TECH - Earnings call transcript Q2 2025

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Operator

Good morning, and welcome to the Bio-Techne Conference Call for the Second Quarter of Fiscal Year 2025. [Operator Instructions] I would now like to turn the call over to David Clair, Bio-Techne's Vice President, Investor Relations.

David Clair

Good morning, and thank you for joining us.

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

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

company's company new this does the statements forward-looking or the beliefs not on may the factors company's to that filings comments actual identify its call. of in the to year conference for and statements results. section. fiscal XX-K within made developments. forward-looking any during are made Investor website about could update well company's including Some or projected because events The certain statements of as differ as information this during call future any available materially XXXX XX-K those The other company's Relations undertake forward-looking The be the expectations the company's SEC cause future results consider from

the company's the business most During to GAAP available pertinent at at be I non-GAAP now care weeks, forward measures may Kim. Investor Separately, turn connecting look call conferences. this in to Relations of these the Barclays of measures release in call, provide are coming our comparable section used information to Bio-Techne Leerink morning on financial press events. performance. website Corporation measures participating issued We we will the reconciling health earlier Tables many with over to to these the Cowen, upcoming www.bio-techne.com. you be and the ongoing will in

Kim Kelderman

spatial analytical GMP their market, pharma biology the for end franchises large X% with that yet for strong we projections morning, revenue and beginning you to conference everyone. our in side joining good growth exceeded on that I'm and year, our Thank the protein that fiscal the at benefited the combined fiscal reagents report our another second organic Dave, and delivered of our This, pleased Thanks, made traction ExosomeDx quarter. continued the drove call. our quarter we improving initial biopharma in implementation. quarter particularly

seeing that also benefits over and efficiency organizational improvements X.X are years. We operational implemented have last the we the of the

quarter, sequentially are margin second positioned profile in more will to in the and adjusted peer-leading points the operating call. markets we improvement for details that our end on I'm Jim our ongoing continue XXX margin increased operating basis well provide these results recover. as our XX.X%, During to confident later

a I hope you the month that during provided see latest Healthcare many we Conference. of corporate to had presentation the chance JPMorgan last

X to year slightly website. the those of For have I visit this not section presented that would you different Investor outlining novel lens enable We seen and support we a customers our manufacturing development through diagnostics. precision strategy challenges Bio-Techne's we Relations it, encourage the company's advanced We help enable by and major solve. the biological therapeutics, of of we the discovery insights,

our across efficiently positioned and Our support product uniquely and these reliably solutions portfolio in to advancing science sectors. are customers

GMP improvement and a regions. Now instrument orders our we well increased results, Sales geographies. protein with to overview as analysis let's strength customers strength both the our markets reagent quarter QX end large an and end pharma particular strong in review European and the beginning U.S. with our mid-teens both included markets notable as in across in This in as performance from biopharma experienced portfolio. our

For delivered the academic revenue team mid-single-digit our market, growth. end

despite markets as reduced achieved this end single academic of the well mid-single-digit the as challenging we our prior quarter's in to related midweek reminder, holidays a the year and in selling As number days growth period, grew upper December. comp the digits revenue

in therapy protein we as digits strong grew low Americas, our quarter. the well customers from analysis our performance automated primarily for double regions. for In was strength This demand the aforementioned cell driven by Now the the our portfolio. as

XX%. protein double region low analysis by automated also was more our well, than which EMEA driven grew as digits grew portfolio, Our which

we addition, through our new expanded reach agreements. X distribution geographic In

and First, to follow growth QX to in our We our in distribution will to the single with environment cooperating portfolio It's we that across In government declined Azerbaijan. would countries. agreement geography. in the improvement line funding expectation the a in to partnership worth Life Turkey performance materialize. a and as our a the that positive sales with the growth ease due that Gulf access the to of in expand headwind and stimulus Leader growth access QX portfolio noting our expectations targeted this low fiscal China, remained slowly fortify the will to challenging shift with is negative program digits Sciences announced economic Medcomtech to modest modest a

Jim As to to care variety will of government were health citizens our in was remain Chinese a forward the the consistent and In remains role value is priority It modernization extremely high for and the course, the enabling a motivated our of our customers. across continue customers our to our of I term, and breadth and a and meet to mission, evolution that just its of a committed visit the health the China note, the portfolio. and clear care side team our looking to quality of playing for key long Bio-Techne in world. team

solutions. with starting of Now portfolio our our cell workflow let's discuss growth pillars, therapy

more for growth customers advanced require XXX therapeutics therapy customers in over within experienced that this later-stage are of all expanding their in lying During trials We base, robust clinical reagents. cell currently customer our for reagents our development. as the are trials, portfolio progressing on now XX III. GMP GMP including stages X materially phases Within of various clinical reagents have across their GMP Phase quarter, we

