pleased as in we'll once we're accelerated growth -- So -- again. the portfolio markets market great normalize, instrument those with normal our performed

Paul Knight

is potential and the GMP you your in Where the And capacity are -- expressed now revenue, as maybe your business? capacity of past revenue. then mentioned where on dollar GMP you facility or thinking

James Hippel

capacity have as it -- We're could because with issue. talking at not is is stop capacity no about for our proteins a Capacity I to a an as you the probably yes, the think we as decade to honest it pertains for GMP market. be CAR-T longer least last immunotherapy

capacity it But which some to what need built have a of the be capacity or regenerative build as facility protein specifically side come. not for therapy pertains more was decade to an immunotherapy still that the for cell -- issue our GMP side for, will we out to We medicine market. of that is our business.

Operator

the turn and floor Ladies session. Kelderman we you. now the Thank question-and-answer gentlemen, like I would Kim to for to comments. have of closing reached end over

Kim Kelderman

everybody, this proud deliver the you, I'm for accomplishments results and proud the quarter. this for insightful thank call questions. able in and also you, of of team's the today Thank extremely joining Bio-Techne the dynamic I'm environment, Yes. and we've been to in

Our joining portfolio going differentiated for markets the growth stakeholders highest sciences all and in to call. best-in-class much deliver performance, some our of the addresses forward. positioned very you life is Thank

Operator

This you. teleconference. concludes today's Thank

time. You your you Thank may at for participation. this lines your disconnect

Bio-Techne (TECH) 1 May 242024 Q3 Earnings call transcript