our For revenue XX%. GMP increased over reagents QX,

reagents growth GMP be further trials customers much can be their business therefore, our make orders reminder, along from lumpy clinical can timing a volatile. can as As order larger, quarterly

a So indicator. performance better we view as trailing revenue XX-month

Our current just organically. our for sits reagents TTM XX% over GMP

ease of our our instrument, by Western automated across Simple use, savings the Western appreciate Now we again, to their continue This Maurice protein our system, precision labor we offered and platform the where Biologics installed base. Simple experienced to automated these multiplexing portfolio instrument on and sales drove strong and consumables out bring cost installed solutions. let's base. delivered across specific pillar, Plex workflow reproducibility increased strong last automated marks blood growth Once the quarter. immunoassay quarters discuss consumable our X of the at least platforms Customers where analysis our X utilization growing in our laboratories. Overall, consumable of innovative teens high our double-digit momentum growth

consumables It just showed though. strength, was not that

in last and which X China. we marks delivered This in also increased in instruments instrument our for low digits first placements. instrument quarter years mid-single positive the digits, experienced We grew quarter excluding growth Globally, the growth. new single the

LEO. Separately, team the successful funnel the Simple capitalized order launch of instruments the shipped our growing of early like of our on team congratulate I'd at end to quarter. high-throughput platform several these LEO on called next-generation, Western and the high-end The access

discussion, I'd to our update on platform Maurice up Wrapping like an Flex. give

Our increasingly rapidly utilizing protein fractionation gene a growing as methods biopharma of applications customers are well preparation. for Maurice as sample analysis mass number flex therapy for sample in spectrometry

During of the biotherapeutic awareness agreement the market a Maurice Waters capabilities the expand aiming Corporation, to with quarter, Flex. characterization of the co-marketing we announced

proteomics to core portfolio only, reagents. turn of our RUO, let's or use Now research

by over manufacture Let proteins catalog insights me gain therapeutics we've amassed and customers biological precision the XXX,XXX into highlight develop enable of biological antibody XX a novel to and to over that across X,XXX last years, to relied pathways diagnostics. content This types. globe the advanced upon is and

view starting quarter. Our modestly picked We continued single RUO All sequentially up everyday in, larger indicator to of our our the low reagents also while improve. business the orders customers to run in reagents gradually an our end that rate this portfolio RUO are biopharma in improve core of bulk markets digits grew quarter. to as

reagent update Bio-Techne. I on our an give wanted our portfolio, within AI to with Sticking core initiatives

have in the we antibodies to As with proteins see leveraging enhanced past, we tremendous develop and mentioned potential AI functionality.

cell data our utilize generated to which patentable engineered proteins. are train know-how we continued several internal and last set, models fast we These AI quarter, proteins designer the our to and are new the decades generative over to We develop exhibit our During our proteins many heat QX, features. other therapies. to properties, X attributes added and announced catalog These for portfolio designer total the hyperactive applications, stability relevant bringing including X. novel in to

new a protein steady expect of forward. designer can You launches going cadence

the excited growth. Sciences Protein were our best organic in to the related this very of of fiscal This began segment the of performance team as for revenue is since they aftermath headwinds pandemic XXXX. that delivered X% the the I'm Overall, market quarter first the

organic That our which launch we biology growth the in progress make business, Now continue automated and we COMET quarter. our spatial the a instrument. started will spatial fully XX% delivered growth biology pillars of move with the system, the biology to spatial within Diagnostics significant where multiomic with to segment,

to COMET we reminder, proteins capabilities RNA new and of a allow to visualization simultaneously. our the recently XX up XX enabled for on targets scope As

actively the platform. upgrading enable installed of researchers base to COMET's capabilities fully to the are We multiomic leverage

Bio-Techne's we of the the for Additionally, stream instrument paired will scope is that expected launch The growing capabilities, validated continue with portfolio a be any systems-branded RNA to use highest on of support the Bio-Techne to consumable COMET RNA antibodies antibodies, the pull-through system. umbrella. under

for space. Biology During in are this we continued the increased Spatial leadership mid-teens, our quarter, fast-evolving positioned and revenue

with which the tools this the reflection I'd tools diagnostic precise a like provide exosome-based diagnostics our Next, that is as proprietary our new update give clinical business, is a Asuragen's an referred name previously of chemistries. precision combined diagnostic believe diagnostic laboratories business. to on to with of We to molecular leverage team, better technology focus

through which kitted the Asuragen. and than cancer our for test to grew breast technology cancer. as the prostate enjoy first the in volume Meanwhile, of launch our quarter. we continues the we test more announced chemistries. This We unit acquisition in adoption for mutations rapid the is a utilize also commercialized of laboratory to During XX% this ESRX exosome-based ExoDx quarter, test Asuragen's channel, test a obtained

in momentum with in pleased the with and of end execution businesses by early-stage In team that strength cell the extremely that believe saw markets. indicative the summary, our we key of globally. in pillars core combined our our gene therapy I'm biopharma all recovery proteomics We across the products, an growth analysis, and Bio-Techne are

confident to Bio-Techne growth that add Precision then the for franchise best-in-class continued positioned why you and have differentiated I'm of our platform, high-value Biology performance we that forward. our Spatial Tools will going you understand If Diagnostic

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

James Hippel

additional year. some financial with second I'll Thank foreign overall then performance, unfavorable Starting on the remainder start $X.XX with exchange thoughts and adjusted in of the compared details with financial prior impact. $X.XX the outlook you, $X.XX on for our some quarter year, performance an was the financial give having Kim. the to EPS QX fiscal

$X.XX $X.XX and for prior in X% an increase million, $XXX quarter was year-over-year organic the EPS revenue a was GAAP basis. compared QX the reported of both to year. on

QX APAC in analysis double strength Kim. you market while Recapping end cell therapy and digits Europe driven in previously year-over-year, heard America that customers increased from particularly decreased portfolios, by biopharma China proteomic our and our and low single organic growth low digits. region and North our by from

By digits end quarter. mid-teens QX, increased and in excluding China, biopharma in academia the increased mid-single market

Our in orders and while benefited larger our our rate instrument end biopharma business therapy in improvement and markets, showed reagent pharma year-over-year. run business modest from cell biopharma

in the Below P&L, to total gross XX.X% productivity initiatives. impact mix product year, compared the quarter last revenue XX.X% adjusted on company by of the favorable margin driven and was

the was benefit in Adjusted expense accruals, year. expense SG&A the driven compared The revenue QX of SG&A in of in the the diligent by and by XX% control. XX.X% increase in of to of compared in streamlining offset R&D X.X% while partially primarily prior prior was incentive X.X% compensation year, structural to was reinstatement QX revenue

to was favorable volume impact Adjusted leverage basis operating for compared offset up the sequentially to by flat and margin reinstatement accruals. XX.X%, prior XXX the of and compensation incentive of control, cost due year points QX the

the We our the and during drive growth containment operating market leverage execute to throughout continue with cost optimizing goal of efficiencies measures the ensuing to initiatives prioritize organization recovery.

QX net year operating at lower debt million prior expense net $X.X due Looking to was numbers levels. our below million, interest compared the income, to $X.X in decreasing

quarter. $XXX million, bank end on debt at from of last QX sheet balance unchanged the of the as Our stood

our Other million increase was to quarter, million $X.X of compared pooling an nonoperating expense the overseas the adjusted year. The by related to arrangement. was cash foreign driven the prior exchange in increase $X.X impact

compared our further basis mix. rate down the XX.X%, due points down geographic year tax Moving prior P&L, XX effective was QX to in to adjusted

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

and with Xx million finished sheet leverage in a our balance QX Our strong below cash, total $XXX.X ratio in EBITDA. well remains position

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

fetal segments, the the Next, QX of prior million, Protein performance the compared to reported discuss with I'll reported of sales segment. Sciences were starting bovine increased year. organic reported business, in segment X% the our X%. revenue and business exclusion revenue The was as reporting for $XXX.X X%. unfavorably classified divested with increasing this by the impacted quarter, Thus, serum which held-for-sale segment revenue growth subsequently

therapy previously in we Kim QX. our GMP orders large well expected in by organic third our several protein segment's as be the portfolio was the by mentioned, where As as strength were quarter our in analysis cell protein that our to requested driven customers placed growth initially business

was points of XX.X%, incentive structural to management prior increase partially Sciences as the compensation leverage, Operating were an accruals. compared favorable of cost segment margin the alignment volume and year offset the by impact basis for XX reinstatement initiatives Protein of

last the Reagents, Spatial All biology organic this our to XX% same to growth spatial and Turning Precision increasing reported Diagnostics quarter contributed X all the year. compared to were Diagnostic segment, within Biology both and nicely businesses million, growth. $XX.X Core and with segment, tools, Diagnostics sales QX

to operating the segment the margin X.X%, Biology and operating X%. at Spatial Moving on margin, decreased segment's to prior compared the year's Diagnostics

Diagnostics of impact Biology improvement would approximately and to compensation basis volume operating Excluding the operating expanded Lunaphore have We points incentive favorable Spatial reinstatement, the impact margin continues anticipate accrual due margins to in leverage. as year-over-year the scale. of XXX

in very including and larger run CapEx the fiscal in our large bulk sign customers is through requests funding solid improvements clinic summary, in Earlier positive pipeline behind daily for a a we calendar was much is likely order more as pharma and more increase year, this pharma increased of R&D the view our spend that types quarter. purchases. from expected In activity QX than of in reagents a saw discovery instruments, repositioning us, R&D We that by rate all from broad-based customers, XXXX. order year the

growth the second several although X continued the protein in progressing came programs clinical saw still outperformance business intact. through for trials. therapy quarters GMP our in customers from timing unexpected 'XX that of who the upside by of outlook large also their this fiscal much We are cell past of the half is QX, provided orders organic Thus, year we've

For QX this specifically, upper the range mid-single-digit of means organic growth.

relative about think you headwinds QX, of a organic expected consider. As our growth performance there to QX to in couple are

is our protein comp QX. the then several of our GMP Also, we year reoccur to in grew by mentioned difficult as declined was revenue the previously in it in expected following X not First, of QX QX and than are last in had large QX year-over-year QX more timing orders percentage X% that in the QX. points X% recent

the pharma our we in from outlook our our hold of we predicted as also year. The allows However, QX QX, an shared seeing to return beginning are we with well early improvement activity can growth organic expected pharma large growth positive China the than our exit strengthens year. note, to have fiscal us all in confidence high that single we digits since in more in earlier revenue the on larger the as organic momentum as expected a that customers,

year. dollar our growth, sales at As a the pertains approximately we it recent of the strengthening current expect fiscal of to rates, X% headwind the back in do of with reported revenue exchange half of U.S. foreign

mix represents be XXX impact improving to a basis exchange much Thus, points. due points do margin full foreign by of and in the P&L, initiatives. product to of our forecasting we continued still the now fiscal half expect 'XX a basis from between operating prior second margins falls fiscal than in first the to leverage, the significant XX adjusted higher operating XX the top margins negative to impact higher and half of line As volume approximately year. from adjusted are step-up This we directly of productivity bottom the line year the year

the And for open with prepared concludes to operator questions. that, line I'll comments. back That over to my the the turn call

Operator

Souda first Partners. [Operator the Instructions] comes Leerink Puneet from with Our question line of

Puneet Souda

offsetting. china congrats from here, so little is can talk bit you those whereas that that to elaborate about momentum a all, XQ in about? of the in backdrop the well? could on that given you'll vectors strong. of bit concerns on But a First the you the recovery therapy seem XQ also quarter, you more NIH pull forward bit the can essentially think talking really But little and gene you in where and You X quarter saw confidence products? cell talked biopharma there continuing, to be now be GMP of the improving, of more you sort have you softer right among things recovery a Where -- as have sort around the where market just third about

Kim Kelderman

very question. thank you Puneet, much your for Yes,

me orders First I you cell of the mentioned. about let talk think gene all, and therapy

Fortunately, we're We there about there, on XX% that GMP proteins. tremendous is to the right? very traction happy see grew

quite drove have this positive is earlier And customers' than anticipated several were confident we half down there. happy markets, demand, studies orders, year. upon also from the of further with the And we that delivered originally in some these QX course, overall clinical pulled and these feel anticipated. for of are larger the the we points customers we're and very of a we sign were traction second into have fiscal for This, of right, their growth, that and

March to of the in for from thing for interesting handful We related this we some we positive should And Science Going related And would go or still apply we funding. were plan where instruments you early additional growth our QX replacement to can China our lift maybe, with that calendar China, XX, provide continued to know to add X-year to the then that funding. confident the expect that some China want is also National deadline view. original a during QX, negative is so it's which and the that and our that a projection that QX forecast replacement did in slight anticipated the we the Jim, funding, funding, we're very see eventually, traction China, in effects sold something? you

James Hippel

Yes, sure.

only thing gives think Puneet, despite therapy that large in timing to and the we So the add regards gene our the of forecast QX holding the confidence broad-based I with saw I'd us it really is orders of strength across pharma. is cell

saw As especially We rate our I -- also well, in our mentioned And cell pharma. comments, even just large course, from in it wasn't instrument our our within the run business gene franchise therapy. it, in did large quarter. my of phenomenally and portfolio improved prior ProteinSimple pharma

gives us It's what So recovery. some it's confidence normal broad-based it's not back that large -- that's pharma of to start a yet.

from back Our it normal, noticeable quarter. run rates aren't prior was the improvement to but a

we've is in assess. as change regards far holding and early in in rates our of of run the very well. what's as we're you mentioned not what actually happens improvement of around tell rate academic in and days head All reading funds overall can It unusual NIH all comes we've -- and is that's you to hit freezing I'll new is a kind seen in on that of so so improvement no lot certain and And that that well. seen what administrative concern and of terms noise administration with that, January, department kind in all the our chatter kind happening, and growth or I as

right noise you're So concerned NIH. out hearing overly we're of regarding Washington not the now about

Puneet Souda

it. Got

base lever could given M&A, does thoughts to the M&A? how if the some I of quickly, the just at on small challenges are companies Just that your your updated on when backdrop that looking of the shape some tools seeing, and cap your market ask opportunity ability of

Kim Kelderman

feel JPMorgan be portfolio. would we during strategy continue where will like the add we've to we to deployment. Conference, Healthcare capital M&A and as clear relatively priority our Yes, to a to for been And our

we it's area that interested But not of are analytical will insights, do really biological so right? in. have be that Fortunately, There any move. huge various gap the the you And processes And support novel have don't to manufacturing platforms to like support the sitting that we and continue we discovery we of and/or would advanced therapeutics. and development the any to any after think love analytical cell gene ought would workflows. are that and before of therapy G-Rex tools to about we

areas precise new sheet Wilson And a really now, Wolf are of the very those at very here very a between and have timeframe right of in. and M&A the to we acquisition the XXXX. capable strong very, nice end interested we are a activity. So do that balance integrate And management a with strategy

Operator

Our of next UBS. question Leonard comes line Dan with from the

Daniel Leonard

to hit you December you the that normalize the QX, for about to Is first want couple rate and about Is think you being you way market run points. -- on when Puneet's in lumps a back mid-single-digit of current what progressive improvement currently it high the guess, off, talked that positive I circle to need way as you're your upper single think to do for I digit you called quarter? where trending? business, QX? the figure out right then

James Hippel

it try I understand And if It's answer I'll rate. your question, correctly. our to run about

to run differentiation that market, and So perform growth business caused the the market. and it's vectors, us rate versus the closer really pillars talk is to to we have day-to-day overall our growth our the our acceleration going that about

improving so is our And market, gradually that thus the performing rates. is are to run our closer so but about think is and the to way rate that market run

vectors mid-single-digit that of because expect run provides. we to we growth be is our Hopefully, So In normalized mid-single-digit company least that to growth growth. rate our run when our expect double-digit do is, at be And company helps? business growth overall it the a a growth. the growth, of market rate and lagging acceleration

Daniel Leonard

in run made and follow-up, were U.S. on broadly was academic Or on more And government -- in that Okay. comment quick The your just rate, academic Jim. commenting January rate run month January? you comment of the business specifically? a you a

James Hippel

regarding That market. academic was a the U.S. specific comment

Kim Kelderman

Jim then Dan, that then This the the you you of about if you our U.S. of was is is academic you represents about which of quantify more about overall exposure. think talking about the that. Kim. I say think which revenues. NIH market And half would exposure, globally, if like help would And it NIH portion about that, half XX%. or is of less about XX%

to be then So that digits. would mid-single than would be less revenue NIH itself directly And related X% revenue. of our

kind the really for of that So scopes you exposure there.

Daniel Leonard

But comment that XX-ish specific percent to Sure. and academic government, of U.S. revenue January was the correct? that's

James Hippel

correct, Yes. is That Dan.

Operator

comes question of next Our from Johnson line Stephens. the Jacob with

Hannah Hefley

This customers could way a therapy you you Hannah larger this us? much was there quarter? in actually there quantify benefit from for any Jacob. the How think cell for is Is of do on

Kim Kelderman

a our shot, Yes. very -- I traction did and really mix but nice see in up. quantify there, Jim we then of an can give don't the can initial think it customers The follow so I we general.

of Phase in moving these And encouraging customers so and than which handful, stages, trailing, customers look in the later-stage that in bit XX if -- little clinical the and very to that in that course, clinical being XX those clinicals of organically then also Phase And now it the this than are But or nonetheless, these or in by overall And XX X field talk is some now, orders of those customers hope larger meantime, used the of that's in several their in lumpiness sitting order our XX% chain the the So are from the stages. are past. we a we clinical also rate expect these well. and XX XXX are those is to really if months trials, III preclinicals. that at that II, are growing comes more relatively the X up clinical sitting studies. we've by in a of to you talked doing rather are we But creates which to in about customers where are be. about

James Hippel

I'll the and that forecasted a little cell that to QX of points same to and around customers and around overall an originally into answer got was what larger And was gave just about bit growth the gene therapy. Kim therapy add gene There attributed topic that X was to QX. in accelerated cell for Puneet

I division. revenue also moved because reagent Kim think probably was point that there but core within diagnostics that's another mentioned our X, of

about expected a in we earlier years. large very will that come some come It's easy So those orders either. there we that, not well, our we orders business to exactly and from talk and customers when about talk it's for and won't there, repeat lumpy predict as saw through always than that necessarily

So X our cell from that's X from and about coming customers core large points I'd say and about is division. diagnostic reagents therapy point gene

Hannah Hefley

around again versus consumables? And then placements you you also mentioned comment this that instruments grew in XQ. Could just is talk about, growing

Kim Kelderman

of X we, we in that have anticipated of And Yes, quarters such indeed on it growth indicates our it consumables very point that again. consumables the the had last double placements comes grew quarter, would proud digits and the that of growing which a out side. side, X capacity constraint some the in growth the instruments We're in our kind we always back when anticipated is. on installment we black this therefore, be eventually And went market, we base. in in consumables to at into

Operator

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

Matthew Larew

signs most academic the the customers? the -- large market any customers where are within of out? is. if referenced Is could like if the biotech you that you it's mainly pharma What, seeing Wondering Or of it not, seeing still it You if smaller recovery sounds you shoots? for and mid-teens. recovery in biopharma, green break are any, that mentioned terms of

Kim Kelderman

calendar or double-click more high with markets, around might our momentum good it. The that is that the can and And to the in expectations. than so portion of of better at we're recovering And us with expectations. A the our I fiscal additional bit our out answer quarter was XX% our expected through have with year, of also line overall, quite large biotech our last laid that year certainly expectations funding gives different the and we And confidence trickle remember some roll line is And we you revenues, see will some QX that's the of which And little on our less expectations. the expected market. the out year, half pharma. biotech line -- Jim how is in into sorry. our our of that in level second happy in end driving happening markets. momentum. then to It in

James Hippel

nice only thing would that did continue of But those one I full Kim biotechs mode Yes. the a QX, was expecting as of smaller alluded the which was larger in April, really our we we not until is frame, progress. gradually yet with the markets. to to, And see already see add, pharma we claiming May weren't time we're nice. either recovery here beginning what The started that to Kim, in that recovery was in surprise

Matthew Larew

past focus of Okay. been a Spatial flipping I the months. there's the mergers couple in want to side. in Obviously, X Lunaphore. And Diagnostics then space the to and on

into will more progress the how for Good headwind to point? your just consumable on landscape of get any issues multiomic manufacturing You the launching to And significant of assessment a you into What a Or about a that solutions then tailwind? the competitive the key pull-through? a are flipping throughout margin at instruments? now it from so side a the that what's really to operating year? with is of this year Is having sense or RNAscope. function are

Kim Kelderman

the for Thanks question. Yes.

very a that So the activity and to the instrument. have Yes, has positive. we bit little do there a least in. sign deem the capabilities with A overall COMET, launched to uptake I last the year ago, want market, is launched spatial happy multiomic capabilities, be in you the we positive correct we at a of which been the market biology have and in been an quarter. that been RNAscope setting,

of been So to of manufacturing do speak. any portfolio. We part? pull-through I in antibodies with line, on your this are forgot as rolling out constraints able the we've anymore systems-branded which mind is on higher the on consumables But that, of the COMET And our And the the have those third launch expect then we we that to good instruments be R&D know. And to also question. instrument. leg repeating you one not pull-through product do XX

Matthew Larew

it a margins obviously segment -- headwind [indiscernible]. called out operating Just that as -- to on you've in

Kim Kelderman

Yes.

And will components the So it will help. pull-through, forward to if there, important And And of both us. the instruments, the course, going of be the reagents. very uptake X comes right? continued one to then is selling

well. certain we see traction So against we aspects both And in these are us milestones. as measuring hitting positive

as profitability our traction. of those result will a the finding So increase

Operator

Our Baird. comes of with the line from Catherine next question Schulte

Catherine Ramsey

first China. XQ instrumentation was do Maybe in how that What on regent to as the region that to trend versus And returns in you expect growth? performance quarter?

James Hippel

both again, it I very be would turning low very reagents. improving as was the think side relatively in as we and comparable And comparable say for Again, well it the to that stable the black at and China, it in the two. growth will the our was on single-digit declines instrument I gradually see QX.

So notable a difference there. not

Catherine Ramsey

Okay. for the half digits as Great. the was you maybe up pharma low academic quarter. in that reagents, of expectation And RUO into what's back And we single versus What get said performance your the then year? there? for

James Hippel

I'm academic sorry, with what? regards to pharma versus performance Catherine,

Catherine Ramsey

Within RUO reagents?

James Hippel

relatively RUO biopharma European Actually, other. slightly of academic. were reagents. to both it run RUO Europe both but U.S. again, growth each rate in X reagents respect in within the and totals and was, X or like again, our stronger But in comparable, point with

talking about a massive not we're So difference.

Operator

next line from comes of Dan Stifel. Our the with question Arias

Daniel Arias

GMP reagents, kind one pull Obviously, you quarter? does forward you Jim, have that X I sound that on like direction next for headed the you is, have growth what business expectations that could. it mentioned, do is in. but Number of the if piece you like you overall for that,

range how could that the just helpful wide we put been if guardrails So what it be there. kind will of piece, some see on you just given for has might

of impact margin the mix the business business don't can it question that moving accelerates. just piece the that, be individual but where I understand mean, comment helpful you on for it get profile that's it's the a would know is? the that too and has I then on specific second so And as to needle portfolio, parts is, you

James Hippel

I the Sure. question, appreciate Dan.

as level to large of with that is As talk you say guidance orders, down -- be it about fidelity. we I'd these don't know, we it give is very What can that lumpy.

saying probably quite most our year. With a for profitable for orders, can not we back it that necessarily for quarter, margin we business strength we've been continued just larger very said as as within to it the profitable as again, that within the again, our cannot our going about about RUO customers for large and every of the be the lot it's say change of being increase the though profitable is nice will will hold continues second the that. still the all but of next that to not well. kind as to reagents, product line as business therapy underlying It's XX%. close. our we're and But that fact quarter, because profile, the cell it be forecast that roughly RUO QX QX, not this growth the was the margin We very and which, TTM out markets I to out you rest any think gene of regards improving core very, growth mix I that business end revenues definitely If a the calling underlying will see do necessarily that quarter in compensate and improvement the contributor business. talked our issue even but us and do I

Daniel Arias

Okay.

get on maybe Just the you growth. to

but fair? year? reagents, anywhere that it's for we the of GMP for decently model that up, half up, the Is like near been can not sounds first it So where

James Hippel

That's fair.

Operator

from Our with the line Conor of question McNamara next RBC. comes

Conor Noel McNamara

strong a quarter. on Congrats really

in those III First there gene way II either cell those opportunity III, the and to to us Phase from any come could handful give market? in programs of off, Phase programs as on is or you quantify or incremental therapy Phase II advance color are the late-stage on that Phase or as they

Kim Kelderman

stage. Conor. and often really see it orders and -- that progress in study general, customer But how there each then That's roughly large you the a really next again, the the is hard, clinical The how with varies the orders would double time to really clinical size is. so

It really to depends it's template really hard on a there. you each So customer. give there's standard --

Conor Noel McNamara

] seeing And Wilson XXXX Okay. this that did there's That market? how that Xx. rebound given any gene That's in prior therapy you us quarter? opportunity then helpful. to the consolidate strength, do Wolf end can [ And in just you're on if to remind cell and

James Hippel

take I'll one. that Yes,

to So that wise mean business stage with regard core would with Wilson Wolf, noncommercial growth say businesses earlier I growth. consistent their was they're our

just are into therapy across X seeing be the gene I double-digit and them that customers they we're consistency XXXX. will alone remind and market the those from preliminary -- for just will forecast from have solid cell So that very year calendar you commercialized very, there. to now growth X enough put very, the of

is future So very bright there.

Operator

from comes question Donnelly the next Patrick Our Citi. line of with

Patrick Donnelly

of of month. lot a of what just know about, a you talk over last there. the the in confidence you noise Can on environment, Obviously, in mentioned you guess, recovery. guys I China. you follow-up terms I there Maybe over were level saw terms

what you there? curious the Just and guys saw the expectations ground, from

Kim Kelderman

Yes.

to Chinese steps in be the I I the to treatments as there. getting in world We citizens to continue would think country of aspects. make and treatments. love a designing am access helping sciences in -- to forward research drive the the better the certain continues well couple as life big

years. encouraged funding, the the compared activities last are funding there which level, that some hand, has On government historically the to more of on are been couple we other elevated

activity slightly. is China that's will in and our doubt not the get also green other that things on we there that there. are be a tough yet. are no all hand, there into to science ready -- things to So and the we increased will Bio-Techne And China just economic there better and back that growth going to some in that But to activities just situation why the a see do expectations again, continue and that hope is support is environment the to in all be improve order positive

Patrick Donnelly

the like It FX of one the an Okay. Can XH, just a you. in maybe than for offset opportunity, there. That's shift then, terms sounds about in helpful. expansion you under anything FX and else bit hood the again, And the XH? margins pieces, the little Jim, is moving other talk of for

James Hippel

sure. Yes,

XXX we year. to our to with in changed margin. second We the XXX points nothing's regards in basis outlook the of So half the knew guided higher to initially beginning

margin comes shows even XX-point of XX points, you think the as range. more that but changes say in you FX, improvement from a And significant our into half the the the contribution basis that, there's with our about me in to the at it in power call Now of earlier, second this it when margin sequentially significant about heard half. still step-up first products. that year-over-year headwind And from just XXX

very years both organizational make be to the year-over-year, X.X in the of our than over ready ready done margin to step-up that revenue the lot -- efficiencies but wise, and has growth when also seasonality more for the nice seasonality the sequentially a with growth past acceleration ever returns. pull-through. continued So -- And we've expansion

not solid you expect hasn't also volume year the And with, the So but that, we pull-through half. improvement can that. quarter we continue returned just mix to saw in and changed. great see second And get growth, the when story that's the as this all coupled we been to that the leverage, that from PSS

Operator

Our of with comes from next question Sung line Scotiabank. the Nam Ji

Sung Ji Nam

this stacks is against capability competitors to the moving new And the on Maybe game-changing and proteins, you on industry forward? right be kind how Bio-Techne this are able of designer competitive up kind comment front? now? capabilities what in on that AI the of would advantages How

Kim Kelderman

create a as and Thank these advantages engineered as proteins are sustainable uniquely products having And we positioned this all were you proteins, hyperactivity, RUO versions you eventually, that the very enhanced cell-based binding to it. know And things for course, that run fast do customers nice And we benefits because real and stepping change the combined are that to then build our work. are can constrained And the engineered the be we of would ladder be truly -- do believe to And about We with can AI so these to I AI and GMP will temperature stepwise a and in designed very innovation. then tremendous well you AI decades internal patentable. antibodies AI these couple successful picking for in you the you the boost really We activities the we receptor you step yes, this the proteins. grab where last if need possible believe over in opportunity of really will features up think the versions we stable, of of past. normally your think GMP not there. really launch proteins, question. have differentiated capabilities. you our all early the now and proteins. we of invested by know-how can only database AI X enhanced proteins, get And -- are but engineered the were And there will that

we real So to continuum nice have on. for lean customers a will

Sung Ji Nam

on launched. the helpful. you bio just side. the on that Great. spatial then comment assays And The just That's super RNAscope

gaining do how also a that quickly think customers the would capabilities? you're further Whether advantage? well, then will adopt curious, development? competitive multiomic Just require to also how as capabilities good And traction the clinical multiomic I the -- expect whether market the there you for be market,

Kim Kelderman

Those change really performances. And throughput in I the to can the so capability, I market. in to having you high that using XX will same And your do you've market-leading past in that give RNA only with we're very week. we're spatial simultaneously are features at think of antibodies that all can continue as protein XX slide. don't think multiomic in have the Four having well. off-the-shelf Yes, use been well experiments. question then you market provider targets customers all multiomics the on that for slides up COMET that in you where targets, the to the our the Thanks spatial the a parallel set look throughput, and XX slides and truly of really

very really out we opinion envision key have we rolling and stable, are currently, market. and capabilities, easy so leaders -- use The working throughout the The reagents. with instrument this is to the multiomic

then So It to And has development a biology I our product least, truly but be overall don't growth you're that spatial continued outpace lot market. right, was the feel not the and rollout clinical last, of to solution. the done. footprint market of in the there's of this

we we're in have example, the clinical really product the happy markets. to for in biology RNAscope few solutions enough clinical our space. of line, feel been So that is stable relevant there, successful And enough also the that we're perform and that one spatial

continue outperform I that there. really So positioned to we're think we're very, well to very confident

Operator

Our final with comes of KeyBanc. question Paul from Knight line the

Unknown Analyst

Knight. This is Paul Lucas on for

uptick that of sticking improvement the kind saw of instrumentation you for COMET interest some the your trending are for generally? instruments Was with in placements In called Just an of the And those one out theme for? of release, of businesses. you how previous signs question. press the

Kim Kelderman

black. reported is answers talk gets talk the encouraged that we biology we That really this mostly analytical COMET protein very we were platform. in our question? biology When and into our about if about sits getting which instrumentation special And instruments, spatial about the excluding still portfolio, your the vertical, back Yes.

James Hippel

growth I'll still the high very, the that rates very just follow that on to are interest and say remains strong. in very still very, very,

So yes.

Unknown Analyst

broaden benefit China expecting seeing? question. as one you just your still Or product western you stimulus then were interest what final groups? Is to And I equipment. out that other automated primarily are blot believe to

Kim Kelderman

will see as I then think in But we really traction traction. good be we platform biological the that you're product have well. again, correct will line the primary that, that

that X platforms our position China much of forward. better So will in feel in going we all be a

Operator

I back over Mr. for closing to you you. turn like Thank Kelderman, the would now floor comments. to

Kim Kelderman

accomplishments call team today, questions. been thanks, you, everybody, the for the insightful and and Bio-Techne Thank the the your Yes. results for proud I'm joining extremely course, has and of of Life the Sciences all highest our deliver forward. positioned going performance this in portfolio for some deliver stakeholders quarter. our and differentiated is best-in-class able of markets to to addresses growth And

thank day. I have So great want you, and with to a that,

Operator

Ladies teleconference. this conclude today's and gentlemen, does

lines your you a your disconnect this Thank for wonderful day. have at You participation, and may time.

Bio-Techne (TECH) 5 Feb 252025 Q2 Earnings call transcript